Document:

CONSULTING AGREEMENT

     CONSULTING AGREEMENT ("Agreement") made and entered as of November 13,
2000, by and between Tech Laboratories, Inc. (the "Company"), a New Jersey
corporation, with offices located at 955 Belmont Avenue, North Haledon, New
Jersey 07508, and Barry Bendett (the "Consultant"), residing at 205 Chestnut
Drive, East Hills, New York.

                                   BACKGROUND

     The parties desire to enter into a consulting agreement to set forth terms
and conditions of the Consultant's relationship with the Company. Accordingly,
in consideration of the mutual covenants and agreements set forth herein and the
mutual benefits to be derived therefrom, and intending to be legally bound, the
Company and the Consultant agree as follows:

1.   Consulting Relationship.

          (a) Duties. The Company shall engage the Consultant as a consultant
     for business development, including, but not limited to, expansion of its
     customer base, financial planning, corporate structuring, and marketing
     matters on the terms set forth in this Agreement. The Consultant accepts
     such engagement by the Company and shall perform and fulfill such
     reasonable duties as are assigned to him in this Agreement by the president
     of the Company and by the Board of Directors of the Company (the "Board").
     The Consultant shall use his best efforts in his independent professional
     judgment in the performance and fulfillment of his duties and to the
     advancement of the interests of the Company, subject only to the approval
     and directives of the Company's president and the Board of Directors.

          (b) Place of Performance. In connection with his duties under this
     Agreement, the Consultant shall be based in the New York City metropolitan
     area or such other geographical locations as mutually agreed to by the
     Company and Consultant from time to time.

2.   Term.

     The Consultant's engagement under this Agreement shall be for a two-year
term (the "Term") commencing as of November 13, 2000 (the "Commencement Date")
and shall, unless sooner terminated in accordance with Section 5. of this
Agreement, continue uninterrupted until November 13, 2002 (the "Expiration
Date").

3.   Compensation.

     Upon the execution of this Agreement, the Company will issue the Consultant
an option to purchase 100,000 shares of the Company's common stock (the "Option
Shares") at an exercise price of $4.00 per share, exercisable at any time until
November , 2003. Unless this Agreement is terminated as provided in Section 5
hereof, as additional compensation, the Company will issue 170,000 shares of the
Company's common stock (the "Shares") as follows:

          (a) 65,000 shares in consideration for (i) services performed by
     Consultant prior to the date hereof and (ii) for services to be performed
     through January 15, 2001 (the "First Payment Date");

          (b) 35,000 shares on April 15, 2001;

<PAGE>

          (c) 35,000 shares on July 15, 2001; and

          (d) 35,000 shares on October 15, 2001.

     The Company agrees to include in its first Registration Statement on Form
S-8 (the "Registration Statement") all of the Option Shares and the Shares,
including any resales by the Consultant, if required. The Company agrees to use
its best efforts to cause such Registration Statement to be declared effective
and to keep the Registration Statement current until the earlier of such time as
(i) Consultant has sold all the Option Shares and Shares or (ii) Consultant can
sell such Option Shares and Shares under Rule 144 promulgated under the
Securities Act of 1933, as amended.

4.   Reimbursement of Expenses.

     The Consultant shall be reimbursed for all items of travel, entertainment,
and miscellaneous expenses which the Consultant reasonably incurs in connection
with the performance of his duties hereunder, provided that the Consultant
submit to the Company such statements and other evidence supporting said
expenses as the Company may reasonably require.

5.   Termination.

          (a) Voluntary Termination by Consultant. Consultant may, by written
     notice to the Company at any time during the Term, voluntarily terminate
     this Agreement. The effective date of such termination shall be the date on
     which such notice is given.

          (b) By Company for Cause. Company may, at any time during the Term, by
     written notice to Consultant, terminate this Agreement for "Cause." As used
     herein, "Cause" shall mean (i) incompetence, fraud, personal dishonesty,
     defalcation or acts of gross negligence or gross misconduct on the part of
     Consultant, (ii) an intentional breach of this Agreement by Consultant that
     is injurious to the Company, (iii) substantial and continued failure by the
     Consultant to perform his duties hereunder, (iv) willful failure by
     Consultant to follow the lawful directions of the president of the Company,
     (v) to directly or indirectly attempt in any way to remove the president
     and/or any of the directors of the Company from their present offices or
     position with the Company, (vi) Consultant's conviction by a court of
     competent jurisdiction of, or pleading "guilty" or "no contest" to, (x) a
     felony, or (y) any other criminal charge (other than minor traffic
     violations) which has or could reasonably be expected to have a material
     adverse impact on the Company's reputation and standing in the community,
     or (vii) Consultant's violation of any of the provisions of Section 7
     herein. In the event of a termination of this Agreement for Cause, this
     Agreement shall terminate immediately upon written notice by the Company of
     termination for Cause.

          (c) Disability. During the Term, if, as a result of physical or mental
     incapacity or infirmity, Consultant shall be unable to perform his duties
     under this Agreement for (i) a continuous period of at least 60 days, or
     (ii) periods aggregating at least 60 days during any period of 12
     consecutive months (each a "Disability Period"), and at the end of the
     Disability Period there is no reasonable probability that Consultant can
     promptly resume his duties hereunder, Consultant shall be deemed disabled
     (the "Disability") and Company, by written notice to Consultant, shall have
     the right to terminate the Agreement for Disability at, as of or after the
     end of the Disability Period. The existence of the Disability shall be
     determined by a reputable, licensed physician selected by Company in good
     faith, whose determination shall be final and binding on the parties.
     Consultant shall cooperate in all reasonable respects to enable an
     examination to be made by such physician.

                                      - 2 -
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          (d) Death. This Agreement shall terminate on the date of Consultant's
     death.

6.   Termination Compensation.

          (a) Termination. If this Agreement is terminated pursuant to the
     provisions of Section 5, the Company shall pay to Consultant, within thirty
     (30) calendar days of the date of termination all Shares vested as of the
     date of termination. Consultant shall not be entitled to any partial
     vesting of shares prior to a vesting date.

          (b) No Other Termination Compensation. Consultant shall not, except as
     set forth in this Section 6, be entitled to any compensation following
     termination of the Employment Period.

7.   Restrictive Covenant.

          (a) Competition. The Consultant undertakes and agrees that from the
     date hereof until two (2) years after the Expiration Date, he will not
     compete, directly or indirectly, or participate as a director, officer,
     employee, consultant, agent, representative, or otherwise, or as a
     stockholder, partner, or joint venturer, or have any direct or indirect
     financial interest, including, without limitation, the interest of a
     creditor, in any business competing directly or indirectly with the
     business of the Company or any of its subsidiaries. The Consultant further
     undertakes and agrees that during the Term of the Agreement, and for a
     period of two (2) years after the Expiration Date, he will not directly or
     indirectly engage, cause to be employed, or solicit for employment any of
     the Company's or its subsidiaries' employees.

          (b) Trade Secrets. During the Term, and after termination for any
     reason, the Consultant shall not disclose, divulge, copy, or otherwise use
     any trade secret of the Company or its subsidiaries, it being acknowledged
     that all such information and materials compiled or obtained by or
     disclosed to the Consultant while employed by the Company or its
     subsidiaries hereunder or otherwise are confidential and the exclusive
     property of the Company and its subsidiaries.

          (c) Scope of Covenant. Should the duration, geographical area, or
     range of proscribed activities contained in subparagraph (a), above, be
     held unreasonable by any court of competent jurisdiction, then such
     duration, geographical area, or range of proscribed activities shall be
     modified to such degree as to make it or them reasonable and enforceable.

8.   Indemnity.

          (a) By Company. The Company shall indemnify and hold the Consultant
     harmless to the maximum extent permitted by law against any claim, action,
     demand, loss, damage, cost, expense, liability, or penalty arising out of
     any act, failure to act, omission, or decision by him while performing
     services as an officer, director, or employee of the Company, other than an
     act, omission, or decision by the Consultant which is not in good faith and
     is without his reasonable belief that same is, or was, in the best
     interests of the Company. To the extent permitted by law, the Company shall
     pay all attorneys' fees, expenses, and costs actually incurred by the
     Consultant in connection with the defense of any of the claims referenced
     herein.

          (b) By Consultant. The Consultant shall indemnify and hold the Company
     harmless to the maximum extent permitted by law against any claim, action,
     demand, loss, damage, cost, expense, liability, or penalty arising out of
     any act, failure to act, omission, or decision by him while performing

                                      - 3 -
<PAGE>

     services as a consultant which is not in good faith and is without his
     reasonable belief that same is, or was, in the best interests of the
     Company. To the extent permitted by law, the Consultant shall pay all
     attorneys' fees, expenses, and costs actually incurred by the Company in
     connection with the defense of any of the claims referenced herein.

9.   Miscellaneous.

          (a) Notices. Any notice, demand, or communication required or
     permitted under this Agreement shall be in writing and shall either be
     hand-delivered to the other party or mailed to the addresses set forth
     below by registered or certified mail, return receipt requested, or sent by
     overnight express mail or courier or facsimile to such address, if a party
     has a facsimile machine. Notice shall be deemed to have been given and
     received when so hand-delivered or after three (3) business days when so
     deposited in the U.S. Mail or when transmitted and received by facsimile or
     sent by express mail properly addressed to the other party. The addresses
     are:

    To the Company:        Tech Laboratories, Inc.
                           955 Belmont Avenue
                           North Haledon, New Jersey 07508

    To the Consultant:     Barry Bendett
                           205 Chestnut Drive
                           East Hills, New York

     The foregoing addresses may be changed at any time by written notice given
in the manner herein provided.

          (b) Integration; Modification. This Agreement constitutes the entire
     understanding and agreement between the Company and the Consultant
     regarding its subject matter and supersedes all prior negotiations and
     agreements, whether oral or written, between them with respect to its
     subject matters. This Agreement may not be modified except by a written
     agreement signed by the Consultant and a duly authorized member of the
     Company.

          (c) Enforceability. If any provision of this Agreement shall be
     invalid or unenforceable, in whole or in part, such provision shall be
     deemed to be modified or restricted to the extent and in the manner
     necessary to render the same valid and enforceable, or shall be deemed
     excised from this Agreement, as the case may require, and this Agreement
     shall be construed and enforced to the maximum extent permitted by law as
     if such provision had been originally incorporated herein as so modified or
     restricted, or as if such provision had not been originally incorporated
     herein, as the case may be.

          (d) Binding Effect. This Agreement shall be binding upon and inure to
     the benefit of the parties, including their respective heirs, executors,
     successors, and assigns, except that this Agreement may not be assigned by
     the Consultant.

          (e) Waiver of Breach. No waiver by either party of any condition or of
     the breach by the other of any term or covenant contained in this
     Agreement, whether by conduct or otherwise, in any one or more instances
     shall be deemed or construed as a further or continuing waiver of any such
     condition or breach or a waiver of any other condition, or the breach of
     any other term or covenant set

                                      - 4 -
<PAGE>

     forth in this Agreement. Moreover the failure of either party to exercise
     any right hereunder shall not bar the later exercise thereof.

          (f) Governing Law and Interpretation. This Agreement shall be governed
     by and construed in accordance with the laws of the State of New York
     without regard to principles of conflicts of laws. Any action brought by
     either party against the other concerning the transactions contemplated by
     this Agreement shall be brought only in the state courts of New York or in
     the federal courts located in the state of New York, New York County. Both
     parties executing this Agreement and other agreements on behalf of the
     Company agree to submit to the jurisdiction of such courts and waive trial
     by jury. The prevailing party shall be entitled to recover from the other
     party its reasonable attorneys' fees and costs. In the event that any
     provision of this Agreement or any other agreement delivered in connection
     herewith is invalid or unenforceable under any applicable statute or rule
     of law, then such provision shall be deemed inoperative to the extent that
     it may conflict therewith and shall be deemed modified to conform with such
     statute or rule of law. Any such provision which may prove invalid or
     unenforceable under any law shall not affect the validity or enforceability
     of any other provision of any agreement. The parties further agree to the
     exclusive jurisdiction of the federal and state courts.

          (g) Headings. The headings of the various sections and paragraphs have
     been included herein for convenience only and shall not be considered in
     interpreting this Agreement.

          (h) Counterparts. This Agreement may be executed in several
     counterparts, each of which shall be deemed to be an original but all of
     which together will constitute one and the same instrument.

          (i) Cumulative Rights and Remedies. All rights and remedies of the
     Company and the Consultant under this Agreement are not exclusive and are,
     in fact, cumulative in nature. The Company and the Consultant hereby agree
     that all rights and remedies set forth in this Agreement are in addition to
     any and all other rights and remedies which the parties hereto may have
     under any other agreement or under any law of any kind whatsoever.

     IN WITNESS WHEREOF, this Agreement has been executed by the Consultant and
on behalf of the Company by its duly authorized officers on the date first above
written.

                                      TECH LABORATORIES, INC.

                                      By: /s/ Bernard M. Ciongoli
                                         ---------------------------------------
                                         Bernard M. Ciongoli

                                         /s/ Barry Bendett
                                         ---------------------------------------
                                         Barry Bendett

                                      - 5 -CREDIT AGREEMENT

                                      among

                          TRENWICK AMERICA CORPORATION,

                           TRENWICK HOLDINGS LIMITED,

                          VARIOUS LENDING INSTITUTIONS,

                            THE CHASE MANHATTAN BANK,
                            AS ADMINISTRATIVE AGENT,

                           FIRST UNION NATIONAL BANK,
                              AS SYNDICATION AGENT

                                       and

                              FLEET NATIONAL BANK,
                             AS DOCUMENTATION AGENT

                          -----------------------------

                          Dated as of November 24, 1999
                and Amended and Restated as of September 27, 2000
                          -----------------------------

                                  $490,000,000

                             CHASE SECURITIES INC.,
                   AS ADVISOR, LEAD ARRANGER AND BOOK MANAGER

================================================================================

<PAGE>

                                TABLE OF CONTENTS
                                                                           Page
SECTION 1.  Revolving Credit Facility.........................................2

         1.01  Commitments....................................................2
         1.02  Minimum Amount of Each Borrowing; Maximum Number
               of Borrowings..................................................2
         1.03  Notice of Borrowing of Revolving Loans.........................2
         1.04  Disbursement of Funds..........................................4
         1.06  Conversions....................................................4
         1.07  Pro Rata Borrowings............................................4
         1.08  Interest.......................................................5
         1.09  Interest Periods...............................................5
         1.10  Increased Costs, Illegality, etc...............................6
         1.11  Compensation...................................................9
         1.12  Change of Lending Office.......................................9
         1.13  Replacement of Banks...........................................9

SECTION 2.  Letter of Credit Facility........................................10

         2.01  Letters of Credit.............................................10
         2.02  Letter of Credit Request; Notices of Issuance.................12
         2.03  Agreement to Repay Letter of Credit Payments..................12
         2.04  Increased Costs...............................................12
         2.05  Letter of Credit Expiration Extensions........................13
         2.06  Changes to Stated Amount......................................13
         2.07  Representations and Warranties of L/C Banks...................14

SECTION 3.  Fees; Commitments................................................14

         3.01  Fees..........................................................14
         3.02  Voluntary Reduction of Commitments............................15
         3.03  Mandatory Reductions of Commitments...........................15

SECTION 4.  Payments.........................................................16

         4.01  Voluntary Prepayments.........................................16
         4.02  Mandatory Repayments and Prepayments..........................16
         4.03  Method and Place of Payment...................................19
         4.04  Net Payments..................................................20

SECTION 5.  Conditions Precedent.............................................21

         5.01  Execution of Agreement........................................22
         5.02  No Default; Representations and Warranties....................22

<PAGE>

         5.03  Officer's Certificate.........................................22
         5.04  Opinions of Counsel...........................................22
         5.05  Corporate Proceedings.........................................22
         5.06  Adverse Change, etc...........................................23
         5.07  Litigation....................................................23
         5.08  Subsidiary Guaranty...........................................23
         5.09  Consummation of the LaSalle Business Combination..............23
         5.10  The Original Credit Agreement.................................23
         5.11  Financial Statements; Projections.............................24
         5.12  Approvals, etc................................................25
         5.13  Indebtedness..................................................25
         5.14  Payment of Fees...............................................25
         5.15  Letter of Credit Request; Notice of Borrowing.................25
         5.16  Capital Structure.............................................26
         5.17  Solvency Certificate..........................................26
         5.18  A.M. Best Rating..............................................26
         5.19  Holdings Guaranty.............................................26

SECTION 6.  Representations, Warranties and Agreements.......................26

SECTION 7.  Affirmative Covenants............................................27

SECTION 8.  Negative Covenants...............................................27

SECTION 9.  Events of Default................................................27

         9.01  Payments......................................................27
         9.02  Representations, etc..........................................27
         9.03  Covenants.....................................................27
         9.04  Default Under Other Agreements................................27
         9.05  Bankruptcy, etc...............................................28
         9.06  ERISA.........................................................28
         9.07  Guaranties....................................................29
         9.08  Judgments.....................................................29
         9.09  Change of Control.............................................30
         9.10  Senior Unsecured Debt Ratings.................................30
         9.11  A.M. Best Ratings.............................................30

SECTION 10.  Definitions.....................................................30

SECTION 11.  The Administrative Agent........................................30

         11.01  Appointment..................................................30
         11.02  Delegation of Duties.........................................31
         11.03  Exculpatory Provisions.......................................31
         11.04  Reliance by Administrative Agent.............................32

<PAGE>

         11.05  Notice of Default............................................32
         11.06  Non-Reliance.................................................32
         11.07  Indemnification..............................................33
         11.08  The Administrative Agent in its Individual Capacity..........33
         11.09  Successor Administrative Agent...............................33
         11.10  Other Agents.................................................34

SECTION 12.  Trenwick America Guaranty.......................................34

         12.01  The Trenwick America Guaranty................................34
         12.02  Bankruptcy...................................................34
         12.03  Nature of Liability..........................................34
         12.04  Trenwick America Guaranty Absolute...........................35
         12.05  Independent Obligation.......................................35
         12.06  Authorization................................................35
         12.07  Reliance.....................................................36
         12.08  Subordination................................................36
         12.09  Waivers......................................................36
         12.10  Trenwick America Guaranty Continuing.........................37
         12.11  Binding Nature of Guaranties.................................37
         12.12  Judgments Binding............................................38

SECTION 13.  Miscellaneous...................................................38

         13.01  Payment of Expenses, etc.....................................38
         13.02  Right of Setoff..............................................38
         13.03  Notices......................................................39
         13.04  Benefit of Agreement.........................................39
         13.05  No Waiver; Remedies Cumulative...............................41
         13.06  Payments Pro Rata............................................42
         13.07  Computations.................................................42
         13.08  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.............43
         13.09  Counterparts.................................................44
         13.10  Effectiveness................................................44
         13.11  Headings Descriptive.........................................45
         13.12  Amendment or Waiver..........................................45
         13.13  Survival.....................................................45
         13.14  Domicile of Loans............................................45
         13.15  Confidentiality..............................................45
         13.16  WAIVER OF JURY TRIAL.........................................46
         13.17  Judgment Currency............................................46
         13.18  Euro.........................................................47

<PAGE>

SCHEDULE I          --     Definitions

ANNEX I             --     List of Banks and Commitments
ANNEX II            --     Bank Addresses

EXHIBIT A-1         --     Form of Notice of Borrowing
EXHIBIT A-2         --     Form of Letter of Credit Request
EXHIBIT B           --     Form of Letter of Credit
EXHIBIT C-1         --     Legal Opinion of Appleby, Spurling & Kempe
EXHIBIT C-2         --     Legal Opinion of Conyers Dill & Pearman
EXHIBIT C-3         --     Legal Opinion of Baker & McKenzie
EXHIBIT C-4         --     Legal Opinion of Lovells
EXHIBIT C-5         --     Legal Opinion of John V. Del Col
EXHIBIT C-6         --     Legal Opinion of White & Case LLP
EXHIBIT D           --     Form of Officer's Certificate
EXHIBIT E           --     Form of Section 4.04(b)(ii) Certificate
EXHIBIT F           --     Subsidiary Guaranty
EXHIBIT G           --     Form of Solvency Certificate
EXHIBIT H           --     Form of Assignment and Assumption Agreement
EXHIBIT I           --     Holdings Guaranty

<PAGE>

                  CREDIT  AGREEMENT,  dated as of November  24, 1999 and amended
and restated as of September 27, 2000,  among TRENWICK  AMERICA  CORPORATION,  a
Delaware  corporation  (hereinafter  referred  to as the  "Borrower"),  TRENWICK
HOLDINGS LIMITED,  a company organized under the laws of the United Kingdom (the
"Account Party"),  the lending  institutions listed from time to time on Annex I
hereto (each a "Bank" and,  collectively,  the  "Banks"),  FIRST UNION  NATIONAL
BANK, as Syndication  Agent (the "Syndication  Agent"),  FLEET NATIONAL BANK, as
Documentation Agent (the "Documentation Agent") and THE CHASE MANHATTAN BANK, as
Administrative  Agent (the  "Administrative  Agent").  Unless otherwise  defined
herein,  all  capitalized  terms used  herein and defined in Section 10 are used
herein as so defined.

                              W I T N E S S E T H:
                               - - - - - - - - - -

                  WHEREAS,   Trenwick   Group  Inc.,   a  Delaware   corporation
("Trenwick"), the Original Banks, the Syndication Agent, the Documentation Agent
and the  Administrative  Agent  are  party  to a Credit  Agreement,  dated as of
November 24, 1999 (as the same has been amended,  modified or  supplemented  to,
but  not  including,  the  Restatement  Effective  Date,  the  "Original  Credit
Agreement"); and

                  WHEREAS,  on March 20, 2000,  Trenwick entered into an Amended
and Restated  Agreement,  Schemes of Arrangement and Plan of Reorganization (the
"Business  Combination  Agreement") with LaSalle Re Holdings Limited,  a company
organized under the laws of Bermuda ("LaSalle Re Holdings"), LaSalle Re Limited,
a company  organized under the laws of Bermuda ("LaSalle Re") and Trenwick Group
Ltd.  (formerly  known as  Gowin  Holdings  International  Limited),  a  company
organized under the laws of Bermuda ("Holdings"); and

                  WHEREAS,  pursuant to the Business Combination Agreement,  (i)
the assets and  liabilities of Trenwick  shall be transferred to Holdings,  (ii)
the Borrower, the Account Party, certain other subsidiaries of Trenwick, LaSalle
Re Holdings and LaSalle Re shall become  Subsidiaries  of Holdings and (iii) all
of the common  stock of  Trenwick  and  LaSalle Re  Holdings  and certain of the
non-voting common stock of LaSalle Re shall be exchanged for the common stock of
Holdings (such transactions,  collectively, the "LaSalle Business Combination");
and

                  WHEREAS,  the  parties  hereto  wish to amend and  restate the
Original  Credit  Agreement  to,  inter alia,  (i)  substitute  the Borrower for
Trenwick as the borrower  under the  revolving  credit  facility in the Original
Credit Agreement,  (ii) substitute the Account Party for Trenwick as the account
party under the letter of credit  facility  in the  Original  Credit  Agreement,
(iii) add Holdings and the  Borrower as  guarantors  and (iv) permit the LaSalle
Business Combination; and

                  WHEREAS,  subject  to and upon the  terms and  conditions  set
forth  herein,  the Banks are willing to make  available to the Borrower and the
Account Party the credit facilities provided for herein;

                                       1
<PAGE>

                  NOW,  THEREFORE,  the parties  hereto  agree that the Original
Credit  Agreement shall be and is hereby amended and restated in its entirety as
follows:

                  NOW, THEREFORE, IT IS AGREED:

                  SECTION 1.  Revolving Credit Facility.
                              -------------------------

                  1.01  Commitments.  (a)  Subject  to and  upon the  terms  and
conditions  herein set forth,  each Bank  severally  agrees at any time and from
time to time on and  after  the  Restatement  Effective  Date  and  prior to the
Conversion  Date, to make a revolving loan or revolving loans (each a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Borrower, which Revolving
Loans (i) may be made and  maintained in such Approved  Currency as is requested
by the Borrower (except that Base Rate Loans may only be denominated in Dollars)
and (ii) shall, at the option of the Borrower,  be Base Rate Loans or Eurodollar
Loans,  provided  that all  Revolving  Loans made as part of the same  Borrowing
shall, unless otherwise specifically provided herein, consist of Revolving Loans
of the same Type,  (iii) may be repaid and  reborrowed  in  accordance  with the
provisions  hereof,  (iv) shall not exceed for any Bank at any time  outstanding
that aggregate  Principal  Amount which equals the Revolving Loan  Commitment of
such  Bank at such  time and (v)  shall  not  exceed  for all  Banks at any time
outstanding  that aggregate  Principal  Amount which equals the Total  Revolving
Loan Commitment at such time.

                  (b)  Subject  to and upon the terms and  conditions  set forth
herein, the Borrower and each Bank which has Revolving Loans outstanding at such
time  agree  that at 9:00  A.M.  (New York  time) on the  Conversion  Date,  the
aggregate principal amount of Revolving Loans owing to such Bank and outstanding
at such time shall  (unless  such  Revolving  Loans have been  declared (or have
become) due and payable pursuant to this Credit  Agreement),  without any notice
or action by any party,  automatically convert to and thereafter constitute Term
Loans  owing to such Bank  hereunder.  The Term  Loans of each Bank (i) shall be
made and  thereafter  maintained  in the same  currencies  in which the  related
Revolving Loans were  denominated as of the Conversion  Date, (ii) shall, at the
option of the Borrower,  be Base Rate Loans or Eurodollar  Loans,  provided that
(A) Base Rate Loans may only be  denominated  in Dollars  and (B) all Term Loans
comprising the same Borrowing  shall,  unless  otherwise  specifically  provided
herein,  consist  of Term  Loans of the same Type and (iii)  shall not exceed in
initial  Principal  Amount  for such  Bank an  amount  which  equals  the  total
Principal   Amount  of  Revolving  Loans  owed  to  such  Bank  and  outstanding
immediately  prior to the Conversion  Date.  Once repaid,  Term Loans may not be
reborrowed.

                  1.02  Minimum  Amount  of Each  Borrowing;  Maximum  Number of
Borrowings. The aggregate Principal Amount of each Borrowing hereunder shall not
be less  than the  Minimum  Borrowing  Amount.  More than one  Borrowing  may be
incurred on any day;  provided that at no time shall there be  outstanding  more
than five Borrowings of Eurodollar Loans.

                                      -2-
<PAGE>

                  1.03 Notice of Borrowing of Revolving  Loans. (a) Whenever the
Borrower  desires to incur  Revolving  Loans,  it shall give the  Administrative
Agent at its Notice  Office,  (x) prior to 11:00 A.M. (New York time),  at least
three  Business  Days'  prior  written  notice (or  telephonic  notice  promptly
confirmed in writing) of each  Borrowing  of  Eurodollar  Loans in Dollars,  (y)
prior to 1:00 P.M. (New York time) at least four Business Days' prior written of
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans  constituting  Alternate  Currency Loans and (z) prior to 11:00
A.M.  (New York  time) at least one  Business  Day's  prior  written  notice (or
telephone  notice  promptly  confirmed in writing)  each  Borrowing of Base Rate
Loans.  Each such notice (each, a "Notice of Borrowing") shall be in the form of
Exhibit  A-1 and  shall be  irrevocable  and  shall  specify  (i) in the case of
Alternate  Currency  Loans,  the  Approved  Currency  for such  Loans,  (ii) the
aggregate  principal  amount of the Revolving  Loans to be made pursuant to such
Borrowing  (stated  in the  applicable  Approved  Currency),  (iii)  the date of
Borrowing  (which  shall be a  Business  Day) and (iv)  whether  the  respective
Borrowing   shall  consist  of  Base  Rate  Loans  or  Eurodollar   Loans.   The
Administrative Agent shall promptly give each Bank written notice (or telephonic
notice promptly confirmed in writing) of each proposed Borrowing, of the portion
thereof to be funded by such Bank and of the other matters covered by the Notice
of Borrowing.

                  (b) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative  Agent may prior to receipt of written  confirmation  act without
liability upon the basis of such telephonic notice, believed by it in good faith
to be from an  Authorized  Officer  of the  Borrower.  In each  such  case,  the
Borrower hereby waives the right to dispute the Administrative Agent's record of
the terms of such telephonic notice absent manifest error.

                  1.04  Disbursement of Funds. (a) No later than 11:00 A.M. (New
York time) on the date  specified  in each Notice of  Borrowing,  each Bank will
make  available its pro rata share,  if any, of such  Borrowing  requested to be
made  on  such  date.   All  such  amounts  shall  be  made   available  to  the
Administrative Agent in the relevant Approved Currency and immediately available
funds at the Payment Office and the Administrative  Agent will make available to
the Borrower by  depositing to the account  designated  by the  Borrower,  which
account shall be at an institution  in the same city as the  respective  Payment
Office,  the  aggregate  of the amounts so made  available  in the type of funds
received.  Unless the Administrative  Agent shall have been notified by any Bank
participating  in a Borrowing prior to the date of such Borrowing that such Bank
does not intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date,  the  Administrative  Agent may
assume that such Bank has made such amount available to the Administrative Agent
on such date of Borrowing,  and the Administrative  Agent, in reliance upon such
assumption,  may (in its sole  discretion  and without any  obligation to do so)
make available to the Borrower a  corresponding  amount.  If such  corresponding
amount is not in fact made  available to the  Administrative  Agent by such Bank
and the  Administrative  Agent  has made  available  same to the  Borrower,  the
Administrative Agent shall be entitled to recover such corresponding amount from
such Bank. If such Bank does not pay such  corresponding  amount  forthwith upon
the  Administrative  Agent's demand  therefor,  the  Administrative  Agent shall
promptly notify the Borrower in writing or by telephone  (promptly  confirmed in
writing),  and the Borrower shall immediately pay such  corresponding  amount to
the  Administrative  Agent. The  Administrative  Agent shall also be entitled to
recover on demand from such Bank or the Borrower,  as the case may be,  interest
on such  corresponding  amount  in  respect  of each  day  from  the  date  such
corresponding  amount  was made  available  by the  Administrative  Agent to the
Borrower  to  the  date  such   corresponding   amount  is   recovered   by  the
Administrative Agent, at a rate per annum equal to (x) if paid by such Bank, the
overnight Federal Funds Effective Rate or (y) if paid by the Borrower,  the then
applicable rate of interest, calculated in accordance with Section 1.08, for the
type of respective Loans which were required to be repaid.

                                      -3-
<PAGE>

                  (b)  Nothing  herein  shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice rights which
the  Borrower  may have against any Bank as a result of any default by such Bank
hereunder.

                  1.05 Register.  (a) The Administrative  Agent shall maintain a
register for the  recordation  of the  Revolving  Loan  Commitments  and the L/C
Commitments of the Banks from time to time and,  after the  Conversion  Date has
occurred,  the  principal  amount  of the Term  Loans  owing to each  Bank  (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes,  absent manifest error. The Register shall be available for inspection
by the Borrower,  the Account Party or any Bank at any reasonable  time and from
time to time upon reasonable prior notice.

                  (b) The  Borrower  hereby  agrees to provide a Note,  promptly
upon the request of any Bank, to the extent such Bank has requested such Note in
connection with any pledge or assignment by such Bank of any or all of its Loans
hereunder to a Federal Reserve Bank.

                  1.06  Conversions.  The  Borrower  shall  have the  option  to
convert on any Business Day occurring on or after the Restatement Effective Date
all or a portion at least equal to the applicable  Minimum  Borrowing  Amount of
its outstanding Loans denominated in a single Approved Currency and constituting
Base Rate Loans or  Eurodollar  Loans into a Borrowing  or  Borrowings  of Loans
denominated in such Approved Currency and constituting  Eurodollar Loans or Base
Rate Loans,  respectively,  provided that (i) Eurodollar Loans  denominated in a
currency other than Dollars may not be converted  into Base Rate Loans,  (ii) no
partial  conversion  shall  reduce  the  outstanding  principal  amount  of  the
Eurodollar Loans made pursuant to a Borrowing to less than the Minimum Borrowing
Amount  applicable  thereto,  (iii)  Base Rate Loans may not be  converted  into
Eurodollar  Loans when a Default or Event of Default is then in existence if the
Administrative Agent or the Required Banks shall have determined in its or their
sole  discretion not to permit such conversion and (iv) Borrowings of Eurodollar
Loans resulting from this Section 1.06 shall be limited in number as provided in
Section 1.02. Each such conversion  shall be effected by the Borrower giving the
Administrative  Agent at the Notice Office, prior to 11:00 A.M. (New York time),
at least three  Business  Days' (or one Business Day in the case of a conversion
into Base Rate  Loans)  prior  written  notice (or  telephonic  notice  promptly
confirmed in writing) (each, a "Notice of  Conversion")  specifying the Loans to
be so converted,  the Type of Loans (as to interest option) to be converted into
and, if to be  converted  into a Borrowing  of  Eurodollar  Loans,  the Interest
Period to be initially  applicable thereto.  The Administrative Agent shall give
each Bank prompt  notice of any such  proposed  conversion  affecting any of its
Loans.

                  1.07 Pro Rata Borrowings. All Revolving Loans under the Credit
Agreement  shall be made by the Banks  pro rata on the basis of their  Revolving
Loan  Commitments.  It is understood  that no Bank shall be responsible  for any
default by any other Bank in its  obligation  to make Loans  hereunder  and that
each  Bank  shall be  obligated  to make  the  Loans  provided  to be made by it
hereunder,  regardless  of  the  failure  of  any  other  Bank  to  fulfill  its
commitments hereunder.

                                      -4-
<PAGE>

                  1.08 Interest.  (a) The unpaid  principal  amount of each Base
Rate Loan shall bear interest  from the date of the Borrowing  thereof until the
earlier of (i) the maturity  (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the  conversion  of such Base Rate Loan to a Eurodollar  Loan
pursuant to Section  1.06, at a rate per annum which shall at all times be equal
to the  Applicable  Margin then in effect for Base Rate Loans plus the Base Rate
in effect from time to time.

                  (b) The unpaid  principal amount of each Eurodollar Loan shall
bear interest  from the date of the  Borrowing  thereof until the earlier of (i)
the maturity  (whether by  acceleration or otherwise) of such Eurodollar Loan or
(ii) the  conversion  of such  Eurodollar  Loan to a Base Rate Loan  pursuant to
Section  1.06,  at a rate per  annum  which  shall at all  times be equal to the
Applicable  Margin then in effect for  Eurodollar  Loans plus the relevant LIBOR
for the Interest Period applicable to such Eurodollar Loan.

                  (c) Overdue  principal  and, to the extent  permitted  by law,
overdue  interest in respect of each Loan and any other overdue  amount  payable
hereunder  shall  bear  interest  at a rate per annum  equal to the Base Rate in
effect from time to time plus the sum of (i) 2% and (ii) the  Applicable  Margin
then in effect for Base Rate Loans;  provided that  Eurodollar  Loans shall bear
interest after maturity  (whether by acceleration or otherwise) until the end of
the applicable  Interest Period at a rate per annum equal to 2% in excess of the
rate of interest then applicable thereto.

                  (d) Interest  shall accrue from and  including the date of any
Borrowing  to but  excluding  the date of any  repayment  thereof  and  shall be
payable (i) in respect of each Base Rate Loan,  quarterly in arrears on the last
Business Day of each calendar quarter,  (ii) in respect of each Eurodollar Loan,
the last day of each Interest Period  applicable  thereto and, in the case of an
Interest  Period of six months,  on the date  occurring  three  months after the
first day of such  Interest  Period and (iii) in  respect  of each Loan,  on any
conversion  or prepayment  (on the amount so converted or prepaid),  at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.

                  (e)      All computations of  interest hereunder shall be made
in accordance with Section 13.07(a) and (b).

                  (f) The  Administrative  Agent,  upon determining the interest
rate for any  Borrowing  of  Eurodollar  Loans for any  Interest  Period,  shall
promptly notify the Borrower and the Banks thereof.

                  1.09 Interest Periods. At the time the Borrower gives a Notice
of Borrowing or Notice of  Conversion in respect of the making of, or conversion
into,  a Borrowing  of  Eurodollar  Loans (in the case of the  initial  Interest
Period  applicable  thereto) or prior to 11:00 A.M. (New York time) on the third
Business  Day prior to the  expiration  of an Interest  Period  applicable  to a
Borrowing of  Eurodollar  Loans,  it shall have the right to elect by giving the
Administrative  Agent written notice (or telephonic notice promptly confirmed in
writing)  of the  Interest  Period to be  applicable  to such  Borrowing,  which
Interest  Period shall,  at the option of the Borrower,  be a one, two, three or
six month period. Notwithstanding anything to the contrary contained above:

                                      -5-
<PAGE>

                 (i) the initial Interest Period for any Borrowing of Eurodollar
         Loans shall commence on the date of such Borrowing  (including the date
         of any  conversion  from a  Borrowing  of Base  Rate  Loans)  and  each
         Interest Period occurring thereafter in respect of such Borrowing shall
         commence  on the  day on  which  the  next  preceding  Interest  Period
         expires;

                (ii) if any Interest  Period  begins on a day for which there is
         no  numerically  corresponding  day in the calendar month at the end of
         such  Interest  Period,  such  Interest  Period  shall  end on the last
         Business Day of such calendar month;

               (iii) if any  Interest  Period  would  otherwise  expire on a day
         which is not a Business Day,  such Interest  Period shall expire on the
         next  succeeding  Business Day,  provided  that if any Interest  Period
         would  otherwise  expire on a day which is not a Business  Day but is a
         day of the month  after  which no further  Business  Day occurs in such
         month, such Interest Period shall expire on the next preceding Business
         Day;

                (iv) no  Interest  Period  may be  elected  at any  time  when a
         Default or Event of Default is then in existence if the  Administrative
         Agent or the Required Banks shall have  determined in its or their sole
         discretion not to permit such Interest Period;

                 (v)     no Interest Period  shall  extend  beyond the Term Loan
         Maturity Date; and

                (vi) no Interest  Period with  respect to any  Borrowing of Term
         Loans may be  elected  that would  extend  beyond any date upon which a
         mandatory  repayment of Term Loans is required to be made under Section
         4.02(i)(a)  if, after giving  effect to the  selection of such Interest
         Period,  the  aggregate  principal  amount of Term Loans  maintained as
         Eurodollar  Loans with  Interest  Periods  ending after such date would
         exceed the  aggregate  principal  amount of Term Loans  permitted to be
         outstanding after such mandatory repayment.

If upon the expiration of any Interest  Period,  the Borrower has failed,  or is
not permitted, to elect a new Interest Period to be applicable to the respective
Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to
have  elected to convert  such  Borrowing  into a  Borrowing  of Base Rate Loans
effective as of the expiration date of such current  Interest  Period;  provided
that if such Eurodollar  Loans are denominated in a currency other than Dollars,
then such  Eurodollar  Loans  shall  not  convert  to Base Rate  Loans but shall
instead be prepaid by the Borrower on the last day of such Interest Period.

                  1.10 Increased Costs,  Illegality,  etc. (a) In the event that
(x) in the case of clause (i) or (iv) below, the Administrative  Agent or (y) in
the case of clauses (ii) and (iii) below, any Bank shall have determined  (which
determination  shall, absent manifest error, be final and conclusive and binding
upon all parties hereto,  provided that such determination has been made in good
faith):

                 (i) on any date for  determining  any  LIBOR  for any  Interest
         Period,  that, by reason of any changes  arising after the  Restatement
         Effective Date affecting the interbank Eurodollar market,  adequate and
         fair means do not exist for ascertaining  the applicable  interest rate
         on the basis provided for in the definition of the respective LIBOR; or

                                      -6-
<PAGE>

                (ii) at any time,  that such Bank shall incur increased costs or
         reductions in the amounts received or receivable hereunder with respect
         to any Eurodollar  Loans (other than any increased cost or reduction in
         the amount received or receivable resulting from the imposition of or a
         change  in the rate of taxes or  similar  charges)  because  of (x) any
         change since the  Restatement  Effective  Date in any  applicable  law,
         governmental rule, regulation,  guideline, order or request (whether or
         not  having   the  force  of  law),   or  in  the   interpretation   or
         administration thereof and including the introduction of any new law or
         governmental rule,  regulation,  guideline,  order or request (such as,
         for  example,  but  not  limited  to,  a  change  in  official  reserve
         requirements,  but, in all events,  excluding  reserves  required under
         Regulation  D  to  the  extent  included  in  the  computation  of  the
         respective LIBOR) and/or (y) other circumstances  materially  affecting
         the interbank Eurodollar market generally; or

               (iii)  at  any  time,  that  the  making  or  continuance  of any
         Eurodollar  Loan has become unlawful due to the compliance by such Bank
         in good faith with any change since the  Restatement  Effective Date in
         any law,  governmental  rule,  regulation,  guideline or order,  or the
         interpretation  or  application  thereof,  or would  conflict  with any
         thereof  not  having  the  force  of  law  but  with  which  such  Bank
         customarily  complies,  or has  become  impracticable  as a result of a
         contingency  occurring  after  the  Restatement  Effective  Date  which
         materially adversely affects the interbank Eurodollar market; or

                (iv) at any time that any Alternate Currency is not available in
         sufficient  amounts,  as determined in good faith by the Administrative
         Agent,  to fund any Borrowing of Loans  denominated  in such  Alternate
         Currency;

then, and in any such event, such Bank (or the Administrative  Agent in the case
of clause (i) or (iv)  above)  shall (x) on such date and (y) within 10 Business
Days of the date on which such event no longer  exists give notice (by telephone
confirmed in writing) to the Borrower and, except in the case of clauses (i) and
(iv) above, to the Administrative  Agent of such determination (which notice the
Administrative  Agent  shall  promptly  transmit  to each of the  other  Banks).
Thereafter  (w) in the case of clause (i)  above,  Eurodollar  Loans,  priced in
respect of the affected  LIBOR,  shall no longer be available until such time as
the  Administrative   Agent  notifies  the  Borrower  and  the  Banks  that  the
circumstances  giving rise to such notice by the Administrative  Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with  respect to  Eurodollar  Loans  which have not yet been  incurred  shall be
deemed  rescinded  by the  Borrower  or, in the case of a Notice  of  Borrowing,
shall,  at the  option of the  Borrower,  be deemed  converted  into a Notice of
Borrowing  for Base Rate Loans to be made on the date of Borrowing  contained in
such Notice of  Borrowing,  (x) in the case of clause (ii) above,  the  Borrower
shall  pay to such  Bank,  within  10  days of its  receipt  of  written  demand
therefor,  such  additional  amounts (in the form of an increased  rate of, or a
different  method of  calculating,  interest  or  otherwise  as such Bank  shall
determine) as shall be required to compensate such Bank for such increased costs
or  reductions  in amounts  receivable  hereunder  (a  written  notice as to the
additional  amounts  owed to such Bank,  showing  the basis for the  calculation

                                      -7-
<PAGE>

thereof, which basis shall be reasonable and consistently applied,  submitted to
the Borrower by such Bank shall,  absent manifest error, be final and conclusive
and binding upon all parties hereto), (y) in the case of clause (iii) above, the
Borrower shall take one of the actions  specified in Section 1.10(b) as promptly
as possible and, in any event, within the time period required by applicable law
and (z) in the  case of  clause  (iv)  above,  Loans in the  affected  Alternate
Currency  shall no longer be  available  until  such time as the  Administrative
Agent notifies the Borrower and the Banks that the circumstances  giving rise to
such  notice by the  Administrative  Agent no longer  exist in  accordance  with
clause (y) of the preceding  sentence,  and any Notice of Borrowing or Notice of
Conversion  given by a Borrower with respect to such  Alternate  Currency  Loans
which have not yet been incurred shall be deemed rescinded by the Borrower.

                  (b) At any time that any  Eurodollar  Loan is  affected by the
circumstances  described in Section  1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected  pursuant to Section  1.10(a)(iii) the
Borrower  shall) either (i) if the affected  Eurodollar  Loan is then being made
pursuant to a Borrowing,  by giving the  Administrative  Agent telephonic notice
(confirmed  promptly in writing)  thereof on the same date that the Borrower was
notified in writing by a Bank pursuant to Section  1.10(a)(ii) or (iii),  cancel
said  Borrowing,  convert the related  Notice of Borrowing into one requesting a
Borrowing of Base Rate Loans or require the affected  Bank to make its requested
Loan  as a Base  Rate  Loan,  or (ii) if the  affected  Eurodollar  Loan is then
outstanding,  upon at least three  Business  Days' notice to the  Administrative
Agent, (A) in the case of a Eurodollar Loan denominated in Dollars,  require the
affected Bank to convert each such  Eurodollar  Loan into a Base Rate Loan,  and
(B) in the case of a Eurodollar Loan denominated in an Alternate Currency, repay
all  such  Eurodollar  Loans  in full,  provided  that if more  than one Bank is
affected at any time, then all affected Banks must be treated in the same manner
pursuant to this Section 1.10(b).

                  (c)  If  any  Bank  shall  have   determined  that  after  the
Restatement  Effective Date the adoption or effectiveness of any applicable law,
rule or regulation  regarding  capital adequacy,  or any change therein,  or any
change in the  interpretation  or  administration  thereof  by any  Governmental
Authority,   central  bank  or  comparable   agency  charged  by  law  with  the
interpretation  or  administration  thereof,  or  compliance by such Bank or its
parent  corporation  with any request or directive  regarding  capital  adequacy
(whether  or not  having the force of law) of any such  Governmental  Authority,
central  bank  or  comparable  agency,  in  each  case  made  subsequent  to the
Restatement Effective Date, has or would have the effect of reducing the rate of
return  on such  Bank's  or its  parent  corporation's  capital  or  assets as a
consequence of such Bank's commitments or obligations hereunder to a level below
that which such Bank or its parent  corporation could have achieved but for such
adoption,  effectiveness,  change or compliance  (taking into consideration such
Bank's or its parent  corporation's  policies with respect to capital adequacy),
then from time to time,  the  Borrower  shall  within 10 days of its  receipt of
written demand by such Bank (with a copy to the  Administrative  Agent),  pay to
such Bank such additional  amount or amounts as will compensate such Bank or its
parent corporation for such reduction. Each Bank, upon determining in good faith
that any additional  amounts will be payable  pursuant to this Section  1.10(c),
will give prompt written notice thereof to the Borrower,  which notice shall set
forth in  reasonable  detail  the basis of the  calculation  of such  additional
amounts,  which basis must be reasonable and consistently applied,  although the
failure  to give any such  notice  shall  not  release  or  diminish  any of the
Borrower's  obligations  to pay  additional  amounts  pursuant  to this  Section
1.10(c) upon the subsequent receipt of such notice.

                                      -8-
<PAGE>

                  1.11  Compensation.  The Borrower shall  compensate each Bank,
upon its written request (which request shall set forth the basis for requesting
such  compensation),   for  all  reasonable  losses,  expenses  and  liabilities
(including,  without  limitation,  any loss,  expense or  liability  incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Bank to fund its  Eurodollar  Loans but excluding  any loss of  anticipated
profit with respect to such Loans)  which such Bank may sustain:  (i) if for any
reason  (other  than a  default  by such  Bank or the  Administrative  Agent)  a
Borrowing of Eurodollar  Loans does not occur on a date specified  therefor in a
Notice of Borrowing  or Notice of  Conversion  (whether or not  withdrawn by the
Borrower  or  deemed  withdrawn  pursuant  to  Section  1.10(a));  (ii)  if  any
repayment,  prepayment or conversion of any of its Eurodollar  Loans occurs on a
date which is not the last day of an Interest Period applicable  thereto;  (iii)
if any  prepayment  of any of its  Eurodollar  Loans  is not  made  on any  date
specified  in a  notice  of  prepayment  given  by the  Borrower;  or  (iv) as a
consequence  of (x) any other  failure by the  Borrower  to repay its Loans when
required by the terms of this Credit  Agreement or (y) an election made pursuant
to Section  1.10(b).  Calculation  of all  amounts  payable to a Bank under this
Section 1.11 shall be made as though that Bank had actually  funded its relevant
Eurodollar Loan through the purchase of a Eurodollar deposit bearing interest at
the  relevant  LIBOR in an amount  equal to the  amount of that  Loan,  having a
maturity  comparable to the relevant Interest Period and through the transfer of
such Eurodollar  deposit from an offshore office of that Bank or other bank to a
domestic office of that Bank in the United States of America; provided, however,
that each Bank may fund each of its  Eurodollar  Loans in any manner it sees fit
and the  foregoing  assumption  shall be utilized  only for the  calculation  of
amounts payable under this Section 1.11.

                  1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section  1.10(a)(ii)  or
(iii) or Section  4.04 with respect to such Bank,  it will,  if requested by the
Borrower,  use reasonable  efforts (subject to overall policy  considerations of
such Bank) to designate  another  lending  office for any Loans affected by such
event; provided that such designation is made on such terms that, in the opinion
of such Bank,  such Bank and its lending  office  suffer no  economic,  legal or
regulatory  disadvantage,  with the object of avoiding  the  consequence  of the
event giving rise to the operation of any such Section.  Nothing in this Section
1.12 shall  affect or postpone  any of the  obligations  of the  Borrower or the
right of any Bank provided in Section 1.10 or 4.04.

                  1.13   Replacement  of  Banks.  (x)  If  any  Bank  becomes  a
Defaulting  Bank or (y) upon the  occurrence  of any  event  giving  rise to the
operation of Section 1.10(a)(ii) or (iii),  Section 1.10(c) or Section 4.04 with
respect  to any  Bank  which  results  in such  Bank  charging  to the  Borrower
increased costs in excess of those being  generally  charged by the other Banks,
the  Borrower  shall  have the right,  if no  Default  or Event of Default  then
exists,  to replace such Bank (the "Replaced Bank") with one or more other banks
or financial  institutions,  none of whom shall  constitute a Defaulting Bank at
the time of such replacement  (collectively,  the "Replacement Bank") reasonably
acceptable  to the  Administrative  Agent,  provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Bank shall enter into
one or more Assignment and Assumption  Agreements  pursuant to Section  13.04(b)
(and with all fees payable  pursuant to said Section  13.04(b) to be paid by the

                                      -9-
<PAGE>

Replacement  Bank) pursuant to which the  Replacement  Bank shall acquire all of
the Revolving Loan  Commitments (if prior to the Conversion Date) and all of the
L/C Commitments  and all of the  outstanding  Loans of the Replaced Bank and, in
connection  therewith,  shall pay to the  Replaced  Bank in  respect  thereof an
amount  equal  to (A)  the  principal  of,  and all  accrued  interest  on,  all
outstanding  Loans of the Replaced  Bank plus (B) all accrued,  but  theretofore
unpaid,  Fees owing to the Replaced Bank pursuant to Section 3.01,  and (ii) all
obligations  (including,  without limitation,  all such amounts, if any, due and
owing under  Section  1.11) of the Borrower  due and owing to the Replaced  Bank
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement.  Upon the
execution of the respective Assignment and Assumption Agreement,  the payment of
amounts  referred to in clauses (i) and (ii) above,  the Replacement  Bank shall
become a Bank  hereunder  and the Replaced Bank shall cease to constitute a Bank
hereunder,  except with respect to indemnification  provisions under this Credit
Agreement (including,  without limitation,  Sections 1.10, 1.11, 4.04, 11.07 and
13.01), which shall survive as to such Replaced Bank.

                  SECTION 2. Letter of Credit Facility.

                  2.01 Letters of Credit.  (a) Subject to and upon the terms and
conditions  herein set forth, the Account Party may request the Issuing Agent at
any time and from time to time on or after the Restatement Effective Date and on
or prior to the L/C  Issuance  Expiration  Date to  issue,  for the  benefit  of
Lloyd's and in support of, on a standby basis, L/C Supportable Obligations,  and
subject to and upon the terms and conditions  herein set forth the Issuing Agent
agrees to issue at any time and from  time to time on or after  the  Restatement
Effective Date and on or prior to the L/C Issuance  Expiration Date, one or more
irrevocable standby letters of credit in the form of Exhibit B (each such letter
of credit,  a "Letter of Credit"  and,  collectively,  the "Letters of Credit").
Notwithstanding the foregoing, the Issuing Agent shall be under no obligation to
issue any Letter of Credit if at the time of such issuance:

                 (i) any order, judgment or decree of any governmental authority
         or  arbitrator  shall  purport by its terms to enjoin or  restrain  the
         Issuing Agent or any L/C Bank from issuing such Letter of Credit or any
         requirement  of law  applicable to the Issuing Agent or any L/C Bank or
         any request or directive  (whether or not having the force of law) from
         any governmental  authority with jurisdiction over the Issuing Agent or
         any L/C Bank shall  prohibit,  or request that the Issuing Agent or any
         L/C Bank refrain from,  the issuance of letters of credit  generally or
         such Letter of Credit in  particular  or shall  impose upon the Issuing
         Agent or any L/C  Bank  with  respect  to such  Letter  of  Credit  any
         restriction  or reserve or capital  requirement  (for which the Issuing
         Agent or any L/C Bank is not  otherwise  compensated)  not in effect on
         the date hereof,  or any  unreimbursed  loss, cost or expense which was
         not applicable, in effect or known to the Issuing Agent or any L/C Bank
         as of the date  hereof and which the  Issuing  Agent or any L/C Bank in
         good faith deems material to it; or

                (ii)     the conditions precedent set forth in Section 5 are not
         satisfied at that time.

                                      -10-
<PAGE>

                  (b) Each Letter of Credit will be issued by the Issuing  Agent
on behalf of the L/C Banks, and each L/C Bank will participate in each Letter of
Credit pro rata in accordance with its L/C  Percentage.  The obligations of each
L/C Bank  under and in respect of each  Letter of Credit  are  several,  and the
failure by any L/C Bank to perform its obligations hereunder or under any Letter
of Credit shall not affect the obligations of the Account Party toward any other
party  hereto nor shall any other  such party be liable for the  failure by such
L/C Bank to perform its obligations hereunder or under any Letter of Credit.

                  (c)  Notwithstanding  the foregoing,  (i) the aggregate Stated
Amount of each Letter of Credit shall not exceed an amount which,  when added to
the Letter of Credit  Outstandings at the time of issuance  thereof,  equals the
Total L/C  Commitment  at the time of issuance  thereof;  (ii) no L/C Bank's L/C
Exposure  shall exceed such L/C Bank's L/C Commitment at the time of issuance of
any Letter of Credit  (and after  giving  effect to such  issuance);  (iii) each
Letter of Credit (x) issued after the  Restatement  Effective  Date and prior to
the  Lloyd's  Coming in Line Date  occurring  in  November,  2000  shall have an
initial expiration date of December 31, 2004 and (y) issued thereafter but prior
to the Lloyd's  Coming in Line Date  occurring in November,  2001 (to the extent
permitted  to be issued  hereunder)  shall  have an initial  expiration  date of
December 31, 2005; (iv) each Letter of Credit may be denominated in any Approved
Currency as determined by the Account Party at the time of issuance, and payable
on a sight basis;  and (v) the Issuing Agent will not issue any Letter of Credit
after it has  received  notice  from the  Account  Party or the  Required  Banks
stating that any condition  precedent set forth in Section 5 is not satisfied at
that time until the Issuing  Agent shall have  received a written  notice of (x)
rescission of such notice from the party or parties  originally  delivering  the
same or (y) a waiver of such condition precedent by the Required Banks.

                  (d)  Subject  to and on the  terms  and  conditions  set forth
herein,  the Issuing Agent is hereby authorized by the Account Party and the L/C
Banks to arrange for the  issuance  of any Letter of Credit  pursuant to Section
2.01(a)  and the  amendment  of any Letter of Credit  pursuant  to Section  2.06
and/or 13.04(b) by:

                 (i)     completing the commencement date and the expiry date of
         such Letter of Credit;

                (ii)     (in the case of an amendment increasing or reducing the
         amount  thereof)  amending  such  Letter  of  Credit  in such manner as
         Lloyd's may agree;

               (iii)     completing  Schedule  1 to  such  Letter of Credit with
         the participation of each L/C Bank as allocated  pursuant to  the terms
         hereof; and

                (iv)  executing such Letter of Credit on behalf of each L/C Bank
         and  following  such  execution  delivering  such  Letter  of Credit to
         Lloyd's.

                  (e) Each L/C Bank hereby makes,  constitutes  and appoints the
Issuing  Agent its true and  lawful  attorney-in-fact,  in its  name,  place and
stead, giving the Issuing Agent full power to issue, amend and take other action
with respect to each Letter of Credit as contemplated by this Credit Agreement.

                                      -11-
<PAGE>

                  2.02  Letter of  Credit  Request;  Notices  of  Issuance.  (a)
Whenever  it desires a Letter of Credit to be issued,  the  Account  Party shall
give the Issuing Agent  written  notice that it desires such Letter of Credit to
be issued, which written notice shall be in the form of Exhibit A-2 (the "Letter
of Credit  Request").  The  Letter of Credit  Request  shall  include  any other
documents  as  the  Administrative  Agent  customarily  requires  in  connection
therewith.

                  (b) Upon its issuance of or amendment to any Letter of Credit,
the Issuing Agent shall  promptly  notify the Account Party and the L/C Banks of
such issuance or amendment,  which notice shall include a summary description of
the Letter of Credit actually issued and any amendments thereto.

                  2.03  Agreement  to Repay Letter of Credit  Payments.  (a) The
Account  Party  hereby  agrees to  reimburse  each L/C Bank,  by making  payment
directly to each L/C Bank in  immediately  available  funds,  for any payment or
disbursement  made by such L/C Bank under any Letter of Credit (each such amount
so paid or disbursed until  reimbursed,  an "Unpaid  Drawing") no later than one
Business Day following the date that the Borrower  receives notice in writing or
by  telephone  (promptly  confirmed in writing)  from the Issuing  Agent of such
payment or  disbursement,  with  interest on the amount so paid or  disbursed by
such L/C Bank to the extent not reimbursed prior to 1:00 P.M. (New York time) on
the date of such payment or  disbursement,  from and  including the date paid or
disbursed  to but not  including  the date  that  such  L/C  Bank is  reimbursed
therefor at a rate per annum which shall be the Applicable  Margin plus the Base
Rate as in effect  from  time to time  (plus an  additional  2% per annum if not
reimbursed by the third Business Day after the date the Borrower receives notice
from such L/C Bank of such payment or  disbursement),  such  interest also to be
payable on  demand,  provided  that if a Default  or an Event of  Default  under
Section 9.05 shall have occurred and be continuing,  such Unpaid  Drawings shall
be due and payable immediately without presentment, demand, protest or notice of
any kind (all of which are hereby  waived by the  Account  Party) and shall bear
interest at a rate per annum  which  shall be the Base Rate plus the  Applicable
Margin (plus an additional 2% on and after the third  Business Day following the
respective drawing).

                  (b) The Account Party's  obligation under this Section 2.03 to
reimburse  each L/C Bank with  respect to Unpaid  Drawings  (including,  in each
case,  interest thereon) shall be absolute and  unconditional  under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which  the  Account  Party  may  have or have had  against  such L/C Bank or the
Issuing Agent, including, without limitation, any defense based upon the failure
of any drawing under any Letter of Credit to substantially  conform to the terms
of such  Letter  of  Credit  or any  non-application  or  misapplication  by the
beneficiary of the proceeds of such drawing; provided, however, that the Account
Party shall not be obligated to reimburse any L/C Bank for any wrongful  payment
made by such L/C Bank under a Letter of Credit  issued by it as a result of acts
or omissions  constituting willful misconduct or gross negligence on the part of
such L/C Bank.

                                      -12-
<PAGE>

                  2.04 Increased Costs. If after the Restatement Effective Date,
the adoption or effectiveness of any applicable law, rule or regulation,  or any
change therein, or any change in the interpretation or administration thereof by
any Governmental  Authority,  central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any L/C Bank with any
request  or  directive  (whether  or not  having  the  force of law) by any such
Governmental  Authority,  central  bank or  comparable  agency  shall either (i)
impose,  modify or make  applicable any reserve,  deposit,  capital  adequacy or
similar  requirement  against  letters of credit issued by or participated in by
such L/C Bank,  or (ii) impose on such L/C Bank any other  conditions  affecting
this  Credit  Agreement  or any  Letter of Credit  and the  result of any of the
foregoing is to increase  the cost to such L/C Bank,  or to reduce the amount of
any sum received or  receivable  by such L/C Bank,  then from time to time,  the
Account Party shall within 10 days of its receipt of written  demand by such L/C
Bank  (with a copy  to the  Administrative  Agent)  pay to such  L/C  Bank  such
additional  amounts as will compensate such L/C Bank for such cost or reduction.
Each L/C Bank, upon  determining in good faith that any additional  amounts will
be payable  pursuant  to this  Section  2.04,  will give prompt  written  notice
thereof to the Account Party,  which notice shall set forth in reasonable detail
the basis of the  calculation of such  additional  amounts,  which basis must be
reasonable and  consistently  applied,  although the failure to deliver any such
notice  shall not release or diminish  the Account  Party's  obligations  to pay
additional amounts pursuant to this Section 2.04 upon subsequent receipt of such
notice.

                  2.05 Letter of Credit Expiration Extensions. (a) Each L/C Bank
acknowledges  that in  accordance  with the terms of each  Letter of Credit  the
expiration date of such Letter of Credit will be  automatically  extended for an
additional year,  without written  amendment,  unless, at least 30 days prior to
December 31 of each year (commencing with December 31, 2000), notice is given by
the  Issuing  Agent in  accordance  with the terms of the  respective  Letter of
Credit (a  "Notice  of  Non-Extension")  that the  Letter of Credit  will not be
extended beyond its current expiration date.

                  (b) In connection with the first possible extension of Letters
of Credit  (occurring  in the year  2000),  the  Issuing  Agent shall not give a
Notice of  Non-Extension  in respect of any Letter of Credit unless a Default or
Event of Default  exists at such time,  in which case the Issuing Agent may, and
if requested  by the  Required  Banks will,  give a Notice of  Non-Extension  to
Lloyd's in respect of each Letter of Credit no later than  December 1, 2000.  In
connection with any subsequent  possible extension of the Letters of Credit, the
Issuing Agent may, and if requested by any L/C Bank (which  request any L/C Bank
may make in its sole  discretion)  the  Issuing  Agent  will,  give a Notice  of
Non-Extension  to  Lloyd's  in  respect  of each  Letter of Credit no later than
December 1st of such year.

                  (c)  Each  L/C  Bank  agrees  that  on or  prior  to the  date
occurring  90 days  prior  to the  Lloyd's  Coming  in Line  Date  occurring  in
November,  2001,  such L/C Bank will notify the  Borrower as to whether such L/C
Bank intends to request the Issuing Agent to deliver Notices of Non-Extension in
respect  of then  outstanding  Letters  of  Credit in  accordance  with the last
sentence of Section 2.05(b) above,  provided that the failure of any L/C Bank to
give such notice to the  Account  Party  shall not  preclude  such L/C Bank from
subsequently  delivering  such request to the Issuing Agent or the Issuing Agent
from giving any such Notices of Non-Extension to Lloyd's.

                  2.06 Changes to Stated Amount.  At any time when any Letter of
Credit is  outstanding,  at the request of the Account Party,  the Issuing Agent
will enter into an amendment  increasing  or reducing the Stated  Amount of such
Letter of Credit,  provided that (i) in no event shall the Stated Amount of such
Letter of Credit be  increased to an amount  which,  when added to the Letter of
Credit Outstandings at such time, exceeds the Total L/C Commitment at such time,
(ii) the Stated Amount of a Letter of Credit may not be increased at any time if
the  conditions  precedent  set forth in Section 5.02 are not  satisfied at such
time,  and (iii) the Stated Amount of a Letter of Credit may not be increased at
any time after the L/C Issuance Expiration Date.

                                      -13-
<PAGE>

                  2.07  Representations  and  Warranties of L/C Banks.  Each L/C
Bank  represents  and warrants  that each Letter of Credit  constitutes a legal,
valid and binding obligation of such L/C Bank enforceable in accordance with its
terms.

                  SECTION 3.  Fees; Commitments.
                              -----------------

                  3.01 Fees.  (a) The Borrower  shall pay a commitment  fee (the
"RL  Commitment  Fee") to the  Administrative  Agent  for  distribution  to each
Non-Defaulting  Bank for the period from the  Restatement  Effective Date to but
not including the earlier of (A) the date the Total  Revolving  Loan  Commitment
has been  terminated and (B) the Conversion  Date,  computed at a rate per annum
for each day equal to the Applicable Commitment Fee Percentage then in effect on
the  daily  Unutilized  Revolving  Loan  Commitment  of such  Bank.  Accrued  RL
Commitment  Fees  shall be due and  payable  quarterly  in  arrears  on the last
Business  Day of each  calendar  quarter  and the  earlier of the date the Total
Revolving Loan Commitment has been terminated and the Conversion Date.

                  (b) The  Account  Party shall pay a  commitment  fee (the "L/C
Commitment  Fee")  to  the   Administrative   Agent  for  distribution  to  each
Non-Defaulting  Bank for the period from the  Restatement  Effective Date to but
not  including  the date that such Bank's L/C  Commitment  has been  terminated,
computed at a rate per annum for each day equal to the Applicable Commitment Fee
Percentage  then in effect on the daily  Unutilized L/C Commitment of such Bank.
Accrued L/C Commitment Fees shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter and the date the Total L/C Commitment
has been terminated.

                  (c) The  Account  Party  shall pay a letter of credit fee (the
"Letter of Credit Fee") to the  Administrative  Agent for  distribution  to each
Non-Defaulting  Bank  with an L/C  Commitment  for the  period  from the date of
issuance of the initial Letter of Credit to but not including the date that such
Bank's L/C Commitment has been terminated, computed at a rate for each day equal
to the Applicable  Margin then in effect for  Eurodollar  Loans on the daily L/C
Exposure of such Bank (provided that for purposes of this Section  3.01(c) only,
each  L/C  Bank's  L/C  Exposure  shall be no less  than  such  L/C  Bank's  L/C
Percentage  of  $150,000,000).  Accrued  Letter of Credit  Fees shall be due and
payable  quarterly in arrears on the last Business Day of each calendar  quarter
and the date the Total L/C Commitment has been terminated.

                  (d) The  Account  Party  hereby  agrees to pay to the  Issuing
Agent upon each issuance of, payment under,  and/or  amendment of, any Letter of
Credit such amount as shall at the time of such  issuance,  payment or amendment
be the administrative charge which the Issuing Agent is customarily charging for
issuances of, payments under or amendments of, letters of credit issued by it.

                                      -14-
<PAGE>

                  (e)  The  Borrower  and the  Account  Party  shall  pay to the
Administrative  Agent,  for its own account,  such fees as may be agreed to from
time to time in writing between the Borrower and the Administrative Agent or the
Account Party and the Administrative Agent, when and as due.

                  (f)  All computations of Fees shall be made in accordance with
Section 14.07(b).

                  3.02 Voluntary Reduction of Commitments. (a) At any time prior
to the Conversion  Date, upon at least three Business Days' prior written notice
to  the   Administrative   Agent  at  the  Notice   Office   (which  notice  the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall  have the  right,  at any time or from time to time,  without  premium  or
penalty, to terminate or reduce the Total Unutilized  Revolving Loan Commitment,
in whole or in part,  pursuant to this Section 3.02(a),  in an integral multiple
of  $5,000,000,  in the  case of  partial  reductions  to the  Total  Unutilized
Revolving  Loan  Commitment,  provided  that each  such  reduction  shall  apply
proportionately  to  permanently  reduce the Revolving  Loan  Commitment of each
Bank.

                  (b) At any time,  upon at least  three  Business  Days'  prior
written  notice to the  Administrative  Agent at the Notice Office (which notice
the  Administrative  Agent shall  promptly  transmit to each of the Banks),  the
Account  Party shall have the right,  at any time or from time to time,  without
premium or penalty,  to terminate or reduce the Total Unutilized L/C Commitment,
in whole or in part,  pursuant to this Section 3.02(b),  in an integral multiple
of  $5,000,000,  in the case of partial  reductions to the Total  Unutilized L/C
Commitment,  provided that each such reduction  shall apply  proportionately  to
permanently reduce the L/C Commitment of each Bank.

                  3.03  Mandatory  Reductions  of  Commitments.  (a)  The  Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety at 9:00 a.m.  (New York time) on the  Conversion  Date
(after giving effect to the conversion of outstanding  Revolving Loans into Term
Loans at such time).

                  (b) The Total L/C  Commitment  (and the L/C Commitment of each
Bank) shall  terminate  on the later of (i) the L/C  Maturity  Date and (ii) the
date on which no Letters of Credit are outstanding and no Unpaid Drawings exist.

                  (c) On each date upon which a mandatory repayment of Revolving
Loans pursuant to Section  4.02(i)(c) or (d) is required or would be required if
(x) an unlimited  amount of Revolving  Loans were then  outstanding  and (y) the
conditions precedent to borrowing set forth in Section 5.02 are not satisfied at
such time, the Total Revolving Loan Commitment  shall be permanently  reduced by
the amount required to be applied pursuant to said Section  (determined as if an
unlimited amount of Revolving Loans were actually outstanding);  provided,  that
except to the extent  resulting from a mandatory  prepayment of Revolving  Loans
pursuant  to  Section  4.02(i)(d)  with  the  portion  of net cash  proceeds  of
Indebtedness  incurred under Section 4.04(h) of the Holdings Guaranty  exceeding
$150,000,000  (i) no mandatory  reduction of the Total Revolving Loan Commitment
shall be required  pursuant  to this  Section  3.03(c) at any time if  Holdings'
senior  unsecured debt rating from S&P is BBB+ or greater at such time, and (ii)
in no  event  shall  the  Total  Revolving  Loan  Commitment  be  reduced  below
$100,000,000 as a result of the operation of this Section 3.03(c).

                                      -15-
<PAGE>

                  (d) Each  reduction or adjustment of the Total  Revolving Loan
Commitment  pursuant to this  Section  3.03 shall apply  proportionately  to the
Revolving Loan Commitment of each Bank with such a Commitment.

                  SECTION 4.  Payments.
                              --------

                  4.01 Voluntary Prepayments.  The Borrower shall have the right
to prepay Loans, without premium or penalty (except for amounts payable pursuant
to Section 1.11),  in whole or in part, from time to time on the following terms
and  conditions:  (i) the Borrower  shall give the  Administrative  Agent at its
Notice  Office  written  notice (or  telephonic  notice  promptly  confirmed  in
writing) of its intent to prepay the Loans, whether such Loans are Term Loans or
Revolving  Loans,  the amount of such  prepayment and (in the case of Eurodollar
Loans) the  specific  Borrowing(s)  pursuant to which such  prepayment  is made,
which  notice shall be received by the  Administrative  Agent (x) in the case of
Base Rate Loans, no later than 11:00 A.M. (New York time) one Business Day prior
to the date of such prepayment,  or (y) in the case of Eurodollar  Loans,  three
Business Days prior to the date of such prepayment,  which notice shall promptly
be  transmitted  by the  Administrative  Agent to each of the  Banks;  (ii) each
partial prepayment of any Borrowing shall be in an aggregate Principal Amount of
at least  $1,000,000,  provided that no partial  prepayment of Eurodollar  Loans
made pursuant to a Borrowing shall reduce the aggregate  principal amount of the
Loans outstanding  pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount; (iii) each prepayment in respect of any Loans made pursuant to
a Borrowing shall be applied pro rata among such Loans; and (iv) each prepayment
of Term Loans  pursuant to this  Section  4.01 shall  reduce the then  remaining
Scheduled  Repayments  on a pro  rata  basis  (based  upon  the  then  remaining
principal amount of each such Scheduled Repayment).

                  4.02  Mandatory Repayments and Prepayments.
                        ------------------------------------

                  (i)      Requirements:

                  (a) In addition to any other mandatory  repayments pursuant to
this Section 4.02, on each date set forth below,  the Borrower shall be required
to repay the principal amount of Term Loans in an amount equal to the product of
(x) the aggregate Principal Amount of Revolving Loans converted to Term Loans on
the Conversion  Date pursuant to Section  1.01(b)  hereof  multiplied by (y) the
percentage set forth below opposite such date (each such repayment,  as the same
may be reduced  pursuant  to  Sections  4.01 and/or  4.02(ii)(a),  a  "Scheduled
Repayment"):

                 Scheduled Repayment Date                     Percentage
                 ------------------------                     ----------
                 June 30, 2002                                   10.0%
                 December 31, 2002                               12.5%
                 June 30, 2003                                   12.5%
                 December 31, 2003                               15.0%
                 June 30, 2004                                   15.0%
                 December 31, 2004                               17.5%
                 Term Loan Maturity Date                         17.5%

                                      -16-
<PAGE>

                  (b) In addition to any other mandatory  repayments pursuant to
this Section 4.02,  not later than the third  Business Day following the date of
the receipt  thereof by Holdings  and/or any of its  Subsidiaries,  the Borrower
shall be required to repay an amount equal to 100% of the cash  proceeds (net of
underwriting  discounts  and  commissions  and other  reasonable  fees and costs
associated  therewith)  of the sale or  issuance  of equity by, or cash  capital
contributions  to,  Holdings or any  Subsidiary of Holdings  (other than (i) any
issuance of common stock or options to purchase  common stock by Holdings to the
extent issued to the employees or agents of Holdings or its  Subsidiaries,  (ii)
issuances of common stock pursuant to warrants  outstanding  on the  Restatement
Effective Date,  (iii) issuances of preferred stock of Holdings  pursuant to the
terms of the Cat E Put Securities and (iv) issuances of stock by Subsidiaries of
Holdings to Holdings or to Wholly-Owned  Subsidiaries  of Holdings,  and capital
contributions  by Holdings to its  Subsidiaries),  which shall be applied (i) if
prior to the  Conversion  Date,  to repay  the  aggregate  Principal  Amount  of
Revolving  Loans,  and (ii) if the  Conversion  Date has occurred,  to repay the
aggregate Principal Amount of the Term Loans.

                  (c) In addition to any other mandatory  repayments pursuant to
this Section 4.02,  not later than the fifth  Business Day following the date of
receipt  thereof by Holdings  and/or any of its  Subsidiaries of the proceeds of
any Asset Sale,  the Borrower shall be required to repay an amount equal to 100%
of the Net Available  Proceeds of such Asset Sale, which shall be applied (i) if
prior to the  Conversion  Date  (but  only to the  extent  that  the  conditions
precedent  to  borrowing  set forth in Section  5.02 are not  satisfied  at such
time),  to  repay  the  Principal  Amount  of  Revolving  Loans  and (ii) if the
Conversion  Date has occurred,  to repay the aggregate  Principal  Amount of the
Term Loans;  provided that (A) if the Net  Available  Proceeds of any such Asset
Sale are less than $5,000,000, such Net Available Proceeds shall not be required
to be so applied until such time as such Net Available  Proceeds,  when combined
with the Net Available Proceeds from additional  subsequent Asset Sales,  exceed
$5,000,000,  at which time all such Net Available  Proceeds shall be required to
be  applied  pursuant  to this  Section  4.02(i)(c),  and (B) the Net  Available
Proceeds  from Asset  Sales  shall not be required to be so applied on such date
(i) to the  extent  that no  Default  or Event of  Default  then  exists and the
Borrower delivers a certificate to the Administrative  Agent on or prior to such
date stating that such Net Available  Proceeds  shall within 180 days  following
the date of such Asset Sale be used to purchase  assets used,  or to be used, in
the business  described  in Section 8.01  (including,  without  limitation,  the
equity  interest of a Person engaged in any such  business),  which  certificate
shall  set  forth the  estimate  of the  proceeds  to be so  expended,  it being
understood that (1) if all or any portion of such Net Available  Proceeds not so
applied are not so used (or contractually  committed to be used) within such 180
day  period,  such  remaining  portion  shall be applied on the last day of such
period as  provided  above in this  Section  4.02(i)(c)  (without  regard to the
proviso herein) and (2) if all or any portion of such Net Available Proceeds are
not  required  to be  applied on the 180th day  referred  to in clause (1) above
because such amount is contractually committed to be used and subsequent to such
date such contract is terminated or expires  without such portion being so used,
then such remaining  portion shall be applied on the date of such termination or
expiration as provided in this Section 4.02(i)(c) (without regard to the proviso
herein).

                                      -17-
<PAGE>

                  (d) In addition to any other mandatory  repayments pursuant to
this Section 4.02,  not later than the third  Business Day following the date of
the receipt  thereof by Holdings  and/or any of its  Subsidiaries,  the Borrower
shall be required to repay an amount equal to 100% of the cash  proceeds (net of
underwriting  discounts  and  commissions  and other  reasonable  fees and costs
associated  therewith) of the incurrence of  Indebtedness  for borrowed money or
evidenced by bonds, notes,  debentures or similar instruments by Holdings and/or
any of its Subsidiaries  (other than  Indebtedness  permitted by Section 4.04 of
the  Holdings  Guaranty  as such  Section  4.04 is in effect on the  Restatement
Effective  Date,  provided  that  notwithstanding  the  foregoing  the net  cash
proceeds of Indebtedness incurred under Section 4.04(h) of the Holdings Guaranty
shall be required  to be applied  pursuant to this  Section  4.02(i)(d)),  which
shall be  applied  (i) if prior to the  Conversion  Date (but only to the extent
that the  conditions  precedent to  borrowing  set forth in Section 5.02 are not
satisfied at such time),  to repay the aggregate  Principal  Amount of Revolving
Loans and (ii) if the  Conversion  Date has  occurred,  to repay  the  aggregate
Principal Amount of the Term Loans.

                  (e) If on any date the aggregate  outstanding Principal Amount
of Revolving Loans (after giving effect to all other repayments  thereof on such
date) exceeds the Total Revolving Loan Commitment as then in effect  (including,
without  limitation,  as a result of the  determination  of  Dollar  Equivalents
pursuant  to  Section  13.07(c)),  the  Borrower  shall  repay on such  date the
principal of the Revolving Loans in an amount equal to such excess.

                  (f) If on any date the  Letter of Credit  Outstandings  exceed
the Total L/C  Commitment  (including,  without  limitation,  as a result of the
determination of Dollar Equivalents  pursuant to Section 13.07(c)),  the Account
Party  agrees to pay to the  Administrative  Agent an amount in cash and/or Cash
Equivalents  equal to such excess and the  Administrative  Agent shall hold such
payment as security for the obligations of the Account Party hereunder  pursuant
to a cash  collateral  agreement  to be  entered  into  in  form  and  substance
reasonably  satisfactory to the Administrative Agent (which shall permit certain
investments in Cash Equivalents  satisfactory to the Administrative  Agent until
the proceeds are applied to the secured obligations).

                  (g) Notwithstanding anything to the contrary contained in this
Credit  Agreement or in any other Credit  Document,  all then  outstanding  Term
Loans shall be repaid in full on the Term Loan Maturity Date.

                  (ii)     Application:

                  (a)  Each  mandatory  prepayment  of Term  Loans  pursuant  to
Section  4.02(i)(b),  (c) or (d) shall be applied  to reduce the then  remaining
Scheduled  Repayments  on a pro  rata  basis  (based  upon  the  then  remaining
principal amount of each such Scheduled Repayment).

                                      -18-
<PAGE>

                  (b) With respect to each  prepayment of Loans required by this
Section  4.02,  the  Borrower may  designate  the Types of Loans which are to be
prepaid and the specific  Borrowing(s) pursuant to which made; provided that (i)
the Borrower shall first so designate all Base Rate Loans and  Eurodollar  Loans
with Interest  Periods ending on the date of repayment  prior to designating any
other Eurodollar Loans; (ii) if any prepayment of Eurodollar Loans made pursuant
to a single  Borrowing shall reduce the outstanding  Loans made pursuant to such
Borrowing to an amount less than the Minimum  Borrowing  Amount,  such Borrowing
shall be immediately  converted into Base Rate Loans;  and (iii) each prepayment
of any Loans made  pursuant to a Borrowing  shall be applied pro rata among such
Loans.  In the absence of a  designation  by the  Borrower as  described  in the
preceding sentence,  the Administrative  Agent shall, subject to the above, make
such  designation in its sole  discretion  with a view,  but no  obligation,  to
minimize breakage costs owing under Section 1.11.  Notwithstanding the foregoing
provisions  of this Section  4.02,  if at any time the  mandatory  prepayment of
Loans  pursuant to Section  4.02(i)(b),  (c) or (d) would  result,  after giving
effect to the first  sentence  of this clause  (b),  in the  Borrower  incurring
breakage  costs under Section 1.11 as a result of Eurodollar  Loans being repaid
other  than on the  last  day of an  Interest  Period  applicable  thereto  (the
"Affected  Eurodollar Loans"),  then the Borrower may, if it so elects by notice
to the Administrative  Agent, deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected  Eurodollar Loans with
the  Administrative  Agent to be held  pursuant  to an  escrow  agreement  to be
entered into in form and substance  satisfactory  to the  Administrative  Agent,
with such escrowed amounts to be released from such escrow (and applied to repay
the principal amount of such Loans) upon each occurrence  thereafter of the last
day of an Interest Period  applicable to the relevant  Eurodollar Loans (or such
earlier date or dates as shall be requested by the Borrower), with the amount to
be so  released  and applied on the last day of each  Interest  Period to be the
amount of the Loans to which such  Interest  Period  applies  (or, if less,  the
amount remaining in such escrow account).

                  4.03  Method  and  Place  of  Payment.   Except  as  otherwise
specifically  provided herein, all payments under this Credit Agreement shall be
made to the  Administrative  Agent for the ratable account of the Banks entitled
thereto,  not later  than  12:00  Noon (New York  time) on the date when due and
shall be made in  immediately  available  funds  at the  Payment  Office  in (x)
Dollars, if such payment is made in respect of any obligation of the Borrower or
the Account Party, as applicable, under this Credit Agreement except as provided
in the  immediately  succeeding  clause (y), and (y) the  appropriate  Alternate
Currency,  if such payment is made by the Borrower in respect of principal of or
interest on Alternate  Currency  Loans or if such payment is made by the Account
Party in respect of any Unpaid Drawing (or interest  thereon) with respect to an
Alternate  Currency  Letter of  Credit,  it being  understood  that  written  or
facsimile  notice by the Borrower or the Account Party,  as  applicable,  to the
Administrative  Agent to make a payment from the funds in the  Borrower's or the
Account Party's account,  as applicable,  at the Payment Office shall constitute
the making of such payment to the extent of such funds held in such account. Any
payments under this Credit  Agreement  which are made later than 12:00 Noon (New
York  time)  shall be deemed to have been made on the next  succeeding  Business
Day.  Whenever any payment to be made  hereunder  shall be stated to be due on a
day which is not a Business  Day, the due date thereof  shall be extended to the
next  succeeding  Business  Day and,  with  respect to  payments  of  principal,
interest shall be payable during such extension period at the applicable rate in
effect immediately prior to such extension.

                                      -19-
<PAGE>

                  4.04 Net  Payments.  (a) All payments  made by the Borrower or
the  Account  Party  hereunder  or by the  Borrower  under any Note will be made
without  setoff,  counterclaim  or other defense.  Except as provided in Section
4.04(b), all such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts,  duties, fees,
assessments or other charges of whatever nature now or hereafter  imposed by any
jurisdiction  or by any political  subdivision  or taxing  authority  thereof or
therein with respect to such payments (but excluding,  except as provided in the
second succeeding sentence,  any tax imposed on or measured by the net income or
net profits of a Bank  pursuant to the laws of the  jurisdiction  in which it is
organized  or the  jurisdiction  in which the  principal  office  or  applicable
lending  office of such Bank is located or any  subdivision  thereof or therein)
and  all  interest,  penalties  or  similar  liabilities  with  respect  to such
non-excluded taxes, levies, imposts,  duties, fees, assessments or other charges
(all such non-excluded taxes,  levies,  imposts,  duties,  fees,  assessments or
other charges being referred to  collectively  as "Taxes").  If any Taxes are so
levied or imposed,  the Borrower or the Account Party, as applicable,  agrees to
pay the full  amount  of such  Taxes,  and  such  additional  amounts  as may be
necessary so that every  payment of all amounts due under this Credit  Agreement
or under any Note,  after  withholding  or  deduction  for or on  account of any
Taxes,  will not be less than the amount provided for herein or in such Note. If
any amounts are payable in respect of Taxes pursuant to the preceding  sentence,
the Borrower or the Account Party, as applicable, agrees to reimburse each Bank,
upon the written  request of such Bank,  for taxes imposed on or measured by the
net income or net profits of such Bank pursuant to the laws of the  jurisdiction
in which such Bank is organized or in which the  principal  office or applicable
lending  office  of such  Bank is  located  or under  the laws of any  political
subdivision or taxing  authority of any such  jurisdiction in which such Bank is
organized or in which the principal office or applicable  lending office of such
Bank is located and for any  withholding  of taxes as such Bank shall  determine
are payable by, or withheld from,  such Bank, in respect of such amounts so paid
to or on behalf of such Bank pursuant to the  preceding  sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence.  The
Borrower or the Account Party, as applicable, will furnish to the Administrative
Agent  within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts,  evidencing such payment by the
Borrower or the Account  Party,  as applicable.  Without  duplication of amounts
payable pursuant to the foregoing  provisions of this Section  4.04(a),  each of
the Borrower and the Account  Party agrees to indemnify  and hold  harmless each
Bank,  and reimburse such Bank upon its written  request,  for the amount of any
Taxes so levied or imposed and paid by such Bank.

                  (b) Each Bank that is not a United States person (as such term
is defined  in  Section  7701(a)(30)  of the Code) for U.S.  Federal  income tax
purposes  agrees  to  deliver  to  the  Borrower,  the  Account  Party  and  the
Administrative  Agent on or prior to the  Restatement  Effective Date, or in the
case of a Bank that is an  assignee  or  transferee  of an  interest  under this
Credit  Agreement  pursuant to Section  13.04(b) (unless the respective Bank was
already a Bank hereunder  immediately prior to such assignment or transfer),  on
the date of such  assignment  or transfer  to such Bank,  (i) two  accurate  and
complete  original signed copies of Internal Revenue Service Form W-8ECI or Form
W-8BEN  (with  respect to a complete  exemption  under an income tax treaty) (or
successor  forms)  certifying  to such Bank's  entitlement  as of such date to a

                                      -20-
<PAGE>

complete  exemption from United States  withholding tax with respect to payments
to be made under this Credit  Agreement  and under any Note, or (ii) if the Bank
is not a "bank"  within  the  meaning of  Section  881(c)(3)(A)  of the Code and
cannot deliver either Internal  Revenue Service Form W-8ECI or Form W-8BEN (with
respect to a complete  exemption under an income tax treaty)  pursuant to clause
(i) above,  (x) a certificate  substantially  in the form of Exhibit E (any such
certificate,  a "Section  4.04(b)(ii)  Certificate")  and (y) two  accurate  and
complete  original  signed copies of Internal  Revenue Service Form W-8BEN (with
respect to the portfolio  interest  exemption) (or successor form) certifying to
such  Bank's  entitlement  as of such date to a complete  exemption  from United
States  withholding  tax with  respect to  payments of interest to be made under
this Credit  Agreement  and under any Note.  In addition,  each Bank agrees that
from time to time after the Restatement  Effective Date, when a lapse in time or
change  in  circumstances  renders  the  previous   certification   obsolete  or
inaccurate in any material respect, it will deliver to the Borrower, the Account
Party and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under an income tax treaty),  or Form W-8BEN (with respect to
the portfolio interest exemption) and a Section 4.04(b)(ii) Certificate,  as the
case may be,  and such  other  forms as may be  required  in order to confirm or
establish  the  entitlement  of  such  Bank  to a  continued  exemption  from or
reduction in United States  withholding  tax with respect to payments under this
Credit Agreement and any Note, or it shall immediately notify the Borrower,  the
Account Party and the Administrative  Agent of its inability to deliver any such
Form or  Certificate,  in which case such Bank shall not be  required to deliver
any such Form or Certificate  pursuant to this Section 4.04(b).  Notwithstanding
anything to the contrary  contained in Section  4.04(a),  but subject to Section
14.04(b)  and the  immediately  succeeding  sentence,  (x) the  Borrower and the
Account  Party shall be entitled,  to the extent it is required to do so by law,
to deduct or withhold  income or similar  taxes imposed by the United States (or
any political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Bank which is not
a United  States person (as such term is defined in Section  7701(a)(30)  of the
Code) for U.S.  Federal income tax purposes to the extent that such Bank has not
provided to the  Borrower or the Account  Party U.S.  Internal  Revenue  Service
Forms that establish a complete exemption from such deduction or withholding and
(y) neither the  Borrower nor the Account  Party shall be obligated  pursuant to
Section  4.04(a) hereof to gross-up  payments to be made to a Bank in respect of
income or similar  taxes  imposed by the United  States if (I) such Bank has not
provided to the Borrower or the Account Party the Internal Revenue Service Forms
required to be provided to the Borrower and the Account  Party  pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes.

                  SECTION  5.  Conditions  Precedent.   The  occurrence  of  the
Restatement  Effective Date pursuant to Section 13.10 and the obligation of each
Bank to make Revolving Loans to the Borrower hereunder and the obligation of the
Issuing  Agent to issue or  increase  the Stated  Amount of any Letter of Credit
hereunder,  is subject, on the Restatement Effective Date or at the time of each
such  Credit  Event  (except  as  otherwise  hereinafter   indicated),   to  the
satisfaction of each of the following conditions:

                                      -21-
<PAGE>

                  5.01  Execution of Agreement.  On or prior to the  Restatement
Effective Date, this Credit  Agreement shall have been executed and delivered as
provided in Section 13.10.

                  5.02 No Default;  Representations and Warranties.  At the time
of each Credit Event and also after giving effect thereto, (i) there shall exist
no Default or Event of Default and (ii) all  representations  and  warranties of
each Credit Party  contained  herein or in the other Credit  Documents  shall be
true and correct in all  material  respects  with the same effect as though such
representations  and  warranties  had  been  made on and as of the  date of such
Credit Event,  unless stated to relate to a specific earlier date, in which case
such  representations  and warranties  shall be true and correct in all material
respects as of such earlier date.

                  5.03 Officer's Certificate. On the Restatement Effective Date,
the Administrative Agent shall have received an officer's  certificate from each
of Holdings,  the Borrower and the Account  Party dated such date,  signed by an
Authorized  Officer of each of Holdings,  the  Borrower  and the Account  Party,
respectively,  stating  that  all of the  applicable  conditions  set  forth  in
Sections 5.02, 5.06, 5.07, 5.09 and 5.13 exist as of such date.

                  5.04 Opinions of Counsel.  On the Restatement  Effective Date,
the Administrative  Agent shall have received an opinion,  in form and substance
reasonably  satisfactory to the Administrative  Agent,  addressed to each of the
Banks and dated the Restatement  Effective  Date,  from (i) Appleby,  Spurling &
Kempe,  Bermuda  counsel to  Holdings,  which  opinion  shall  cover the matters
contained in Exhibit C-1 with respect to Holdings,  (ii) Conyers Dill & Pearman,
counsel to LaSalle Re Holdings  which opinion  shall cover matters  contained in
Exhibit C-2 with respect to LaSalle Re Holdings, (iii) Baker & McKenzie, counsel
to the Borrower, which opinion shall cover the matters contained in Exhibit C-3,
(iv) Lovells,  United Kingdom counsel to the Account Party,  which opinion shall
cover the matters contained in Exhibit C-4, (v) John V. Del Col, General Counsel
of Holdings and the Borrower, which opinion shall cover the matters contained in
Exhibit  C-5 and (vi)  White & Case LLP,  counsel to the  Administrative  Agent,
which opinion shall cover the matters contained in Exhibit C-6.

                  5.05 Corporate  Proceedings.  (a) On the Restatement Effective
Date,  the Banks  shall  have  received  from  each  Credit  Party an  officer's
certificate,  dated the Restatement  Effective Date,  signed by the President or
any Vice President of such Credit Party, and attested to by the Secretary or any
Assistant  Secretary of such Credit Party,  in the form of Exhibit D hereto with
appropriate  insertions,   together  with  (x)  copies  of  the  Certificate  of
Incorporation  and  By-Laws (or  equivalent  organizational  documents)  of such
Credit  Party  and (y)  the  resolutions  of such  Credit  Party  and the  other
documents referred to in such certificate, and the foregoing shall be reasonably
satisfactory to the Administrative Agent.

                  (b)  All  corporate,   tax  and  legal   proceedings  and  all
instruments and agreements in connection with the  transactions  contemplated by
this Credit Agreement,  the other Credit Documents and the Transaction Documents
shall be reasonably  satisfactory  in form and  substance to the  Administrative
Agent,  and the  Administrative  Agent shall have received all  information  and
copies of all  certificates,  documents  and  papers,  including  good  standing
certificates  and any other records of corporate  proceedings  and  governmental
approvals,  if any, which the Administrative Agent reasonably may have requested
in  connection  therewith,  such  documents and papers where  appropriate  to be
certified by proper corporate or governmental authorities.

                                      -22-
<PAGE>

                  5.06 Adverse Change,  etc. On the Restatement  Effective Date,
the Administrative  Agent shall not have become aware of any facts or conditions
not  previously  known or  disclosed,  whether  occurring  prior to or after the
Restatement  Effective  Date,  and since  December 31, 1999  nothing  shall have
occurred,  in either case which, when taken as a whole, the Administrative Agent
shall reasonably  determine (i) has, or is reasonably likely to have, a material
adverse  effect on the  rights or  remedies  of the Banks or the  Administrative
Agent  under this  Credit  Agreement  or any other  Credit  Document,  or on the
ability of any Credit Party to perform its obligations  hereunder or thereunder,
or (ii) has or is reasonably likely to have a Material Adverse Effect.

                  5.07  Litigation.   On  the  Restatement  Effective  Date,  no
actions,  suits or  proceedings  shall be pending or, to the knowledge of any of
Holdings, the Borrower or the Account Party, threatened (i) with respect to this
Credit Agreement or any other Credit Document,  the Transaction Documents or the
transactions  contemplated  hereby or thereby  (including  the LaSalle  Business
Combination) or (ii) which either the Administrative Agent or the Required Banks
shall reasonably  determine has, or is reasonably likely to have, (x) a Material
Adverse Effect or (y) a material adverse effect on the rights or remedies of the
Banks or the  Administrative  Agent hereunder or under any other Credit Document
or on the ability of any Credit  Party to perform its  obligations  hereunder or
thereunder.

                  5.08 Subsidiary Guaranty.  On the Restatement  Effective Date,
each Subsidiary  Guarantor shall have duly authorized,  executed and delivered a
Subsidiary  Guaranty  in  the  form  of  Exhibit  F  (as  modified,  amended  or
supplemented  from time to time in accordance with the terms hereof and thereof,
the "Subsidiary  Guaranty"),  and the Subsidiary Guaranty shall be in full force
and effect.

                  5.09 Consummation of the LaSalle Business Combination.  (a) On
or before the Restatement Effective Date, the LaSalle Business Combination shall
have been  consummated  in  accordance  with the  LaSalle  Business  Combination
Documents,  which LaSalle  Business  Combination  Documents shall be in form and
substance  reasonably  satisfactory to the  Administrative  Agent, and all Legal
Requirements  and each of the conditions  precedent to the  consummation  of the
LaSalle Business  Combination shall have been satisfied in all material respects
and not waived,  except with the reasonable consent of the Administrative Agent,
to the reasonable satisfaction of the Administrative Agent.

                  (b) On or before the Restatement  Effective Date,  there shall
have been delivered to the Banks true and correct copies of all LaSalle Business
Combination  Documents,  and all of the material  terms and  conditions  of such
LaSalle Business Combination Documents shall be in form and substance reasonably
satisfactory to the Administrative Agent.

                  (c)  On  or  before  the   Restatement   Effective  Date,  all
commitments  under the LaSalle Credit  Agreement  shall have been terminated and
all amounts owing thereunder shall have been paid in full.

                                      -23-
<PAGE>

                  5.10  The  Original  Credit  Agreement.   On  the  Restatement
Effective  Date  and  concurrently  with the  initial  incurrence  of Loans  and
issuance of Letters of Credit hereunder,  (i) all Original Loans shall have been
repaid in full in cash,  together with accrued but unpaid interest thereon,  and
all Original  Letters of Credit shall have been returned to the Original  Banks,
it being understood and agreed,  however,  that any Continuing Bank may net fund
any  Loans  required  to be  made  by it on the  Restatement  Effective  Date by
permitting the principal  amount of the Original  Loans made by such  Continuing
Bank to remain  outstanding  on the  Restatement  Effective Date to satisfy such
Continuing  Bank's  obligation  to fund a like  principal  amount of Loans to be
incurred  hereunder by the Borrower on the  Restatement  Effective Date, and for
purposes of this Section 5.10 only such  outstanding  principal  amount shall be
deemed  outstanding  as  Revolving  Loans under this Credit  Agreement  and such
corresponding Original Loans shall be deemed to have been so repaid in full, and
(ii) there  shall  have been paid in cash in full all  accrued  but unpaid  Fees
under,  and as defined in, the Original  Credit  Agreement  (including,  without
limitation,  commitment fees, letter of credit fees and facing fees) accrued but
unpaid  prior to but  excluding  the  Restatement  Effective  Date and all other
amounts, costs and expenses (including,  without limitation,  breakage costs, if
any,  with respect to  eurodollar  rate loans) then owing to any of the Original
Banks  and/or the  Administrative  Agent,  as agent  under the  Original  Credit
Agreement,  in each case to the satisfaction of the Administrative  Agent or the
Original  Banks,  as the case may be,  regardless of whether or not such amounts
would  otherwise  be due and  payable at such time  pursuant to the terms of the
Original  Credit  Agreement and (iii) all  outstanding  Notes (as defined in the
Original  Credit  Agreement)  issued by Trenwick to the Original Banks under the
Original Credit Agreement shall be deemed canceled.

                  5.11   Financial   Statements;   Projections.   Prior  to  the
Restatement Effective Date, each of Holdings, the Borrower and the Account Party
shall have delivered or caused to be delivered to the Administrative  Agent with
copies for each Bank:

                  (a) the audited Annual  Statement of each Regulated  Insurance
         Company  which is a  Material  Subsidiary  for the  fiscal  year  ended
         December 31, 1999,  prepared in  accordance  with SAP and as filed with
         the respective Applicable Insurance Regulatory Authority,  which Annual
         Statements   shall  be  satisfactory  in  form  and  substance  to  the
         Administrative Agent;

                  (b)  the  unaudited  Quarterly  Statement  of  each  Regulated
         Insurance Company which is a Material Subsidiary for the fiscal quarter
         ended March 31, 2000, prepared in accordance with SAP and as filed with
         the  respective  Applicable  Insurance  Regulatory   Authority,   which
         Quarterly Statements shall be satisfactory in form and substance to the
         Administrative Agent;

                  (c) the audited balance sheet of Trenwick and its Subsidiaries
         (on a consolidated  basis) for the fiscal year ended December 31, 1999,
         and the related  statements of income,  of stockholders'  equity and of
         cash flows, in each case prepared in accordance with GAAP;

                  (d) the audited  balance  sheet of LaSalle Re Holdings and its
         Subsidiaries  (on a  consolidated  basis)  for the  fiscal  year  ended
         September  30,  1999,  and  the  related   statements  of  income,   of
         stockholders'  equity  and of cash  flows,  in each  case  prepared  in
         accordance with GAAP;

                                      -24-
<PAGE>

                  (e)  the  unaudited  balance  sheet  of (i)  Trenwick  and its
         Subsidiaries (on a consolidated basis) and (ii) LaSalle Re Holdings and
         its Subsidiaries (on a consolidated basis), in each case for the fiscal
         quarter ended March 31, 2000, and the related  unaudited  statements of
         income,  of  stockholders'  equity  and of cash  flows,  in  each  case
         prepared in accordance with GAAP;

                  (f)  projected  financial  statements  for  Holdings  and  its
         Subsidiaries,  reflecting the projected financial condition, income and
         expenses of Holdings and its  Subsidiaries,  after giving effect to the
         Transaction  and the  other  transactions  contemplated  hereby,  which
         projected financial statements shall be reasonably satisfactory in form
         and substance to the Administrative Agent; and

                  (g) a pro forma balance sheet of Holdings and its Subsidiaries
         as of March 31, 2000, after giving effect to the Transaction (as if the
         Transaction had occurred prior to such date) and the other transactions
         contemplated hereby.

                  5.12  Approvals,  etc. On the  Restatement  Effective Date the
following  approvals  shall  have  been  obtained  to  the  satisfaction  of the
Administrative Agent:

                 (i) all  necessary  and material  governmental  and third party
         approvals,  permits and licenses in connection with the Transaction and
         this  Credit  Agreement  and  the  transactions   contemplated  by  the
         Transaction  Documents  and  otherwise  referred  to herein or  therein
         (including without limitation the LaSalle Business Combination), to the
         extent such approvals,  consents,  permits and licenses are required to
         be obtained or made prior to the Restatement Effective Date, shall have
         been obtained and remain in full force and effect,  and all  applicable
         waiting  periods  shall have  expired,  in each case without any action
         being taken by any  competent  authority  (including  any court  having
         jurisdiction)  which restrains,  prevents or imposes, in the reasonable
         judgment of the Required Banks or the Administrative Agent,  materially
         adverse conditions upon the consummation of the Transaction or any such
         agreement or transaction; and

                (ii) all necessary  shareholder approvals in connection with the
         Transaction  shall  have been  obtained  and  remain in full  force and
         effect.

                  5.13 Indebtedness. On the Restatement Effective Date and after
giving effect to the consummation of the Transaction,  the only Indebtedness for
borrowed  money  of  Holdings  and its  Subsidiaries,  other  than  Indebtedness
permitted under Sections 4.04(b)-(i) of the Holdings Guaranty,  shall consist of
the Indebtedness incurred pursuant to the Credit Documents.

                  5.14 Payment of Fees. On the  Restatement  Effective Date, all
costs,  fees  and  expenses  (including,  without  limitation,  legal  fees  and
expenses),  and all other compensation  contemplated by this Credit Agreement or
the other Credit Documents,  due to the Administrative  Agent or any Banks shall
have been paid to the extent due.

                                      -25-
<PAGE>

                  5.15 Letter of Credit Request;  Notice of Borrowing.  Prior to
the  issuance  of the  Letter of Credit,  the  Administrative  Agent  shall have
received a Letter of Credit Request satisfying the requirements of Section 2.02;
and prior to the incurrence of any Revolving  Loans,  the  Administrative  Agent
shall have received a Notice of Borrowing satisfying the requirements of Section
1.03.

                  5.16  Capital  Structure.  On  or  prior  to  the  Restatement
Effective Date, the corporate and capital structure (and all agreements  related
thereto) of Holdings and its  Subsidiaries and all  organizational  documents of
Holdings  and  its  Subsidiaries   shall  be  reasonably   satisfactory  to  the
Administrative Agent (after giving effect to the Transaction).

                  5.17 Solvency Certificate.  On the Restatement Effective Date,
Holdings shall have delivered to the Administrative Agent a solvency certificate
from the Chief Financial Officer of Holdings in the form of Exhibit G.

                  5.18  A.M.  Best Rating.  On  the  Restatement Effective Date,
each Rated Ongoing  Regulated  Subsidiary  of Holdings shall  have  an A.M. Best
claims paying rating of at least A-.

                  5.19 Holdings  Guaranty.  On the  Restatement  Effective Date,
Holdings shall have duly authorized,  executed and delivered a Holdings Guaranty
in the form of Exhibit I (as modified, amended or supplemented from time to time
in accordance with the terms hereof and thereof, the "Holdings  Guaranty"),  and
the Holdings Guaranty shall be in full force and effect.

                  The acceptance of the benefits of each Credit Event  occurring
on the Restatement Effective Date shall constitute a representation and warranty
by each of the Borrower  and the Account  Party to each of the Banks that all of
the  applicable  conditions  specified  in this  Section  5 exist  or have  been
satisfied as of such date.  The  acceptance of the benefits of each Credit Event
occurring after the Restatement Effective Date shall constitute a representation
and warranty by each of the Borrower and the Account  Party to each of the Banks
that all of the applicable  conditions specified in Sections 5.02 and 5.15 exist
or have been satisfied as of such date. All of the certificates,  legal opinions
and other documents and papers  referred to in this Section 5, unless  otherwise
specified,  shall be delivered to the Administrative  Agent at its Notice Office
for the account of each of the Banks.

                  SECTION 6.  Representations,  Warranties  and  Agreements.  In
order to induce the Administrative Agent and the Banks to enter into this Credit
Agreement  and to make the Loans and issue  the  Letters  of Credit as  provided
herein,   each  of  the  Borrower  and  the  Account   Party  hereby  makes  the
representations  and warranties set forth in Section 2 of the Holdings  Guaranty
on  behalf  of  themselves  and  their  respective  Subsidiaries,  all of  which
representations  and warranties shall survive the execution and delivery of this
Credit  Agreement and the making of the Loans and the issuance of the Letters of
Credit (with the occurrence of the Restatement Effective Date and the occurrence
of each Credit Event being deemed to  constitute a  representation  and warranty
that the matters  specified in Section 2 of the  Holdings  Guaranty are true and
correct in all material respects on and as of the Restatement Effective Date and
on the date of each such Credit Event (after giving  effect to the  consummation
of the Transaction)  unless such representation and warranty expressly indicates
that  it is  being  made  as of any  other  specific  date in  which  case  such
representation  and warranty shall be true and correct in all material  respects
as of such other specified date).

                                      -26-
<PAGE>

                  SECTION 7. Affirmative Covenants. Each of the Borrower and the
Account Party hereby covenants and agrees that on the Restatement Effective Date
and thereafter,  for so long as this Credit Agreement is in effect and until the
Total  Commitment and all Letters of Credit are terminated and all the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder,  are paid in full, it will,  and will cause each of its  Subsidiaries
to, comply with the  covenants set forth in Section 3 of the Holdings  Guaranty,
in each case as and to the extent applicable to them.

                  SECTION 8.  Negative  Covenants.  Each of the Borrower and the
Account Party hereby covenants and agrees that on the Restatement Effective Date
and thereafter,  for so long as this Credit Agreement is in effect and until the
Total  Commitment  and all  Letters of Credit are  terminated  and all Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full, it will, and will cause each of its Subsidiaries to
comply with the  covenants set forth in Section 4 of the Holdings  Guaranty,  in
each case as and to the extent applicable to them.

                  SECTION 9. Events of Default.  Upon the  occurrence  of any of
the following specified events (each an "Event of Default"):

                  9.01 Payments.  The Borrower or the Account Party shall (i) in
the case of the  Borrower,  default in the payment when due of any  principal of
the Loans, and in the case of the Account Party, default in the payment when due
of any Unpaid Drawing,  (ii) default,  and such default shall continue for three
or more  Business  Days, in the payment when due of any interest on the Loans or
any Fees or (iii)  default,  and such  default  shall  continue for five or more
Business Days in the payment of any other  amounts owing  hereunder or under any
other Credit Document; or

                  9.02  Representations,  etc. Any  representation,  warranty or
statement  made or deemed made by the Borrower or the Account Party herein or by
any Credit Party in any other Credit Document or in any statement or certificate
delivered or required to be delivered  pursuant hereto or thereto shall prove to
be untrue in any  material  respect on the date as of which made or deemed made;
or

                  9.03 Covenants.  Any Credit Party shall (a) default in the due
performance or observance by it of any term,  covenant or agreement contained in
Section 3.10 or 4 of the Holdings  Guaranty  (except for Sections 4.01, 4.07 and
4.09  of the  Holdings  Guaranty),  or (b)  default  in the due  performance  or
observance by it of any term,  covenant or agreement  (other than those referred
to in Section 9.01 or clause (a) of this Section 9.03)  contained in this Credit
Agreement or in the Holdings Guaranty and such default shall continue unremedied
for a period of at least 30 days; or

                                      -27-
<PAGE>

                  9.04 Default  Under Other  Agreements.  (a) Holdings or any of
its  Subsidiaries  shall (i) default in any payment with respect to Indebtedness
(other than the  Obligations),  in excess of $10,000,000  individually or in the
aggregate,   for  Holdings  and  its   Subsidiaries   (collectively,   "Material
Indebtedness"),  beyond the period of grace, if any,  provided in the instrument
or agreement  under which such  Indebtedness  was created or (ii) default in the
observance or  performance  of any  agreement or condition  relating to any such
Material  Indebtedness  or contained in any instrument or agreement  evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the  effect of which  default or other  event or  condition  is to cause,  or to
permit  the holder or holders  of such  Material  Indebtedness  (or a trustee or
agent  on  behalf  of such  holder  or  holders)  to  cause  any  such  Material
Indebtedness  to  become  due  prior  to its  stated  maturity;  or (b) any such
Material  Indebtedness of Holdings or any of its Subsidiaries  shall be declared
to be due and  payable,  or  required  to be prepaid  other than by a  regularly
scheduled required prepayment or as a mandatory prepayment (unless such required
prepayment or mandatory prepayment results from a default thereunder or an event
of the type that constitutes an Event of Default),  prior to the stated maturity
thereof; or

                  9.05  Bankruptcy,  etc.  Holdings  or any of its  Subsidiaries
shall commence a voluntary case  concerning  itself under Title 11 of the United
States  Code  entitled  "Bankruptcy,"  as now or  hereafter  in  effect,  or any
successor  thereto (the "Bankruptcy  Code"); or an involuntary case is commenced
against Holdings or any of its Subsidiaries and the petition is not controverted
within 10 days, or is not dismissed  within 60 days,  after  commencement of the
case; or a custodian (as defined in the  Bankruptcy  Code) is appointed  for, or
takes charge of, all or substantially  all of the property of Holdings or any of
its Subsidiaries; or Holdings or any of its Subsidiaries commences (including by
way of  applying  for or  consenting  to the  appointment  of, or the  taking of
possession by, a rehabilitator,  receiver,  custodian,  trustee,  conservator or
liquidator  (collectively,  a "conservator") of itself or all or any substantial
portion  of  its  property)  any  other  proceeding  under  any  reorganization,
arrangement,  adjustment of debt,  relief of debtors,  dissolution,  insolvency,
liquidation, rehabilitation,  conservatorship or similar law of any jurisdiction
whether  now  or  hereafter  in  effect  relating  to  Holdings  or  any  of its
Subsidiaries; or any such proceeding is commenced against Holdings or any of its
Subsidiaries and remains undismissed for a period of 60 days; or Holdings or any
of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief
or other order  approving  any such case or  proceeding  is entered;  or (a) any
Regulated  Insurance  Company  which is engaged in the business of  underwriting
insurance and/or reinsurance in the United States suffers any appointment of any
conservator or the like for it or any substantial  part of its property,  or (b)
Holdings or any of its Subsidiaries  (other than any Regulated Insurance Company
described in the  immediately  preceding  clause (a)) suffers any appointment of
any conservator or the like for it or any substantial part of its property which
continues  undischarged  or unstayed for a period of 60 days; or Holdings or any
of its Subsidiaries makes a general assignment for the benefit of creditors;  or
any  corporate  action is taken by Holdings or any of its  Subsidiaries  for the
purpose of effecting any of the foregoing; or

                  9.06  ERISA.  (a) Any Plan shall fail to satisfy  the  minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such  standard or  extension  of
any  amortization  period is sought or granted  under Section 412 of the Code or
Section  303 or 304  of  ERISA,  a  Reportable  Event  shall  have  occurred,  a
contributing  sponsor  (as  defined in Section  4001(a)(13)  of ERISA) of a Plan
subject  to  Title  IV of  ERISA  shall  be  subject  to the  advance  reporting
requirement of PBGC Regulation  Section 4043.61  (without regard to subparagraph

                                      -28-
<PAGE>

(b)(1)  thereof) and an event  described in subsection  .62, .63, .64, .65, .66,
 .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with  respect  to such Plan  within  the  following  30 days,  any Plan which is
subject  to Title IV of ERISA  shall  have had or is  likely  to have a  trustee
appointed by the PBGC to administer  such Plan, any Plan or  Multiemployer  Plan
which is  subject  to Title IV of ERISA is,  shall  have been or is likely to be
terminated or to be the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded  Current  Liability,  a contribution  required to be made
with respect to a Plan,  Multiemployer Plan or Foreign Pension Plan has not been
timely made,  Holdings or any Subsidiary of Holdings or any ERISA  Affiliate has
incurred  or is likely  to incur any  liability  to or on  account  of a Plan or
Multiemployer  Plan under Section 409,  502(i),  502(l),  515, 4062, 4063, 4064,
4069,  4201,  4204 or 4212 of ERISA or Section  401(a)(29),  4971 or 4975 of the
Code or on account of a group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or Holdings
or any  Subsidiary  of Holdings has  incurred or is likely to incur  liabilities
pursuant to one or more  employee  welfare  benefit plans (as defined in Section
3(1) of ERISA)  that  provide  benefits  to retired  employees  or other  former
employees  (other  than as required by Section 601 of ERISA) or Plans or Foreign
Pension  Plans,  a  "default,"  within the meaning of Section  4219(5) of ERISA,
shall occur with respect to any Multiemployer  Plan; any applicable law, rule or
regulation  is  adopted,  changed  or  interpreted,  or  the  interpretation  or
administration  thereof is changed,  in each case after the date hereof,  by any
governmental  authority or agency or by any court (a "Change in Law"),  or, as a
result of a Change  in Law,  an event  occurs  following  a Change in Law,  with
respect to or otherwise  affecting  any Plan or  Multiemployer  Plan;  (b) there
shall  result  from any such  event or  events  the  imposition  of a lien,  the
granting of a security interest,  or a liability or a material risk of incurring
a liability;  and (c) such lien,  security  interest or liability,  individually
and/or in the aggregate,  in the opinion of the Required Banks has had, or could
reasonably be expected to have, a Material Adverse Effect; or

                  9.07  Guaranties.  (a) The Holdings  Guaranty or any provision
thereof  shall cease to be in full force and  effect,  or Holdings or any Person
acting by or on behalf of Holdings shall deny or disaffirm Holdings' obligations
under the Holdings Guaranty; or

                  (b) The Trenwick  America  Guaranty or any  provision  thereof
shall cease to be in full force and effect, or the Borrower or any Person acting
by or on  behalf  of  the  Borrower  shall  deny  or  disaffirm  the  Borrower's
obligations under the Trenwick America Guaranty or the Borrower shall default in
the due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to the Trenwick America Guaranty; or

                  (c) The  Subsidiary  Guaranty or any  provision  thereof shall
cease to be in full force and effect, or any Subsidiary  Guarantor or any Person
acting by or on behalf of such Subsidiary Guarantor shall deny or disaffirm such
Subsidiary  Guarantor's   obligations  under  the  Subsidiary  Guaranty  or  any
Subsidiary  Guarantor  shall default in the due performance or observance of any
term,  covenant or agreement on its part to be performed or observed pursuant to
the Subsidiary Guaranty; or

                  9.08  Judgments.  One or more  judgments  or decrees  shall be
entered against Holdings or any of its Subsidiaries  involving a liability,  net
of undisputed  reinsurance,  of  $10,000,000 or more in the case of any one such
judgment or decree or in the  aggregate  for all such  judgments and decrees for
Holdings and its  Subsidiaries  and any such judgments or decrees shall not have
been vacated,  discharged,  stayed or bonded  pending appeal within 60 days from
the entry thereof; or

                                      -29-
<PAGE>

                  9.09  Change of Control.  A Change of Control shall occur; or

                  9.10  Senior Unsecured Debt Ratings. By the 90th day following
the Restatement Effective Date, Holdings shall not have received a confirmed S&P
Credit Rating (taking into account the LaSalle Business Combination) of at least
BBB- and a confirmed  Moody's  Credit  Rating  (taking  into account the LaSalle
Business Combination) of at least Baa3; or

                  9.11   A.M.  Best   Ratings.   Any  Rated  Ongoing  Regulated
 Subsidiary shall fail to have an A.M. Best claims paying rating of at least A-;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be  continuing,  the  Administrative  Agent  shall,  upon the written
request of the Required Banks, by written notice to the Borrower and the Account
Party, take any or all of the following actions, without prejudice to the rights
of the  Administrative  Agent or any Bank to  enforce  its  claims  against  the
Borrower,  the Account  Party or any other  Credit  Party,  except as  otherwise
specifically provided for in this Credit Agreement (provided that if an Event of
Default  specified in Section  9.05 shall occur with  respect to  Holdings,  the
Borrower or the Account  Party,  the result which would occur upon the giving of
written  notice by the  Administrative  Agent as specified in clauses (i), (ii),
(iii) and (v) below  shall  occur  automatically  without the giving of any such
notice): (i) declare the Total Revolving Loan Commitment  terminated,  whereupon
the  Revolving  Loan   Commitment  of  each  Bank  shall   forthwith   terminate
immediately,  (ii)  declare  the Total  Unutilized  L/C  Commitment  terminated,
whereupon the Unutilized L/C Commitment of each Bank shall  forthwith  terminate
immediately,  (iii) declare the principal of and any accrued interest in respect
of all Loans  and all  other  Obligations  owing  hereunder  and under the other
Credit  Documents to be,  whereupon  the same shall  become,  forthwith  due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby  waived by each of the  Borrower  and the Account  Party,  (iv)
terminate  any Letter of Credit if permitted in accordance  with its terms,  and
(v) direct the Account  Party to pay (and the Account  Party hereby  agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 9.05, to pay) to the  Administrative  Agent at the Payment  Office an
amount of cash to be held as  security  for the  Account  Party's  reimbursement
obligations in respect of all Letters of Credit then  outstanding,  equal to the
aggregate Stated Amount of all Letters of Credit at such time.

                  SECTION  10.  Definitions.  Defined  terms used in this Credit
Agreement  shall have the  meanings  set forth in  Schedule  I attached  hereto.
Defined terms in this Agreement  shall include in the singular number the plural
and in the plural the singular.

                                      -30-
<PAGE>
                  SECTION 11. The Administrative Agent.

                  11.01 Appointment. Each Bank hereby irrevocably designates and
appoints Chase as Administrative  Agent (such term as used in this Section 11 to
include Chase Manhattan International Limited, acting as the Issuing Agent under
this Credit  Agreement and the Letters of Credit) to act as specified herein and
in the other Credit Documents,  and each such Bank hereby irrevocably authorizes
Chase,  as the  Administrative  Agent for such Bank,  to take such action on its
behalf  under the  provisions  of this  Credit  Agreement  and the other  Credit
Documents  and to exercise  such powers and perform such duties as are expressly
delegated to the Administrative  Agent by the terms of this Credit Agreement and
the other Credit  Documents,  together with such other powers as are  reasonably
incidental  thereto.  The  Administrative  Agent  agrees to act as such upon the
express conditions  contained in this Section 11.  Notwithstanding any provision
to the contrary  elsewhere in this Credit Agreement,  the  Administrative  Agent
shall not have any duties or responsibilities,  except those expressly set forth
herein or in the other Credit Documents, nor any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations
or  liabilities  shall be read into this Credit  Agreement  or  otherwise  exist
against the  Administrative  Agent. The provisions of this Section 11 are solely
for the benefit of the  Administrative  Agent and the Banks, and no Credit Party
shall  have any rights as a third  party  beneficiary  of any of the  provisions
hereof. In performing its functions and duties under this Credit Agreement,  the
Administrative  Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation or relationship of agency
or trust with or for the Credit Party.

                  11.02  Delegation  of  Duties.  The  Administrative  Agent may
execute  any of its  duties  under this  Credit  Agreement  or any other  Credit
Document by or through its affiliates,  agents or attorneys-in-fact and shall be
entitled to advice of counsel  concerning all matters pertaining to such duties.
The  Administrative  Agent  shall  not be  responsible  for  the  negligence  or
misconduct  of any agents or  attorneys-in-fact  selected by it with  reasonable
care except to the extent otherwise required by Section 11.03.

                  11.03 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers,  directors,  employees,  agents,  attorneys-in-fact  or
affiliates  shall be (i) liable for any action  lawfully  taken or omitted to be
taken by it or such Person  under or in  connection  with this Credit  Agreement
(except for its or such Person's own gross negligence or willful  misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by Holdings or any of its Subsidiaries or any
of their  respective  officers  contained  in this Credit  Agreement,  any other
Credit  Document or in any  certificate,  report,  statement  or other  document
referred to or provided for in, or received by the Administrative Agent under or
in connection  with,  this Credit  Agreement or any other Credit Document or for
any failure of Holdings or any of its  Subsidiaries  or any of their  respective
officers to perform its obligations hereunder or thereunder.  The Administrative
Agent shall not be under any  obligation  to any Bank to ascertain or to inquire
as to the observance or  performance  of any of the agreements  contained in, or
conditions of, this Credit  Agreement,  or to inspect the  properties,  books or
records of Holdings or any of its Subsidiaries.  The Administrative  Agent shall
not be responsible  to any Bank for the  effectiveness,  genuineness,  validity,
enforceability,  collectibility  or sufficiency of this Credit  Agreement or any
Credit Document or for any representations,  warranties,  recitals or statements
made  herein or  therein  or made in any  written  or oral  statement  or in any
financial or other statements,  instruments,  reports, certificates or any other
documents  in  connection  herewith  or  therewith  furnished  or  made  by  the
Administrative  Agent to the Banks or by or on behalf of Holdings,  the Borrower
or the Account Party to the  Administrative  Agent or any Bank or be required to
ascertain or inquire as to the  performance  or  observance of any of the terms,
conditions,  provisions,  covenants or agreements contained herein or therein or
as to the use of the  proceeds  of the  Loans or of the  existence  or  possible
existence of any Default or Event of Default.

                                      -31-
<PAGE>

                  11.04 Reliance by  Administrative  Agent.  The  Administrative
Agent shall be entitled to rely, and shall be fully  protected in relying,  upon
any note, writing, resolution, notice, consent, certificate,  affidavit, letter,
cablegram,   telegram,  facsimile  transmission,   telex  or  teletype  message,
statement,  order or other document or conversation believed by it to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons and upon advice and  statements  of legal  counsel  (including,  without
limitation, counsel to Holdings, the Borrower or the Account Party), independent
accountants  and  other  experts  selected  by  the  Administrative  Agent.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Credit  Agreement or any other Credit Document unless it shall
first  receive  such advice or  concurrence  of the  Required  Banks as it deems
appropriate or it shall first be indemnified  to its  satisfaction  by the Banks
against any and all  liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative  Agent shall
in all cases be fully protected in acting,  or in refraining from acting,  under
this Credit  Agreement  and the other  Credit  Documents  in  accordance  with a
request of the Required Banks,  and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks.

                  11.05 Notice of Default. The Administrative Agent shall not be
deemed to have  knowledge or notice of the occurrence of any Default or Event of
Default  hereunder  unless the  Administrative  Agent has received notice from a
Bank or any Credit Party  referring to this Credit  Agreement,  describing  such
Default  or Event of  Default  and  stating  that such  notice  is a "notice  of
default." In the event that the Administrative Agent receives such a notice, the
Administrative  Agent  shall  give  prompt  notice  thereof  to the  Banks.  The
Administrative  Agent  shall take such action  with  respect to such  Default or
Event of Default as shall be reasonably directed by the Required Banks, provided
that  unless  and  until the  Administrative  Agent  shall  have  received  such
directions,  the  Administrative  Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Banks.

                  11.06  Non-Reliance.  Each Bank  expressly  acknowledges  that
neither the Administrative Agent nor any of its officers, directors,  employees,
agents,  attorneys-in-fact  or  affiliates  have  made  any  representations  or
warranties to it and that no act by the Administrative  Agent hereinafter taken,
including  any review of the  affairs of  Holdings  or any of its  Subsidiaries,
shall  be  deemed  to  constitute   any   representation   or  warranty  by  the
Administrative  Agent to any Bank.  Each Bank  represents to the  Administrative
Agent that it has,  independently  and without reliance upon the  Administrative
Agent or any other Bank, and based on such  documents and  information as it has
deemed  appropriate,  made  its own  appraisal  of and  investigation  into  the
business,  assets,  operations,   property,   financial  and  other  conditions,
prospects and creditworthiness of Holdings and its Subsidiaries and made its own
decision to make its Loans hereunder, participate in the Letter of Credit issued
hereunder and enter into this Credit  Agreement.  Each Bank also represents that
it will, independently and without reliance upon the Administrative Agent or any
other  Bank,  and  based on such  documents  and  information  as it shall  deem
appropriate at the time,  continue to make its own credit  analysis,  appraisals
and decisions in taking or not taking action under this Credit Agreement, and to
make  such  investigation  as it deems  necessary  to  inform  itself  as to the
business,  assets,  operations,   property,   financial  and  other  conditions,
prospects  and   creditworthiness   of  Holdings  and  its   Subsidiaries.   The
Administrative  Agent shall not have any duty or  responsibility  to provide any
Bank with any credit or other information  concerning the business,  operations,
assets, property, financial and other conditions,  prospects or creditworthiness
of  Holdings  or any  Subsidiary  which  may  come  into the  possession  of the
Administrative  Agent  or any of its  officers,  directors,  employees,  agents,
attorneys- in-fact or affiliates.

                                      -32-
<PAGE>

                  11.07  Indemnification.  Each  Bank  agrees to  indemnify  the
Administrative  Agent in its capacity as such  ratably  according to such Bank's
percentage  used in  determining  Required  Banks  from  time to time,  from and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits, costs,  reasonable expenses or disbursements of any
kind whatsoever which may at any time  (including,  without  limitation,  at any
time  following the payment of the  Obligations)  be imposed on,  incurred by or
asserted  against the  Administrative  Agent in its  capacity as such in any way
relating  to or  arising  out of  this  Credit  Agreement  or any  other  Credit
Document,  or  any  documents  contemplated  by or  referred  to  herein  or the
transactions  contemplated  hereby or any action taken or omitted to be taken by
the Administrative  Agent under or in connection with any of the foregoing,  but
only to the extent that any of the  foregoing  is not paid by Holdings or any of
its  Subsidiaries,  provided that no Bank shall be liable to the  Administrative
Agent for the payment of any portion of such liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
resulting  from  the   Administrative   Agent's  gross   negligence  or  willful
misconduct.  If any  indemnity  furnished  to the  Administrative  Agent for any
purpose shall,  in the opinion of the  Administrative  Agent, be insufficient or
become impaired,  the Administrative Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.  The  agreements in this Section 11.07 shall survive the
payment of all Obligations.

                  11.08 The  Administrative  Agent in its  Individual  Capacity.
Chase and its affiliates  may make loans to, accept  deposits from and generally
engage in any kind of business  with  Holdings  and its  Subsidiaries  as though
Chase were not acting as  Administrative  Agent  hereunder.  With respect to the
Loans  made by it and all  Obligations  owing to it,  Chase  shall have the same
rights and powers  under this Credit  Agreement as any Bank and may exercise the
same as though it were not the  Administrative  Agent,  and the terms "Bank" and
"Banks" shall include the Administrative Agent in its individual capacity.

                  11.09 Successor Administrative Agent. The Administrative Agent
may  resign as the  Administrative  Agent  upon 20 days'  notice  to the  Banks,
Holdings,  the  Borrower  and the  Account  Party.  Upon such  resignation,  the
Required Banks shall, with the consent of each of Holdings, the Borrower and the
Account Party (such consent not to be unreasonably withheld), appoint from among
the  Banks a  successor  Administrative  Agent  for the  Banks,  whereupon  such
successor  agent  shall  succeed  to  the  rights,  powers  and  duties  of  the
Administrative  Agent,  and the term  "Administrative  Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's  rights,  powers  and  duties  as  the  Administrative  Agent  shall  be
terminated,  without any other or further act or deed on the part of such former
Administrative  Agent or any of the parties to this Credit Agreement.  After the
retiring  Administrative  Agent's  resignation  hereunder as the  Administrative
Agent,  the  provisions  of this Section 11 shall inure to its benefit as to any
actions  taken or  omitted to be taken by it while it was  Administrative  Agent
under this Credit Agreement.

                                      -33-
<PAGE>

                  11.10 Other  Agents.  Nothing in this Credit  Agreement or any
other Credit Document shall impose on the Documentation Agent or the Syndication
Agent, in each case in such capacity, any duties or obligations.

                  SECTION 12. Trenwick America Guaranty.

                  12.01 The Trenwick  America  Guaranty.  In order to induce the
Administrative  Agent, the Issuing Agent and the Banks to enter into this Credit
Agreement  and to extend  credit  hereunder  and in  recognition  of the  direct
benefits to be received by Borrower  from the  issuance of the Letters of Credit
on behalf of the Account  Party,  the Borrower  hereby  agrees with the Banks as
follows:  the Borrower  hereby  unconditionally  and  irrevocably  guarantees as
primary  obligor and not merely as surety the full and prompt  payment when due,
whether upon maturity, by acceleration or otherwise, of any and all indebtedness
of the Account Party to the Guaranteed Creditors under this Credit Agreement and
the other Credit  Documents  and all Interest  Rate  Agreement or Other  Hedging
Agreements  entered  into by a Guaranteed  Creditor or a Lending  Affiliate of a
Guaranteed  Creditor.  If any or all of the indebtedness of the Account Party to
the Guaranteed  Creditors  becomes due and payable hereunder or under such other
Credit  Documents or Interest Rate  Agreement or Other Hedging  Agreements,  the
Borrower  unconditionally  promises to pay such  indebtedness  to the Guaranteed
Creditors,  on  demand,  together  with  any  and all  reasonable  out-of-pocket
expenses  which may be incurred by the  Administrative  Agent or the  Guaranteed
Creditors in collecting any of the indebtedness. The word "indebtedness" is used
in this  Section  12 in its  most  comprehensive  sense  and  means  any and all
advances,  debts,  obligations  and  liabilities of the Account Party arising in
connection with this Credit Agreement or any other Credit Documents or under any
Interest Rate Agreement or Other Hedging Agreement with a Guaranteed Creditor or
a Lending Affiliate of a Guaranteed Creditor, in each case, heretofore,  now, or
hereafter  made,  incurred or created,  whether  voluntarily  or  involuntarily,
absolute or contingent, liquidated or unliquidated,  determined or undetermined,
whether or not such  indebtedness is from time to time reduced,  or extinguished
and  thereafter  increased or incurred,  whether the Account Party may be liable
individually  or  jointly  with  others,  whether  or  not  recovery  upon  such
indebtedness  may be or hereafter  become barred by any statute of  limitations,
and  whether  or not such  indebtedness  may be or  hereafter  become  otherwise
unenforceable.

                  12.02 Bankruptcy.  Additionally,  the Borrower unconditionally
and  irrevocably  guarantees  the  payment  of any and all  indebtedness  of the
Account Party to the Guaranteed  Creditors whether or not due or payable by upon
the   occurrence  of  any  of  the  events   specified  in  Section  9.05,   and
unconditionally  and  irrevocably  promises  to  pay  such  indebtedness  to the
Guaranteed Creditors, or order, on demand, in the respective Approved Currency.

                                      -34-
<PAGE>

                  12.03  Nature of  Liability.  The  liability  of the  Borrower
hereunder is exclusive and  independent of any security for or other guaranty of
the  indebtedness  of the Account  Party whether  executed by the Borrower,  any
other  guarantor  or by any  other  party,  and the  liability  of the  Borrower
hereunder  shall  not be  affected  or  impaired  by  (a)  any  direction  as to
application  of payment by the Account  Party or by any other party,  or (b) any
other  continuing  or other  guaranty,  undertaking  or maximum  liability  of a
guarantor or of any other party as to the  indebtedness of the Account Party, or
(c) any payment on or in reduction of any such other guaranty or undertaking, or
(d) any dissolution, termination or increase, decrease or change in personnel by
the Account  Party,  or (e) any payment made to any  Guaranteed  Creditor on the
indebtedness which such Guaranteed Creditor repays to the Account Party pursuant
to court order in any  bankruptcy,  reorganization,  arrangement,  moratorium or
other  debtor  relief  proceeding,  and the  Borrower  waives  any  right to the
deferral or  modification  of its  obligations  hereunder  by reason of any such
proceeding.

                  12.04  Trenwick  America  Guaranty  Absolute.  No  invalidity,
irregularity  or  unenforceability  of  all  or any  part  of  the  indebtedness
guaranteed  hereby or of any  security  therefor  shall  affect,  impair or be a
defense to this Trenwick  America  Guaranty,  and this Trenwick America Guaranty
shall be primary,  absolute and unconditional  notwithstanding the occurrence of
any event or the existence of any other  circumstances  which might constitute a
legal or equitable  discharge of a surety or guarantor except payment in full of
the indebtedness guaranteed herein.

                  12.05 Independent Obligation.  The obligations of the Borrower
hereunder  are  independent  of the  obligations  of any other  guarantor or the
Account  Party,  and a separate  action or actions may be brought and prosecuted
against  the  Borrower  whether  or not  action  is  brought  against  any other
guarantor  or the Account  Party and whether or not any other  guarantor  or the
Account Party be joined in any such action or actions.  The Borrower waives,  to
the fullest  extent  permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by the
Account  Party or other  circumstance  which  operates  to toll any  statute  of
limitations  as to the  Account  Party  shall  operate  to toll the  statute  of
limitations as to the Borrower.

                  12.06  Authorization.  The Borrower  authorizes the Guaranteed
Creditors  without  notice or demand,  and without  affecting or  impairing  its
liability hereunder, from time to time to:

                  (a) change the manner,  place or terms of payment  of,  and/or
         change or extend the time of payment of, renew, increase, accelerate or
         alter, any of the  indebtedness  (including any increase or decrease in
         the rate of interest thereon),  any security therefor, or any liability
         incurred  directly or indirectly in respect thereof,  and this Trenwick
         America  Guaranty  herein  made shall apply to the  indebtedness  as so
         changed, extended, renewed or altered;

                  (b) take and hold security for the payment of the indebtedness
         and sell, exchange, release, surrender,  realize upon or otherwise deal
         with in any manner and in any order any property by  whomsoever  at any
         time  pledged  or  mortgaged  to secure,  or  howsoever  securing,  the
         indebtedness  or any  liabilities  (including  any of those  hereunder)
         incurred  directly or indirectly in respect  thereof or hereof,  and/or
         any offset there against;

                                      -35-
<PAGE>

                  (c)  exercise or refrain from  exercising  any rights  against
         the Account  Party or others or  otherwise  act or refrain from acting;

                  (d)  release  or  substitute  any  one  or   more  endorsers,
         guarantors, the Account Party or other obligors;

                  (e) settle or compromise any of the indebtedness, any security
         therefor or any liability  (including any of those hereunder)  incurred
         directly or indirectly in respect  thereof or hereof,  and  subordinate
         the payment of all or any part thereof to the payment of any  liability
         (whether due or not) of the Account Party to its  creditors  other than
         the Guaranteed Creditors;

                  (f) apply any sums by whomsoever paid or howsoever realized to
         any liability or  liabilities  of the Account  Party to the  Guaranteed
         Creditors  regardless of what  liability or  liabilities of the Account
         Party remain unpaid;

                  (g) consent to or waive any breach of, or any act, omission or
         default  under,  this Credit  Agreement  or any of the  instruments  or
         agreements referred to herein, or otherwise amend, modify or supplement
         this Credit  Agreement or any of such other  instruments or agreements;
         and/or

                  (h)  take  any  other  action  which  would,  under  otherwise
         applicable  principles of common law, give rise to a legal or equitable
         discharge of the Borrower from its liabilities under this Section 12.

                  12.07  Reliance.  It  is  not  necessary  for  any  Guaranteed
Creditors  to inquire  into the  capacity or powers of the Account  Party or its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on their behalf,  and any  indebtedness  made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.

                  12.08 Subordination. Any indebtedness of the Account Party now
or hereafter held by the Borrower is hereby  subordinated to the indebtedness of
the Account Party to the  Guaranteed  Creditors;  and such  indebtedness  of the
Account Party to the Borrower,  if the Administrative Agent (at the direction of
the Required Banks), after an Event of Default has occurred, so requests,  shall
be  collected,  enforced  and  received  by the  Borrower  as  trustee  for  the
Guaranteed  Creditors and be paid over to the Guaranteed Creditors on account of
the indebtedness of the Account Party to the Guaranteed  Creditors,  but without
affecting  or impairing  in any manner the  liability of the Borrower  under the
other provisions of this Trenwick America Guaranty. Prior to the transfer by the
Borrower of any note or negotiable instrument evidencing any indebtedness of the
Account Party to the Borrower,  the Borrower  shall mark such note or negotiable
instrument with a legend that the same is subject to this subordination.

                                      -36-
<PAGE>

                  12.09  Waivers.  (a) The Borrower  waives any right to require
any Guaranteed  Creditors to (i) proceed  against the Account  Party,  any other
guarantor or any other party,  (ii) proceed against or exhaust any security held
from the Account Party,  any other  guarantor or any other party or (iii) pursue
any other remedy in any Guaranteed  Creditor's  power  whatsoever.  The Borrower
waives any defense based on or arising out of any defense of the Account  Party,
any other  guarantor  or any  other  party  other  than  payment  in full of the
indebtedness, including, without limitation, any defense based on or arising out
of the disability of the Account Party,  any other guarantor or any other party,
or the  unenforceability of the indebtedness or any part thereof from any cause,
or the cessation from any cause of the liability of the Account Party other than
to the extent of payment in full of the indebtedness.  The Guaranteed  Creditors
may, in accordance with the Credit  Documents,  at their election,  foreclose on
any security held by the Administrative Agent, the Collateral Agent or any other
Guaranteed  Creditors by one or more judicial or nonjudicial  sales,  whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable  law), or exercise any other right or remedy the
Guaranteed  Creditors  may have against any Borrower or any other party,  or any
security,  without  affecting  or  impairing  in any  way the  liability  of the
Borrower  hereunder  except to the extent the  indebtedness  has been paid.  The
Borrower  waives any defense  arising out of any such election by the Guaranteed
Creditors,  even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of the Borrower against
the Account Party or any other party or any security.

                  (b) Except as otherwise  specifically required hereunder,  the
Borrower waives all presentments, demands for performance, protests and notices,
including,  without limitation,  notices of nonperformance,  notices of protest,
notices of dishonor,  notices of acceptance of this Trenwick  America  Guaranty,
and  notices  of the  existence,  creation  or  incurring  of new or  additional
indebtedness.  The  Borrower  assumes all  responsibility  for being and keeping
itself informed of the Account Party's  financial  condition and assets,  and of
all other circumstances bearing upon the risk of non-payment of the indebtedness
and the  nature,  scope and extent of the risks which the  Borrower  assumes and
incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty to
advise the Borrower of information known to them regarding such circumstances or
risks.

                  (c) The Borrower  warrants and agrees that each of the waivers
set  forth  above in this  Section  12.09 is made  with  full  knowledge  of its
significance  and consequences and that if any of such waivers are determined to
be  contrary to any  applicable  law or public  policy,  such  waivers  shall be
effective only to the maximum extent permitted by law.

                  12.10  Trenwick  America  Guaranty  Continuing.  This Trenwick
America  Guaranty is a continuing one and all liabilities to which it applies or
may apply under the terms  hereof  shall be  conclusively  presumed to have been
created in reliance  hereon.  No failure or delay on the part of any  Guaranteed
Creditors in exercising any right, power or privilege hereunder shall operate as
a waiver thereof;  nor shall any single or partial exercise of any right,  power
or privilege  hereunder  preclude any other or further  exercise  thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein
expressly  specified are  cumulative and not exclusive of any rights or remedies
which any Guaranteed Creditors or any subsequent holder of a Note, or issuer of,
or  participant  in, a Letter of Credit would  otherwise  have.  No notice to or
demand on the  Borrower in any case shall  entitle the  Borrower to any other or
further  notice or demand in  similar or other  circumstances  or  constitute  a
waiver of the  rights of the  Guaranteed  Creditors  or any  holder,  creator or
purchaser to any other or further action in any circumstances  without notice or
demand.

                                      -37-
<PAGE>

                  12.11 Binding  Nature of  Guaranties.  This  Trenwick  America
Guaranty  shall be binding upon the Borrower and its  successors and assigns and
shall inure to the benefit of the Guaranteed  Creditors and their successors and
assigns.

                  12.12  Judgments  Binding.  If  claim  is ever  made  upon any
Guaranteed  Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the indebtedness and such Guaranteed Creditor
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative  body having  jurisdiction over such payee or any
of its property,  or (b) any settlement or compromise of any such claim effected
by such Guaranteed Creditor with any such claimant (including the Account Party)
then and in such  event the  Borrower  agrees  that any such  judgment,  decree,
order,   settlement   or   compromise   shall  be  binding  upon  the  Borrower,
notwithstanding  any revocation hereof or the cancellation of any Note, or other
instrument evidencing any liability of the Account Party, and the Borrower shall
be and remain  liable to the  Guaranteed  Creditors  hereunder for the amount so
repaid or  recovered  to the same extent as if such amount had never  originally
been received by any such payee.

                  SECTION 13.  Miscellaneous.
                               -------------

                  13.01  Payment of Expenses,  etc. Each of the Borrower and the
Account Party,  jointly and  severally,  hereby agree to: (i) whether or not the
transactions   herein   contemplated   are   consummated,   pay  all  reasonable
out-of-pocket costs and expenses of the Administrative  Agent in connection with
the negotiation,  preparation, syndication, execution and delivery of the Credit
Documents  and  the  documents  and  instruments  referred  to  therein  and any
amendment,  waiver or consent relating thereto  (including,  without limitation,
the  reasonable  fees  and  disbursements  of  White & Case  LLP);  (ii) pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent and each
of the Banks in connection with the enforcement of the Credit  Documents and the
documents and instruments  referred to therein  (including,  without limitation,
the reasonable fees and  disbursements of counsel for the  Administrative  Agent
and for each of the Banks);  (iii) pay and hold each of the Banks  harmless from
and against any and all present and future  stamp and other  similar  taxes with
respect to the  foregoing  matters and save each of the Banks  harmless from and
against any and all  liabilities  with respect to or resulting from any delay or
omission to pay such taxes; and (iv) indemnify the Administrative Agent and each
Bank, and their respective officers, directors,  employees,  representatives and
agents  (each,  an  "indemnified  person")  from and hold each of them  harmless
against  any  and  all  losses,   liabilities,   claims,   damages  or  expenses
(collectively,  "Claims") incurred by any of them as a result of, or arising out
of, or in any way related to, or by reason of, any investigation,  litigation or
other proceeding (whether or not the Administrative Agent or any Bank is a party
thereto) related to the entering into and/or  performance of any Credit Document
or any other Transaction Document or the use of the proceeds of any Loans or the
Letter of Credit  hereunder or the Transaction or the  consummation of any other
transactions contemplated in any Credit Document, including, without limitation,
the reasonable fees and disbursements of counsel incurred in connection with any
such  investigation,  litigation  or other  proceeding  (but  excluding any such
losses,  liabilities,  claims,  damages or  expenses  to the extent  incurred by
reason  of the  gross  negligence  or  willful  misconduct  of the  Person to be
indemnified).  No Bank shall be liable for any damages  arising  from the use by
others  of  information  or  other  materials   obtained   through   electronic,
telecommunications or other information transmission systems.

                                      -38-
<PAGE>

                  13.02  Right of  Setoff.  In  addition  to any  rights  now or
hereafter  granted  under  applicable  law  or  otherwise,  and  not  by  way of
limitation of any such rights,  upon the occurrence and  continuance of an Event
of  Default,  each Bank is hereby  authorized  at any time or from time to time,
without presentment,  demand,  protest or other notice of any kind to any Credit
Party or to any other Person,  any such notice being hereby expressly waived, to
set off and to appropriate  and apply any and all deposits  (general or special)
and any other  Indebtedness  at any time held or owing by such Bank  (including,
without  limitation,  by branches and agencies of such Bank wherever located) to
or for the credit or the account of such Credit Party  against and on account of
the  Obligations  and liabilities of such Credit Party to such Bank or any other
Bank under this Credit  Agreement  or under any of the other  Credit  Documents,
including, without limitation, all interests in Obligations of such Credit Party
purchased by such Bank or any other Bank pursuant to Section  13.06(b),  and all
other claims of any nature or description  arising out of or connected with this
Credit  Agreement or any other Credit  Document,  irrespective of whether or not
such Bank shall have made any demand  hereunder and although  said  Obligations,
liabilities or claims,  or any of them,  shall be contingent or unmatured.  Each
Bank is hereby designated the agent of all other Banks for purposes of effecting
set off  pursuant to this Section  13.02 and each Credit Party hereby  grants to
each  Bank for such  Bank's  own  benefit  and as agent  for all  other  Banks a
continuing security interest in any and all deposits, accounts or moneys of such
Credit Party maintained from time to time with such Bank.

                  13.03 Notices.  Except as otherwise expressly provided herein,
all notices and other communications  provided for hereunder shall be in writing
(including facsimile  communication) and mailed,  telecopied or delivered, if to
any Credit Party, at the address  specified  opposite its signature below; if to
any Bank, at its address specified for such Bank on Annex II hereto; or, at such
other  address as shall be  designated  by any party in a written  notice to the
other  parties  hereto.  All such  notices and  communications  shall be mailed,
telecopied,  sent by overnight  courier or delivered by hand and shall be deemed
to have been  given on the date of  receipt if  delivered  by hand or  overnight
courier or sent by telecopy,  or the date that is five Business Days after being
deposited in the mail, postage prepaid,  in each case delivered,  sent or mailed
(properly  addressed)  to such party as  provided  in this  Section  13.03 or in
accordance  with the last  unrevoked  notice from such party given in accordance
with this  Section  13.03;  provided  that  notices  and  communications  to the
Administrative  Agent shall be  effective  when  received by the  Administrative
Agent.

                  13.04 Benefit of Agreement. (a) This Credit Agreement shall be
binding upon and inure to the benefit of and be  enforceable  by the  respective
successors and assigns of the parties hereto; provided,  however, that no Credit
Party may assign or transfer any of its rights or obligations  hereunder without
the  prior  written  consent  of the  Banks.  Each  Bank may at any  time  grant
participations  in any of its rights  hereunder or under any of its Notes to any
bank or  other  financial  institution;  provided  that in the  case of any such
participation,  (i) such Bank's  obligations  under this Credit  Agreement shall
remain  unchanged,  (ii) such Bank shall remain solely  responsible to the other
parties hereto for the  performance of such  obligations,  (iii) the participant
shall agree to be bound by the confidentiality  provisions  contained in Section
13.15 and (iv) the  participant  shall not have any  rights  under  this  Credit
Agreement or any of the other  Credit  Documents,  including  rights of consent,
approval or waiver (the  participant's  rights  against  such Bank in respect of
such participation to be those set forth in the agreement executed by such  Bank

                                      -39-
<PAGE>

in favor of the  participant  relating  thereto) and all amounts  payable by the
Borrower and the Account Party hereunder shall be determined as if such Bank had
not sold such  participation,  except that the participant  shall be entitled to
receive the additional amounts under Sections 1.10, 1.11 and 4.04 of this Credit
Agreement to, and only to, the extent that, and in no greater amount than,  such
Bank  would be  entitled  to such  benefits  if the  participation  had not been
entered into or sold; and provided further,  that no Bank shall transfer,  grant
or assign any  participation  under which the  participant  shall have rights to
approve any amendment to or waiver of this Credit  Agreement or any other Credit
Document  except to the extent  such  amendment  or waiver  would (i) extend any
Scheduled  Repayment or the final scheduled maturity of any Loan, Note or Letter
of Credit in which such participant is  participating  (it being understood that
any waiver of the  application of any prepayment or the method of application of
any  prepayment  to the  amortization  of,  the Loans  shall not  constitute  an
extension of a Scheduled  Repayment or the final  scheduled  maturity  date), or
reduce the rate or extend the time of payment of  interest  thereon or Fees,  or
reduce  the  principal   amount   thereof,   or  increase   such   participant's
participating  interest  in any  Commitment,  Loan or Letter of Credit  over the
amount thereof then in effect (it being  understood that a waiver of any Default
or Event of Default or of a mandatory  reduction in the Total Commitment or of a
mandatory  repayment or prepayment shall not constitute a change in the terms of
any Commitment and that an increase in any Commitment shall be permitted without
the  consent  of any  participant  if such  participant's  participation  is not
increased as a result thereof), or (ii) consent to the assignment or transfer by
Holdings,  the Borrower or the Account Party of any of their  respective  rights
and obligations  under this Credit Agreement or any other Credit Document except
in accordance with the terms hereof and thereof.

                  (b) Notwithstanding the foregoing,  any Bank may assign all or
a portion of its rights and  obligations  hereunder to a bank or other financial
institution  with the prior written  consent of the  Administrative  Agent,  the
Borrower  and the  Account  Party,  which  consents  shall  not be  unreasonably
withheld or delayed  (provided  that (i) no such  consents  shall be required in
connection  with an assignment to a Person which is already a Bank  hereunder or
an  affiliate of a Bank  hereunder  and (ii) the consent of the Borrower and the
Account  Party  shall not be  required  at any time  when a Default  or Event of
Default  exists).  No  assignment  of  less  than  all of a  Bank's  rights  and
obligations  hereunder pursuant to the immediately  preceding sentence shall, to
the extent such  transaction  represents an assignment to an  institution  other
than one or more  Banks  hereunder,  be in an  aggregate  amount  less  than the
minimum of $5,000,000  unless otherwise agreed to by the  Administrative  Agent,
the  Borrower  and the Account  Party in writing.  No  assignment  of all or any
portion of a Bank's L/C Commitment shall be made to an institution  which is not
an Approved Credit Institution,  and no such assignment shall be effective until
all then  outstanding  Letters of Credit are  returned by Lloyd's to the Issuing
Agent for cancellation in exchange for new or amended Letters of Credit having a
Schedule 1 thereto which gives effect to such  assignment.  If any Bank so sells
or  assigns  all or a part of its  rights  hereunder  or under  the  Notes,  any
reference  in this Credit  Agreement or the Notes to such  assigning  Bank shall
thereafter  refer to such Bank and to the  respective  assignee to the extent of
their respective interests and the respective assignee shall have, to the extent
of such  assignment  (unless  otherwise  provided  therein),  the  same  rights,
obligations  and  benefits  as it would if it were  such  assigning  Bank.  Each
assignment  pursuant to this Section 13.04(b) shall be effected by the assigning
Bank and the assignee Bank  executing an  Assignment  and  Assumption  Agreement

                                      -40-
<PAGE>

substantially  in  the  form  of  Exhibit  H   (appropriately   completed)  (the
"Assignment and Assumption Agreement").  At the time of any such assignment, (i)
Annex I shall be deemed to be amended to reflect the  Commitments,  if any,  and
outstanding  Loans of the  respective  assignee  (which shall result in a direct
reduction to the  Commitments,  if any, and  outstanding  Loans of the assigning
Bank) and of the  other  Banks,  (ii) if any such  assignment  occurs  after the
Restatement  Effective  Date, at the request of the assignor or the assignee the
Borrower  will issue new Notes to the  respective  assignee and to the assigning
Bank  in  conformity  with  the   requirements   of  Section  1.05,   (iii)  the
Administrative  Agent shall receive from the assigning  Bank and/or the assignee
Bank or  financial  institution  at the time of each  assignment  (other than an
assignment to an affiliate of a Bank  hereunder) the payment of a  nonrefundable
assignment fee of $3,500,  (iv) the Administrative  Agent shall receive from the
assignee Bank the Administrative Agent's administrative  questionnaire completed
by such assignee  Bank and (v) if any such  assignment is of all or a portion of
the assigning  Bank's L/C  Commitment,  all then  outstanding  Letters of Credit
shall be amended or  returned  by the  Account  Party to the  Issuing  Agent for
cancellation  and  reissued  to  reflect  such  assignment.  At the time of each
assignment  pursuant to this Section 13.04(b) to a Person which is not already a
Bank  hereunder and which is not a United States person (as such term is defined
in  Section  7701(a)(30)  of the Code) for  Federal  income  tax  purposes,  the
respective  assignee Bank shall  provide to the Borrower,  the Account Party and
the Administrative Agent the appropriate Internal Revenue Service forms (and, if
applicable a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). Each
Bank,  the  Borrower  and the Account  Party  agrees to execute  such  documents
(including, without limitation, amendments to the Credit Agreement and the other
Credit  Documents)  as shall be  necessary  to effect  the  foregoing.  Promptly
following any assignment  pursuant to this Section 13.04(b),  the assigning Bank
shall  promptly  notify the Borrower,  the Account Party and the  Administrative
Agent thereof.  Nothing in this Section 13.04 shall prevent or prohibit any Bank
from pledging its Loans or Notes  hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank.

                  (c)  Notwithstanding  any  other  provisions  of this  Section
13.04,  no transfer or assignment of the  interests or  obligations  of any Bank
hereunder  or any grant of  participations  therein  shall be  permitted if such
transfer, assignment or grant would require the Borrower or the Account Party to
file a  registration  statement  with the SEC or to qualify  the Loans under the
"Blue Sky" laws of any state.

                  (d) Each Bank initially party to this Credit  Agreement hereby
represents,  and each  Person  that  becomes a Bank  pursuant  to an  assignment
permitted  by clause  (b)  above  will upon its  becoming  party to this  Credit
Agreement represent, that it is a commercial lender, other financial institution
or other  "accredited  investor"  (as defined in SEC  Regulation  D) which makes
loans in the ordinary course of its business or is acquiring the Loans without a
view to distribution  of the Loans within the meaning of the federal  securities
laws, and that it will make or acquire Loans for its own account in the ordinary
course of such  business,  provided that,  subject to the preceding  clauses (a)
through (c), the  disposition of any promissory  notes or other  evidences of or
interests  in  Indebtedness  held by such Bank  shall at all times be within its
exclusive control.

                                      -41-
<PAGE>

                  13.05 No Waiver;  Remedies Cumulative.  No failure or delay on
the part of the Administrative  Agent or any Bank in exercising any right, power
or  privilege  hereunder  or under any other  Credit  Document  and no course of
dealing between any Credit Party and the Administrative  Agent or any Bank shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right, power or privilege  hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right,  power
or privilege  hereunder or thereunder.  The rights and remedies herein expressly
provided are  cumulative  and not exclusive of any rights or remedies  which the
Administrative Agent or any Bank would otherwise have. No notice to or demand on
the Borrower or the Account  Party in any case shall  entitle such Person to any
other  or  further  notice  or  demand  in  similar  or other  circumstances  or
constitute  a waiver of the rights of the  Administrative  Agent or the Banks to
any other or further action in any circumstances without notice or demand.

                  13.06 Payments Pro Rata. (a) The  Administrative  Agent agrees
that  promptly  after its receipt of each payment from or on behalf of Holdings,
the Borrower or the Account Party in respect of any Obligations of such Persons,
it shall  distribute  such  payment to the Banks  (other  than any Bank that has
consented in writing to waive its pro rata share of such payment) pro rata based
upon their respective  shares,  if any, of the Obligations with respect to which
such payment was received.

                  (b) Each of the Banks  agrees that,  if it should  receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by  counterclaim  or cross
action,  by  the  enforcement  of any  right  under  the  Credit  Documents,  or
otherwise)  which is  applicable to the payment of the principal of, or interest
on, the  Loans,  Unpaid  Drawings  or Fees,  of a sum which with  respect to the
related sum or sums received by other Banks is in a greater  proportion than the
total of such  Obligation  then owed and due to such Bank  bears to the total of
such Obligation then owed and due to all of the Banks  immediately prior to such
receipt,  then such Bank  receiving  such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of Holdings,  the Borrower and the Account Party to such Banks in such amount as
shall result in a proportional participation by all of the Banks in such amount,
provided  that  if all or any  portion  of  such  excess  amount  is  thereafter
recovered  from such Bank,  such  purchase  shall be rescinded  and the purchase
price restored to the extent of such recovery, but without interest.

                  (c) Notwithstanding anything to the contrary contained herein,
the  provisions of the preceding  Sections  13.06(a) and (b) shall be subject to
the  express  provisions  of this Credit  Agreement  which  require,  or permit,
differing  payments to be made to Non-Defaulting  Banks as opposed to Defaulting
Banks.

                  13.07  Computations.    (a)    All  computations  of interest
on  Eurodollar  Loans and Fees  hereunder shall be made on the actual  number of
days elapsed over a year of 360 days.

                  (b) All  computations of interest on Base Rate Loans hereunder
shall be made on the actual number of days elapsed over a year of 365/366 days.

                  (c)  For  purposes  of  this  Credit  Agreement,   the  Dollar
Equivalent  of each  Loan  that is an  Alternate  Currency  Loan and the  Dollar
Equivalent  of the stated  amount of each Letter of Credit that is an  Alternate
Currency  Letter of Credit shall be calculated on the date when any such Loan is
made or such Letter of Credit is issued, on the first Business Day of each month
and at such other times as  designated by the  Administrative  Agent at any time
when a Default or an Event of  Default  exists.  Such  Dollar  Equivalent  shall
remain in effect until the same is recalculated by the  Administrative  Agent as
provided above and notice of such  recalculation  is received by the Borrower or
the  Account  Party,  as the case may be, it being  understood  that  until such
notice is received,  the Dollar  Equivalent  shall be that Dollar  Equivalent as
last reported to the Borrower and the Account Party by the Administrative Agent.
The Administrative  Agent shall promptly notify the Borrower,  the Account Party
and the Banks of each such determination of the Dollar Equivalent.

                                      -42-
<PAGE>

                  13.08 GOVERNING LAW;  SUBMISSION TO  JURISDICTION;  VENUE. (a)
THIS  CREDIT  AGREEMENT  AND THE  OTHER  CREDIT  DOCUMENTS  AND THE  RIGHTS  AND
OBLIGATIONS  OF THE PARTIES  HEREUNDER  AND  THEREUNDER  SHALL BE  CONSTRUED  IN
ACCORDANCE  WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.  ANY LEGAL
ACTION OR PROCEEDING  WITH RESPECT TO THIS CREDIT  AGREEMENT OR ANY OTHER CREDIT
DOCUMENT  MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN  DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS CREDIT AGREEMENT,  EACH CREDIT PARTY HEREBY IRREVOCABLY  ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION  OF  THE  AFORESAID  COURTS.   EACH  CREDIT  PARTY  HEREBY  FURTHER
IRREVOCABLY  WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK  JURISDICTION  OVER SUCH
CREDIT  PARTY,  AND  AGREES  NOT TO PLEAD  OR  CLAIM,  IN ANY  LEGAL  ACTION  OR
PROCEEDING  WITH RESPECT TO THIS CREDIT  AGREEMENT OR ANY OTHER CREDIT  DOCUMENT
BROUGHT IN ANY OF THE AFORESAID COURTS,  THAT ANY SUCH COURT LACKS  JURISDICTION
OVER SUCH CREDIT PARTY.  EACH CREDIT PARTY FURTHER  IRREVOCABLY  CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES  THEREOF BY  REGISTERED  OR CERTIFIED  MAIL,
POSTAGE  PREPAID,  TO SUCH CREDIT  PARTY AT ITS ADDRESS FOR NOTICES  PURSUANT TO
SECTION 13.03, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
CREDIT PARTY HEREBY  IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING  HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE  ADMINISTRATIVE  AGENT OR ANY  BANK TO SERVE  PROCESS  IN ANY  OTHER  MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL  PROCEEDINGS OR OTHERWISE  PROCEED AGAINST
ANY CREDIT PARTY IN ANY OTHER JURISDICTION.

                  (b) EACH CREDIT PARTY HEREBY  IRREVOCABLY WAIVES ANY OBJECTION
WHICH  IT MAY  NOW OR  HEREAFTER  HAVE  TO THE  LAYING  OF  VENUE  OF ANY OF THE
AFORESAID  ACTIONS OR  PROCEEDINGS  ARISING  OUT OF OR IN  CONNECTION  WITH THIS
CREDIT  AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO
IN CLAUSE  (A) ABOVE AND  HEREBY  FURTHER  IRREVOCABLY  WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR  PROCEEDING  BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                                      -43-
<PAGE>

                  13.09  Counterparts.  This Credit Agreement may be executed in
any number of  counterparts  and by the  different  parties  hereto on  separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts  executed  by all the  parties  hereto  shall  be  lodged  with the
Borrower, the Account Party and the Administrative Agent.

                  13.10  Effectiveness.  (a) This Credit  Agreement shall become
effective  on the date  (the  "Restatement  Effective  Date")  on which  (i) the
Borrower,  the  Account  Party and each of the Banks  shall  have  signed a copy
hereof (whether the same or different  copies) and shall have delivered the same
to the Administrative  Agent at the Administrative  Agent's Notice Office or, in
the case of the Banks, shall have given to the  Administrative  Agent telephonic
(confirmed in writing), written, telex or telecopy notice (actually received) at
such  office  that  the  same  has been  signed  and  mailed  to it and (ii) the
conditions  contained in Sections 5 and 13.10(b) are met to the  satisfaction of
the  Administrative  Agent and the Required Banks (determined  immediately after
the occurrence of the Restatement  Effective  Date).  Unless the  Administrative
Agent has received actual notice from any Bank that the conditions  contained in
Section 5 have not been met to its  satisfaction,  upon the  satisfaction of the
conditions  described in clause (i) of the  immediately  preceding  sentence and
upon the  Administrative  Agent's good faith  determination  that the conditions
described in clause (ii) of the  immediately  preceding  sentence have been met,
then the  Restatement  Effective  Date shall have been deemed to have  occurred,
regardless of any  subsequent  determination  that one or more of the conditions
thereto have not been met (although the occurrence of the Restatement  Effective
Date shall not release the Borrower or the Account  Party from any liability for
failure to satisfy one or more of the applicable conditions contained in Section
5). The Administrative Agent will give the Borrower,  the Account Party and each
Bank prompt written notice of the occurrence of the Restatement Effective Date.

                  (b) On the Restatement  Effective Date, each New Bank and each
Continuing Bank shall deliver to the Administrative Agent for the account of the
Borrower  an  amount  equal to (i) in the case of each New Bank,  the  Revolving
Loans to be made by such New Bank on the Restatement  Effective Date and (ii) in
the case of each  Continuing  Bank, the amount by which the principal  amount of
Revolving Loans to be made by such Continuing Bank on the Restatement  Effective
Date  exceeds  the  amount  of  the  Original  Loans  of  such  Continuing  Bank
outstanding on the  Restatement  Effective Date (it being  understood and agreed
that to the extent the amount by which the principal  amount of Revolving  Loans
to be made by such  Continuing  Bank on the  Restatement  Effective Date is less
than the amount of the Original Loans of such Continuing Bank outstanding on the
Restatement Effective Date the difference between such amounts shall be returned
to such Continuing Bank).  Notwithstanding anything to the contrary contained in
this  Section  13.10(b),  in  satisfying  the  foregoing  condition,  unless the
Administrative  Agent  shall  have  been  notified  by  any  Bank  prior  to the
occurrence of the  Restatement  Effective Date that such Bank does not intend to
make available to the Administrative  Agent such Bank's Revolving Loans required
to be made by it on such date, then the Administrative Agent may, in reliance on
such  assumption,  make available to the Borrower the  corresponding  amounts in
accordance with the provisions of Section 1.04, and the making  available by the
Administrative Agent of such amounts shall satisfy the condition in this Section
13.10(b).

                                      -44-
<PAGE>

                  13.11  Headings  Descriptive.  The  headings  of  the  several
sections and  subsections of this Credit  Agreement are inserted for convenience
only  and  shall  not in any way  affect  the  meaning  or  construction  of any
provision of this Credit Agreement.

                  13.12 Amendment or Waiver.  Neither this Credit  Agreement nor
any other  Credit  Document  nor any terms  hereof or  thereof  may be  changed,
waived,  discharged  or  terminated  unless such  change,  waiver,  discharge or
termination is in writing signed by the respective  Credit Parties party thereto
and the  Required  Banks,  provided  that no such change,  waiver,  discharge or
termination shall, without the consent of each Bank affected thereby (other than
a Defaulting  Bank),  (i) extend any Scheduled  Repayment or the scheduled final
maturity  of any Loan,  Letter of Credit or Note (it being  understood  that any
waiver of the  application of any prepayment or the method of application of any
prepayment to the amortization of the Loans shall not constitute an extension of
any Scheduled Repayment or the scheduled final maturity thereof),  or reduce the
rate, or extend the time of payment,  of interest  thereon or Fees or reduce the
principal  amount  thereof,  (ii) increase the  Commitments of any Bank over the
amount thereof then in effect (it being  understood that a waiver of any Default
or Event of Default  or of a  mandatory  reduction  in the Total  Commitment  or
mandatory  repayment or prepayment shall not constitute a change in the terms of
any Commitment of any Bank), (iii) amend,  modify or waive any provision of this
Section 13.12, (iv) reduce any percentage specified in, or otherwise modify, the
definition  of Required  Banks or (v) consent to the  assignment  or transfer by
Holdings,  the Borrower or the Account Party of any of their  respective  rights
and obligations  under this Credit Agreement or the other Credit  Documents.  No
provision  of Section 11 or any other  provision  relating to the rights  and/or
obligations of the  Administrative  Agent may be amended  without the consent of
the Administrative Agent.

                  13.13 Survival.  All  indemnities set forth herein  including,
without  limitation,  in Section 1.10,  1.11, 4.04, 11.07 or 13.01 shall survive
the execution and delivery of this Credit Agreement and the making of the Loans,
the repayment of the Obligations and the termination of the Total Commitment.

                  13.14 Domicile of Loans.  Subject to Section 13.04,  each Bank
may transfer and carry its Loans at, to or for the account of any branch office,
subsidiary or affiliate of such Bank, provided that neither the Borrower nor the
Account Party shall be responsible  for costs arising under Section 1.10 or 4.04
resulting from any such transfer to the extent not otherwise  applicable to such
Bank prior to such transfer.

                                      -45-
<PAGE>

                  13.15 Confidentiality.  The Administrative Agent and each Bank
shall hold all non-public  information furnished by or on behalf of the Borrower
and the Account  Party in connection  with such Bank's  evaluation of whether to
become a Bank hereunder or obtained by such Bank pursuant to the requirements of
the  Credit  Documents  ("Confidential  Information")  in  accordance  with  its
customary procedure for handling confidential  information of this nature and in
accordance with safe and sound banking or lending  practices;  provided that any
Bank and/or its affiliates may disclose any such Confidential Information (a) to
their respective affiliates, directors, officers, employees, auditors or counsel
for purposes related to the Credit  Documents and the transactions  contemplated
thereby,  provided  that  the  Bank  disclosing  such  confidential  information
pursuant to this clause (a) shall remain liable for any non-permitted disclosure
of such information by any such employee, director, agent, attorney,  accountant
or professional  advisor,  (b) as has become  generally  available to the public
other than as a result of disclosure in violation of this Section 13.15,  (c) as
has become  available to such Bank or any such  affiliate on a  non-confidential
basis  from a source  other than the  Borrower  or the  Account  Party and their
respective affiliates,  provided that the source is not known by such Bank to be
prohibited  from  transmitting  such  information to such Bank by a contractual,
legal or  fiduciary  obligation,  (d) as may be required or  appropriate  in any
report,  statement or testimony  submitted  to any  municipal,  state or Federal
regulatory  body having or claiming to have  jurisdiction  over such Bank and/or
its affiliates,  (e) as may be required or appropriate in respect to any summons
or subpoena or in connection  with any litigation or other judicial  process (it
being  understood  that,  to  the  extent  reasonably  practicable  and  legally
permitted  under the  circumstances,  the Borrower or the Account Party,  as the
case may be,  shall be given  prior  notice and an  opportunity  to contest  any
proposed  disclosure  pursuant to this clause (e)),  (f) in order to comply with
any law,  order,  regulation  or  ruling  applicable  to such  Bank  and/or  its
affiliates,  and (g) to any permitted  prospective or actual syndicate member or
participant in the Loans,  provided that such  prospective  or actual  syndicate
member or participant  agrees with the respective  assigning Bank to be bound by
the provisions of this Section 13.15. The provisions of this Section 13.15 shall
survive any termination of the Credit Agreement.

                  13.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS CREDIT
AGREEMENT HEREBY  IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM  ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT,
THE CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  13.17  Judgment  Currency.  (a) Each of the Borrower's and the
Account Party's  Obligations  hereunder and under the other Credit  Documents to
make payments in the applicable  Approved  Currency (the "Obligation  Currency")
shall not be discharged  or satisfied by any tender or recovery  pursuant to any
judgment  expressed in or converted  into any currency other than the Obligation
Currency,  except to the  extent  that such  tender or  recovery  results in the
effective receipt by the Administrative Agent or the respective Bank of the full
amount of the Obligation  Currency expressed to be payable to the Administrative
Agent or such Bank under the Credit Agreement or the other Credit Documents. If,
for the purpose of obtaining or enforcing  judgment  against the Borrower or the
Account  Party in any court or in any  jurisdiction,  it  becomes  necessary  to
convert into or from any currency other than the Obligation Currency (such other
currency  being  hereinafter  referred to as the "Judgment  Currency") an amount
due, in the Obligation  Currency,  the conversion  shall be made at the Relevant
Currency Equivalent,  and, in the case of other currencies, the rate of exchange
(as quoted by the Administrative  Agent or if the Administrative  Agent does not
quote a rate of exchange on such  currency,  by a known dealer in such  currency
designated  by the  Administrative  Agent)  determined,  in each case, as of the
Business Day immediately  preceding the day on which the judgment is given (such
Business Day being hereinafter  referred to as the "Judgment Currency Conversion
Date").

                                      -46-
<PAGE>

                  (b) If there is a change  in the rate of  exchange  prevailing
between the Judgment Currency  Conversion Date and the date of actual payment of
the amount due,  the  Borrower  and the  Account  Party  jointly  and  severally
covenant and agree to pay, or cause to be paid, such additional  amounts, if any
(but in any event not a lesser  amount) as may be  necessary  to ensure that the
amount paid in the  Judgment  Currency,  when  converted at the rate of exchange
prevailing  on the date of payment,  will  produce the amount of the  Obligation
Currency which could have been  purchased  with the amount of Judgment  Currency
stipulated in the judgment or judicial award at the rate of exchange  prevailing
on the Judgment Currency Conversion Date.

                  (c)  For  purposes  of  determining   the  Relevant   Currency
Equivalent  or any other rate of exchange for this  Section,  such amounts shall
include any premium and costs  payable in  connection  with the  purchase of the
Obligation Currency.

                  13.18 Euro. (a) If at any time that an Alternate Currency Loan
or an Alternate Currency Letter of Credit is outstanding, the relevant Alternate
Currency  is fully  replaced as the lawful  currency of the country  that issued
such Alternate Currency (the "Issuing Country") by the Euro so that all payments
are to be made in the Issuing Country in Euros and not in the Alternate Currency
previously the lawful  currency of such country,  then such  Alternate  Currency
Loan or Alternate  Currency  Letter of Credit shall be  automatically  converted
into a Loan or Letter of Credit  denominated  in Euros in a principal  amount or
stated  amount equal to the amount of Euros into which the  principal  amount or
stated  amount of such  Alternate  Currency  Loan or  Letter of Credit  would be
converted  pursuant to the EMU  Legislation and thereafter no further Loans will
be available in such Alternate Currency,  with the basis of accrual of interest,
notices requirements and payment offices with respect to such converted Loans or
Letters of Credit to be that consistent with the convention and practices in the
London interbank market for Euro denominated Loans or Letters of Credit.

                  (b) Each of the Borrower and the Account Party shall from time
to time, at the request of any Bank,  pay to such Bank the amount of any losses,
damages, liabilities,  claims, reduction in yield, additional expense, increased
cost, reduction in any amount payable,  reduction in the effective return of its
capital,  the  decrease or delay in the payment of interest or any other  return
forgone  by such  Bank or its  affiliates  as a  result  of the tax or  currency
exchange resulting from the introduction, changeover to or operation of the Euro
in any applicable nation or Eurocurrency market.

                                      -47-

<PAGE>

                  IN WITNESS  WHEREOF,  each of the parties  hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as of the
date first above written.

Address:
-------

One Canterbury Green                           TRENWICK AMERICA CORPORATION
Stamford, Connecticut  06901
Tel:  (203) 353-5500
Fax:  (203) 353-5557
Attention:  Alan L. Hunte                      By: /s/ Alan L. Hunte
                                               ---------------------------------
                                               Title:  Executive Vice President
                                                       and Treasurer

                                               TRENWICK HOLDINGS LIMITED

                                               By: /s/ Ginette Handfield
                                               ---------------------------------
                                               Title: Finance Director

                                               THE CHASE MANHATTAN BANK,
                                               Individually and as
                                               Administrative Agent

                                               By: /s/ Donald Rands
                                               ---------------------------------
                                               Title: Vice President

                                               CHASE MANHATTAN INTERNATIONAL
                                               LIMITED, as Issuing Agent

                                               By: /s/ Stephen Hurford
                                               ---------------------------------
                                               Title: Vice President

                                               By: /s/ Stephen Clark
                                               ---------------------------------
                                               Title: Vice President

                                      -48-
<PAGE>

                                               FIRST UNION NATIONAL BANK,
                                               Individually and as Syndication
                                               Agent

                                               By: /s/ Thomas L. Stitchberry
                                               ---------------------------------
                                               Title:  Senior Vice President

                                               FLEET NATIONAL BANK, Individually
                                               and as Documentation Agent

                                               By: /s/ Jan-Gee McCollam
                                               ---------------------------------
                                               Title:  Managing Director

                                               CREDIT LYONNAIS NEW YORK BRANCH

                                               By: /s/ Sebastian Rocco
                                               ---------------------------------
                                               Title:  Senior Vice President

                                               DRESDNER BANK AG, New York
                                               and Grand Cayman Branches

                                               By: /s/ Lloyd Stevens
                                               ---------------------------------
                                               Title: Vice President

                                               By: /s/ George T. Ferguson, IV
                                               ---------------------------------
                                               Title:  Assistant Vice President

                                               NATIONAL WESTMINSTER BANK PLC

                                               By: /s/ Ian Grimsley
                                               ---------------------------------
                                               Title:  Head of Insurance, City
                                                       Markets Group

                                      -49-
<PAGE>

                                               STATE STREET BANK AND TRUST
                                               COMPANY

                                               By: /s/ Edward M. Anderson
                                               ---------------------------------
                                               Title: Vice President

                                               THE BANK OF NOVA SCOTIA

                                                By: /s/ John Hopmans
                                                --------------------------------
                                                Title:  Managing Director

                                                THE FUJI BANK, LIMITED

                                                By: /s/ Raymond Ventura
                                                --------------------------------
                                                Title:  Vice President & Manager

                                                ING BANK, N.V., LONDON BRANCH

                                                By: /s/ Christopher Quinn
                                                --------------------------------
                                                Title:  Managing Director

                                                By: /s/ James Longden
                                                --------------------------------
                                                Title: Director

                                                BARCLAYS BANK PLC

                                                By: /s/ Richard Askey
                                                --------------------------------
                                                Title:  Relationship Director

                                      -50-
<PAGE>

                                                CITIBANK, N.A.

                                                By: /s/ Michael Taylor
                                                --------------------------------
                                                Title: Vice President

                                                DLJ CAPITAL FUNDING, INC.

                                                By: /s/ Joseph J. Adipietro
                                                --------------------------------
                                                Title: Vice President

                                      -51-
<PAGE>

                                                                       ANNEX I
<TABLE>
<CAPTION>

                          LIST OF BANKS AND COMMITMENTS

Bank                                            Revolving Loan Commitment                   L/C Commitment
----                                            -------------------------                   --------------
<S>                                                  <C>                                     <C>

The Chase Manhattan Bank                             $  43,541,666.67                        $  18,125,000.00
First Union National Bank                            $  43,541,666.67                        $  18,125,000.00
Fleet National Bank                                  $  43,541,666.66                        $  18,125,000.00
Credit Lyonnais New York Branch                      $  14,875,000.00                        $  20,125,000.00
Dresdner Bank AG, New York     and                   $  14,875,000.00                        $  20,125,000.00
Grand Cayman Branches
National Westminster Bank PLC                        $  0                                    $  40,000,000.00
State Street Bank and Trust Company                  $  10,625,000.00                        $  14,375,000.00
The Bank of Nova Scotia                              $  17,000,000.00                        $  23,000,000.00
The Fuji Bank, Limited                               $   6,375,000.00                        $  8,625,000.00
Citibank, N.A.                                       $  10,625,000.00                        $  14,375,000.00
DLJ Capital Funding, Inc.                            $  25,000,000.00                        $  0
ING Bank, N.V.                                       $  0                                    $  35,000,000.00
Barclays Bank PLC                                    $  30,000,000.00                        $   0

Total                                                $ 260,000.000.00                        $ 230,000,000.00
                                                      ===============                          ==============

</TABLE>

                                      -52-
<PAGE>

                                                                      ANNEX II

                                 BANK ADDRESSES

Bank Address
-------------

The Chase Manhattan Bank                      One Chase Manhattan Plaza
                                              New York, New York  10081
                                              Tel:  (212) 552-7935
                                              Fax:  (212) 552-7490
                                              Attention:  Ms. Linda Hill

Chase Manhattan International Limited         9 Thomas More Street
                                              London  E9YT
                                              Tel:  44-171-777-2347
                                              Fax:  44-171-777-2360
                                              Attention:  Mr. Stephen Hurford

First Union National Bank                     First Union Securities, Inc.
                                              Financial Institutions Group
                                              1339 Chestnut Street, PA  4819
                                              Philadelphia, PA  19107
                                              Tel:  (215) 973-2944
                                              Fax:  (215) 786-4114
                                              Attention:  Mr. Joseph DiFrancesco

Fleet National Bank                           777 Main Street
                                              Mail Code CTMO0250
                                              Hartford, CT  06115
                                              Tel:  (860) 986-4535
                                              Fax:  (860) 986-1264
                                              Attention:  Ms. Jan-Gee McCollam

Credit Lyonnais New York Branch               1301 Avenue of the Americas,
                                              18th Floor
                                              New York, NY  10019
                                              Tel:  (212) 261-7718
                                              Fax:  (212) 261-3401
                                              Attention:  Mr. Peter Rasmussen

                                      -53-
<PAGE>

Dresdner Bank AG, New York                    Dresdner Bank AG, New York Branch
and Grand Cayman Branches                     75 Wall Street, 24th Floor
                                              New York, NY  10005-2889
                                              Tel:  (212) 429-3189
                                              Fax:  (212) 429-2524
                                              Attention: Mr. George T.
                                                         Ferguson, IV

National Westminster Bank PLC                 Institutional Banking Group
                                              1 Prince Street, 3rd Floor
                                              London, England  EC2R8PB
                                              Tel:  44-171-551-1040
                                              Fax:  44-171-551-1094
                                              Attention:  Mr. Ian Grimsley

State Street Bank and Trust Company           Citizens Bank
                                              Lafayette Corporate Center
                                              Boston, MA  02101-0351
                                              Tel:  (617) 662-3782
                                              Fax:  (617) 662-3778
                                              Attention:  Mr. Edward M. Anderson

The Bank of Nova Scotia                       One Liberty Plaza, 26th Floor
                                              New York, NY  10006
                                              Tel:  (212) 225-5267
                                              Fax:  (212) 225-5090
                                              Attention:  Mr. James Witmer

The Fuji Bank, Limited                        Two World Trade Center, 79th Floor
                                              New York, NY  10048
                                              Tel:  (212) 898-2067
                                              Fax:  (212) 912-0516
                                              Attention:  Ms. Chigusa Tada

Citibank, N.A.                                33 Canada Square
                                              Canary Wharf
                                              London, E14 5LB
                                              Tel:  011-44-207-986-5139
                                              Fax: 011-44-209-986-5353
                                              Attention:  Mr. Michael Taylor

                                      -54-
<PAGE>

DLJ Capital Funding, Inc.                     277 Park Avenue
                                              New York, NY 10172
                                              Tel:  (212) 892-7911
                                              Fax:  (212) 892-7542
                                              Attention:  Mr. Dana Klein

ING Bank, N.V.                                60 London Wall
                                              London EC2M 5TQ
                                              Tel:  011-44-207-767-5908
                                              Fax:  011-44-207-767-7507
                                              Attention:  Robert Miners

Barclays Bank PLC                             54 Lombard Street
                                              London, EC3V 9EX
                                              Tel:  011-44-207-699-3687
                                              Fax: 011-44-207-699-2407
                                              Attention:  Martin Byrne

                                      -55-

<PAGE>

                                                                    EXHIBIT A-1

                           FORM OF NOTICE OF BORROWING

                                                                      [Date]

The Chase  Manhattan  Bank, as  Administrative  Agent for the Banks party to the
    Credit Agreement referred to below
One Chase Manhattan Plaza
New York, New York  100811

Attention:

                  The  undersigned,  Trenwick  America  Corporation,  a Delaware
corporation  (the  "Borrower"),  refers  to the  Credit  Agreement,  dated as of
November 24, 1999, and amended and restated as of September 27, 2000,  among the
Borrower, Trenwick Holdings Limited (the "Account Party"), the lenders from time
to time party thereto (the  "Banks"),  First Union National Bank, as Syndication
Agent,  Fleet National Bank, as Documentation  Agent and you, as  Administrative
Agent for such Banks (as amended,  modified or  supplemented  from time to time,
the "Credit  Agreement,"  the terms defined therein being used herein as therein
defined),  and hereby gives you irrevocable notice,  pursuant to Section 1.03(a)
of the Credit Agreement,  that the undersigned hereby requests a Borrowing under
the Credit  Agreement,  and in that  connection sets forth below the information
relating to such  Borrowing  (the  "Proposed  Borrowing") as required by Section
1.03(a) of the Credit Agreement.

                  (i)      The Business Day of the Proposed Borrowing is
                           __________ , ____.(2)

                  (ii)     The aggregate principal amount of the Proposed
                           Borrowing is $______. (3)

-------------------------------------------
1     Shall be addressed to the following for a Proposed Borrowing  of Alternate
      Currency  Loans:  Chase  Manhattan  International  Limited,  9 Thomas More
      Street, London E9YT, Attention: Steve Hurford.

2     Shall be a Business Day at least one Business Day in the case of Base Rate
      Loans, (ii) three Business Days in the case of Eurodollar Loans in Dollars
      or (iii) four Business Days in the case of Eurodollar  Loans  constituting
      Alternate Currency Loans, in each case, after the date hereof.

3     This amount (A) shall be stated in the  applicable  Approved  Currency and
      (B) (i) for Revolving Loans that are any Dollar  denominated  shall not be
      less than  $5,000,000  and if in excess  thereof,  shall be in an integral
      Dollar denominated multiple of $1,000,000 and (ii) for any Revolving Loans
      that are Alternate Currency Loans, shall be in an amount in the respective
      Approved  Currency  having a  Dollar  Equivalent  (determined  on the date
      hereof)  of  $5,000,000  and if in  excess  thereof,  shall be in a Dollar
      Equivalent  multiple of $1,000,000 in the  respective  currency  (provided
      that in all cases, Base Rate Loans shall be Dollar denominated).

<PAGE>

                                                              Exhibit A-1
                                                              Page 2

                  (iii)    The Proposed Borrowing is to consist of [Base Rate
                           Loans] [Eurodollar Loans].

                  [(iv)    The initial Interest Period for the Proposed
                           Borrowing is ____ month(s).](4)

                  [(v)     The Approved Currency is _____________________.](5)

                  The undersigned hereby certifies that the following statements
are  true on the  date  hereof,  and  will be true on the  date of the  Proposed
Borrowing:

                  (A) the  representations  and warranties of the Credit Parties
         contained in the Credit  Agreement or in the other Credit Documents are
         and will be true and correct in all material respects,  both before and
         after giving effect to the Proposed Borrowing and to the application of
         the  proceeds  thereof,  as though made on and as of such date,  unless
         stated  to  relate  to a  specific  earlier  date,  in which  case such
         representations  and  warranties  shall  be  true  and  correct  in all
         material respects as of such earlier date; and

                  (B) no  Default  or  Event  of  Default  has  occurred  and is
         continuing,  or would result from such  Proposed  Borrowing or from the
         application of the proceeds thereof.

                                              Very truly yours,

                                              TRENWICK AMERICA CORPORATION

                                              By____________________________
                                                Title:

-------------------------------------------

4     To be included  for a Proposed  Borrowing  of  Eurodollar  Loans and shall
      specify an Interest Period of one, two, three or six months.

5     To be included for a Proposed Borrowing of Alternate Currency Loans in the
      case of Eurodollar Loans only.

<PAGE>

                                                                   Exhibit A-2
                                                                   Page 1

                        FORM OF LETTER OF CREDIT REQUEST

No.   1           Dated       2
    -----               -------------

ChaseManhattan   International  Limited,  as  Issuing  Agent  under  the  Credit
Agreement (as amended,  modified or supplemented  from time to time, the "Credit
Agreement"),  dated as of November  24,  1999,  and  amended and  restated as of
September  27,  2000,  among  Trenwick  America  Corporation  (the  "Borrower"),
Trenwick Holdings Limited (the "Account Party"),  the lending  institutions from
time to time  party  thereto  (the  "Banks"),  First  Union  National  Bank,  as
Syndication  Agent,  Fleet National Bank, as  Documentation  Agent and The Chase
Manhattan Bank, as Administrative Agent

9 Thomas More Street
London E9YT

Attention:  Steve Hurford

Dear Sir or Madam:

                  We hereby request that Chase Manhattan  International Limited,
as Issuing Agent for the Banks, on behalf of the Banks, issue a Letter of Credit
for the benefit of Lloyds on 3 (the "Date of Issuance") in the aggregate  stated
amount of 4 .

                  The  Letter of Credit  will be issued  for the  account of the
Account Party on behalf of it's Subsidiary, 5 ].

------------------------
1     Letter of Credit Request Number.

2     Date of Letter of Credit Request.

3     Date of  Issuance  which  shall be at any time and from time to time on or
      after the  Restatement  Effective Date and on or prior to the L/C Issuance
      Expiration Date.

4     Aggregate  Stated  Amount of the Letter of Credit  shall not exceed,  when
      added to the Letter of Credit  Outstandings  at such  time,  the Total L/C
      Commitment at such time.

                                       1

<PAGE>
                                                                 Exhibit A-2
                                                                 Page Two

                  For  purposes  of  this  Letter  of  Credit  Request,   unless
otherwise defined herein, all capitalized terms used herein which are defined in
the Credit Agreement shall have the respective meaning provided therein.

                  The Letter of Credit will have a stated expiration date of 6 .

                  We hereby certify that:

                  (1) The  representations  and warranties of the Credit Parties
contained in the Credit  Agreement or in the other Credit Documents will be true
and correct in all material  respects on the Date of  Issuance,  both before and
after giving effect to the issuance of the Letter of Credit requested hereby, as
though  made on and as of such  date,  unless  stated to  relate  to a  specific
earlier date, in which case such  representations  and warranties  shall be true
and correct in all material respects as of such earlier date; and

                  (2) no  Default  or  Event  of  Default  has  occurred  and is
continuing  nor,  after  giving  effect to the  issuance of the Letter of Credit
requested hereby, would such a Default or an Event of Default occur.

----------------------------

5     If not issued on behalf of the Account Party, insert name of Subsidiary of
      the Account Party that the Letter of Credit is being issued on behalf of.

6     Insert last date upon which drafts may be presented, which may not be
      later than the L/C Maturity Date.

<PAGE>
                                                                 Exhibit A-2
                                                                Page Three

                  Copies of all  documentation  with  respect  to the  supported
transaction are attached hereto.

                                                     TRENWICK HOLDINGS LIMITED

                                                     By_________________________
                                                       Title:

                                       3
<PAGE>

                                                                      EXHIBIT B
                                                                      Page 1

                            FORM OF LETTER OF CREDIT

To:      The Council of Lloyd's
         c/o The Manager Member's Funds Department
         Chatham, Kent ME4 4TU

                                                            Dated ________ (1)

Dear Sirs:

Irrevocable Standby Letter of Credit No. [  ]

Re:  Trenwick Holdings Limited (the "Applicant") on behalf of
     [Name of Corporate Member of Lloyd's]

This Clean Irrevocable  Standby Letter of Credit (the "Credit") is issued by the
banks whose names are set out in Schedule 1 hereto  (the  "Issuing  Banks",  and
each an "Issuing  Bank") in favour of the Society of Lloyd's  ("Lloyd's") on the
following terms:

                  1. Subject to the terms  hereof,  the Issuing Banks shall make
payments  within two business  days of demand on Chase  Manhattan  International
Limited (the "Agent") in accordance with paragraph 4 below.

                  2. Upon a demand being made by Lloyd's pursuant to paragraph 4
below each Issuing Bank shall pay that  proportion of the amount  demanded which
is equal to the  proportion  which its  Commitment  set out in Schedule 1 hereto
bears to the aggregate  Commitments of all the Issuing Banks set out on Schedule
1 hereto  provided that the  obligations  of the Issuing Banks under this Credit
shall be  several  and no  Issuing  Bank  shall  be  required  to pay an  amount
exceeding  its  Commitment  set out in Schedule 1 hereto and the  Issuing  Banks
shall not be obliged to make payments  hereunder in aggregate amount exceeding a
maximum amount of [amount in Dollars].  Any payment by an Issuing Bank hereunder
shall be made in  [Dollars] to Lloyd's  account  specified in the demand made by
Lloyd's pursuant to paragraph 4 below.

                  3. The initial  expiry  date of this  Credit is  December  31,
2004.  This Credit will be extended  automatically  for a further year,  without
written  amendment,  on the first day of January of every  future  year from the
commencement date, so that it is always valid for a minimum period of four years
unless,  at least thirty days prior to December 31 of the first year of the then
current validity period, notice is given in writing, sent by registered mail for
the attention of the Manager,  Members Funds  Department,  at the above address,
that this Credit will not be extended beyond the then current expiry date.

--------------------------------
(1)  Date of Letter of Credit

<PAGE>
                                                                      EXHIBIT B
                                                                      Page 2

                  4. Subject to paragraph 3 above,  the Issuing  Banks shall pay
to Lloyd's under this Credit upon  presentation  of a demand by Lloyd's on Chase
Manhattan   International   Limited,   9  Thomas  More   Street,   London  E9YT,
substantially  in the form set out in  Schedule 2 hereto  the  amount  specified
therein (which amount shall not, when  aggregated with all other amounts paid by
the  Issuing  Banks to Lloyd's  under this  Credit,  exceed the  maximum  amount
referred to in paragraph 2 above).

                  5. The Agent has  signed  this  Credit as agent for  disclosed
principals  and  accordingly  shall be under no obligation to Lloyd's  hereunder
other than in its capacity as an Issuing Bank.

                  6.       All charges are for the Applicant's account.

                  7.       Subject  to  any  contrary  indication  herein,  this
Letter of Credit is subject to the Uniform Customs and Practice for  Documentary
Credits (1993 Revision) International Chamber  of  Commerce Publication No. 500.

                  8.  This  Credit  shall  be  governed  by and  interpreted  in
accordance with English law and the Issuing Banks hereby  irrevocably  submit to
the jurisdiction of the High Court of Justice in England.

                  9. Each of the Issuing Banks engages with Lloyd's that demands
made under and in compliance  with the terms and  conditions of this Credit will
be duly honored on presentation.

                                           Very truly yours,

                                           CHASE MANHATTAN INTERNATIONAL LIMITED

                                           for and on behalf of
                                           [Names of all Issuing Banks including
                                           Agent ]

                                           By:_______________________________
                                              Name:
                                              Title:

<PAGE>

                                                                     SCHEDULE 1

                           Issuing Banks' Commitments

Name and Address of Issuing Bank                                     Commitment
                                                                      (Dollars)

<PAGE>

                                                                     SCHEDULE 2

                            Form of Demand (Dollars)

                             [on Lloyd's letterhead]

Dear Sir/Madam

THE SOCIETY OF LLOYD'S
TRUSTEE OF
LETTER OF CREDIT NO.

With  reference to the above,  we enclose for your attention a Bill of Exchange,
together with the respective Letter of Credit.  Payment should be made by way of
CHAPS. The account details are as follows:

[National Westminster Bank Plc                              Sort Code 60-00-01

City of London Office                                         Account 13637444

P.O. Box 12258

1 Princes Street

London EC2R 8AP]

Please quote Member Code:

                                                    Very truly yours,

                                                    for Manager
                                                    Members' Funds Department
                                                    Members' Services Unit

                                                    By:___________________
                                                       Name:
                                                       Title:

<PAGE>

Your ref:

Our ref:      MEM/    /     /      /C911f

Extn:

BILL OF EXCHANGE

The Society of Lloyd's

Trustee of

Letter of Credit No.

Please pay in accordance with the terms of the Letter of Credit to our order the
amount of $____________.

                                                        For and on behalf of

                                                        Authorised Signatory

                                                        Members' Fund Department

To:      Chase Manhattan International Limited
         as Issuing Agent

<PAGE>

                                                                     EXHIBIT C-1
                    [Letterhead of Appleby Spurling & Kempe]

                                                               27 September 2000

To:  The Financial Institutions named in the Second Schedule to this opinion

Dear Sirs

We have acted as legal counsel in Bermuda to the Company in connection  with the
execution and delivery of a credit  agreement,  dated as of 24 November 1999 and
amended and restated as of 27 September 2000,  among Trenwick  America  Holdings
Corporation (the  "Borrower"),  Trenwick Holdings Ltd. (the "Account Party") and
the  Financial  Institutions  named  in  the  Second  Schedule  (the  "Financial
Institutions")  (the  "Credit  Agreement"),  and the  transactions  contemplated
thereby.

The  Company  has  requested  that we provide  this  opinion,  which is required
pursuant  to  Clause  5.04 of the  Credit  Agreement,  in  connection  with  the
following agreements:

(i)      the Credit Agreement;

(ii)     the Holdings Guaranty between the Company and the Chase Manhattan  Bank
         as Administrative Agent (the "Holdings Guaranty"); and

(iii)    the  Subsidiary  Guaranty  made  by  the   Guarantors (the  "Subsidiary
         Guaranty").

         (The  Credit  Agreement,  the  Holdings  Guaranty  and  the  Subsidiary
         Guaranty  are  hereinafter  collectively  referred  to as the  "Subject
         Agreements").

For the purposes of this opinion we have  examined and relied upon the documents
listed,  and in some cases  defined,  in the First Schedule to this opinion (the
"Documents").  Unless  otherwise  defined  herein,  capitalised  terms  have the
meanings assigned to them in the Credit Agreement.

Assumptions

In stating our opinion we have assumed:-

(a)      the authenticity,  accuracy and completeness of all Documents submitted
         to us as originals and the conformity to authentic  original  Documents
         of all Documents  submitted to us as certified,  conformed,  notarised,
         faxed or photostatic copies;

(b)      the genuineness of all signatures on the Documents;

<PAGE>

(c)      the  authority, capacity and power of each of the  persons  signing the
         Documents   (other   than  the  Company  in   respect   of  the Subject
         Agreements);

(d)      that any  representation, warranty or  statement of fact or law, other
         than as to the laws of  Bermuda, made in any of the Documents is  true,
         accurate and complete;

(e)      that the Subject  Agreements  constitute  the legal,  valid and binding
         obligations  of each of the parties  thereto,  other than the  Company,
         under the laws of its jurisdiction of incorporation or its jurisdiction
         of formation;

(f)      that the Subject Agreements have been validly authorised,  executed and
         delivered by each of the parties thereto,  other than the Company,  and
         the performance  thereof is within the capacity and powers of each such
         party thereto;

(g)      that the Subject  Agreements will effect,  and will  constitute  legal,
         valid  and  binding   obligations  of  each  of  the  parties  thereto,
         enforceable in accordance with their terms, under the laws of the State
         of New York by which they are expressed to be governed;

(h)      that  the  Subject  Agreements  are  in the  proper  legal  form  to be
         admissible  in evidence  and enforced in the courts of the State of New
         York and in accordance with the laws of the State of New York;

(i)      that  there  are  no  provisions  of the  laws  or  regulations  of any
         jurisdiction  other than  Bermuda  which  would be  contravened  by the
         execution or delivery of the Subject Agreements or which would have any
         implication in relation to the opinion expressed herein and that, in so
         far as any obligation  under, or action to be taken under,  the Subject
         Agreements  is required to be  performed  or taken in any  jurisdiction
         outside  Bermuda,  the  performance of such obligation or the taking of
         such action will  constitute a valid and binding  obligation of each of
         the parties thereto under the laws of that jurisdiction and will not be
         illegal by virtue of the laws of that jurisdiction;

(j)      that the  records  which were the  subject of the  Company  Search were
         complete  and  accurate  at the time of such search and  disclosed  all
         information which is material for the purposes of this opinion and such
         information  has  not  since  the  date  of  the  Company  Search  been
         materially altered;

(k)      that the records which were the subject of the  Litigation  Search were
         complete  and  accurate  at the time of such search and  disclosed  all
         information which is material for the purposes of this opinion and such
         information  has not  since  the  date of the  Litigation  Search  been
         materially altered;

(l)      that the  Company is not  carrying  on  investment  business in or from
         within Bermuda under the provisions of the Investment Business Act 1998
         as amended from time to time (the "IBA");

                                       2
<PAGE>

(m)      that  the  Resolutions  are in full  force  and  effect,  have not been
         rescinded,  either  in whole  or in part,  and  accurately  record  the
         resolutions  passed  by the  Board of  Directors  of the  Company  in a
         meeting which was duly convened and at which a duly constituted  quorum
         was present and voting throughout and that there is no matter affecting
         the  authority of the  Directors to enter into the Subject  Agreements,
         not disclosed by the Constitutional Documents or the Resolutions, which
         would  have  any  adverse  implication  in  relation  to  the  opinions
         expressed herein;

(n)      that  the  Financial  Institutions  have  no  express  or  constructive
         knowledge of any circumstance whereby any Director of the Company, when
         the Board of Directors of the Company passed the Resolutions, failed to
         discharge  his  fiduciary  duty owed to the Company and to act honestly
         and in good faith with a view to the best interests of the Company;

(o)      that the  Company has entered  into its  obligations  under the Subject
         Agreements  in good faith for the purpose of  carrying on its  business
         and that,  at the time it did so,  there were  reasonable  grounds  for
         believing that the transactions  contemplated by the Subject Agreements
         would benefit the Company;

(p)      that each  transaction  to be  entered  into  pursuant  to the  Subject
         Agreements  is  entered  into in good faith and for full value and will
         not have the effect of preferring one creditor over another;

(q)      that, when executed and delivered,  the Subject Agreements will be in a
         form  which  does not differ in any  material  respect  from the drafts
         which we have examined for the purposes of this opinion.

Opinion

Based upon and subject to the foregoing and subject to the reservations set out
below and to any matters not disclosed to us, we are of the opinion that:-

(1)      The Company is an exempted company  incorporated with limited liability
         and  existing  under the laws of  Bermuda.  The Company  possesses  the
         capacity  to sue and be sued in its own  name  and is in good  standing
         under the laws of Bermuda.

(2)      The Company has all  requisite  corporate  power and authority to enter
         into, execute,  deliver,  and perform its obligations under the Subject
         Agreements  to which it is a party  and to take  all  action  as may be
         necessary to complete the transactions contemplated thereby.

(3)      The execution,  delivery and  performance by the Company of the Subject
         Agreements  to which it is a party  and the  transactions  contemplated
         thereby have been duly authorised by all necessary  corporate action on
         the part of the Company.

                                       3
<PAGE>

(4)      The Subject  Agreements to which the Company is a party will,  upon due
         execution  by the Company,  each  constitute  legal,  valid and binding
         obligations  of  the  Company,   enforceable  against  the  Company  in
         accordance with its terms.

(5)      Subject as otherwise provided in this opinion,  no consent,  licence or
         authorisation  of,  filing with,  or other act by or in respect of, any
         governmental  authority  or court of Bermuda is required to be obtained
         by  the  Company  in  connection   with  the  execution,   delivery  or
         performance  by the Company of the Subject  Agreements or to ensure the
         legality, validity, admissibility into evidence or enforceability as to
         the Company, of the Subject Agreements.

(6)      The execution,  delivery and  performance by the Company of the Subject
         Agreements and the  transactions  contemplated  thereby do not and will
         not  violate,  conflict  with or  constitute  a  default  under (i) any
         requirement  of any  law or any  regulation  of  Bermuda  or  (ii)  the
         Constitutional Documents.

(7)      The transactions contemplated by the Subject Agreements are not subject
         to any currency deposit or reserve requirements in Bermuda. The Company
         has been designated as "non-resident"  for the purposes of the Exchange
         Control  Act 1972  and  regulations  made  thereunder  and  there is no
         restriction  or  requirement  of Bermuda  binding on the Company  which
         limits the  availability or transfer of foreign  exchange (i.e.  monies
         denominated in currencies  other than Bermuda dollars) for the purposes
         of the performance by the Company of its obligations  under the Subject
         Agreements.

(8)      The financial  obligations of the Company under the Subject  Agreements
         rank at least  pari  passu  in  priority  of  payment  with  all  other
         unsecured   and   unsubordinated   indebtedness   (whether   actual  or
         contingent)  issued,  created  or  assumed  by the  Company  other than
         indebtedness  which is preferred by virtue of any  provision of Bermuda
         law of general application.

         Competing priorities between creditors of an insolvent company which is
         a company in  liquidation  in Bermuda are  generally  determined in the
         following order:-

         (i)      claims of secured creditors under fixed charges rank  first in
                  priority;

         (ii)     pursuant to Section 236 of the Companies  Act 1981,  claims by
                  creditors in respect of taxes owing to the Bermuda  Government
                  and  rates  owing to any  municipality,  as well as  specified
                  wages accrued and unpaid, holiday remuneration and amounts due
                  under  the  Contributory  Pensions  Act  1970,  the  Workmen's
                  Compensation Act 1965, will rank second in priority;

                                       4
<PAGE>

         (iii)    claims  of secured creditors under floating charges rank third
                  in priority;

         (iv)     claims by unsecured creditors rank fourth in priority; and

         (v)      claims in the nature of capital  claims  (generally the claims
                  of shareholders) or subordinated claims rank last and, amongst
                  themselves,  in accordance with the bye-laws of the company or
                  any shareholders  agreement of the company or the terms of any
                  subordination agreement in the liquidation.

         On the winding up of a pension plan maintained by a company which is in
         liquidation,  under the National Pension Scheme (Occupational Pensions)
         Act 1998 as amended,  the  property or proceeds of sale of any property
         seized  or sold  in  pursuance  of a court  order  as  provided  in the
         statute,   will  not  be  distributed  to  a  secured   creditor  until
         contributions due from the employer have been provided for.

(9)      The  choice of the laws of the State of New York as the  proper  law to
         govern the Subject  Agreements  is a valid choice of law under  Bermuda
         law and such choice of law would be  recognised,  upheld and applied by
         the courts of Bermuda as the proper law of the  Subject  Agreements  in
         proceedings  brought before them in relation to the Subject Agreements,
         provided that (i) the point is specifically  pleaded;  (ii) such choice
         of law is valid  and  binding  under the laws of the State of New York;
         and (iii)  recognition  would not be contrary to public  policy as that
         term is understood under Bermuda law.

(10)     The submission by the Company to the  jurisdiction of the courts of the
         State of New York pursuant to the Subject Agreements is not contrary to
         Bermuda  law and would be  recognised  by the  courts of  Bermuda  as a
         legal,  valid and binding  submission to the jurisdiction of the courts
         of the State of New York, if such submission is accepted by such courts
         and is  legal,  valid  and  binding  under the laws of the State of New
         York.

(11)     A final and conclusive  judgment of a foreign court against the Company
         based upon the Subject  Agreements  (other than a court of jurisdiction
         to which The Judgments (Reciprocal  Enforcement) Act, 1958 applies, and
         it does not apply to the courts of the State of New York) under which a
         sum of money is payable (not being a sum payable in respect of taxes or
         other charges of a like nature,  in respect of a fine or other penalty,
         or in respect of  multiple  damages  as  defined in The  Protection  of
         Trading   Interests  Act  1981)  may  be  the  subject  of  enforcement
         proceedings  in the  Supreme  Court of  Bermuda  under the  common  law
         doctrine of obligation  by action on the debt  evidenced by the foreign
         court's judgment. A final opinion as to the availability of this remedy
         should  be  sought  when the  facts  surrounding  the  foreign  court's
         judgment are known,  but, on general  principles,  we would expect such
         proceedings to be successful provided that:-

                                        5

<PAGE>

         (i)      the  court which gave the  judgment was  competent to hear the
                  action   in   accordance  with   private    international  law
                  principles as applied in Bermuda; and

         (ii)     the judgment is not contrary to public policy in Bermuda,  has
                  not  been  obtained  by fraud or in  proceedings  contrary  to
                  natural justice and is not based on an error in Bermuda law.

         Enforcement  of such a judgment  against  assets in Bermuda may involve
         the  conversion  of the  judgment  debt into Bermuda  dollars,  but the
         Bermuda Monetary  Authority has indicated that its present policy is to
         give the consents  necessary to enable  recovery in the currency of the
         obligation.

         No stamp  duty or similar or other tax or duty is payable in Bermuda on
         the  enforcement of a foreign  judgment.  Court fees will be payable in
         connection with proceedings for enforcement.

(12)     According to the records maintained in the Register of Companies at the
         office of the Registrar of Companies as revealed by the Company  Search
         the current address of the registered office of the Company is 41 Cedar
         Avenue, Hamilton HM 12, Bermuda.

(13)     Neither the Company  nor any of its assets or  property  enjoys,  under
         Bermuda law,  immunity on the grounds of sovereignty  from any legal or
         other  proceedings   whatsoever  or  from  enforcement,   execution  or
         attachment in respect of its obligations under the Subject Agreements.

(14)     Based solely upon the Company Search and the Litigation Search:

         (i)      no  litigation,   arbitration  or   administrative   or  other
                  proceeding  of  or  before  any  arbitrator  or   governmental
                  authority  of  Bermuda is pending  against  or  affecting  the
                  Company or against or affecting any of its properties, rights,
                  revenues or assets; and

         (ii)     no notice to the  Registrar  of  Companies of the passing of a
                  resolution   of  members  or  creditors  to  wind  up  or  the
                  appointment  of a liquidator  or receiver  has been given.  No
                  petition to wind up the Company or  application  to reorganise
                  its affairs pursuant to a Scheme of Arrangement or application
                  for the  appointment  of a  receiver  has been  filed with the
                  Supreme Court.

                                       6

<PAGE>

(15)     The Company  has  received an  assurance  from the  Ministry of Finance
         granting an exemption,  until 28 March 2016, from the imposition of tax
         under any  applicable  Bermuda  law  computed  on  profits or income or
         computed on any capital asset, gain or appreciation,  or any tax in the
         nature of estate duty or inheritance tax,  provided that such exemption
         shall  not  prevent  the  application  of any  such tax or duty to such
         persons as are ordinarily resident in Bermuda and shall not prevent the
         application of any tax payable in accordance with the provisions of the
         Land Tax Act 1967 or  otherwise  payable in relation to land in Bermuda
         leased to the Company. There are, subject as otherwise provided in this
         opinion,  no  Bermuda  taxes,  stamp or  documentary  taxes,  duties or
         similar  charges now due,  or which could in the future  become due, in
         connection with the execution,  delivery, performance or enforcement of
         the Subject Agreements or the transactions  contemplated thereby, or in
         connection with the  admissibility  in evidence thereof and the Company
         is not required by any Bermuda law or regulation to make any deductions
         or withholdings in Bermuda from any payment it may make thereunder.

(16)     Charges over the assets of Bermuda  companies (other than real property
         in  Bermuda  or a ship or  aircraft  registered  in  Bermuda)  wherever
         situated,  and charges on assets  situated in Bermuda  (other than real
         property in Bermuda or a ship or aircraft  registered in Bermuda) which
         are  granted  by or to  companies  incorporated  outside  Bermuda,  are
         capable of being  registered  in Bermuda in the office of the Registrar
         of Companies  pursuant to the provisions of Part V of the Companies Act
         1981 (the  "Act").  Registration  under  the Act is the only  method of
         registration of charges over the assets of Bermuda companies in Bermuda
         except  charges  over real  property  in Bermuda  or ships or  aircraft
         registered in Bermuda. Registration under the Act is not compulsory and
         does not affect the validity or enforceability of a charge and there is
         no time limit within which  registration  of a charge must be effected.
         However,  in the event that questions of priority fall to be determined
         by reference to Bermuda law, any charge registered  pursuant to the Act
         will  take   priority   over  any  other  charge  which  is  registered
         subsequently  in regard to the same assets,  and over all other charges
         created over such assets after 1 July 1983, which are not registered.

Reservations

We have the following reservations:-

(a)      The term  "enforceable"  as used in this opinion  means that there is a
         way of ensuring that each party performs an agreement or that there are
         remedies available for breach.

(b)      We express no opinion as to the availability of equitable remedies such
         as specific  performance  or  injunctive  relief,  or as to any matters
         which are within the  discretion of the courts of Bermuda in respect of
         any obligations of the Company as set out in the Subject Agreements. In
         particular,  we  express no  opinion  as to the  enforceability  of any
         present or future waiver of any  provision of law (whether  substantive
         or  procedural)  or of any right or remedy  which  might  otherwise  be
         available presently or in the future under the Subject Agreements.

                                       7
<PAGE>

(c)      Enforcement  of  the  obligations  of the  Company  under  the  Subject
         Agreements  may be limited or affected by applicable  laws from time to
         time in effect relating to bankruptcy, insolvency or liquidation or any
         other  laws  or  other  legal   procedures   affecting   generally  the
         enforcement of creditors' rights.

(d)      Enforcement of the obligations  of the Company may be the subject of a
         statutory  limitation  of the time within  which such
         proceedings may be brought.

(e)      We express no opinion as to any law other than  Bermuda law and none of
         the opinions  expressed  herein  relates to compliance  with or matters
         governed by the laws of any jurisdiction  except Bermuda.  This opinion
         is limited  to  Bermuda  law as applied by the Courts of Bermuda at the
         date hereof.

(f)      Where an  obligation  is to be performed in a  jurisdiction  other than
         Bermuda,  the courts of Bermuda  may refuse to enforce it to the extent
         that such  performance  would be illegal under the laws of, or contrary
         to public policy of, such other jurisdiction.

(g)      We  express  no  opinion  as  to  the  validity,   binding   effect  or
         enforceability  of any provision  incorporated  into any of the Subject
         Agreements  by reference to a law other than that of Bermuda,  or as to
         the  availability  in Bermuda of remedies  which are available in other
         jurisdictions.

(h)      Where a person is vested with a discretion or may determine a matter in
         his or its opinion, such discretion may have to be exercised reasonably
         or such an opinion may have to be based on reasonable grounds.

(i)      Any provision in the Subject  Agreements  that certain  calculations or
         certificates  will be  conclusive  and binding will not be effective if
         such  calculations or certificates are fraudulent or erroneous on their
         face and will not  necessarily  prevent  juridical  enquiries  into the
         merits of any claim by an aggrieved party.

(j)      We  express  no  opinion  as to the  validity or binding  effect of any
         provision in the Subject Agreements for the  payment of  interest at  a
         higher rate on overdue  amounts than on amounts which are  current,  or
         that liquidated damages are or may be payable. Such a provision may not
         be enforceable if it could be established that the amount  expressed as
         being  payable  was in  the  nature  of a  penalty;  that  is to  say a
         requirement  for a  stipulated  sum to be  paid  irrespective  of,  or
         necessarily  greater  than,  the loss  likely to be  sustained.  If it
         cannot be  demonstrated  to the Bermuda court that the higher   payment
         was a reasonable  pre-estimate  of the  loss  suffered,  the court will
         determine  and  award  what  it  considers  to be  reasonable  damages.
         Section 9 of The Interest and  Credit  Charges  (Regulations)  Act 1975
         provides that the Bermuda  courts have  discretion as to the  amount of
         interest,  if any,  payable on the amount of a judgment  after  date of
         judgment.  If  the  Court  does  not  exercise  that  discretion,  then
         interest will accrue at the  statutory  rate which is  currently 7% per
         annum.

                                       8
<PAGE>

(k)      We  express  no opinion  as to the  validity  or binding  effect of any
         provision of the Subject Agreements which provides for the severance of
         illegal, invalid or unenforceable provisions.

(l)      A Bermuda  court may  refuse to give  effect to any  provisions  of the
         Subject  Agreements  in  respect  of costs of  unsuccessful  litigation
         brought before the Bermuda court or where that court has itself made an
         order for costs.

(m)      Searches of the Register of Companies at the office of the Registrar of
         Companies  and of the Supreme  Court Causes Book at the Registry of the
         Supreme  Court  are not  conclusive  and it  should  be noted  that the
         Register of Companies and the Supreme Court Causes Book do not reveal:

         (i)      whether an  application  to the Supreme Court for a winding up
                  petition or for the  appointment  of a receiver or manager has
                  been prepared but not yet been presented or has been presented
                  but does not  appear in the  Causes  Book at the date and time
                  the Search is concluded;

         (ii)     whether any  arbitration  or  administrative  proceedings  are
                  pending  or  whether  any   proceedings  are   threatened,  or
                  whether any arbitrator has been appointed;

         (iii)    details  of  matters  which  have been  lodged  for  filing or
                  registration  which as a matter  of  general  practice  of the
                  Registrar  of  Companies   would  have  or  should  have  been
                  disclosed  on the  public  file  but have  not  actually  been
                  registered  or to the  extent  that they have been  registered
                  have not been disclosed or do not appear in the public records
                  at the date and time the search is concluded;

         (iv)     details  of   matters  which   should  have  been  lodged  for
                  registration but have not been lodged for registration at  the
                  date the search is concluded; or

         (v)      whether a receiver  or manager  has been  appointed  privately
                  pursuant to the  provisions of a debenture or other  security,
                  unless  notice of the fact has been entered in the Register of
                  Charges in accordance with the provisions of the Act.

(n)      In order to issue this opinion we have  carried out the Company  Search
         as  referred  to in the First  Schedule  to this  opinion  and have not
         enquired as to whether there has been any change since the date of such
         search.

(o)      In order to issue  this  opinion  we have  carried  out the  Litigation
         Search as  referred to in the First  Schedule to this  opinion and have
         not enquired as to whether  there has been any change since the date of
         such search.

                                       9
<PAGE>

(p)      In paragraph (1) above, the term "good standing" means that the Company
         has  received  a  Certificate  of  Compliance  from  the  Registrar  of
         Companies.

Disclosure

This  opinion is  addressed  to you solely for your benefit and is neither to be
transmitted to any other person,  nor relied upon by any other person or for any
other  purpose nor quoted or referred to in any public  document  nor filed with
any governmental agency or person, without our prior written consent,  except as
may be required by law or regulatory authority.  Further, this opinion speaks as
of its date and is strictly  limited to the matters  stated herein and we assume
no obligation to review or update this opinion if applicable law or the existing
facts or circumstances should change.

All of the attorneys  practising as such at Appleby Spurling & Kempe are members
of the  Bermuda  Bar  Association.  This  opinion  is  governed  by and is to be
construed in accordance  with Bermuda law. It is given on the basis that it will
not give rise to any legal  proceedings with respect thereto in any jurisdiction
other than Bermuda.

Yours faithfully

/s/ Appleby Spurling & Kempe
    -------------------------
    Appleby Spurling & Kempe

<PAGE>

                                 FIRST SCHEDULE

1.       The entries and filings  shown in respect of the Company on the file of
         the Company  maintained  in the  Register of Companies at office of the
         Registrar of Companies in Hamilton, Bermuda, as revealed by a search on
         22 September 2000 (the "Company Search").

2.       The entries and filings  shown in respect of the Company in the Supreme
         Court Causes Book  maintained  at the Registry of the Supreme  Court in
         Hamilton,  Bermuda,  as  revealed by a search on 22  September  2000 in
         respect of the Company (the "Litigation Search").

3.       Originals  of   the  Certificate  of  Incorporation,    Memorandum   of
         Association and the revised  Bye-laws adopted 22 March 2000 for the
         Company (collectively referred to as the "Constitutional Documents").

4.       Certified copy of the Minutes of the Meeting of the Board of  Directors
         of the Company held on [DATE] (the "Resolutions").

5.       The original "Foreign Exchange Letter",  dated 14 December 1999, issued
         by the Bermuda Monetary Authority,  Hamilton Bermuda in relation to the
         Company.

6.       The original  "Tax  Assurance",  dated 13 January  2000, issued by  the
         Registrar of Companies for the Minister of Finance in  relation to  the
         Company.

7.       A  Certificate of  Compliance, dated  21  September 2000, issued by the
         Ministry of Finance in respect of the Company.

12.      A draft Credit Agreement.

13.      A draft Holdings Guaranty.

14.      A draft Subsidiary Guaranty.

<PAGE>

                                 SECOND SCHEDULE

                             Financial Institutions

The Chase Manhattan Bank                        One Chase Manhattan Plaza
                                                New York, New York 10081
                                                Tel:  (212) 552-7935
                                                Fax:  (212) 552-7490
                                                Attention: Ms. Linda Hill

Chase Manhattan International Limited          9 Thomas More Street
                                               London  E9YT
                                               Tel:  44-171-777-2347
                                               Fax:  44-171-777-2360
                                               Attention: Mr. Stephen Hurford

First Union National Bank                      First Union Securities, Inc.
                                               Financial Institutions Group
                                               1339 Chestnut Street, PA  4819
                                               Philadelphia, PA  19107
                                               Tel:  (215) 973-2944
                                               Fax:  (215) 786-4114
                                               Attention: Mr. Joseph DiFrancesco

Fleet National Bank                            777 Main Street
                                               Mail Code CTMO0250
                                               Hartford, CT  06115
                                               Tel:  (860) 986-3127
                                               Fax:  (860) 986-1264
                                               Attention:  Ms. Elizabeth Shelley

Credit Lyonnais New York Branch                1301 Avenue of the Americas,
                                               12th Floor
                                               New York, NY  10019
                                               Tel:  (212) 261-7718
                                               Fax:  (212) 261-3401
                                               Attention: Mr. Peter Rasmussen

Dresdner Bank AG, New York                     Dresdner Bank AG, New York Branch
and Grand Cayman Branches                      75 Wall Street
                                               New York, NY  10005
                                               Tel:  (212) 429-2229
                                               Fax:  (212) 429-2524
                                               Attention: Mr. Lloyd Stevens

                                       1
<PAGE>

National Westminster Bank PLC                  Institutional Banking Group
                                               P.O. Box 12264
                                               1 Princes Street, 3rd Floor
                                               London, England  EC2R8PB
                                               Tel:  44-171-551-1040
                                               Fax:  44-171-551-1094
                                               Attention:  Mr. Ian Grimsley

State Street Bank and Trust Company            2 Avenue De Lafayette-LCC2N
                                               Boston, MA  02111
                                               Tel:  (617) 662-3782
                                               Fax:  (617) 662-3778
                                               Attention: Mr. Edward M. Anderson

The Bank of Nova Scotia                        One Liberty Plaza, 26th Floor
                                               New York, NY  10006
                                               Tel:  (212) 225-5096
                                               Fax:  (212) 225-5090
                                               Attention: Mr. Todd Meller

The Fuji Bank, Limited                         Two World Trade Center,
                                               79th Floor
                                               New York, NY  10048
                                               Tel:  (212) 898-2067
                                               Fax:  (212) 912-0516
                                               Attention: Ms. Chigusa Tada

                                       2

<PAGE>

                                                                     EXHIBIT C-2

                             Conyers Dill &Pearman
                             BARRISTERS & ATTORNEYS

27 September 2000

The Chase Manhattan Bank, as
Administrative Agent under the
Credit Agreement referred to below,
whose address is set out in the Schedule attached hereto (the
"Administrative Agent")

And each of the parties  whose names and  addresses  are set out in the Schedule
attached hereto (together, the "Lenders").

Dear Sirs

LaSalle Re Holdings Limited (the "Company")

We have acted as special  legal  counsel in Bermuda to the Company in connection
with a guarantee dated 27 September,  2000 given by the Company in favour of The
Chase  Manhattan Bank as  Administrative  Agent in respect of the obligations of
Trenwick  Holdings  Limited  and  Trenwick  America  Corporation  under a credit
agreement dated 27 September, 2000 among Trenwick America Corporation,  Trenwick
Holdings  Limited,  the various lending  institutions  party thereto,  The Chase
Manhattan Bank as Administrative Agent, First Union National Bank as Syndication
Agent and Fleet National Bank as Documentation Agent (the "Credit Agreement").

For the purposes of giving this opinion,  we have  examined a facsimile  copy of
the executed Guarantee.

The  reference  in this  opinion to the  Guarantee  does not  include  any other
instrument  or  agreement  whether or not  specifically  referred  to therein or
attached as an exhibit or schedule thereto.

We have also  reviewed the  memorandum  of  association  and the bye-laws of the
Company,  each  certified  by  the  Assistant  Secretary  of the  Company  on 27
September,  2000,  minutes of a meeting of its  directors  held on 25 September,
2000 (the  "Minutes"),  and such other  documents and made such  enquiries as to
questions of law as we have deemed  necessary in order to render the opinion set
forth below.

                                       1
<PAGE>

The Chase Manhattan Bank
27 September 2000
Page: 2
--------------------------------------------------------------------------------

We have assumed (a) the genuineness  and  authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken,  (b) that where a document has been examined by us in draft form, it
will be or has been  executed in the form of that  draft,  and where a number of
drafts of a document  have been  examined  by us all changes  thereto  have been
marked  or  otherwise  drawn  to our  attention,  (c) the  capacity,  power  and
authority of each of the parties to the  Guarantee,  other than the Company,  to
enter into and perform its respective  obligations under the Guarantee,  (d) the
due  execution of the Guarantee by each of the parties  thereto,  other than the
Company,  and the  delivery  thereof  by each of the  parties  thereto,  (e) the
accuracy and completeness of all factual  representations  made in the Guarantee
and other documents  reviewed by us, (f) that the  resolutions  contained in the
Minutes  remain in full force and effect and have not been rescinded or amended,
(g) that the Company is entering  into the  Guarantee  pursuant to the  business
purposes  set  out in its  memorandum  of  association,  (h)  that  there  is no
provision of the law of any jurisdiction,  other than Bermuda,  which would have
any implication in relation to the opinions  expressed herein,  (i) the validity
and binding  effect  under New York law (the  "Foreign  Laws") of the  Guarantee
which is expressed to be governed by such  Foreign Laws in  accordance  with its
terms,  (j) the  validity  and  binding  effect  under the  Foreign  Laws of the
submission  by the  Company  pursuant  to  the  Guarantee  to the  non-exclusive
jurisdiction  of the courts of the State of New York or of the United  States of
America for the Southern District of New York (the "Foreign  Courts"),  (k) that
none of the parties to the Guarantee has carried on or will carry on activities,
other than the performance of its obligations  under the Guarantee,  which would
constitute the carrying on of investment  business in or from within Bermuda and
that none of the parties to the Guarantee,  other than the Company, will perform
its obligations under the Guarantee in or from within Bermuda.

The  obligations  of the Company  under the Guarantee (a) will be subject to the
laws  from  time  to  time  in  effect   relating  to  bankruptcy,   insolvency,
liquidation, possessory liens, rights of set off, reorganisation,  amalgamation,
moratorium or any other laws or legal procedures, whether of a similar nature or
otherwise,  generally affecting the rights of creditors,  (b) will be subject to
statutory  limitation of the time within which  proceedings may be brought,  (c)
will be  subject  to  general  principles  of  equity  and,  as  such,  specific
performance  and  injunctive  relief,  being  equitable  remedies,  may  not  be
available,  (d) may not be given  effect to by a Bermuda  court,  whether or not
applying the Foreign Laws, if and to the extent they  constitute  the payment of
an  amount  which  is in the  nature  of a  penalty  and  not in the  nature  of
liquidated   damages.   Notwithstanding   any  contractual   submission  to  the
jurisdiction of specific courts, a Bermuda court has inherent discretion to stay
or allow proceedings in the Bermuda courts.

We express no opinion as to the enforceability of any provision of the Guarantee
which  provides for the payment of a specified rate of interest on the amount of
a judgment  after the date of judgment or which purports to fetter the statutory
powers of the Company.

                                       2
<PAGE>

The Chase Manhattan Bank
27 September, 2000
Page: 3
--------------------------------------------------------------------------------

We have made no  investigation of and express no opinion in relation to the laws
of any  jurisdiction  other than Bermuda.  This opinion is to be governed by and
construed in accordance  with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda.  This opinion is issued
solely for your benefit and is not to be relied upon by any other  person,  firm
or entity or in respect of any other matter.

On the basis of and subject to the foregoing, we are of the opinion that:

1.       The Company is duly incorporated and existing under the laws of Bermuda
         in good  standing  (meaning  solely  that it has not failed to make any
         filing with any Bermuda  governmental  authority  or to pay any Bermuda
         government  fee or tax which  would make it liable to be struck off the
         Register  of  Companies  and  thereby  cease to exist under the laws of
         Bermuda).

2.       The Company has the  necessary  corporate  power and authority to enter
         into and perform its obligations under the Guarantee. The execution and
         delivery of the  Guarantee  by the Company and the  performance  by the
         Company of its  obligations  thereunder will not violate the memorandum
         of  association  or  bye-laws  of the  Company or any  applicable  law,
         regulation, order or decree in Bermuda.

3.       The Company has taken all  corporate  action  required to authorise its
         execution, delivery and performance of the Guarantee. The Guarantee has
         been duly  executed and  delivered by or on behalf of the Company,  and
         constitutes  the  valid  and  binding  obligations  of the  Company  in
         accordance with the terms thereof.

4.       No order, consent, approval, licence, authorisation or validation of or
         exemption by any  government  or public body or authority of Bermuda or
         any  sub-division  thereof is required to  authorise  or is required in
         connection with the execution, delivery, performance and enforcement of
         the Guarantee.

5.       There is no income or other tax of Bermuda  imposed  by  withholding or
         otherwise on  any  payment  to be made to or by the Company pursuant to
         the Guarantee.

6.       It is not  necessary  or  desirable to ensure the  enforceability  in

         Bermuda of the Guarantee  that it be registered in any register kept
         by, or filed with, any governmental  authority or regulatory body in
         Bermuda. However, to the extent that the Guarantee creates a charge
         over assets of the Company, it may be desirable to ensure the priority
         in Bermuda of the charge  that it be  registered  in the  Register  of
         Charges in
          accordance with Section 55 of the Companies Act 1981. On registration,
          to the extent that Bermuda law governs the priority of a charge,  such
          charge will have  priority in Bermuda  over any  unregistered  charges
          created  after 11 July  1984,  and over  any  subsequently  registered
          charges, in respect of the assets which are the subject of the charge.
          A  registration  fee  of  $446  will  be  payable  in  respect  of the
          registration.

<PAGE>

The Chase Manhattan Bank
27 September, 2000
Page: 4
--------------------------------------------------------------------------------

         While there is no exhaustive  definition of a charge under Bermuda law,
         a charge normally has the following characteristics:
         (i)      it is a proprietary  interest granted by way of security which
                  entitles  the chargee to resort to the charged  property  only
                  for the  purposes  of  satisfying  some  liability  due to the
                  chargee (whether from the chargor or a third party); and
         (ii)     the chargor retains  an  equity  of  redemption  to  have  the
                  property restored to him when the liability has been
                  discharged.
         However, as the Guarantee is governed by the Foreign Laws, the question
         of whether it would possess these particular  characteristics  would be
         determined under the Foreign Laws.

7.       The Guarantee wi11 not be subject to ad valorem stamp duty or other
         documentary tax in Bermuda.

8.       The  Lenders  and the  Administrative  Agent  will not be  deemed to be
         resident,  domiciled  or carrying on business in Bermuda by reason only
         of the execution,  performance  and/or  enforcement of the Guarantee by
         the Lenders and the Administrative Agent.

9.       Each of' the Lenders and the Administrative Agent has standing to bring
         an action or proceedings  before the appropriate  courts in Bermuda for
         the  enforcement of the Guarantee.  It is not necessary or advisable in
         order for the  Lenders or the  Administrative  Agent to  enforce  their
         respective  fights  under the  Guarantee,  including  the  exercise  of
         remedies  thereunder,  that they be  licensed,  qualified  or otherwise
         entitled to carry on business in Bermuda.

10.      The Company is not entitled to any immunity  under the laws of Bermuda,
         whether  characterised  as sovereign  immunity or  otherwise,  from any
         legal  proceedings to enforce the Guarantee in respect of itself or its
         property.

11.      The choice of the Foreign Laws as the governing law of the Guarantee is
         a valid  choice of law and would be  recognised  and given effect lo in
         any action brought before a court of competent jurisdiction in Bermuda,
         except for those laws (i) which such court  considers to be  procedural
         in  nature,  (ii)  which  are  revenue  or  penal  laws  or  (iii)  the
         application of which would be inconsistent  with public policy, as such
         term is  interpreted  under the laws of Bermuda.  The submission in the
         Guarantee to the  non-exclusive  jurisdiction  of the Foreign Courts is
         valid and binding upon the Company.

12.      The courts of Bermuda would recognise as a valid judgment,  a final and
         conclusive  judgment in personam obtained in the Foreign Courts against
         the  Company  based upon the  Guarantee  under  which a sum of money is
         payable  (other  than a sum of money  payable in  respect  of  multiple
         damages,  taxes or other  charges  of a like  nature or in respect of a
         fine or other penalty) and would give a judgment based thereon provided
         that (a) such courts had proper

<PAGE>

The Chase Manhattan Bank
27 September, 2000
Page 5
--------------------------------------------------------------------------------
jurisdiction over the parties subject to such judgment,  (b) such courts did not
contravene  the rules of natural  justice of Bermuda,  (c) such judgment was not
obtained by fraud,  (d) the enforcement of the judgment would not be contrary to
the public  policy of Bermuda  (e) no new  admissible  evidence  relevant to the
action is  submitted  prior to the  rendering  of the  judgment by the courts of
Bermuda and (f) there is due compliance  with the correct  procedures  under the
laws of Bermuda.

Yours faithfully

/s/ Conyers Dill & Pearman
    -----------------------
    Conyers Dill & Pearman

<PAGE>

The Chase Manhattan Bank
27 September, 2000
Page: 6
--------------------------------------------------------------------------------

The Chase Manhattan Bank                           One Chase Manhattan Plaza
                                                   New York, New York 10081
                                                   U.S.A.

Chase Manhattan International Limited              9 Thomas More Street
                                                   London E9 YT
                                                   United Kingdom

First Union National Bank                          First Union Securities, Inc.
                                                   Financial Institutions Group
                                                   1339 Chestnut Street, PA 4819
                                                   Philadelphia, PA 19107
                                                   U.S.A.

Fleet National Bank                                777 Main Street Mail
                                                   Code CTMO0250
                                                   Hartford, CT 06115
                                                   U.S.A.

Credit Lyonnais New York Branch                    1301 Avenue of the Americas,
                                                   12th Floor
                                                   New York, NY 10019
                                                   U.S.A.

Dresdner Bank AG, New York                         Dresdner Bank AG, New York
and Grand Cayman Branches                          Branch
                                                   75 Wall Street
                                                   New  York  NY  10005
                                                   U.S.A.

National Westminster Bank PLC                      Institutional Banking Group
                                                   P.O. Box 12264
                                                   1 Princes Street, 3rd Floor
                                                   London EC2R 8PB
                                                   United Kingdom

State Street Bank and Trust Company                2 Avenue De Lafayette - LCC2N
                                                   Boston, MA 02111
                                                   U.S.A.

<PAGE>

The Chase Manhattan Bank
27 September: 2000
Page: 7
--------------------------------------------------------------------------------

                                    SCHEDULE

The Bank of Nova Scotia                            One Liberty  Plaza,
                                                   26th Floor
                                                   New York, NY 10006
                                                   U.S.A.

The Fuji Bank, Limited                             Two World Trade Center,
                                                   79th Floor
                                                   New York, NY  10048
                                                   U.S.A.

Citibank, NA.                                      33 Canada Square
                                                   Canary Wharf
                                                   London El4 5LB
                                                   United Kingdom

DLJ Capital Funding, Inc.                          277 Park Avenue
                                                   New York, NY 10172
                                                   U.S.A.

lNG Bank N.V.                                      60 London Wall
                                                   London EC2M 5TQ
                                                   United Kingdom

Barclays Bank PLC                                  54 Lombard Street
                                                   London EC3V 9EX
                                                   United Kingdom

<PAGE>
                                                                     EXHIBIT C-3

                                 BAKER & McKENZIE
                                ATTORNEYS AT LAW

September 27, 2000

To the Administrative Agent
and each of the Banks party to
the Credit Agreement referred to below

Ladies & Gentlemen:

                  We  have  acted  as  special   counsel  to  Trenwick   America
Corporation Inc., a Delaware  corporation (the "Borrower") and Trenwick Holdings
Limited,  a company organized under the laws of the United Kingdom (the "Account
Party"),  in connection with the execution and delivery of the Credit Agreement,
dated as of November 24, 1999 and amended and restated as of September 27, 2000,
among the Borrower,  the Account Party, the lending  institutions  listed on the
signature pages thereto (the "Banks"), First Union National Bank, as Syndication
Agent, Fleet National Bank, as Documentation Agent and The Chase Manhattan Bank,
as  Administrative  Agent  (the  "Credit   Agreement"),   and  the  transactions
contemplated  thereby.  This  opinion is  delivered to you at the request of the
Borrower and the Account Party pursuant to Section 5.04 of the Credit Agreement.
Unless  otherwise  indicated,  capitalized  terms used herein but not  otherwise
defined  herein  shall  have the  respective  meanings  set forth in the  Credit
Agreement.

                  In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such documents
as we have deemed necessary or appropriate as a basis for the opinions set forth
herein, including,  without limitation, the following (the documents referred to
in (a), (b), (c) and (d) below, collectively,  the "Credit Documents"):  (a) the
Credit Agreement,  (b) the Notes, (c) the Holdings Guaranty,  (d) the Subsidiary
Guaranty,  and (e) such other public and  corporate  documents and records as we
deem necessary or appropriate in connection with this opinion.

                  In  our   examination   we  have  assumed  that  (i)  the  due
authorization,  execution  and  delivery of the Credit  Documents  by each party
thereto (other than the Credit Parties),  (ii) the Credit  Documents  constitute
the legal, valid and binding obligation of each party thereto (other

                                       1

<PAGE>

than the Credit Parties), (iii) the genuineness of all signatures (other than as
to the Credit Parties),  and (iv) the authenticity of all documents submitted to
us as originals  and the  conformity  to original  document's  of all  documents
submitted to us as certified  or  photostatic  copies.  In  connection  with the
opinion set forth in  paragraph  1 below,  we have with your  permission  relied
exclusively  upon the  opinions of (i) John V. Del Col,  General  Counsel of the
Borrower,  (ii) Lovells,  United  Kingdom  counsel to the Account  Party,  (iii)
Appleby,  Spurling & Kempe,  Bermuda  counsel to Holdings for all matters stated
therein, and (iv) Conyers,  Dill & Peatman,  Bermuda,  counsel to the Subsidiary
Guarantor.  As to  questions  of fact not  independently  verified by us we have
relied,  to  the  extent  we  deemed  appropriate,   upon   representations  and
certificates  of  officers  of the  Borrower  and  the  Credit  Parties,  public
officials and other appropriate persons.

Based upon the foregoing, we are of the opinion that:

                  1. Each Credit  Document to which each Credit Party is a party
constitutes  the  legal,  valid and  binding  obligation  of such  Credit  Party
enforceable in accordance with its terms.

                  2.  Neither  the  execution,  delivery or  performance  by any
Credit Party of the Credit  Documents to which it is a party,  nor compliance by
it  with  the  terms  and  provisions  thereof,  nor  the  consummation  of  the
transactions  contemplated  therein will contravene any applicable  provision of
any law, statute, rule or regulation (including, without limitation, Regulations
T, U and X of the Board of Governors of the Federal Reserve System).

                  3. No order, consent,  approval,  license,  authorization,  or
validation of, or filing,  recording or registration  with, or exemption by, any
Governmental  Authority of the State of New York or the United States (except as
have been obtained or made prior to the date hereof),  is required to authorize,
or is required in connection  with, (i) the execution,  delivery and performance
of any Credit  Document  by any  Credit  Party or (ii) the  legality,  validity,
binding effect or enforceability of any such Credit Document against such Credit
Party.

                  4. No Credit  Party is an  "investment  company"  or a company
"controlled"  by an "investment  company,"  within the meaning of the Investment
Company Act of 1940, as amended.

                  5. No Credit Party is a "holding  company,"  or a  "subsidiary
company" of a "holding  company," or an "affiliate" of a "holding company" or of
a "subsidiary  company" of a "holding  company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

                  We are  members  of the Bar of the State of New  York,  and we
express no opinion  as to the laws of any  jurisdiction  other than those of the
State of New York and the United States of America.

                  The   foregoing   opinions   are  subject  to  the   following
qualifications  and exceptions:  (i) the  enforceability of the Credit Documents
may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting creditors' rights

                                       2
<PAGE>

generally,   and  by  general  principles  of  equity,   regardless  of  whether
enforcement  is  pursuant  to a  proceeding  in  equity  or  at  law;  (ii)  the
enforceability  of the  indemnification  rights in the Credit  Documents  may be
limited in certain respects by considerations of public policy; (iii) we express
no opinion as to the  enforceability  of Section  13.17 of the Credit  Agreement
relating to an indemnity against loss from a court judgment in another currency;
and (iv) we express no opinion concerning the enforceability of any provision in
the Credit  Agreement  which  requires the Borrower or the Account Party to make
any or all payments thereunder without setoff or counterclaim or any other right
which the Borrower or the Account Party may have.

                  This opinion is being  furnished only to the addressees and is
solely for your benefit in connection with the above  transaction.  This opinion
may not be relied upon for any other purpose, or relied upon by any other person
for any purpose, without our prior written consent.

                                Very truly yours,

                               /s/ Baker & McKenzie
                                   -------------------
                                   Baker & McKenzie

<PAGE>

                                                                     EXHIBIT C-4
Lovells
65 Holborn Viaduct
London EC1A 2DY
Tel:  +44 (0) 20 7296 2000
Fax: +44 (0) 20 7296 2001

6 October 2000

The  Administrative  Agent and each of the Banks  party to the Credit  Agreement
referred tO below as at the date of this tatter

(the "Addressees")

Dear Sirs

TRENWICK HOLDINGS LIMITED

We refer to our opinion latter dated 27 September  2000 (the  "Original  Opinion
Letter")  relating to Trenwick  Holdings  Limited (the "Account  Party") and the
Credit Agreement, dated as of 24 November 1999 and amended and restated as of 27
September 2000 among Trenwick America Corporation (the "Borrower").  the Account
Party,  the  lending  institutions  party  thereto  (the  "Banks").  First Union
National Bank, as Syndication Agent, Fleet National Bank, as Documentation Agent
and The Chase Manhattan Bank, as Administrative  Agent (the "Credit Agreement').
Unless  otherwise  indicated  capitalised  terms used  herein but not  otherwise
defined  herein  shall  have the  respective  meanings  set forth in the  Credit
Agreement.

We nave now received and reviewed copies of the following documents:

1.       the Credit Agreement executed on behalf of Trenwick  Holdings  Limited,
         including Schedule I and Annex I and Annex II  thereto,  but  excluding
         any of the exhibits thereto;

2.       the Holdings Guaranty executed on behalf  of Trenwick Group Limited and
         dated as of  27 September  2000  including   Schedule  1  thereto,  but
         excluding any of the annexures thereto.

(together the "Agreements").

We confirm that,  having reviewed the Agreements,  our opinion as set out in the
Original Opinion Letter remains  unchanged,  subject to the  qualifications  and
observations and on the basis of the assumptions set out in the Original Opinion
Letter, save that assumption(s) no longer applies.

This letter is given on the basis that it is to be governed by and  construed in
accordance  with English law. It is  addressed to the  Addressees  and given for
their  sole  benefit  for the  purposes  of the  Agreements  only and may not be
disclosed  or quoted to or relied  upon by any other  person,  without our prior
written  consent in each specific  case.  No person (other than the  Addressees)
into  whose  possession  a copy of this  letter  comes  may rely on this  letter
without our express written consent addressed to him.

Yours faithfully

/s/ Lovells
    ------------
    LOVELLS

<PAGE>

Lovells

27 September 2000

The  Administrative  Agent and each of the Banks  party to the Credit  Agreement
referred to below as at the date of this opinion letter

(the "Addressees")

Dear Sirs

TRENWICK HOLDINGS LIMITED

1.       We have acted as English legal advisers to Trenwick  Holdings  Limited
         (registered  number 24883~0) (the "Account  Party") in connection  with
         the entry by the Account Party into the Credit Agreement defined below.
         This opinion is delivered to you at  the request of the  Account  Party
         pursuant to Section  5.04 of  the  Credit  Agreement,  dated as  of  24
         November 1999 and amended and restated as of  27 September  2000  among
         Trenwick  America  Corporation  (the  "Borrower"),  the Account  Party,
         the lending institutions  party  thereto  (the  "Banks"),  First  Union
         National   Bank,  as   Syndication   Agent.  Fleet  National  Bank,  as
         Documentation  Agent and The Chase  Manhattan  Bank, as  Administrative
         Agent  (the  'Credit  Agreement'}.    Unless   otherwise     indicated,
         capitalised  terms used herein but not otherwise  defined herein  shall
         have the  respective  meanings set forth in the Credit Agreement.

DOCUMENTS EXAMINED

2.       For the purposes of giving this opinion, we have examined the following
         documents:

         (a)  (i) a facsimile copy of the Credit Agreement executed on behalf of
              Trenwick  Holdings Limited,  including  Schedule 1 and Annex I and
              Annex II thereto, but excluding any of the exhibits hereto;

              (ii)a draft of the Holdings Guaranty (document reference: 09/14/00
              9:01 Ag/Pg New York 628790v6)  including Schedule 1  thereto,  but
              excluding any of the annexures thereto;

         (b)  copies, certified by the Secretary of the Account Party to be true
              copies,  of  its  Memorandum  and  Articles of Association and its
              Certificate  of  Incorporation and Certificate(s) of Incorporation
              on Change of Name;

         (c)  a copy,  certified by the  Secretary of the Account  Party to be a
              true  copy,  of an extract of minutes of a meeting of its Board of
              Directors held on 26 September 2000; and

<PAGE>

                                        -2 -                   27 September 2000

         (d)  a  copy,  certified  by the Secretary of the Account Party to be a
              true  copy, of  a  certificate  dated 27 September  2000  of   the
              Managing   Director  of  the  Account  Party  containing,  amongst
              other  things, specimen signatures of the officers of the  Account
              Party  and  certain confirmations in relation to the Agreements.

         The documents  listed in paragraph 2(a) are referred to collectively as
         the "Agreements" and individually as an "Agreement".

3.       Except  for the  documents  listed in  paragraph  2 above,  we have not
         examined any contracts or other documents  entered into by or affecting
         the Account Party or any  corporate  records of the Account  Party.  We
         have not made any other  enquiries or searches  concerning  the Account
         Party (whether  within this firm or otherwise),  except as mentioned in
         paragraph 4 below. In giving this opinion, we have also relied, without
         further  enquiry,  upon the  certificate  referred to in paragraph 2(d)
         above as to all matters set out in such certificate.

SEARCHES

4.       We have  carried out a search of a  microfiche  relating to the Account
         Party   supplied  to us by  the  Companies  Registration  Office  on 25
         September  2000  timed at 17:34 which reveals no order or resolution to
         wind up  the  Account  Party  and no notice  of the  appointment  of an
         administrator  or  receiver of the Account  Party.  We made a telephone
         enquiry to the  Companies  Registry at the Companies Court in London at
         approximately   4:07 pm on 26 September 2000 and requested the Clerk to
         carry out a  search of the  register of  winding-up  petitions  and the
         register of  administration petitions in relation to the Account Party.
         The Clerk   confirmed  that there were no entries  against  the Account
         Party.  We have not conducted any further search,  or any search in any
         District  Registry of  the High Court where  winding-up  petitions  may
         also be presented in  certain cases,  and  accordingly  this opinion is
         given on the  assumption  that such searches (if made) would not reveal
         any circumstances which would require amendment of this opinion.

SCOPE OF OPINION

5.       This  opinion is given only with respect to English law in force at the
         date of this  letter as  applied  by  English  Courts.  No  opinion  is
         expressed or implied as to the laws of any other  territory as to which
         no enquiries  have been made or as to European  Union law as it affects
         any  jurisdiction  except  England  and Wales.  Statements  relating to
         United Kingdom  taxation are based on English law as currently  applied
         by the English courts and on generally published practice of the Inland
         Revenue applying at the date of this opinion.

ASSUMPTIONS

6.       This opinion is based on the assumptions set out in the appendix to
         this letter, which we have taken no steps to verify independently.

OPINIONS

7.       Based  upon  and  subject  to  the  foregoing,  and  subject  to   the
         qualifications  and  observations  set out below and to any matters not
         disclosed to us, we are of the opinion that:

         (a)  The Account Party is duly  incorporated and validly existing under
              English law and has the  necessary  corporate  power to enter into
              the  Agreements  and  to  exercise  its  rights  and  perform  its
              obligations thereunder. All corporate and other action required by
              its  Memorandum  and  Articles of  Association  to  authorise  the
              execution  of  the   Agreements  by  the  Account  Party  and  the
              performance of its obligations thereunder has been duly taken. The
              Account Party has duly executed and  delivered  each  Agreement to
              which  it  is  a  party.  Neither  the  execution,   delivery  nor
              performance  by the Account Party of the Agreements to which it is
              a party will violate any provision of the  Memorandum and Articles
              of Association of the Account Party in the form provided to us, as
              referenced to a 2(b) above.

<PAGE>

                                            -3 -               27 September 2000

         (b)  Subject to the  Agreements  being in a proper legal form under the
              laws of the State of New York (by which they are  expressed  to be
              governed)  and the  obligations  of the Account  Party  thereunder
              constituting  valid and legally  binding  obligations  enforceable
              under the laws of the State of New York,  then  there is no reason
              under  English  law  why  the  obligations  of the  Account  Party
              contained in the Agreements will not constitute  valid and legally
              binding  obligations of the Account Party  enforceable  against it
              under English law.

         (c)  No  filings  or  registrations  with any  registration  office  in
              England  and  Wales  are  necessary  to ensure  the  validity  and
              legality of the  Agreements  or their  enforceability  against the
              Account Party.

         (d)  No approvals,  consents,  licences,  authorisations  or exemptions
              from any governmental  authority or regulatory body in England and
              Wales are necessary for the execution, delivery and performance of
              any  Agreement by the Account  Party or to ensure the validity and
              Iegally of the  Agreements  or their  enforceability  against  the
              Account Party.

         (e)  No United  Kingdom ad valorem stamp duty or sleep duty reserve tax
              is payable by the  Account  Party on the  execution  of the Credit
              Agreement.

         (f)  No deduction or  withholding  for or on account of United  Kingdom
              taxes will be required to be made from any payment of interest due
              by the Account Party to each L/C Bank under the Credit Agreement.

         (g)  The express choice of the laws of the State of New York to govern
              the  Agreements  and  the    submission   to   the   non-exclusive
              jurisdiction of the courts of the State of New York and the United
              States for  the  Southern  District  of  New York  (the  "New York
              Courts") will  be recognised  and upheld by an English  Court, but
              such choice  of  law and  submission  will not displace  mandatory
              rules of  law  applicable in another  jurisdiction  with which the
              relevant  transaction  is  otherwise solely  connected or in which
              any dispute with respect to  the  Agreements is being adjudicated.
              To the extent that  such  mandatory  rules  affect any part of the
              transaction,  an    English   Court  is  likely  to  restrict  the
              application of those rules to the relevant part of the transaction
              and to treat the laws of the State of New York as applicable   to,
              and the New York Courts as having jurisdiction in respect of,  the
              remainder.

         (h)  A judgment obtained against the Account Party in the Courts of the
              State of New York could not be  enforced  by  registration  in the
              English  Courts,  but such  judgment  would be  treated  as itself
              constituting a cause of action against the Account Party and could
              be sued upon in the  English  Courts.  The English  Courts  should
              enter  judgment  against  the Account  Party in such  proceedings,
              provided that:

              (i)the  original  Court had  jurisdiction  to deliver the original
                 judgment under its own rules and under the rules of the English
                 Courts  and the  original  judgment  is  final  and  conclusive
                 between the parties:

             (ii) there is payable under the original judgment a definite sum of
                 money in respect of a cause of action known to English law;

             (iii) the original judgment is not for multiple damages or for
                 taxes or charges of a like nature or fines or other penalties;

<PAGE>

                                          - 4 -                27 September 2000

              (iv)the original  judgment was not obtained by or  in  proceedings
                  contrary  to   natural  justice and  its  enforcement  is  not
                  contrary to English public policy;

              (v) restrictions  have not been imposed  under the  Protection  of
                  Trading  Interests Act 1980 prior to judgment being  enforced;
                  and

              (vi)enforcement proceedings are instituted within six years after
                  the date of the original judgment.

QUALIFICATIONS

8.       This  opinion  is  subject  to the  qualifications  stated  below.  The
         expression  "enforceable"  as used above means that the  obligations of
         the Account Party created by the Agreements are of a type which English
         Courts  enforce.   It  does  not  mean  that  those   obligations  will
         necessarily be enforced in all  circumstances  in accordance with their
         terms. In addition, but without limitation:

         (a)  The opinion  set forth  above as regards  the  binding  effect and
              validity of the  Agreements and their  enforceability  against the
              Account  Party is subject to all  limitations  resulting  from the
              laws of administration,  liquidation, insolvency,  reorganisation,
              suretyship  or  similar  laws  of  general  application  affecting
              creditors' rights.

         (b)  The power of an English Court to order specific  performance of an
              obligation or to grant  injunctive  relief or any equitable remedy
              is  discretionary  and,  accordingly,  we express no opinion as to
              whether such remedies  would be available in respect of any of the
              obligations  of the Account  Party.  Specific  performance  is not
              usually  ordered  and an  injunction  not  usually  granted  where
              damages would be regarded by the Court as an adequate  alternative
              remedy.

         (c)  Where  any  obligations  of  any  person  are to be  performed  or
              observed  in  jurisdictions  outside  England  and Wales,  or by a
              person subject to the laws of a jurisdiction  outside  England and
              Wales,  such obligations may not be enforceable  under English law
              to the  extent  that  their  performance  or  observance  would be
              illegal or  contrary to public  policy  under the laws of any such
              jurisdiction.

         (d)  Where any party to the Agreements is vested with a discretion,  or
              may determine  any matter in its opinion,  English law may require
              that such discretion is exercised  reasonably or that such opinion
              is based on reasonable grounds.

         (e)  Enforcement  of the rights of the parties under the Agreements may
              become  time-barred  under  the  Limitation  Act 1980 or may be or
              become subject to defences of set-off or  counterclaim,  depending
              on the relevant facts.

         (f)  An English  Court may refuse to give effect to clause 13.01 of the
              Credit  Agreement  dealing  with  the cost of  litigation  brought
              before an English Court where such  litigation is  unsuccessful or
              where the Court itself has made an order for costs.

         (g)  An English Court may enforce a foreign  judgment debt  denominated
              in a  currency  other  than  sterling,  as  a  matter  of  current
              procedural  practice.  However, the judgment debtor may settle the
              judgment debt in sterling,  applying the rate of exchange  current
              at the time of  payment.  Further,  in the  event  of the  Account
              Party's  insolvent  liquidation  under  English  law,  any foreign
              currency  claim against the Account Party would be converted  into
              starting  at the date on which  the  liquidation  commenced  or is
              deemed to have commenced.

(h)           Except  in  those  cases  where   jurisdiction  is  determined  in
              accordance  with the  provisions  of the  Brussels  convention  on
              Jurisdiction  in Civil and Commercial  Matters of 1968, an English
              Court will  normally stay an action where it is shown that it can,
              without injustice to the

<PAGE>

                                         - 5 -                 27 September 2000

              claimant,  be tried in a more  convenient  forum. An English Court
              may also, at its discretion,  order a claimant in an action, if he
              is not  ordinarily  resident  in the  United  Kingdom,  to provide
              security for costs.

         (i)  Any provision in the Agreements  providing  that any  calculation,
              certification or determination will be conclusive and binding will
              not  be   effective   if  such   calculation,   certification   or
              determination is fraudulent or made on an unreasonable  basis, and
              it will not necessarily  prevent  judicial enquiry into the merits
              of any claims by any party thereto.

         (j)  If  any  provision   for  the  payment  or   liquidated   damages,
              compensation,  additional  interest  or similar  amounts  does not
              represent  a  genuine  pre-estimate  of the loss or the  aggrieved
              party,  then that provision might be held to be  unenforceable  on
              the grounds that it is a penalty.

         (k)  We express no opinion on any  provisions of the  Agreements  which
              refer to specific laws or regulations of any  jurisdiction  (other
              than England and Wales).

         (I)  The effectiveness of contract terms seeking to exclude or restrict
              the  liability  of a party  for  negligence  or  breach of duty is
              limited by the Unfair Contract Terms Act 1977.

         (m)  Provisions as to severability in the Agreements may not be binding
              and the  question of whether or not any invalid  provision  may be
              severed  from  other  provisions  in  order  to  save  such  ether
              provisions  would  be  determined  by  an  English  Court  at  its
              discretion.

         (n)  A term of a written  agreement may be varied by oral  agreement of
              the parties,  notwithstanding that such written agreement requires
              variations to be made only in writing.

         (o)  Where a judgment  has been given by an English  Court or a foreign
              Court in  respect  of the  Agreements  (or any part of them),  the
              English  Court  may hold  that the  effect  of that  judgment  may
              subsume some or all of the obligations  under the Agreements.  For
              example,  where a judgment  has been given by an English  Court in
              respect of an obligation contained in the Agreements,  the English
              Court will  assist the  aggrieved  party to enforce  the  judgment
              debt,  but will not  permit  the  aggrieved  party to bring  fresh
              proceedings  in  respect  of the  original  obligation  under  the
              Agreements.  Where the  judgment  was given  lawfully by a foreign
              Court of competent  jurisdiction,  the English Court,  even if not
              bound  to  follow  the  decision  of the  foreign  Court,  will be
              reluctant to permit the matter to be re-tried in England.

         (p)  An   undertaking   to  assume   liability   for   non-payment   or
              insufficiency of United Kingdom stamp duty on any instrument or to
              indemnify any person against such liability or such non-payment or
              insufficiency  is void under Section 117 of the Stamp Act 1891. In
              addition,  an unstamped or insufficiently  stamped document is not
              admissible  in  evidence  in civil  proceedings  before an English
              Court.

         (q)  We have taken no  account  of the  effect of the Human  Rights Act
              1998 (the "Act") (which comes into force on 2 October 2000) on any
              laws  applicable  to  the  interpretation  or  enforcement  of any
              Agreement  or on the  action  by any  party  in  entering  into or
              performing  that  Agreement.  The Act gives  effect to rights  and
              fundamental  freedoms  guaranteed under the European Convention on
              Human Rights ("Convention rights"). In particular,  it is unlawful
              for a public authority to act in a way which is incompatible  with
              a  Convention  right  and,  insofar  as it is  possible  to do so,
              primary and subordinate  legislation must be read and given effect
              in a way which is compatible with Convention  rights.  There is at
              present  little  English  case law to provide  guidance on how the
              overarching  Iaw  introduced  by the Act will  apply to  different
              factual cases.

<PAGE>

                                      - 6 -                    27 September 2000
OBSERVATIONS

9.       We also make the following observations:

         (a)  We have not consulted the parliamentary  debates in Hansard on any
              statutory provision relevant to this opinion.

         (b)  We have assumed  that all  statutory  provisions  relevant to this
              opinion  were  validly  adopted  and  are  fully  enforceable.  In
              particular,  we have not  investigated  whether any such statutory
              provision is contrary to  overriding  provisions of the law of the
              European Union.

         (c)  We  express no opinion  as to the  correctness  of any  warranties
              given by the Account Party  (expressly  or impliedly)  under or by
              virtue  of the  Agreements,  save if and  insofar  as the  matters
              warranted  are the  subject-matter  of  specific  opinions in this
              letter.

         (d)  We have not considered the particular  circumstances  of any party
              to the Agreements  (save the Account Party to the extent expressly
              stated in thls  opinion  letter) or the effect of such  particular
              circumstances on the Agreements or the  transactions  contemplated
              thereby.

         (e)  The searches referred to in paragraph 4 above will not necessarily
              reveal whether or not a resolution has been passed, an appointment
              made or proceedings  commenced,  or a charge or other  registrable
              document  created,  since  particulars  or  such  matters  are not
              required  to be recorded  immediately  but only within a specified
              period.

BENEFIT OF OPINION

This opinion is given on the basis that it is to be governed by and construed in
accordance  with English law. It is  addressed to the  Addressees  and given for
their  sole  benefit  for the  purposes  of the  Agreements  only and may not be
disclosed  or quoted to or relied  upon by any other  person,  without our prior
written  consent in each specific  case.  No person (other than the  Addressees)
into whose  possession  a copy of this  Opinion  comes may rely on this  opinion
without our express written consent addressed to him.

Yours faithfully

/s/ Lovells
   ----------------
    Lovells

<PAGE>

                                      - 7 -                    27 September 2000

APPENDIX TO OPINION

         in this opinion letter, we have assumed that:

         (a)  All documents submitted to us as originals are authentic and
     complete and all signatures and seals are genuine.

         (b)  All  documents   supplied  to  us  as   photocopies  or  facsimile
              transmitted  copies or other copies  conform to the  originals and
              such originals are authentic and complete.

         (c)  All documents,  forms and notices which should have been delivered
              to the Companies  Registration  Office on behalf of or relating to
              the Account  Party have been so delivered  and the file of records
              maintained at the Companies  Registration  Office  concerning  the
              Account Party, and reproduced on microfiche for public inspection,
              was  complete,  accurate and  up-to-date at the time of the search
              referred to in paragraph 4 of this opinion letter.

         (d)  The resolutions  contained in the minutes referred to in paragraph
              2(c) of  this  opinion  letter  were  duly  passed  at a  properly
              convened,  constituted  and  conducted  meeting of duly  appointed
              directors  of the  Account  Party  at  which  all  constitutional,
              statutory and other formalities were duly observed (including,  if
              applicable,  those  relating  to  the  declaration  of  directors'
              interests  or the power of  interested  directors  to vote);  such
              resolutions  have not been  amended or  rescinded  and are in full
              force and effect;  and the minutes of such meeting  referred to in
              paragraph  2(c) of this  opinion  letter are a true  record of the
              proceedings at such meeting.

         (e)  The Account  Party has entered into the  Agreements  in good faith
              for the purposes of its business and there are reasonable  grounds
              for believing that the transactions contemplated in the Agreements
              will benefit the Account Party.

         (f)  The Account Party has not passed a resolution  for its  winding-up
              and no  proceedings  have been  instituted  or steps taken for the
              winding-up  of  the  Account  Party  or  the   appointment  of  an
              administrator  or  receiver in respect of all or any assets of the
              Account Party.

         (g)  No proceedings have been instituted or injunction  granted against
              the  Account  party  to  restrain  it from  performing  any of its
              obligations under the Agreements.

         (h)  The  Agreements  accurately  record all terms  agreed  between the
              parties and none of the Agreements  has been  terminated or varied
              and no obligation under them has been waived.

         (i)  The documents listed in paragraph 2 of this opinion letter contain
              all relevant information which is material for the purposes of our
              opinion   and   there   is  no   other   agreement,   undertaking,
              representation   or  warranty  (oral  or  written)  and  no  other
              arrangement (whether legally binding or not) between all or any of
              the parties or any other  matter which  renders  such  information
              inaccurate,   incomplete   or  misleading  or  which  affects  the
              conclusions stated in this opinion letter.

         (j)  Each  of  the  parties  (other  than  the  Account  Party)  to the
              Agreements has full corporate capacity, power, authority and legal
              right  to  enter  into  and  perform  its  obligations  under  the
              Agreements  and each  such  Agreement  has been  duly  authorised,
              executed and delivered by such party.

         (k)  All copies certified and all documents dated earlier than the date
              of this opinion letter on which we have expressed  reliance remain
              accurate,  complete  and in full  force and  effect at the date of
              this opinion letter.

<PAGE>

                                    - 8 -                      27 September 2000

         (l)  The binding  effect of the  Agreements on the Account Party is not
              affected by duress,  undue  influence  or mistake and no Agreement
              has been  entered  into by any  party  in  connection  with  money
              laundering or any other unlawful activity.

         (m)  All formalities and requirements of the laws of any relevant state
              (other than England and Wales),  and of any  regulatory  authority
              therein,  applicable to the execution,  performance,  delivery and
              enforceability  of the  Agreements,  have  been  or  will  be duly
              complied with.

         (n)  No party to the  Agreements  is  resident in or  connected  with a
              territory  which is subject to any  embargo,  sanction  or similar
              restriction  imposed by the  United  Nations,  the  Council of the
              European  Union or the  Parliament  of the  United  Kingdom or any
              person or body to whom their powers are delegated.

         (o)  There  is no  reason  under  any  foreign  law  applicable  to the
              Agreements  why the selection of the laws of the State of New York
              as the governing law of the  Agreements  and the submission of the
              parties to the Agreements to the jurisdiction of the Courts of the
              State of New York could be  successfully  challenged or held to be
              invalid.

         (p)  No law (other than  English  law) affects  any of the  conclusions
              stated in this opinion letter.

         (q)  The parties to the Credit  Agreement intend the Account Party will
              repay  each  L/C  Bank   within  364  days  for  any   payment  or
              disbursement made by such L/C Bank under any Letter of Credit.

         (r)  The Letters of Credit issued or to  be  issued  under  the  Credit
              Agreement are in a form approved by Lloyd's.

         (s)  The  Holdings  Guaranty as executed  will not,  differ in form and
              content  from the  draft  referred  to in  paragraph  2(a) of this
              opinion letter.

<PAGE>

                                                                   Exhibit C-5

September 27, 2000

To the Administrative Agent
and each of the Banks party to
the Credit Agreement referred to below

Ladies and Gentlemen:

         I am the General Counsel of Trenwick  America  Corporation,  a Delaware
corporation  (the  "Borrower").  This  opinion is  delivered  to you pursuant to
Section 5.04 of the Credit Agreement,  dated as of November 24, 1999 and amended
and  restated as of September  27, 2000 among the  Borrower,  Trenwick  Holdings
Limited,  a company organized under the laws of the United Kingdom (the "Account
Party"),  the lending  institutions  party  thereto (the  "Banks"),  First Union
National Bank, as Syndication Agent, Fleet National Bank, as Documentation Agent
and The Chase Manhattan Bank, as Administrative  Agent (the "Credit Agreement").
Unless  otherwise  indicated,  capitalized  terms used herein but not  otherwise
defined  herein  shall  have the  respective  meanings  set forth in the  Credit
Agreement.

         In connection with this opinion,  I have examined  originals or copies,
certified or otherwise  identified to my  satisfaction,  of such  documents as I
have deemed  necessary  or  appropriate  as a basis for the  opinions  set forth
herein, including,  without limitation, the following (the documents referred to
in (a), (b), (c) and (d) below, collectively,  the "Credit Documents"):  (a) the
Credit Agreement,  (b) the Notes, (c) the Holdings Guaranty,  (d) the Subsidiary
Guaranty,  and (e) such other public and  corporate  documents  and records as I
deem necessary or appropriate in connection with this opinion.

         In my  examination,  I have assumed the  genuineness  of all signatures
(other  than  as to the  Credit  Parties),  the  authenticity  of all  documents
submitted  to me as  originals,  the  conformity  to original  documents  of all
documents   submitted  to  me  as  certified  or  photostatic   copies  and  the
authenticity  of the  originals  of such  copies.  As to  questions  of fact not
independently verified by me, I have relied, to the extent I deemed appropriate,
upon  representations  and  certificates  of  officers of the  Borrower,  public
officials and other appropriate persons.

                                       1
<PAGE>

To the Administrative Agent
and each of the Banks party to
the Credit Agreement
September 27, 2000
Page 2

         Based upon the foregoing, I am of the opinion that:

         1. Holdings and each of its  Subsidiaries  (i) is a duly  organized and
validly existing corporation in good standing under the laws of the jurisdiction
of its  organization,  and has the  corporate  power  and  authority  to own its
property  and assets and to  transact  the  business  in which it is engaged and
presently  proposes to engage and (ii) is duly qualified and is authorized to do
business and is in good standing in all jurisdictions where the failure to be so
qualified is reasonably likely to have a Material Adverse Effect.

         2. Each Credit Party has the corporate  power and authority to execute,
deliver and carry out the terms and  provisions of each of the Credit  Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of the Credit Documents to which it is a
party. Each Credit Party has duly executed and delivered each Credit Document to
which it is a party.

         3. Neither the  execution,  delivery or performance by any Credit Party
of the Credit  Documents to which it is a party,  nor  compliance by it with the
terms  and  provisions  thereof,   nor  the  consummation  of  the  transactions
contemplated  therein,  (i) will, to the best of my knowledge after due inquiry,
contravene any order,  writ,  injunction or decree of any court or  governmental
instrumentally,  (ii) will  conflict  or be  inconsistent  with or result in any
breach  of,  any of the  terms,  covenants,  conditions  or  provisions  of,  or
constitute a default  under,  or result in the creation or imposition of (or the
obligation  to create or impose) any Lien upon any of the  property or assets of
Holdings or any of its  Subsidiaries  pursuant  to the terms of, any  indenture,
mortgage,  deed of trust,  credit  agreement,  loan  agreement or other material
agreement or instrument to which Holdings or any of its  Subsidiaries is a party
or by which it or any of its  property or assets are bound or to which it may be
subject of (iii) will violate any provision of the Certificate of  Incorporation
or By-Laws of Holdings or any of its Subsidiaries.

         4. To the best of my knowledge after due inquiry, there are no actions,
suits or  proceedings  pending  or  threatened  (i) with  respect  to any Credit
Document or (ii) with  respect to Holdings or any of its  Subsidiaries  (a) that
could  reasonably be expected to have a material adverse effect on the business,
property, assets, operations,  liabilities or condition (financial or otherwise)
of Holdings,  or of Holdings and its  Subsidiaries  taken as a whole or (b) that
could  reasonably be expected to have a material adverse effect on the rights or
remedies  of the Banks or on the  ability  of any Credit  Party to  perform  its
obligations under the Credit Documents to which it is a party.

                                       2
<PAGE>

         5. Each Regulated  Insurance Company  possesses the insurance  licenses
which each such Regulated  Insurance  Company needs to operate its businesses as
presently conducted.

         I am a member of the Bar of the  State of New  York,  and I do not hold
myself out as being  conversant  with, and express no opinion as to, the laws of
any jurisdiction other than those of the United States of America,  the State of
New York and the General Corporation Law of the State of Delaware.  This opinion
is rendered only with respect to the laws and the rules,  regulations and orders
thereunder that are currently in effect.

         This opinion is being furnished only to the addresses and is solely for
their  benefit in connection  with the  transaction  contemplated  by the Credit
Agreement.  This opinion may not be relied upon for any other purpose, or relied
upon by any other person, firm or corporation for any purpose,  without my prior
written consent.

                                                   Very truly yours,

                                                   John V. Del Col
                                                   Senior Vice President,
                                                   General Counsel and Secretary

<PAGE>

                                                                     EXHIBIT C-6

                                 WHITE & CASE

                                                              September 27, 2000

The Administrative Agent and various
lending institutions (collectively, the "Banks") party to the
Credit Agreement referred to below

re:      Credit  Agreement,  dated  as of  November  24,  1999 and  amended  and
         restated as of  September  27,  2000 (the  "Credit  Agreement"),  among
         Trenwick  America  Corporation  (the  "Borrower"),   Trenwick  Holdings
         Limited (the "Account Party") and the Banks

Ladies and Gentlemen:
                  We have  acted as special  counsel  to the Banks  party to the
Credit  Agreement in  connection  with the  execution and delivery of the Credit
Agreement.  This opinion is delivered to you pursuant to Section  5.04(v) of the
Credit  Agreement.  Terms used herein which are defined in the Credit  Agreement
shall have the  respective  meanings  set forth in the Credit  Agreement  unless
otherwise defined herein.

                  In  connection  with  this  opinion,   we  have  examined  the
originals,  or  certified,  conformed or  reproduction  copies,  of all records,
agreements, instruments and documents as we have deemed relevant or necessary as
the basis for the opinions  hereinafter  expressed.  In stating our opinion,  we
have assumed the genuineness of all signatures on original or certified  copies,
the authenticity of documents submitted to us as originals and the conformity to
original or  certified  copies of all copies  submitted  to us as  certified  or
reproduction copies.

                  We have also assumed,  for purposes of the opinions  expressed
herein,  that the parties to the Credit  Agreement have the corporate  power and
authority to enter into and perform

<PAGE>

the Credit  Agreement and that the Credit  Agreement  has been duly  authorized,
executed and delivered by each such party.

                  Based upon the foregoing,  and subject to the  limitations set
forth herein,  we are of the opinion that the Credit  Agreement  constitutes the
legal,  valid and binding  obligation  of the  Borrower  and the  Account  Party
enforceable in accordance with its terms,  except to the extent that enforcement
may be limited by applicable  bankruptcy,  insolvency,  reorganization  or other
similar laws  affecting  creditors'  rights  generally and by equity  principles
(regardless of whether enforcement is sought in equity or at law).

                  We  have  not  been   requested  to  render  and,   with  your
permission,  we express no opinion as to the applicability to the obligations of
the Borrower and the Account Party under the Credit  Agreement of Section 548 of
the  Bankruptcy  Code and  Article  10 of the New York  Debtor  &  Creditor  Law
relating to fraudulent transfers and obligations.

                  This  opinion  is  limited  to the  federal  law of the United
States of America and the law of the State of New York.

Very truly yours,

/s/ White & Case LLP
   ------------------
    White & Case LLP

<PAGE>

                                                                      EXHIBIT D

                          FORM OF OFFICERS' CERTIFICATE

                  I, the undersigned,  [President/Vice President] of __________,
a  [corporation]  organized  and existing  under the laws of  ____________  (the
"Company"), do hereby certify on behalf of the Company that:

                  1. This  Certificate is furnished  pursuant to Section 5.05 of
the Credit Agreement, dated as of November 24, 1999, and amended and restated as
of September 27, 2000,  among Trenwick  America  Corporation  (the  "Borrower"),
Trenwick Holdings Limited (the "Account  Party"),  the lenders from time to time
party thereto,  First Union National Bank, as Syndication  Agent, Fleet National
Bank, as  Documentation  Agent and The Chase Manhattan  Bank, as  Administrative
Agent  (such  Credit  Agreement,  as in effect on the date of this  Certificate,
being herein called the "Credit  Agreement").  Unless otherwise  defined herein,
capitalized  terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.

                  2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his or her name
and has held such  office  since  _________  __,  ____.1 The  signature  written
opposite  the  name  and  title  of  each  such  officer  is his or her  genuine
signature.

              Name2                 Office                            Signature
         --------------          -----------                        ------------

         --------------          -----------                        ------------

         --------------          -----------                        ------------

         --------------          -----------                        ------------

                  3.  Attached  hereto as Exhibit A is a  certified  copy of the
[Certificate of  Incorporation]  of the Company,  as filed in [the Office of the
Secretary of State of the State of ________] on ___________, ____, together with
all amendments thereto adopted through the date hereof.

                  4. Attached  hereto as Exhibit B is a true and correct copy of
the  [By-Laws]  of the Company  which were duly  adopted,  are in full force and
effect on the date hereof, and have been in effect since
-------------, ----.

------------------------
1 Insert a date prior to the time of any corporate action relating to the Credit
Documents or related documentation.

2 Include  name,  office and  signature of each officer who will sign any Credit
Document,  including the officer who will sign the  certification  at the end of
this Certificate or related documentation.

                                       1
<PAGE>

                                                                       EXHIBIT D
                                                                          Page 2

                  5. Attached  hereto as Exhibit C is a true and correct copy of
resolutions  which were duly adopted on __________,  ____ [by unanimous  written
consent of the Board of  Directors of the Company] [by a meeting of the Board of
Directors  of the Company at which a quorum was present and acting  throughout],
and said  resolutions  have not been rescinded,  amended or modified.  Except as
attached  hereto as Exhibit C, no resolutions  have been adopted by the Board of
Directors of the Company which deal with the execution,  delivery or performance
of any of the Credit Documents to which the Company is party.

                  [6. On the date hereof,  all of the applicable  conditions set
forth in Sections 5.02,  5.06, 5.07, 5.09, and 5.13 of the Credit Agreement have
been satisfied.]3

                  [7. Attached hereto as Exhibit D are true and  correct  copies
of all  LaSalle  Business Combination Documents.]4

                  [6.]  [8.]  On  the  date  hereof,  the   representations  and
warranties  of the Credit  Parties  contained in the Credit  Agreement or in the
other Credit  Documents  are true and correct in all material  respects with the
same effect as though such  representations  and warranties had been made on the
date hereof,  both before and after giving effect to the incurrence of Revolving
Loans and  Letters  of  Credit on the date  hereof  and the  application  of the
proceeds  thereof,  unless stated to relate to a specific earlier date, in which
case such  representations  and warranties were true and correct in all material
respects as of such earlier date.

                  [7.] [9.] On the date  hereof,  no Default or Event of Default
has  occurred  and is  continuing  or would  result  from the  Borrowing  or the
issuance  of the  Letters  of  Credit  to occur on the date  hereof  or from the
application of the proceeds thereof.

                  [8.]  [10.]  There is no  proceeding  for  the  dissolution or
liquidation  of the  Company  or threatening its existence.

-----------------------------------
3     Insert in Officer's Certificate of Holdings, the Borrower and the Account
      Party only.

4     Insert in Officer's Certificate of Holdings only.

                                       2

<PAGE>

                                                                       EXHIBIT D
                                                                          Page 3

                  IN WITNESS WHEREOF,  I have hereunto set my hand this ____ day
of _________, 2000.

                                                     [Name of Credit Party]

                                                     By _______________________
                                                        Name:
                                                        Title:

                                       3

<PAGE>
                                                                       EXHIBIT D
                                                                          Page 4

I, the undersigned,  [Secretary/Assistant  Secretary] of the Company,  do hereby
certify on behalf of the Company that:
                  1. [Name of Person  making above  certifications]  is the duly
elected  and  qualified  [President/Vice  President]  of  the  Company  and  the
signature above is his or her genuine signature.

                  2. The  certifications  made by [name of Person  making  above
certifications] on behalf of the Company in Items 2, 3, 4, 5, and [8] [10] above
are true and correct.

                  IN WITNESS WHEREOF,  I have hereunto set my hand this ____ day
of _______, 2000.

                                                      [Name of Credit Party]

                                                       By _____________________
                                                          Name:
                                                          Title:

                                       4
<PAGE>

                                                                     EXHIBIT E

                     FORM OF SECTION 4.04(b)(ii) CERTIFICATE

                  Reference is hereby made to the Credit Agreement,  dated as of
November 24, 1999,  and amended and  restated as of  September  27, 2000,  among
Trenwick America  Corporation (the  "Borrower"),  Trenwick Holdings Limited (the
"Account  Party"),  the lending  institutions  from time to time party  thereto,
First Union Bank, as Syndication  Agent,  Fleet National Bank, as  Documentation
Agent  and The Chase  Manhattan  Bank,  as  Administrative  Agent  (as  amended,
modified or supplemented from time to time, the "Credit Agreement"). Pursuant to
the provisions of Section  4.04(b)(ii) of the Credit Agreement,  the undersigned
hereby  certifies  that  it is not a  "bank"  as such  term  is used in  Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.

                                                         [NAME OF BANK]

                                                         By
                                                           --------------------
                                                           Title:

Date:  ________ ___, 2000

<PAGE>

                                                                 EXHIBIT F

                               SUBSIDIARY GUARANTY

                  GUARANTY, dated as of September 27, 2000 (as amended, modified
or  supplemented  from  time  to  time,  this  "Guaranty"),  made by each of the
undersigned  guarantors (each, a "Guarantor" and, together with any other entity
that becomes a party hereto  pursuant to Section 26 hereof,  the  "Guarantors").
Except as otherwise defined herein,  terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.

                              W I T N E S S E T H :
                               - - - - - - - - - -

                  WHEREAS,   Trenwick  America   Corporation  (the  "Borrower"),
Trenwick  Holdings  Limited (the "Account Party" and together with the Borrower,
collectively,  the  "Obligors"),  the financial  institutions  from time to time
party thereto (the "Banks"),  First Union  National Bank, as Syndication  Agent,
Fleet National Bank, as  Documentation  Agent and The Chase  Manhattan  Bank, as
Administrative  Agent  (together with any successor  administrative  agent,  the
"Administrative  Agent"),  have  entered  into a Credit  Agreement,  dated as of
November  24,  1999,  and amended  and  restated  as of  September  27, 2000 (as
amended,  modified or supplemented  from time to time, the "Credit  Agreement"),
providing for the making of Loans to the Borrower and the issuance of Letters of
Credit for the account of the Account Party,  all as  contemplated  therein (the
Banks and the Administrative Agent are herein called the "Bank Creditors");

                  WHEREAS, the Borrower may from time to time be party to one or
more Interest Rate  Agreements  and Other Hedging  Agreements  with a Bank or an
affiliate of a Bank (each such Bank or affiliate,  even if the  respective  Bank
subsequently  ceases to be a Bank under the  Credit  Agreement  for any  reason,
together with such Bank's or affiliate's  successors and assigns,  collectively,
the "Other  Creditors," and together with the Bank Creditors,  are herein called
the "Creditors");

                  WHEREAS, each Guarantor is a Subsidiary of Holdings and/or the
Borrower;

                  WHEREAS,  it is a  condition  to the  making  of  Loans to the
Borrower  and the  issuance  of Letters of Credit for the account of the Account
Party under the Credit  Agreement  that each  Guarantor  shall have executed and
delivered this Guaranty; and

                  WHEREAS,   each  Guarantor  will  obtain   benefits  from  the
incurrence  of Loans by the  Borrower  and the issuance of Letters of Credit for
the account of the Account  Party under the Credit  Agreement  and the  entering
into by the Borrower of Interest Rate  Agreements  or Other  Hedging  Agreements
and,  accordingly,  desires to execute  this  Guaranty  in order to satisfy  the
conditions  described in the preceding paragraph and to induce the Banks to make
Loans to the Borrower and issue Letters of Credit for the account of the Account
Party and Other  Creditors  to enter  into  Interest  Rate  Agreements  or Other
Hedging Agreements with the Borrower;

                  NOW,  THEREFORE,  in  consideration of the foregoing and other
benefits  accruing to each  Guarantor,  the receipt and sufficiency of which are
hereby acknowledged,  each Guarantor hereby makes the following  representations
and  warranties  to the  Creditors  and hereby  covenants  and agrees  with each
Creditor as follows:

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                  1. Each  Guarantor,  jointly and  severally,  irrevocably  and
unconditionally  guarantees:  (i) to the Bank  Creditors  the  full  and  prompt
payment when due (whether at the stated maturity,  by acceleration or otherwise)
of (x) the  principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit  Agreement and all  reimbursement  obligations
and Unpaid Drawings  (including interest thereon) with respect to all Letters of
Credit and (y) all other obligations  (including  obligations which, but for the
automatic stay under Section 362(a) of the  Bankruptcy  Code,  would become due)
and  liabilities  owing by each Obligor to the Bank  Creditors  under the Credit
Agreement  (including,  without  limitation,   indemnities,  Fees  and  interest
thereon)  and the other  Credit  Documents,  whether now  existing or  hereafter
incurred under, arising out of or in connection with the Credit Agreement or any
such other Credit Document and the due performance and compliance with the terms
of  the  Credit  Documents  by  each  Obligor  (all  such  principal,  interest,
liabilities  and  obligations  under  this  clause  (i),  except  to the  extent
consisting  of  obligations  or  liabilities   with  respect  to  Interest  Rate
Agreements or Other Hedging  Agreements,  being herein  collectively  called the
"Credit  Document  Obligations");  and (ii) to each Other  Creditor the full and
prompt  payment when due (whether at the stated  maturity,  by  acceleration  or
otherwise)  of  all  obligations  (including  obligations  which,  but  for  the
automatic stay under Section 362(a) of the  Bankruptcy  Code,  would become due)
and  liabilities  owing by the Borrower  under any Interest  Rate  Agreements or
Other Hedging Agreements, whether now in existence or hereafter arising, and the
due  performance  and compliance by the Borrower with all terms,  conditions and
agreements  contained therein (all such obligations and liabilities being herein
collectively  called  the  "Other  Obligations,"  and  together  with the Credit
Document   Obligations   are  herein   collectively   called   the   "Guaranteed
Obligations").   Each  Guarantor  understands,  agrees  and  confirms  that  the
Creditors  may enforce  this  Guaranty  up to the full amount of the  Guaranteed
Obligations   against  each  Guarantor  without  proceeding  against  any  other
Guarantor, any Obligor, against any security for the Guaranteed Obligations,  or
under  any  other  guaranty   covering  all  or  a  portion  of  the  Guaranteed
Obligations. All payments by each Guarantor under this Guaranty shall be made on
the same basis as payments by the Obligors are made under Sections 4.02 and 4.03
of the Credit Agreement.

                  2.  Additionally,   each  Guarantor,  jointly  and  severally,
unconditionally  and  irrevocably,   guarantees  the  payment  of  any  and  all
Guaranteed  Obligations  of each Obligor to the Creditors  whether or not due or
payable by such Obligor upon the occurrence in respect of such Obligor of any of
the  events   specified   in  Section   9.05  of  the  Credit   Agreement,   and
unconditionally  and  irrevocably,  jointly and severally,  promises to pay such
Guaranteed Obligations to the Creditors, or to their order, on demand, in lawful
money of the United States.

                  3. The liability of each Guarantor  hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed  Obligations
of any Obligor whether  executed by such  Guarantor,  any other  Guarantor,  any
other  guarantor of the Guaranteed  Obligations  or by any other party,  and the
liability of each Guarantor  hereunder  shall not be affected or impaired by (a)
any direction as to application of payment by any Obligor or by any other party,
(b) any other continuing or other guaranty,  undertaking or maximum liability of
a  guarantor  or of any  other  party as to the  Guaranteed  Obligations  of the
Obligor,  (c) any  payment  on or in  reduction  of any such other  guaranty  or
undertaking,  (d) any  dissolution or termination  of, or increase,  decrease or
change in  personnel  by, any Obligor or (e) any payment made to any Creditor on
the Guaranteed  Obligations  which such Creditor repays any Obligor  pursuant to
court order in any bankruptcy, reorganization,  arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.

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                  4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor of the Guaranteed
Obligations, or any Obligor, and a separate action or actions may be brought and
prosecuted  against each Guarantor  whether or not action is brought against any
other  Guarantor,  any other  guarantor of the  Guaranteed  Obligations,  or any
Obligor  and  whether or not any other  Guarantor,  any other  guarantor  of the
Guaranteed Obligations,  or any Obligor be joined in any such action or actions.
Each Guarantor  waives,  to the fullest extent  permitted by law, the benefit of
any statute of limitations  affecting its liability hereunder or the enforcement
thereof. Any payment by any Obligor or other circumstance which operates to toll
any statute of  limitations  as to any Obligor shall operate to toll the statute
of limitations as to each Guarantor.

                  5.  Each  Guarantor  hereby  waives  (to  the  fullest  extent
permitted by applicable law) notice of acceptance of this Guaranty and notice of
any  liability  to  which  it  may  apply,  and  waives  promptness,  diligence,
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liability,  suit or taking of other action by the  Administrative  Agent or
any other  Creditor  against,  and any other notice to, any party liable thereon
(including such Guarantor or any other guarantor of the Guaranteed  Obligations,
or any Obligor).

                  6. Any Creditor may (except as shall be required by applicable
statute  and  cannot be waived)  at any time and from time to time  without  the
consent of, or notice to, any Guarantor,  without  incurring  responsibility  to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:

                  (a) change the manner,  place or terms of payment  of,  and/or
         change or extend the time of payment of, renew, increase, accelerate or
         alter, any of the Guaranteed Obligations, any security therefor, or any
         liability  incurred directly or indirectly in respect thereof,  and the
         guaranty  herein made shall apply to the  Guaranteed  Obligations as so
         changed, extended, renewed or altered;

                  (b)  sell,  exchange,  release,  surrender,  realize  upon  or
         otherwise  deal with in any  manner  and in any order any  property  by
         whomsoever  at any time pledged or  mortgaged  to secure,  or howsoever
         securing,  the Guaranteed Obligations or any liabilities (including any
         of those hereunder)  incurred directly or indirectly in respect thereof
         or hereof, and/or any offset thereagainst;

                  (c) exercise or refrain  from  exercising  any rights  against
         any Obligor or others or otherwise act or refrain from acting;

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                  (d) settle or compromise  any of the  Guaranteed  Obligations,
         any  security  therefor  or  any  liability  (including  any  of  those
         hereunder)  incurred  directly  or  indirectly  in  respect  thereof or
         hereof,  and may  subordinate the payment of all or any part thereof to
         the  payment of any  liability  (whether  due or not) of any Obligor to
         creditors of such Obligor;

                  (e) apply any sums by whomsoever paid or howsoever realized to
         any liability or liabilities of any Obligor to the Creditors regardless
         of what liabilities of such Obligor remain unpaid;

                  (f) consent to or waive any breach of, or any act, omission or
         default  under,  any of the Interest  Rate  Agreements or Other Hedging
         Agreements  entered  into by any  Obligor  and an Other  Creditor,  the
         Credit  Documents or any of the  instruments or agreements  referred to
         therein,  or otherwise amend,  modify or supplement any of the Interest
         Rate Agreements or Other Hedging Agreements entered into by any Obligor
         and an  Other  Creditor,  the  Credit  Documents  or any of such  other
         instruments or agreements; and/or

                  (g)  act or  fail  to act in any  manner  referred  to in this
         Guaranty  which may deprive such  Guarantor of its right to subrogation
         against any Obligor to recover full  indemnity  for any  payments  made
         pursuant to this Guaranty.

                  7. No invalidity,  irregularity or  unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this  Guaranty,  and this  Guaranty  shall be primary,
absolute and  unconditional  notwithstanding  the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except  indefeasible  payment in full in cash
of the Guaranteed Obligations.

                  8. This Guaranty is a continuing  one and all  liabilities  to
which it  applies  or may apply  under the terms  hereof  shall be  conclusively
presumed  to have been  created in reliance  hereon.  No failure or delay on the
part of any Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right,  power or  privilege  hereunder  preclude  any other or further  exercise
thereof or the exercise of any other right,  power or privilege.  The rights and
remedies  herein  expressly  specified are  cumulative  and not exclusive of any
rights or remedies  which any Creditor  would  otherwise  have.  No notice to or
demand on any  Guarantor in any case shall  entitle such  Guarantor to any other
further  notice or demand in  similar or other  circumstances  or  constitute  a
waiver of the  rights of any  Creditor  to any  other or  further  action in any
circumstances  without notice or demand. It is not necessary for any Creditor to
inquire into the capacity or powers of any Obligor or any of its Subsidiaries or
the officers,  directors,  partners or agents acting or purporting to act on its
behalf,  and any  indebtedness  made or created in reliance  upon the  professed
exercise of such powers shall be guaranteed hereunder.

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                  9. Any  indebtedness  of each Obligor now or hereafter held by
any Guarantor is hereby  subordinated to the indebtedness of such Obligor to the
Creditors;  and such  indebtedness  of each  Obligor  to any  Guarantor,  if the
Administrative  Agent, after an Event of Default has occurred and is continuing,
so requests,  shall be  collected,  enforced  and received by such  Guarantor as
trustee for the  Creditors  and be paid over to the  Creditors on account of the
Guaranteed  Obligations,  but without  affecting  or impairing in any manner the
liability of such Guarantor under the other  provisions of this Guaranty.  Prior
to the transfer by any Guarantor of any note or negotiable instrument evidencing
any  indebtedness  of any Obligor to such  Guarantor,  such Guarantor shall mark
such note or  negotiable  instrument  with a legend  that the same is subject to
this  subordination.  Without  limiting the  generality of the  foregoing,  each
Guarantor  hereby agrees with the Creditors  that it will not exercise any right
of  subrogation  which it may at any  time  otherwise  have as a result  of this
Guaranty  (whether  contractual,  under  Section 509 of the  Bankruptcy  Code or
otherwise)  until all Guaranteed  Obligations have been irrevocably paid in full
in cash.
                  10.  (a)  Each  Guarantor  waives  any  right to  require  the
Creditors to: (i) proceed against any Obligor,  any other  Guarantor,  any other
guarantor of any Obligor or any other party; (ii) proceed against or exhaust any
security held from any Obligor, any other Guarantor,  any other guarantor of any
Obligor or any other party;  or (iii) pursue any other remedy in the  Creditors'
power  whatsoever.  Each Guarantor  waives (to the fullest  extent  permitted by
applicable  law) any  defense  based on or  arising  out of any  defense  of any
Obligor,  any other  Guarantor,  any other guarantor of any Obligor or any other
party  other than  payment  in full of the  Guaranteed  Obligations,  including,
without limitation, any defense based on or arising out of the disability of any
Obligor,  any other  Guarantor,  any other guarantor of any Obligor or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause,  or the cessation from any cause of the liability of any Obligor
other than payment in full of the Guaranteed Obligations.  The Creditors may, at
their election,  foreclose on any security held by the  Administrative  Agent or
the other Creditors by one or more judicial or nonjudicial sales, whether or not
every  aspect of any such sale is  commercially  reasonable  (to the extent such
sale is permitted by applicable  law), or exercise any other right or remedy the
Creditors  may have  against any Obligor or any other  party,  or any  security,
without  affecting  or  impairing  in any way  the  liability  of any  Guarantor
hereunder  except to the extent  the  Guaranteed  Obligations  have been paid in
full. Each Guarantor  waives any defense arising out of any such election by the
Creditors,  even though such election operates to impair or extinguish any right
of  reimbursement  or  subrogation  or other  right or remedy of such  Guarantor
against any Obligor or any other party or any security.

                  (b)  Each  Guarantor  waives  all  presentments,  demands  for
performance,  protests and notices,  including,  without limitation,  notices of
nonperformance,  notices of protest, notices of dishonor,  notices of acceptance
of this Guaranty, and notices of the existence, creation or incurrence of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of each Obligor's financial condition and assets, and of
all other  circumstances  bearing upon the risk of nonpayment of the  Guaranteed
Obligations  and the nature,  scope and extent of the risks which such Guarantor
assumes and incurs  hereunder,  and agrees that the Creditors shall have no duty
to  advise  any  Guarantor  of   information   known  to  them   regarding  such
circumstances or risks.

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                  11. Each  Creditor  agrees that this  Guaranty may be enforced
only by the action of the  Administrative  Agent,  in each case  acting upon the
instructions  of the  Required  Banks  (or,  after the date on which all  Credit
Document  Obligations have been paid in full, the holders of at least a majority
of the outstanding Other  Obligations) and that no other Creditor shall have any
right  individually  to seek to enforce or to enforce  this  Guaranty,  it being
understood  and agreed that such rights and  remedies  may be  exercised  by the
Administrative  Agent or the holders of at least a majority  of the  outstanding
Other  Obligations,  as the case may be,  for the  benefit of the  Creditors  in
accordance  with the terms of this Guaranty.  Each Creditor  further agrees that
this  Guaranty  may not be enforced  against any  director,  officer,  employee,
partner or stockholder of any Guarantor  (except to the extent such  stockholder
is also a Guarantor hereunder).

                  12.  In order to  induce  the  Banks to make  Loans  and issue
Letters of Credit pursuant to the Credit  Agreement,  and in order to induce the
Other Creditors to execute,  deliver and perform the Interest Rate Agreements or
Other Hedging  Agreements,  each  Guarantor  represents,  warrants and covenants
that:

                  (a)  Such  Guarantor  (i)  is a  duly  organized  and  validly
         existing corporation,  limited liability company or partnership, as the
         case may be, and is in good  standing  (to the extent  such  concept is
         relevant in such  jurisdiction)  under the laws of the  jurisdiction of
         its organization,  and has the corporate,  limited liability company or
         partnership,  as the  case  may  be,  power  and  authority  to own its
         property and assets and to transact the business in which it is engaged
         and  presently  proposes  to engage and (ii) is duly  qualified  and is
         authorized to do business and is in good standing in all  jurisdictions
         where it is required to be so qualified, except where the failure to be
         so qualified is reasonably likely to have a Material Adverse Effect.

                  (b)  Such  Guarantor  has  the  corporate,  limited  liability
         company or  partnership,  as the case may be,  power and  authority  to
         execute,  deliver  and  carry  out the  terms  and  provisions  of this
         Guaranty and each other Credit  Document to which it is a party and has
         taken  all   necessary   corporate,   limited   liability   company  or
         partnership,  as the case may be,  action to authorize  the  execution,
         delivery  and  performance  by it of each such  Credit  Document.  Such
         Guarantor has duly executed and delivered  this Guaranty and each other
         Credit  Document to which it is a party and each such  Credit  Document
         constitutes the legal,  valid and binding  obligation of such Guarantor
         enforceable in accordance with its terms, except to the extent that the
         enforceability   hereof  or  thereof  may  be  limited  by   applicable
         bankruptcy,  insolvency,  reorganization,  moratorium  or other similar
         laws affecting  creditors' rights generally and by equitable principles
         (regardless of whether enforcement is sought in equity or at law).

                  (c) Neither the  execution,  delivery or  performance  by such
         Guarantor of this Guaranty or any other Credit  Document to which it is
         a party,  nor compliance by it with the terms and provisions  hereof or
         thereof  (i)  will  contravene  any  applicable  provision  of any law,
         statute,  rule or regulation,  or any order, writ, injunction or decree
         of any  court or  Governmental  Authority,  (ii)  will  conflict  or be
         inconsistent  with  or  result  in any  breach  of,  any of the  terms,
         covenants,  conditions or provisions of, or constitute a default under,
         or result in the creation or imposition of (or the obligation to create
         or  impose)  any  Lien  upon  any of the  property  or  assets  of such
         Guarantor  or any of its  Subsidiaries  pursuant  to the terms of,  any
         indenture, mortgage, deed of trust, loan agreement, credit agreement or
         other  material  agreement or other  material  instrument to which such
         Guarantor or any of its  Subsidiaries  is a party or by which it or any
         of its  property  or assets is bound or to which it may be  subject  or
         (iii) will violate any provision of the certificate of incorporation or
         by-laws (or equivalent  organizational  documents) of such Guarantor or
         any of its Subsidiaries.

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                  (d) No order,  consent,  approval,  license,  authorization or
         validation of, or filing,  recording or registration with, or exemption
         by,  any  Governmental  Authority,  is  required  to  authorize,  or is
         required  in  connection   with,  (i)  the   execution,   delivery  and
         performance of this Guaranty or any other Credit Document to which such
         Guarantor is a party, or (ii) the legality, validity, binding effect or
         enforceability  of this Guaranty or any other Credit  Document to which
         such  Guarantor  is a party  (other  than any such  consent,  approval,
         license, authorization,  validation, filing or registration required in
         order for such Guarantor to be in compliance with the Credit Agreement,
         which such Guarantor will make or obtain when and as required).

                  (e) There are no actions,  suits or proceedings pending or, to
         the  knowledge  of such  Guarantor,  threatened  with  respect  to such
         Guarantor  (i) which  has or is  reasonably  likely to have a  Material
         Adverse  Effect or (ii) that is  reasonably  likely to have a  Material
         Adverse  Effect on the rights or  remedies of the  Creditors  or on the
         ability of such Guarantor to perform its respective  obligations to the
         Creditors hereunder and under the other Credit Documents to which it is
         a party.

                  13. Each Guarantor  covenants and agrees that on and after the
date hereof and until the termination of the Total Commitment, all Interest Rate
Agreements  and Other  Hedging  Agreements  and when no Note,  Loan or Letter of
Credit is  outstanding  and all  Guaranteed  Obligations  have been paid in full
(other than indemnities described in Section 13.13 of the Credit Agreement which
are not then due and payable),  such Guarantor  shall take, or will refrain from
taking,  as the case may be, all actions  that are  necessary to be taken or not
taken so that no violation of any provision,  covenant or agreement contained in
Section 3 or 4 of the  Holdings  Guaranty,  and so that no  Default  or Event of
Default,  is caused by the  actions  of such  Guarantor  or any of its  Material
Subsidiaries.

                  14. The Guarantors  hereby jointly and severally  agree to pay
all reasonable  out-of-pocket  costs and expenses of each Creditor in connection
with  the  enforcement  of this  Guaranty,  and of the  Administrative  Agent in
connection with any amendment,  waiver or consent  relating  hereto  (including,
without limitation,  the reasonable fees and disbursements of counsel (including
the  allocated  costs and expenses of in-house  counsel)  employed by any of the
Creditors or the Administrative Agent, as the case may be).

                  15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.

                                       7

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                  16.  Neither  this  Guaranty nor any  provision  hereof may be
changed,  waived,  discharged or terminated  except with the written  consent of
each Guarantor  directly  affected thereby and either (x) the Required Banks (or
to the extent  required  by  Section  13.12 of the  Credit  Agreement,  with the
written consent of each Bank) at all times prior to the time on which all Credit
Document  Obligations  have been paid in full or (y) the  holders  of at least a
majority of the  outstanding  Other  Obligations  at all times after the time on
which all Credit Document Obligations have been paid in full; provided, that any
change, waiver,  modification or variance affecting the rights and benefits of a
single Class (as defined below) of Creditors (and not all Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors (as
defined below) of such Class of Creditors (it being understood that the addition
or release of any Guarantor  hereunder  shall not  constitute a change,  waiver,
discharge or  termination  affecting any  Guarantor  other than the Guarantor so
added or released). For the purpose of this Guaranty the term "Class" shall mean
each class of Creditors,  i.e., whether (x) the Bank Creditors as holders of the
Credit  Document  Obligations  or (y) the Other  Creditors as the holders of the
Other  Obligations.  For the  purpose  of this  Guaranty,  the  term  "Requisite
Creditors"  of any Class  shall  mean  each of (x) with  respect  to the  Credit
Document  Obligations,  the  Required  Banks  (or all the Banks if  required  by
Section  13.12 of the  Credit  Agreement)  and (y)  with  respect  to the  Other
Obligations,  the holders of at least a majority of all obligations  outstanding
from  time  to  time  under  the  Interest  Rate  Agreements  or  Other  Hedging
Agreements.

                  17.  Each   Guarantor   acknowledges   that  an  executed  (or
conformed)  copy of each of the Credit  Documents,  Interest Rate Agreements and
Other Hedging  Agreements  has been made  available to its  principal  executive
officers and such officers are familiar with the contents thereof.

                  18. In addition to any rights now or hereafter  granted  under
applicable  law  (including,  without  limitation,  Section  151 of the New York
Debtor and Creditor Law) and not by way of  limitation of any such rights,  upon
the occurrence  and during the  continuance of an Event of Default (such term to
mean and include any "Event of  Default" as defined in the Credit  Agreement  or
any payment default under any Interest Rate Agreement or Other Hedging Agreement
continuing  after  any  applicable  grace  period),   each  Creditor  is  hereby
authorized at any time or from time to time,  without notice to any Guarantor or
to any other Person,  any such notice being expressly  waived, to set off and to
appropriate  and apply any and all  deposits  (general or special) and any other
indebtedness  at any time held or owing by such Creditor to or for the credit or
the account of such  Guarantor,  against and on account of the  obligations  and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of  whether  or not such  Creditor  shall  have made any  demand  hereunder  and
although  said  obligations,  liabilities,  deposits or claims,  or any of them,
shall be contingent or unmatured.

                  19. All  notices,  requests,  demands or other  communications
pursuant  hereto shall be deemed to have been duly given or made when  delivered
to the Person to which such notice,  request,  demand or other  communication is
required or permitted to be given or made under this Guaranty, addressed to such
party  at (i) in the  case of any  Bank  Creditor,  as  provided  in the  Credit
Agreement,  (ii) in the case of any Guarantor, at the address set forth opposite
its signature below and (iii) in the case of any Other Creditor, at such address
as such Other Creditor  shall have specified in writing to the Guarantor;  or in
any case at such other address as any of the Persons  listed above may hereafter
notify the others in writing.

                                       8
<PAGE>

                  20. If claim is ever made upon any Creditor  for  repayment or
recovery  of any amount or amounts  received  in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said  amount  by  reason  of (i) any  judgment,  decree or order of any court or
administrative  body having  jurisdiction over such payee or any of its property
or (ii) any  settlement or  compromise of any such claim  effected by such payee
with any such  claimant  (including  any  Obligor),  then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor,  notwithstanding  any revocation hereof or
other  instrument  evidencing  any liability of any Obligor,  and such Guarantor
shall be and remain liable to the aforesaid  payees  hereunder for the amount so
repaid or  recovered  to the same extent as if such amount had never  originally
been received by any such payee.

                  21. (a) THIS  GUARANTY AND THE RIGHTS AND  OBLIGATIONS  OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with  respect  to this  Guaranty  or any other  Credit  Document  to which  such
Guarantor is a party may be brought in the courts of the State of New York or of
the United  States of America for the  Southern  District  of New York,  and, by
execution  and delivery of this  Guaranty,  each  Guarantor  hereby  irrevocably
accepts   for   itself  and  in  respect   of  its   property,   generally   and
unconditionally,  the non-exclusive  jurisdiction of the aforesaid courts.  Each
Guarantor hereby further  irrevocably waives any claim that any such courts lack
jurisdiction over such Guarantor, and agrees not to plead or claim, in any legal
action or proceeding  with respect to this Guaranty or any other Credit Document
to which such Guarantor is a party brought in any of the aforesaid courts,  that
any such court lacks  jurisdiction  over such Guarantor.  Each Guarantor further
irrevocably  consents to the service of process out of any of the aforementioned
courts in any such  action or  proceeding  by the  mailing of copies  thereof by
registered or certified mail, postage prepaid,  to each Guarantor at its address
set forth in Section 19,  such  service to become  effective  30 days after such
mailing.  Each Guarantor hereby irrevocably waives any objection to such service
of process  and further  irrevocably  waives and agrees not to plead or claim in
any action or proceeding  commenced hereunder or under any other Credit Document
to which  such  Guarantor  is a party that  service  of  process  was in any way
invalid or  ineffective.  Nothing  herein  shall  affect the right of any of the
Creditors to serve  process in any other manner  permitted by law or to commence
legal  proceedings  or otherwise  proceed  against  each  Guarantor in any other
jurisdiction.

                  (b) Each  Guarantor  hereby  irrevocably  waives any objection
which  it may  now or  hereafter  have  to the  laying  of  venue  of any of the
aforesaid  actions or  proceedings  arising  out of or in  connection  with this
Guaranty  or any other  Credit  Document  brought in the courts  referred  to in
clause (a) above and hereby further  irrevocably  waives and agrees not to plead
or claim in any such court that such  action or  proceeding  brought in any such
court has been brought in an inconvenient forum.

                  22. In the event  that all of the equity  interests  of one or
more  Guarantors  is sold or otherwise  disposed of or  liquidated in compliance
with the Credit Agreement (or such sale or other  disposition or liquidation has
been  approved  in writing by the  Required  Banks (or all Banks if  required by
Section  13.12  of the  Credit  Agreement))  and  the  proceeds  of  such  sale,
disposition or liquidation  are applied in accordance with the provisions of the
Credit  Agreement,  to the extent  applicable,  such Guarantor shall be released
from  this  Guaranty  and this  Guaranty  shall,  as to each such  Guarantor  or
Guarantors,  terminate, and have no further force or effect (it being understood
and  agreed  that  the  sale  of one or  more  Persons  that  own,  directly  or
indirectly, all of the equity interests of any Guarantor shall be deemed to be a
sale of such Guarantor for the purposes of this Section 22).

                                       9
<PAGE>

                  23.   This   Guaranty   may  be  executed  in  any  number  of
counterparts and by the different parties hereto on separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together  constitute one and the same  instrument.  A set of  counterparts
executed  by all the  parties  hereto  shall be  lodged  with  Holdings  and the
Administrative Agent.

                  24.  EACH   GUARANTOR  AND  EACH  OF  THE   CREDITORS   HEREBY
IRREVOCABLY  WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR
COUNTERCLAIM  ARISING  OUT OF OR  RELATING TO THIS  GUARANTY,  THE OTHER  CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  25. All payments made by any Guarantor  hereunder will be made
without setoff, counterclaim or other defense.

                  26.  It is  understood  and  agreed  that  any  Subsidiary  of
Holdings  that is required to execute a counterpart  of this Guaranty  after the
date  hereof   pursuant  to  Section  4.09  of  the  Holdings   Guaranty   shall
automatically become a Guarantor hereunder by executing a counterpart hereof and
delivering the same to the Administrative Agent.

                  27. It is the  desire  and  intent of each  Guarantor  and the
Creditors that this Guaranty shall be enforced to the fullest extent permissible
under  the  laws and  public  policies  applied  in each  jurisdiction  in which
enforcement  is  sought.  If and to  the  extent  that  the  obligations  of any
Guarantor   under  this  Guaranty   shall  be   adjudicated  to  be  invalid  or
unenforceable  for any reason  (including,  without  limitation,  because of any
applicable state or federal law relating to fraudulent conveyances or transfers,
which laws would  determine  the solvency of such  Guarantor by reference to the
full  amount of the  Guaranteed  Obligations  at the time of the  execution  and
delivery of this Guaranty),  then the amount of the Guaranteed Obligations shall
be deemed to be reduced and each  Guarantor  agrees to pay the maximum amount of
the Guaranteed Obligations which would be permissible under applicable law.

                  28. This  Guaranty  shall  not  become   effective  until  the
La Salle Re Business  Combination  has occurred.

                                       10

<PAGE>

                  IN WITNESS WHEREOF,  the Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.

                                                LA SALLE RE HOLDINGS LIMITED

                                                By:  /s/ Clare E. Moran
                                                --------------------------------
                                                Title: Senior Vice President

                                                THE CHASE MANHATTAN BANK, as
                                                Administrative Agent

                                                By:  /s/ Donald Rands
                                                --------------------------------
                                                Title:  Vice President

                                       11

<PAGE>
                                                                     Exhibit G

                          FORM OF SOLVENCY CERTIFICATE

                  I, the  undersigned,  the chief financial  officer of Trenwick
Group  Ltd.,  a  company  organized  and  existing  under  the  laws of  Bermuda
("Holdings"), do hereby certify on behalf of Holdings that:

                  1. This  Certificate is furnished  pursuant to Section 5.17 of
the Credit Agreement, dated as of November 24, 1999, and amended and restated as
of September 27, 2000,  among Trenwick  America  Corporation  ("the  Borrower"),
Trenwick Holdings Limited (the "Account Party"), the financial institutions from
time to time party thereto (the "Banks"),  Fleet National Bank, as Documentation
Agent,  First Union National Bank, as Syndication  Agent and The Chase Manhattan
Bank, as Administrative  Agent (such Credit Agreement,  as in effect on the date
of this  Certificate,  being  herein  called  the  "Credit  Agreement").  Unless
otherwise defined herein,  capitalized terms used in this Certificate shall have
the means set forth in the Credit Agreement.

                  2. For  purposes  of  this  Certificate, the terms below shall
have the following definitions:

                  (a) "Fair Value" shall mean the amount at which the assets, in
their  entirety,  determined  on  a  going  concern  basis  of  Holdings  (on  a
stand-alone basis), the Borrower (on a stand-alone basis), the Account Party (on
a  stand-alone  basis) and  Holdings  and its  Subsidiaries  (on a  consolidated
basis),  in each case would change hands  between a willing  buyer and a willing
seller, within a commercially  reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any compulsion to act.

                  (b) "Present  Fair  Salable  Value" shall mean the amount that
could be obtained by an independent  willing seller from an independent  willing
buyer if the assets of each of Holdings (on a stand-alone  basis),  the Borrower
(on a  stand-alone  basis),  the  Account  Party (on a  stand-alone  basis)  and
Holdings  and  its  Subsidiaries  (on  a  consolidated  basis)  are  sold  in an
arm's-length transaction with reasonable promptness under present conditions for
the sale of comparable business enterprises.

                  The same  methodology has been used in determining  Fair Value
and Present Fair Salable Value.

                  (c) "New Financing" shall mean the indebtedness incurred or to
be  incurred  by  Holdings  and its  Subsidiaries  under  the  Credit  Documents
(assuming  the  utilization  by the Borrower and the Account  Party of the Total
Commitment  under the Credit  Agreement)  after giving effect to the Transaction
and all the financing contemplated therewith.

                  (d) "Stated  Liabilities" shall mean the recorded  liabilities
(including  Contingent  Liabilities  that would be recorded in  accordance  with
generally  accepted  accounting  principles  ("GAAP")  consistently  applied) of
Holdings (on a stand-alone  basis),  the Borrower (on a stand-alone  basis), the
Account Party (on a stand-alone  basis) and Holdings and its  Subsidiaries (on a
consolidated basis) in each case at December 31, 1999 after giving effect to the
Transaction,  together  with (i) the net  change in  long-term  debt  (including
current  maturities)  between  December 31, 1999 and the date  hereof;  and (ii)
without duplication, the amount of all New Financing.

<PAGE>

                  (e) "Contingent  Liabilities" shall mean the maximum estimated
amount of liability reasonably like to result from pending litigation,  asserted
claims  and  assessments,  guarantees,  uninsured  risks  and  other  contingent
liabilities  of each of Holdings (on a  stand-alone  basis),  the Borrower (on a
stand-alone  basis), the Account Party (on a stand-alone basis) and Holdings and
its  Subsidiaries  (on a  consolidated  basis)  (exclusive  of  such  Contingent
Liabilities to the extent reflected in Stated Liabilities).

                  (f) "Will be able to pay its Stated Liabilities and Contingent
Liabilities,  as they  mature,"  shall mean for the period  from the date hereof
through  the  stated  maturity  of all New  Financing,  each of  Holdings  (on a
stand-alone basis), the Borrower (on a stand-alone basis), the Account Party (on
a stand-alone basis) and Holdings and its Subsidiaries (on a consolidated basis)
will have  sufficient  assets  and cash flow to pay its Stated  Liabilities  and
Contingent Liabilities as those liabilities mature or otherwise become payable.

                  (g) "Does not have Unreasonably  Small Capital" shall mean for
the  period  from  the  date  hereof  through  the  stated  maturity  of all New
Financing,  each of  Holdings  (on a  stand-alone  basis),  the  Borrower  (on a
stand-alone  basis), the Account Party (on a stand-alone basis) and Holdings and
its  Subsidiaries  (on  a  consolidated   basis)  after  giving  effect  to  the
Transaction and  Indebtedness  (including the Loans and Letters of Credit) being
incurred or assumed,  is a going  concern and has  sufficient  capital to ensure
that it will  continue  to be a going  concern  for such  period and to remain a
going concern.

                  3.  For  purposes  of  this  Certificate,  I, or  officers  of
Holdings  under my direction  and  supervision,  have  performed  the  following
procedures as of and for the periods set forth below:

                  (a)      I have reviewed the financial statements  of Holdings
and its  Subsidiaries  referred to in Section 5.11 of the Credit Agreement.

                  (b) I have made inquiries of certain other offices of Holdings
and  its  Subsidiaries  that  I  deemed  necessary  as  a  foundation  for  this
Certificate.

                  (c)      I have read the Credit Documents and the Annexes and
Exhibits thereto.

                  (d)  With  respect  to  Contingent  Liabilities,  I have  made
inquires of certain  other  officials  of Holdings and its  Subsidiaries  that I
deemed necessary as a foundation for this Certificate.

                  (e) I have had the  Projections,  which  have been  previously
delivered to the Banks, re-examined on the date hereof and considered the effect
thereof on any changes since the date of the  preparation  hereof and considered
the effect thereon of any changes since the date of the  preparation  thereof on
the results  projected  therein.  After such review, I hereby certify that in my
opinion  the  Projections  are  reasonable  and  attainable.   Furthermore,  the
Projections  support the  conclusions  contained  in the last  paragraph of this
Certificate.

<PAGE>

                  4. Based on and subject to the foregoing,  I hereby certify on
behalf of Holdings that,  after giving effect to the Transaction and the related
financing transactions (including the incurrence of the New Financing), it is my
informed  opinion that as of the date hereof (i) the Fair Value and Present Fair
Salable Value of the assets of Holdings (on a stand-alone  basis),  the Borrower
(on a stand-alone  basis),  the Account  Party (on a  stand-alone  basis) and of
Holdings and its  Subsidiaries  (on a  consolidated  basis) exceed its and their
Stated Liabilities and Contingent  Liabilities;  (ii) Holdings (on a stand-alone
basis),  the  Borrower  (on  a  stand-alone  basis),  the  Account  Party  (on a
stand-alone  basis) and Holdings and its Subsidiaries (on a consolidated  basis)
will not have Unreasonably  Small Capital;  and (iii) Holdings (on a stand-alone
basis),  the  Borrower  (on  a  stand-alone  basis),  the  Account  Party  (on a
stand-alone  basis) and Holdings and its Subsidiaries (on a consolidated  basis)
will be able to pay its Stated  Liabilities  and Contingent  Liabilities as they
mature or otherwise become payable.

                  IN WITNESS  WHEREOF,  Holdings has caused its duly  authorized
chief  financial  officers to execute and deliver this ___ day of  ____________,
2000.

                                                  TRENWICK GROUP LTD.

                                                  By____________________________
                                                    Name:
                                                    Title:

<PAGE>
                                                                      EXHIBIT H

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

                                                         DATE:  ________, _____

                  Reference is made to the Credit Agreement  described in Item 2
of Annex I annexed  hereto (as such Credit  Agreement  may hereafter be amended,
modified or supplemented through, and including the Settlement Date, the "Credit
Agreement").  Unless  defined in Annex I attached  hereto,  terms defined in the
Credit  Agreement  are  used  herein  as  therein  defined.  _____________  (the
"Assignor") and ______________ (the "Assignee") hereby agree as follows:

                  1. The  Assignor  hereby  sells and  assigns  to the  Assignee
without recourse and without representation or warranty (other than as expressly
provided  herein),  and the  Assignee  hereby  purchases  and  assumes  from the
Assignor,  that interest in and to all of the Assignor's  rights and obligations
under the  Credit  Agreement  as of the  Settlement  Date which  represents  the
percentage interest specified in Item 4 of Annex I (the "Assigned Share") of all
of the outstanding rights and obligations under the Credit Agreement, including,
without  limitation,  [with respect to the Assigned Share of the Total Revolving
Loan  Commitment  and all rights and  obligations  with  respect to the Assigned
Share of the  Revolving  Loans]1  [with  respect  to the  Assigned  Share of the
outstanding  Term Loans]2 [with  respect to the Assigned  Share of the Total L/C
Commitment and all rights and obligations  with respect to the Assigned Share of
all outstanding Letters of Credit]3.

                  2. The Assignor  (i)  represents  and warrants  that it is the
legal and  beneficial  owner of the interest  being assigned by it hereunder and
that such  interest is free and clear of any liens or security  interests;  (ii)
makes no representation  or warranty and assumes no responsibility  with respect
to any statements,  warranties or representations  made in or in connection with
the Credit Agreement or the other Credit  Documents or the execution,  legality,
validity,  enforceability,  genuineness,  sufficiency  or  value  of the  Credit
Agreement or the other  Credit  Documents  or any other  instrument  or document
furnished  pursuant  thereto;  and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Holdings or
any of its  Subsidiaries  or the performance or observance by Holdings or any of
its  Subsidiaries  of any of  their  respective  obligations  under  the  Credit
Agreement or the other  Credit  Documents  or any other  instrument  or document
furnished pursuant thereto.

-------------------------------------------------------
1     Insert for assignments effected prior to the Conversion Date.

2     Insert for assignments effected on or after the Conversion Date.

3     Insert for assignments of any L/C Commitment.

                                       1

<PAGE>

                  3. The Assignee  (i)  confirms  that it has received a copy of
the Credit Agreement and the other Credit Documents, together with copies of the
financial   statements   referred  to  therein  and  such  other  documents  and
information  as it has deemed  appropriate  to make its own credit  analysis and
decision to enter into this  Assignment  and Assumption  Agreement;  (ii) agrees
that it will,  independently and without reliance upon the Administrative Agent,
the Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking  action  under the Credit  Agreement;  (iii)  appoints  and
authorizes the  Administrative  Agent to take such action as agent on its behalf
and to exercise  such powers  under the Credit  Agreement  and the other  Credit
Documents as are  delegated to the  Administrative  Agent by the terms  thereof,
together with such powers as are reasonably incidental thereto; (iv) agrees that
it will perform in accordance with their terms all of the  obligations  which by
the terms of the Credit  Agreement are required to be performed by it as a Bank;
[and] (v)  confirms  that it is duly  authorized  to enter into and  perform the
terms of this  Assignment  and  Assumption  Agreement[;  and (vi)  attaches  the
Internal  Revenue  Service  forms (and,  if  applicable,  a Section  4.04(b)(ii)
Certificate) described in Section 13.04(b) of the Credit Agreement].

                  4.  Following the execution of this  Assignment and Assumption
Agreement  by the  Assignor  and  the  Assignee,  an  executed  original  hereof
(together with all attachments) will be delivered to the  Administrative  Agent.
The effective  date of this  Assignment and  Assumption  Agreement  shall be the
first  date  upon  which  each  of the  following  conditions  shall  have  been
satisfied:  (i) the execution  hereof by the Assignor and the Assignee,  (ii) to
the extent required by the Credit  Agreement,  the receipt of the consent of the
Administrative  Agent, the Borrower and the Account Party,  (iii) the receipt by
the  Administrative  Agent of the assignment fee referred to in Section 13.04(b)
of the Credit Agreement, (iv) the recordation by the Administrative Agent of the
assignment  effected  hereby in the Register [and receipt by the  Administrative
Agent,  the Borrower and the Account Party of the Internal Revenue Service forms
(and, if applicable,  a Section  4.04(b)(ii)  Certificate)  described in Section
14.04(b) of the Credit  Agreement],4  [and (v) issuance of new Letters of Credit
(in replacement of all then outstanding Letters of Credit) by the Administrative
Agent  giving  effect to such  assignment,]5  or such  later  date as  otherwise
specified in Item 5 of Annex I (the "Settlement Date").

                  5. Upon the delivery of a fully  executed  original  hereof to
the Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption  Agreement,  have the rights and obligations of a Bank thereunder and
under the other  Credit  Documents  and (ii) the Assignor  shall,  to the extent
provided in this  Assignment  and  Assumption  Agreement,  relinquish its rights
(other than to its rights to  indemnification  which shall  survive as to events
occurring  prior to the  Settlement  Date) and be released from its  obligations
under the  Credit  Agreement,  the other  Credit  Documents  and all  Letters of
Credit.
-----------------------------------

4     If the Assignee is organized under the laws of a jurisdiction outside the
      United States.

5     If the assignment includes an assignment of any part of the Assignor's L/C
      Commitment.

                                       2

<PAGE>
                  6. It is  agreed  that  upon  the  effectiveness  hereof,  the
Assignee  shall be entitled to (w) all  interest  on the  Assigned  Share of the
Loans at the rates  specified in Item 6 of Annex I, (x) all RL  Commitment  Fees
(if  applicable) on the Assigned Share of the Total Revolving Loan Commitment at
the  rate  specified  in Item 7 of  Annex  I,  (y) all L/C  Commitment  Fees (if
applicable)  on the  Assigned  Share of the  Total  L/C  Commitment  at the rate
specified in Item 8 of Annex 1 and (z) all Letter of Credit Fees (if applicable)
on the Assigned  Share of the Total L/C Commitment at the rate specified in Item
9, which such interest and, if  applicable,  RL Commitment  Fees, L/C Commitment
Fees  and  Letter  of  Credit  Fees  shall be paid by the  Administrative  Agent
directly to the  Assignee.  It is further  agreed that all payments of principal
made on the Assigned  Share of the Loans which occur on and after the Settlement
Date will be paid directly by the Administrative Agent to the Assignee. Upon the
Settlement  Date, the Assignee shall pay to the Assignor an amount  specified by
the Assignor in writing  which  represents  the Assigned  Share of the principal
amount of the  respective  Loans  made by the  Assignor  pursuant  to the Credit
Agreement  which are  outstanding  on the  Settlement  Date,  net of any closing
costs,  and which are being  assigned  hereunder.  The Assignor and the Assignee
shall make all  appropriate  adjustments in payments under the Credit  Agreement
for periods prior to the Settlement Date directly between themselves.

                  7. THIS ASSIGNMENT AND ASSUMPTION  AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Assignment and Assumption  Agreement to be executed by their respective officers
thereunto duly  authorized,  as of the date first above written,  such execution
also being made on Annex I hereto.

                                                     [NAME OF ASSIGNOR],
                                                      as Assignor

                                                     By_________________________
                                                        Name:
                                                        Title:

                                                     [NAME OF ASSIGNEE],
                                                      as Assignee

                                                     By_________________________
                                                        Name:
                                                        Title:

Acknowledged and Agreed:

[THE CHASE MANHATTAN BANK, as Administrative Agent

By____________________________
   Name:
   Title:

TRENWICK AMERICA CORPORATION

By____________________________
   Name:
   Title:

TRENWICK HOLDINGS LIMITED

By:
   ___________________________
     Name:
     Title:]6

---------------------------------------
6 The consent of the Administrative Agent and, so long as no Default or Event of
Default is then in existence, the Borrower or the Account Party, as the case may
be, is required in connection  with  assignments of Revolving Loan  Commitments,
outstanding  Term Loans and/or L/C Commitments  pursuant to Section  13.04(b) of
the Credit Agreement (which consents shall not be unreasonably withheld).

                                       3
<PAGE>

                                                          ANNEX I TO EXHIBIT H

                 ANNEX I TO ASSIGNMENT AND ASSUMPTION AGREEMENT

1.       The Borrower:          Trenwick America Corporation (the
         "Borrower").

         The Account Party:     Trenwick Holdings Limited (the "Account Party").

2.       Name and Date of Credit Agreement:

         Credit  Agreement,  dated as of  November  24,  1999,  and  amended and
         restated as of September  27,  2000,  among the  Borrower,  the Account
         Party,  the  lenders  from  time to time  party  thereto,  First  Union
         National   Bank,  as  Syndication   Agent,   Fleet  National  Bank,  as
         Documentation  Agent and The Chase  Manhattan  Bank, as  Administrative
         Agent.

3.       Date of Assignment and Assumption Agreement:

4.       Amounts (as of the date of item #3 above):

                              Outstanding
                             Principal of
                              Revolving
                                Loans]       [Revolving Loan    L/C Commitment
                            [Term Loans]1      Commitment]2
                            -------------    ---------------    --------------
a.    Aggregate Amount      $                 $                 $
      for all Banks          ------------      -------------     -------------

b.    Assigned Share                    %                  %                 %
                             ------------      -------------     -------------
c.    Amount of Assigned
      Share                 $                 $                 $
                             ------------      -------------     -------------

5.       Settlement Date:  _______________.

------------------------------------
1 If prior to the Conversion Date,  insert  outstanding  principal  of Revolving
  Loans. If Conversion Date has occurred, insert principal of Term Loans.
2 Insert amounts if assignment effected prior to the Conversion Date.

<PAGE>

6.       Rate of Interest          As set forth in Section 1.08  of  the  Credit
                                   Agreement (unless or  otherwise agreed  to by
                                   the Assignor and the Assignee)3

7.       R/L Commitment            As set forth in Section 3.01(a) of the Credit
         Fee:                      Credit  Agreement (unless otherwise agreed to
                                   by the Assignor and the Assignee)4

8.       L/C Commitment            As set forth in Section 3.01(b) of the Credit
         Fee:                      Agreement (unless otherwise agreed to by the
                                   Assignor and the Assignee.5

9.       Letter of Credit          As set forth in Section 3.01(c) of the Credit
         Fee:                      Agreement (unless otherwise agreed to by the
                                   Assignor and the Assignee).6

8.       Notice:

                  ASSIGNEE:

                           ---------------------
                           ---------------------
                           ---------------------
                           Attention:
                           Telephone:
                           Telecopier:
                           Reference:

--------------------------------
3 The Borrower and the  Administrative  Agent shall direct the entire  amount of
the interest to the Assignee at the rate set forth in Section 1.08 of the Credit
Agreement,  with the Assignor and Assignee  effecting any agreed upon sharing of
interest through payments by the Assignee to the Assignor.

4 Insert "Not  Applicable" in lieu of text if the Conversion  Date has occurred.
Otherwise,  the  Borrower and the  Administrative  Agent shall direct the entire
amount of the RL Commitment Fee to the Assignee at the rate set forth in Section
3.01(a) of the Credit  Agreement,  with the Assignor and the Assignee  effecting
any  agreed  upon  sharing  of the R/L  Commitment  Fee  through  payment by the
Assignee  to the  Assignor.

5  Insert "Not  Applicable" in lieu of text if no portion of the L/C Commitment
is being assigned.  Otherwise,  the Account Party and the  Administrative  Agent
shall direct the entire amount of the L/C  Commitment Fee to the Assignee at the
rate set forth in Section 3.01(b) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of the L/C Commitment Fee through
payment by the Assignee to the Assignor.

6 Insert "Not  Applicable"  in lieu of text if no portion of the L/C Commitment
is being assigned.  Otherwise,  the Account Party and the  Administrative  Agent
shall  direct the entire  amount of the Letter of Credit Fee to the  Assignee at
the rate set forth in Section 3.01(c) of the Credit Agreement, with the Assignor
and the Assignee  effecting  any agreed upon sharing of the Letter of Credit Fee
through payment by the Assignee to the Assignor.

<PAGE>

                  ASSIGNOR:

                           -------------------
                           -------------------
                           -------------------
                           -------------------
                           Attention:
                           Telephone:
                           Telecopier:
                           Reference:

9.       Payment Instructions:

                  ASSIGNEE:

                           -------------------
                           -------------------
                           -------------------
                           -------------------
                           Attention:
                           Telephone:
                           Telecopier:
                           Reference:

                  ASSIGNOR:

                           -------------------
                           -------------------
                           -------------------
                           -------------------
                           Attention:
                           Telephone:
                           Telecopier:
                           Reference:

<PAGE>

Accepted and Agreed:

[NAME OF ASSIGNEE]                  [NAME OF ASSIGNOR]

By  ------------------------         By --------------------------

    ------------------------            --------------------------
    (Print Name and Title)                (Print Name and Title)

<PAGE>

                                                         EXHIBIT I

                                HOLDINGS GUARANTY

                                     between

                               TRENWICK GROUP LTD.

                                       and

                            THE CHASE MANHATTAN BANK,
                             AS ADMINISTRATIVE AGENT

                          -----------------------------

                         Dated as of September 27, 2000
                          -----------------------------

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page

SECTION 1.  The Holdings Guaranty.............................................2

         1.01  The Holdings Guaranty..........................................2
         1.02  Bankruptcy.....................................................2
         1.03  Nature of Liability............................................2
         1.04  Holdings Guaranty Absolute.....................................3
         1.05  Independent Obligation.........................................3
         1.06  Authorization..................................................3
         1.07  Reliance.......................................................4
         1.08  Subordination..................................................4
         1.09  Waivers........................................................4
         1.10  Holdings Guaranty Continuing...................................5
         1.11  Binding Nature of Guaranties...................................5
         1.12  Judgments Binding..............................................5

SECTION 2.  Representations, Warranties and Agreements........................6

         2.01  Corporate Status...............................................6
         2.02  Corporate Power and Authority; Enforceability..................6
         2.03  No Contravention of Laws, Agreements or Organizational
               Documents......................................................6
         2.04  Litigation and Contingent Liabilities..........................7
         2.05  Use of Proceeds; Margin Regulations............................7
         2.06  Approvals......................................................8
         2.07  Investment Company Act.........................................8
         2.08  Public Utility Holding Company Act.............................8
         2.09  True and Complete Disclosure; Projections and Assumptions......8
         2.10  Consummation of Transaction....................................8
         2.11  Financial Condition; Financial Statements......................9
         2.12  Tax Returns and Payments.......................................9
         2.13  Compliance with ERISA.........................................10
         2.14  Subsidiaries..................................................11
         2.15  Intellectual Property, etc....................................12
         2.16  Pollution and Other Regulations...............................12
         2.17  Labor Relations; Collective Bargaining Agreements.............12
         2.18  Capitalization................................................12
         2.19  Indebtedness..................................................13
         2.20  Compliance with Statutes, etc.................................13
         2.21  Insurance Licenses............................................13

                                      (i)
<PAGE>

SECTION 3.  Affirmative Covenants............................................13

         3.01  Information Covenants.........................................13
         3.02  Books, Records and Inspections................................16
         3.03  Insurance.....................................................17
         3.04  Payment of Taxes..............................................17
         3.05  Corporate Franchises..........................................17
         3.06  Compliance with Statutes, etc.................................17
         3.07  ERISA.........................................................17
         3.08  Performance of Obligations....................................19
         3.09  Good Repair...................................................19
         3.10  End of Fiscal Years; Fiscal Quarters..........................19
         3.11  Maintenance of Licenses and Permits...........................19
         3.12  Mandatory Prepayments.........................................19

SECTION 4.  Negative Covenants...............................................19

         4.01  Changes in Business...........................................20
         4.02  Fundamental Changes; Acquisitions.............................20
         4.03  Liens.........................................................21
         4.04  Indebtedness..................................................22
         4.05  Advances, Investments and Loans...............................23
         4.06  Dividends, etc................................................25
         4.07  Transactions with Affiliates..................................26
         4.08  Issuance of Stock.............................................26
         4.09  Creation of Subsidiaries......................................27
         4.10  Partnership Agreements........................................27
         4.11  Prepayments of Indebtedness, Modifications of
               Agreements, etc...............................................27
         4.12  Leverage Ratio................................................27
         4.13  Interest Coverage Ratio.......................................27
         4.14  Minimum Risk Based Capital....................................27
         4.15  Minimum Combined Statutory Surplus............................28
         4.16  Minimum Consolidated Tangible Net Worth.......................28

SECTION 5.  Miscellaneous....................................................28

         5.01  Payment of Expenses, etc......................................28
         5.02  Right of Setoff...............................................28
         5.03  Notices.......................................................28
         5.04  Benefit of the Agreement......................................29
         5.05  No Waiver; Remedies Cumulative................................29
         5.06  Calculations..................................................29
         5.07  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE..............29
         5.08  Counterparts..................................................30
         5.09  Headings Descriptive..........................................30
         5.10  Amendment or Waiver...........................................31
         5.11  Confidentiality...............................................31

                                      (ii)
<PAGE>

         5.12  WAIVER OF JURY TRIAL..........................................31
         5.13  Judgment Currency.............................................31
         5.14  Availability of Documents.....................................32

SCHEDULE I        -    Definitions

ANNEX I           -   Pension Plans
ANNEX II          -   Subsidiaries
ANNEX III         -   Collective Bargaining Agreements
ANNEX IV          -   Capitalization
ANNEX V           -   Indebtedness
ANNEX VI          -   Liens
ANNEX VII         -   Investments

                                     (iii)
<PAGE>

                  HOLDINGS  GUARANTY,  dated as of September  27, 2000,  made by
TRENWICK  GROUP  LTD.  ("Holdings").  Capitalized  terms  used  herein  and  not
otherwise  defined  shall  have the  meanings  set forth on  Schedule I attached
hereto.

                              W I T N E S S E T H:
                               - - - - - - - - - -

                  WHEREAS,  Trenwick, the Original Banks, the Syndication Agent,
the Documentation  Agent and the Administrative  Agent are party to the Original
Credit Agreement, dated as of November 24, 1999;

                  WHEREAS, in connection with the LaSalle Business  Combination,
the parties to the Original  Credit  Agreement have decided to amend and restate
the Original  Credit  Agreement to, inter alia,  (i) substitute the Borrower for
Trenwick as the borrower  under the  revolving  credit  facility in the Original
Credit Agreement,  (ii) substitute the Account Party for Trenwick as the account
party under the letter of credit  facility  in the  Original  Credit  Agreement,
(iii) add Holdings and the  Borrower as  guarantors  and (iv) permit the LaSalle
Business Combination;

                  WHEREAS, the  Borrower  and the Account Party are Wholly-Owned
Subsidiaries of Holdings;

                  WHEREAS, it is a condition to the amendment and restatement of
the Original Credit  Agreement in the form of the Credit  Agreement,  and to the
making of Loans to the  Borrower  and the  issuance of Letters of Credit for the
account of the Account Party under such Credit  Agreement  that  Holdings  shall
have executed and delivered this Holdings Guaranty;

                  WHEREAS,  the Borrower  and/or the Account Party may from time
to time be party to one or more  Interest  Rate  Agreements  and  Other  Hedging
Agreements  with a  Guaranteed  Creditor or a Lending  Affiliate of a Guaranteed
Creditor; and

                  WHEREAS,  Holdings will obtain benefits from the incurrence of
Loans by the  Borrower  and the issuance of Letters of Credit for the account of
the  Account  Party  under the Credit  Agreement  and the  entering  into by the
Borrower  and/or the Account Party of Interest Rate  Agreements or Other Hedging
Agreements and, accordingly,  desires to execute this Holdings Guaranty in order
to satisfy the conditions  described above and to induce the Banks to make Loans
to the Borrower and issue Letters of Credit for the account of the Account Party
and Guaranteed Creditors (and Lending Affiliates thereof) to enter into Interest
Rate Agreements or Other Hedging Agreements with the Borrower and/or the Account
Party;

                  NOW,  THEREFORE,  in  consideration of the foregoing and other
benefits  accruing to Holdings,  the receipt and sufficiency of which are hereby
acknowledged, Holdings hereby makes the following representations and warranties
to the Guaranteed Creditors and hereby covenants and agrees with each Guaranteed
Creditor as follows:

                                       -1-
<PAGE>

                  SECTION 1.  The Holdings Guaranty.
                              ---------------------

                  1.01 The Holdings  Guaranty.  Holdings hereby  unconditionally
and irrevocably  guarantees as primary obligor and not merely as surety the full
and  prompt  payment  when  due,  whether  upon  maturity,  by  acceleration  or
otherwise,  of any and all  indebtedness of each of the Borrower and the Account
Party to the  Guaranteed  Creditors  under the  Credit  Agreement  and the other
Credit  Documents and all Interest Rate  Agreements or Other Hedging  Agreements
entered  into by a  Guaranteed  Creditor or a Lending  Affiliate of a Guaranteed
Creditor.  If any or all of the  indebtedness  of  either  the  Borrower  or the
Account  Party to the  Guaranteed  Creditors  becomes due and payable  under the
Credit Agreement or under such other Credit Documents or Interest Rate Agreement
or Other  Hedging  Agreements,  Holdings  unconditionally  promises  to pay such
indebtedness to the Guaranteed Creditors,  on demand,  together with any and all
reasonable  out-of-pocket  expenses which may be incurred by the  Administrative
Agent or the  Guaranteed  Creditors in collecting any of the  indebtedness.  The
word  "indebtedness" is used in this Section 1 in its most  comprehensive  sense
and means any and all advances,  debts,  obligations  and liabilities of each of
the  Borrower  and the  Account  Party  arising  in  connection  with the Credit
Agreement or any other Credit  Documents or under any Interest Rate Agreement or
Other Hedging  Agreement with a Guaranteed  Creditor or a Lending Affiliate of a
Guaranteed Creditor, in each case, heretofore,  now, or hereafter made, incurred
or created,  whether  voluntarily  or  involuntarily,  absolute  or  contingent,
liquidated  or  unliquidated,  determined or  undetermined,  whether or not such
indebtedness  is from  time to time  reduced,  or  extinguished  and  thereafter
increased or incurred,  whether the Borrower and the Account Party may be liable
individually  or  jointly  with  others,  whether  or  not  recovery  upon  such
indebtedness  may be or hereafter  become barred by any statute of  limitations,
and  whether  or not such  indebtedness  may be or  hereafter  become  otherwise
unenforceable.

                  1.02 Bankruptcy.  Additionally,  Holdings  unconditionally and
irrevocably  guarantees the payment of any and all  indebtedness  of each of the
Borrower and the Account Party to the Guaranteed Creditors whether or not due or
payable by the Borrower or the Account  Party upon the  occurrence of any of the
events specified in Section 9.05 of the Credit  Agreement,  and  unconditionally
and irrevocably  promises to pay such indebtedness to the Guaranteed  Creditors,
or order, on demand, in the respective Approved Currency.

                  1.03 Nature of Liability.  The liability of Holdings hereunder
is  exclusive  and  independent  of any  security  for or other  guaranty of the
indebtedness  of each of the Borrower and the Account Party whether  executed by
Holdings,  any other  guarantor  or by any other  party,  and the  liability  of
Holdings  hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower, the Account Party or by any other party,
or (b) any other continuing or other guaranty,  undertaking or maximum liability
of a guarantor or of any other party as to the  indebtedness  of the Borrower or
the  Account  Party,  or (c) any  payment on or in  reduction  of any such other
guaranty  or  undertaking,  or (d) any  dissolution,  termination  or  increase,
decrease or change in personnel by either the Borrower or the Account Party,  or
(e) any payment made to any Guaranteed  Creditor on the indebtedness  which such
Guaranteed  Creditor repays to either the Borrower or the Account Party pursuant
to court order in any  bankruptcy,  reorganization,  arrangement,  moratorium or
other debtor relief proceeding, and Holdings waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.

                                       -2-

<PAGE>

                  1.04 Holdings Guaranty Absolute.  No invalidity,  irregularity
or unenforceability of all or any part of the indebtedness  guaranteed hereby or
of any security  therefor shall affect,  impair or be a defense to this Holdings
Guaranty,   and  this  Holdings   Guaranty   shall  be  primary,   absolute  and
unconditional  notwithstanding  the  occurrence of any event or the existence of
any other circumstances which might constitute a legal or equitable discharge of
a surety or  guarantor  except  payment in full of the  indebtedness  guaranteed
herein.

                  1.05  Independent  Obligation.  The  obligations  of  Holdings
hereunder  are  independent  of the  obligations  of any  other  guarantor,  the
Borrower or the Account Party,  and a separate  action or actions may be brought
and prosecuted  against  Holdings  whether or not action is brought  against any
other guarantor,  the Borrower or the Account Party and whether or not any other
guarantor,  the  Borrower or the  Account  Party be joined in any such action or
actions. Holdings waives, to the fullest extent permitted by law, the benefit of
any statute of limitations  affecting its liability hereunder or the enforcement
thereof.  Any  payment  by either the  Borrower  or the  Account  Party or other
circumstance  which  operates  to toll  any  statute  of  limitations  as to the
Borrower or the Account Party shall  operate to toll the statute of  limitations
as to Holdings.

                  1.06   Authorization.   Holdings   authorizes  the  Guaranteed
Creditors  without  notice or demand,  and without  affecting or  impairing  its
liability hereunder, from time to time to:

                  (a) change the manner,  place or terms of payment  of,  and/or
change or extend the time of payment of, renew,  increase,  accelerate or alter,
any of the  indebtedness  (including  any  increase  or  decrease in the rate of
interest thereon),  any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Holdings Guaranty herein made shall apply
to the indebtedness as so changed, extended, renewed or altered;

                  (b) take and hold security for the payment of the indebtedness
and sell, exchange, release,  surrender,  realize upon or otherwise deal with in
any manner and in any order any  property by  whomsoever  at any time pledged or
mortgaged to secure, or howsoever securing,  the indebtedness or any liabilities
(including any of those  hereunder)  incurred  directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;

                  (c) exercise or refrain from exercising any rights against the
Borrower or the Account Party or others or otherwise act or refrain from acting;

                  (d) release  or  substitute  any  one  or   more    endorsers,
guarantors,  the Borrower,  the Account Party or other obligors;

                  (e) settle or compromise any of the indebtedness, any security
therefor or any liability  (including any of those hereunder)  incurred directly
or indirectly in respect  thereof or hereof,  and subordinate the payment of all
or any part thereof to the payment of any liability  (whether due or not) of the
Borrower  and/or the Account  Party to its creditors  other than the  Guaranteed
Creditors;

                                      -3-
<PAGE>
                  (f) apply any sums by whomsoever paid or howsoever realized to
any  liability  or  liabilities  of the  Borrower  or the  Account  Party to the
Guaranteed  Creditors  regardless of what  liability or liabilities of Holdings,
the Borrower or the Account Party remain unpaid;

                  (g) consent to or waive any breach of, or any act, omission or
default under,  this Holdings  Guaranty or any of the  instruments or agreements
referred to herein,  or otherwise  amend,  modify or  supplement  this  Holdings
Guaranty or any of such other instruments or agreements; and/or

                  (h)  take  any  other  action  which  would,  under  otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of Holdings from its liabilities under this Section 1.

                  1.07  Reliance.   It  is  not  necessary  for  any  Guaranteed
Creditors to inquire into the  capacity or powers of the  Borrower,  the Account
Party or their respective Subsidiaries or the officers,  directors,  partners or
agents acting or purporting to act on their behalf, and any indebtedness made or
created  in  reliance  upon  the  professed  exercise  of such  powers  shall be
guaranteed hereunder.

                  1.08  Subordination.  Any indebtedness of the Borrower and the
Account Party now or hereafter  held by Holdings is hereby  subordinated  to the
indebtedness  of  such  Borrower  and  such  Account  Party  to  the  Guaranteed
Creditors;  and such indebtedness of the Borrower and Account Party to Holdings,
if the Administrative  Agent (at the direction of the Required Banks),  after an
Event of Default has occurred,  so requests,  shall be  collected,  enforced and
received by Holdings as trustee for the Guaranteed Creditors and be paid over to
the Guaranteed  Creditors on account of the indebtedness of the Borrower or such
Account Party to the Guaranteed Creditors, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this Holdings
Guaranty. Prior to the transfer by Holdings of any note or negotiable instrument
evidencing  any  indebtedness  of the Borrower or the Account Party to Holdings,
Holdings  shall mark such note or negotiable  instrument  with a legend that the
same is subject to this subordination.

                  1.09  Waivers.  (a)  Holdings  waives any right to require any
Guaranteed  Creditors to (i) proceed  against the Borrower or the Account Party,
any other  guarantor  or any other party,  (ii)  proceed  against or exhaust any
security held from the Borrower or the Account Party, any other guarantor or any
other party or (iii) pursue any other remedy in any Guaranteed  Creditor's power
whatsoever.  Holdings  waives any defense based on or arising out of any defense
of either the Borrower or the Account  Party,  any other  guarantor or any other
party  other  than  payment  in full  of the  indebtedness,  including,  without
limitation,  any defense based on or arising out of the disability of either the
Borrower or the Account Party,  any other  guarantor or any other party,  or the
unenforceability  of the indebtedness or any part thereof from any cause, or the
cessation  from any cause of the  liability of the Borrower or the Account Party
other than to the extent of payment in full of the indebtedness.  The Guaranteed
Creditors  may, in  accordance  with the Credit  Documents,  at their  election,
foreclose  on  any  security  held  by the  Administrative  Agent  or any  other
Guaranteed  Creditors by one or more judicial or nonjudicial  sales,  whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable  law), or exercise any other right or remedy the
Guaranteed  Creditors  may have against the  Borrower,  the Account Party or any
other  party,  or any  security,  without  affecting or impairing in any way the
liability of Holdings  hereunder  except to the extent the indebtedness has been
paid.  Holdings  waives any  defense  arising  out of any such  election  by the
Guaranteed Creditors, even though such election operates to impair or extinguish
any right of  reimbursement  or subrogation or other right or remedy of Holdings
against the Borrower, the Account Party or any other party or any security.

                                      -4-
<PAGE>

                  (b)  Except  as  otherwise  specifically  required  hereunder,
Holdings waives all presentments, demands for performance, protests and notices,
including,  without limitation,  notices of nonperformance,  notices of protest,
notices of  dishonor,  notices of  acceptance  of this  Holdings  Guaranty,  and
notices  of  the   existence,   creation  or  incurring  of  new  or  additional
indebtedness.  Holdings assumes all  responsibility for being and keeping itself
informed of each of the Borrower's and the Account Party's  financial  condition
and assets, and of all other circumstances  bearing upon the risk of non-payment
of the indebtedness and the nature, scope and extent of the risks which Holdings
assumes and incurs  hereunder,  and agrees that the Guaranteed  Creditors  shall
have no duty to advise  Holdings of  information  known to them  regarding  such
circumstances or risks.

                  (c) Holdings  warrants and agrees that each of the waivers set
forth above in this Section 1.09 is made with full knowledge of its significance
and  consequences  and that if any of such waivers are determined to be contrary
to any applicable law or public policy,  such waivers shall be effective only to
the maximum extent permitted by law.

                  1.10 Holdings Guaranty Continuing. This Holdings Guaranty is a
continuing  one and all  liabilities  to which it applies or may apply under the
terms  hereof  shall be  conclusively  presumed to have been created in reliance
hereon.  No  failure  or  delay  on the  part  of any  Guaranteed  Creditors  in
exercising  any right,  power or privilege  hereunder  shall operate as a waiver
thereof;  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege  hereunder  preclude  any other or  further  exercise  thereof  or the
exercise of any other right, power or privilege.  The rights and remedies herein
expressly  specified are  cumulative and not exclusive of any rights or remedies
which any Guaranteed Creditors or any subsequent holder of a Note, or issuer of,
or  participant  in, a Letter of Credit would  otherwise  have.  No notice to or
demand on  Holdings in any case shall  entitle  Holdings to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the  Guaranteed  Creditors or any holder,  creator or purchaser to any
other or further action in any circumstances without notice or demand.

                  1.11 Binding  Nature of  Guaranties.  This  Holdings  Guaranty
shall be binding upon Holdings and its successors and assigns and shall inure to
the benefit of the Guaranteed Creditors and their successors and assigns.

                  1.12  Judgments  Binding.  If  claim  is ever  made  upon  any
Guaranteed  Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the indebtedness and such Guaranteed Creditor
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative  body having  jurisdiction over such payee or any
of its property,  or (b) any settlement or compromise of any such claim effected
by such Guaranteed  Creditor with any such claimant  (including the Borrower and
the  Account  Party)  then  and in such  event  Holdings  agrees  that  any such
judgment,  decree,  order,  settlement  or  compromise  shall  be  binding  upon
Holdings, notwithstanding any revocation hereof or the cancellation of any Note,
or other  instrument  evidencing  any  liability  of the Borrower or the Account
Party,  and  Holdings  shall be and remain  liable to the  Guaranteed  Creditors
hereunder  for the amount so repaid or  recovered  to the same extent as if such
amount had never originally been received by any such payee.

                                      -5-
<PAGE>
                  SECTION 2.  Representations,  Warranties  and  Agreements.  In
order to induce the Administrative  Agent and the Banks to enter into the Credit
Agreement  and to make the Loans and issue  the  Letters  of Credit as  provided
therein,  Holdings makes the following  representations and warranties on behalf
of itself and its  Subsidiaries to, and agreements with, the Banks, all of which
shall  survive the  execution  and  delivery of this  Holdings  Guaranty and the
making  of the  Loans  and the  issuance  of the  Letters  of  Credit  (with the
occurrence of the  Restatement  Effective Date and the occurrence of each Credit
Event being deemed to constitute a representation  and warranty that the matters
specified in this Section 2 are true and correct in all material respects on and
as of the  Restatement  Effective Date and on the date of each such Credit Event
(after  giving  effect  to the  consummation  of the  Transaction)  unless  such
representation and warranty expressly  indicates that it is being made as of any
other specific date in which case such representation and warranty shall be true
and correct in all material respects as of such other specified date):

                  2.01  Corporate  Status.  Each  of  Holdings  and  each of its
Subsidiaries  (i) is a duly organized and validly  existing  corporation in good
standing  (where   applicable)  under  the  laws  of  the  jurisdiction  of  its
organization and has the corporate or other  organizational  power and authority
to own its  property  and assets and to  transact  the  business  in which it is
engaged and presently proposes to engage and (ii) has been duly qualified and is
authorized  to do business and is in good  standing  (where  applicable)  in all
jurisdictions where it is required to be so qualified,  except where the failure
to be so qualified is not reasonably likely to have a Material Adverse Effect.

                  2.02  Corporate  Power  and  Authority;  Enforceability.  Each
Credit Party has the corporate power and authority to execute, deliver and carry
out the terms and provisions of the Transaction Documents to which it is a party
and has  taken  all  necessary  corporate  action to  authorize  the  execution,
delivery and  performance of the  Transaction  Documents to which it is a party.
Each Credit Party and each of its  Subsidiaries  has duly executed and delivered
each  Transaction  Document  to which it is a party  and each  such  Transaction
Document  constitutes  the legal,  valid and binding  obligation  of such Credit
Party enforceable against such Credit Party in accordance with its terms, except
to  the  extent  that  enforceability  thereof  may  be  limited  by  applicable
bankruptcy,  insolvency,  moratorium or similar laws affecting creditors' rights
generally and general principles of equity regardless of whether  enforcement is
sought in a proceeding in equity or at law.

                  2.03 No  Contravention of Laws,  Agreements or  Organizational
Documents.  Neither the execution,  delivery and performance by any Credit Party
of the  Transaction  Documents  to which it is a party nor  compliance  with the
terms  and  provisions  thereof,   nor  the  consummation  of  the  transactions
contemplated  therein (i) will  contravene any applicable  provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any Governmental
Authority, (ii) will conflict or be inconsistent with or result in any breach of
any of the terms,  covenants,  conditions  or  provisions  of, or  constitute  a
default under,  or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of Holdings or any
of its  respective  Subsidiaries,  pursuant  to the  terms  of,  any  indenture,
mortgage, deed of trust, loan agreement,  credit agreement or any other material
instrument to which Holdings,  or any of its respective  Subsidiaries is a party
or by which it or any of its  property or assets are bound or to which it may be
subject or (iii) will violate any provision of the Certificate of  Incorporation
or By-Laws (or  equivalent  organizational  documents) of Holdings or any of its
Subsidiaries;  except in the case of clauses (i) and (ii) above (other than with
respect   to   the   Credit   Documents),   such   contraventions,    conflicts,
inconsistencies,  breaches, defaults or Liens which are not reasonably likely to
have a Material Adverse Effect.

                                      -6-
<PAGE>

                  2.04 Litigation and Contingent  Liabilities.  (a) There are no
actions,  suits  or  proceedings  pending  or,  to  the  knowledge  of  Holdings
threatened in writing involving Holdings or any of its Subsidiaries  (including,
without limitation, with respect to the Transaction,  the Credit Agreement, this
Holdings  Guaranty or any  documentation  executed in  connection  therewith  or
herewith)  (i) which has or is  reasonably  likely  to have a  Material  Adverse
Effect or (ii) that is reasonably  likely to have a material  adverse  effect on
the rights or  remedies  of the Banks or on the  ability of any Credit  Party to
perform its respective  obligations  to the Banks  hereunder and under the other
Credit Documents to which it is, or will be, a party.  Additionally,  there does
not exist any judgment,  order or injunction  prohibiting  or imposing  material
adverse  conditions upon the making of any Loan or the issuance of the Letter of
Credit hereunder.

                  (b)  Except as fully  reflected  in the  financial  statements
described in Section 2.11(b) (including the footnotes thereto), the Indebtedness
incurred under the Credit  Agreement and in connection  with the Transaction and
all  obligations  incurred in the ordinary  course of business since the date of
the  financial  statements  described in Section  2.11(b),  there were as of the
Restatement  Effective  Date (and after giving  effect to the Loans made on such
date),  no  liabilities  or  obligations  with respect to Holdings or any of its
Subsidiaries of any nature whatsoever (whether absolute,  accrued, contingent or
otherwise  and  whether  or not due),  and  Holdings  knows of any basis for the
assertion  against  Holdings or any of its Subsidiaries of any such liability or
obligation,  which,  in the  case of any of the  foregoing  referred  to in this
clause (b),  either  individually  or in the  aggregate,  are or are  reasonably
likely to have a Material Adverse Effect.

                  2.05 Use of Proceeds; Margin Regulations.  (a) The proceeds of
all Loans shall be utilized (i) to repay, on the Restatement Effective Date, all
amounts  outstanding under the Original Credit  Agreement,  (ii) to pay fees and
expenses  incurred  in  connection  with the  Transaction  and (iii) for general
corporate  and working  capital  purposes of the Borrower  and its  Subsidiaries
(including,   without  limitation,   for  mergers  and  acquisitions   permitted
hereunder).

                  (b)      The  Letters of Credit  shall only be issued for the
 benefit of Lloyd's  and in support of L/C Supportable Obligations.

                                      -7-
<PAGE>

                  (c) Neither the making of any Loan hereunder,  the issuance of
any Letter of Credit,  nor the use of the proceeds  thereof,  will violate or be
inconsistent  with  the  provisions  of  Regulation  T, U or X of the  Board  of
Governors of the Federal  Reserve System and no part of the proceeds of any Loan
will be used to purchase or carry any Margin  Stock or to extend  credit for the
purpose of purchasing or carrying any Margin Stock.

                  2.06  Approvals.  Except for  filings  and  approvals  made or
obtained on or prior to the Restatement Effective Date and for which the failure
to make or be obtained is not reasonably  likely to result in a Material Adverse
Effect  (other than with respect to the Credit  Documents),  no order,  consent,
approval,  license,  authorization,  or validation  of, or filing,  recording or
registration  with,  or  exemption  by,  any  foreign or  domestic  Governmental
Authority  is required to authorize  or is required in  connection  with (i) the
execution,  delivery and  performance  of any  Transaction  Document or (ii) the
legality,   validity,  binding  effect  or  enforceability  of  any  Transaction
Document.
                  2.07  Investment Company Act. Neither Holdings nor any  of its
Subsidiaries  is  an  "investment  company"  or a  company  "controlled"  by  an
"investment  company," within the meaning of the Investment Company Act of 1940,
as amended.
                  2.08 Public Utility Holding Company Act.  Neither Holdings nor
any of its Subsidiaries is a "holding  company," or a "subsidiary  company" of a
"holding  company," or an "affiliate" of a "holding company" or of a "subsidiary
company"  of a  "holding  company,"  within the  meaning  of the Public  Utility
Holding Company Act of 1935, as amended.

                  2.09   True   and   Complete   Disclosure;   Projections   and
Assumptions.   All  factual   information  (taken  as  a  whole)  heretofore  or
contemporaneously  furnished  in writing by Holdings or any of its  Subsidiaries
(or by any of their respective agents or  representatives) to the Administrative
Agent or any Bank (including,  without limitation,  all information contained in
the Transaction Documents and in the Confidential Bank Memorandum, but excluding
the Projections and any other projections) for purposes of or in connection with
the Credit  Agreement,  this Holdings  Guaranty or any transaction  contemplated
therein  or herein  is,  and all other  factual  information  (taken as a whole)
hereafter  furnished  by or on  behalf of any such  Persons  in  writing  to the
Administrative  Agent will be, true and accurate in all material respects on the
date as of which such  information  is dated and not  incomplete  by omitting to
state any material fact  necessary to make such  information  (taken as a whole)
not  misleading  at such time in light of the  circumstances  under  which  such
information was provided.  The Projections are based on good faith estimates and
assumptions  believed by Holdings to be  reasonable  and  attainable at the time
made, it being recognized by the Banks that such Projections as to future events
are not to be viewed as facts  and that  actual  results  during  the  period or
periods covered by any such Projections may differ from the projected results.

                  2.10 Consummation of Transaction. On or before the Restatement
Effective  Date, the  Transaction  has been  consummated in accordance  with the
terms and conditions of the  Transaction  Documents and all Legal  Requirements.
All consents and approvals of, and filings and registrations with, and all other
actions   in   respect   of,   all   governmental   agencies,   authorities   or
instrumentalities  required in order to consummate the Transaction in accordance
with the  terms  and  conditions  of the  Transaction  Documents  and all  Legal
Requirements have been, or prior to the time required, will have been, obtained,
given,  filed or taken,  except in the case of any LaSalle Business  Combination
Documents  where the failure to consummate the LaSalle  Business  Combination in
accordance  with the terms and  conditions  thereof and to obtain such consents,
approvals, filings and registrations is not reasonably likely to have a Material
Adverse Effect.

                                      -8-
<PAGE>
                  2.11 Financial Condition;  Financial Statements. (a) On and as
of the  Restatement  Effective Date, on a pro forma basis after giving effect to
the Transaction and all Indebtedness  incurred,  and to be incurred, on or prior
to the Restatement  Effective Date, and Liens created,  and to be created, on or
prior  to  the  Restatement  Effective  Date,  in  connection  with  the  Credit
Agreement,  with  respect to each of  Holdings  (on a  stand-alone  basis),  the
Borrower (on a stand-alone  basis),  the Account Party (on a stand-alone  basis)
and Holdings and its Subsidiaries  (on a consolidated  basis) (x) the sum of the
assets, at a fair valuation,  of each of Holdings (on a stand-alone  basis), the
Borrower (on a stand-alone  basis),  the Account Party (on a stand-alone  basis)
and Holdings and its  Subsidiaries  (on a consolidated  basis) will exceed their
debts,  (y) Holdings (on a  stand-alone  basis),  the Borrower (on a stand-alone
basis),  the  Account  Party  (on a  stand-alone  basis)  and  Holdings  and its
Subsidiaries (on a consolidated basis) will not have incurred or intended to, or
believe that they will,  incur debts  beyond their  ability to pay such debts as
such debts mature and (z) Holdings (on a stand-alone  basis), the Borrower (on a
stand-alone  basis), the Account Party (on a stand-alone basis) and Holdings and
its  Subsidiaries  (on a consolidated  basis) will have sufficient  capital with
which to conduct its or their  business.  For purposes of this Section  2.11(a),
"debt" means any  liability on a claim,  and "claim"  means (i) right to payment
whether or not such a right is reduced to  judgment,  liquidated,  unliquidated,
fixed, contingent,  matured, unmatured,  disputed, undisputed, legal, equitable,
secured  or  unsecured;  or (ii)  right to an  equitable  remedy  for  breach of
performance if such breach gives rise to a payment, whether or not such right to
an  equitable  remedy  is  reduced  to  judgment,  fixed,  contingent,  matured,
unmatured, disputed, undisputed, secured or unsecured.

                  (b) The  financial  statements  and pro forma  balance  sheets
(after giving effect to the Transaction and the other transactions  contemplated
hereby)  delivered to the  Administrative  Agent pursuant to Section 5.11 of the
Credit Agreement present fairly in all material respects the financial  position
of the  respective  Persons  referred  to in such  Section  at the dates of said
statements and the results of operations for the periods covered thereby (or, in
the case of the pro forma balance  sheet,  present a good faith  estimate of the
consolidated pro forma financial  condition of such Persons and their respective
Subsidiaries  as of the date thereof).  All such financial  statements have been
prepared in  accordance  with SAP or GAAP,  as  indicated in Section 5.11 of the
Credit  Agreement,  consistently  applied  except to the extent  provided in the
notes to said financial statements.

                  (c) Since  December  31,  1999,  nothing has  occurred  which,
individually  or  when  taken  as a  whole  with  other  occurrences,  has or is
reasonably likely to have a Material Adverse Effect.

                  2.12 Tax Returns and  Payments.  Each of Holdings  and each of
its Subsidiaries has filed all federal income tax returns and all other material
tax returns,  domestic and foreign,  required to be filed by it and has paid all
material taxes and  assessments  payable by it which have become due, except for
those contested in good faith and adequately disclosed and fully provided for in
the financial  statements of Holdings and each of its Subsidiaries in accordance
with  GAAP  or SAP,  as the  case  may be.  Each  of  Holdings  and  each of its
Subsidiaries  have paid, or have provided  adequate  reserves (in the good faith
judgment of the  management  of such  Person)  for the payment of, all  federal,
state and foreign income taxes applicable for all prior fiscal years and for the
current  fiscal year to date.  There is no material  action,  suit,  proceeding,
investigation,  audit or claim now pending or, to the  knowledge  of Holdings or
any  of its  Subsidiaries,  threatened  by any  authority  regarding  any  taxes
relating to Holdings or any of its Subsidiaries. Neither Holdings nor any of its
Subsidiaries  has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or  collection  of taxes of Holdings or any of its  Subsidiaries,  or is
aware of any  circumstances  that would cause the taxable years or other taxable
periods of Holdings or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations.

                                      -9-
<PAGE>
                  2.13 Compliance  with ERISA.  (a) Annex I sets forth each Plan
and each Multiemployer Plan as of the Restatement Effective Date; each Plan (and
each related trust,  insurance  contract or fund) is in  substantial  compliance
with its terms and with all applicable laws,  including without limitation ERISA
and the Code, except to the extent that any such non-compliance could not result
in a material  liability;  each Plan (and each related  trust,  if any) which is
intended  to be  qualified  under  Section  401(a)  of the Code has  received  a
determination  letter from the  Internal  Revenue  Service to the effect that it
meets the  requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Multiemployer Plan is insolvent or in reorganization;  no
Plan has an Unfunded Current Liability;  no Plan which is subject to Section 412
of the Code or  Section  302 of ERISA  has an  accumulated  funding  deficiency,
within the meaning of such sections of the Code or ERISA,  or has applied for or
received a waiver of an  accumulated  funding  deficiency or an extension of any
amortization  period,  within the  meaning of Section 412 of the Code or Section
303 or 304 of ERISA; except as would not result in any material  liability,  all
contributions  required to be made with respect to a Plan and each Multiemployer
Plan have been timely made;  neither Holdings nor any Subsidiary of Holdings nor
any ERISA Affiliate has incurred any material liability (including any indirect,
contingent  or  secondary  liability)  to or on  account of a Plan  pursuant  to
Section 409,  502(i),  502(1),  4062,  4063,  4064,  or 4069 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or to or on account of a Multiemployer Plan
pursuant to Section 515,  4201,  4204 or 4212 of ERISA or reasonably  expects to
incur any of such liability under any of the foregoing  sections with respect to
any Plan or Multiemployer Plan; to Holdings' knowledge no condition exists which
presents a material risk to Holdings or any  Subsidiary of Holdings or any ERISA
Affiliate  of  incurring  a  material  liability  to or on  account of a Plan or
Multiemployer  Plan pursuant to the foregoing  provisions of ERISA and the Code;
no  proceedings  have been  instituted  to  terminate  or  appoint a trustee  to
administer  any Plan which is subject to Title IV of ERISA;  except as would not
result in any material liability, no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets  of any Plan  (other  than  routine  claims  for  benefits)  is  pending,
reasonably  expected  or to  Holdings'  knowledge  threatened;  using  actuarial
assumptions  and  computation  methods  consistent  with Part 1 of subtitle E of
Title IV of ERISA,  the aggregate  liabilities of Holdings and its  Subsidiaries
and its ERISA Affiliates to each  Multiemployer  Plan in the event of a complete
withdrawal  therefrom,  as of the close of the most  recent  fiscal year of each
such Multiemployer Plan ended prior to the date of the most recent Credit Event,
would not exceed  $10,000,000;  each group  health  plan (as  defined in Section
607(1) of ERISA or Section  4980B(g)(2) of the Code) other than a  multiemployer
plan  described  in  Section  3(37) of ERISA  maintained  or  contributed  to by
Holdings,  a Subsidiary  of Holdings or an ERISA  Affiliate  which covers or has
covered employees or former employees of Holdings, any Subsidiary of Holdings or
any ERISA  Affiliate  has at all times  been  operated  in  compliance  with the
provisions  of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code except as would not result in any material liability; no lien imposed under
the Code or ERISA on the assets of Holdings or any Subsidiary of Holdings or any
ERISA Affiliate  exists or, to Holding's,  the Borrower's or the Account Party's
knowledge,  is likely to arise on account of any Plan or Multiemployer Plan; and
neither  Holdings  nor any of its  Subsidiaries  maintain or  contribute  to any
employee  welfare  benefit  plan (as  defined  in Section  3(1) of ERISA)  which
provides  benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan  obligations with respect to which
could reasonably be expected to have a material adverse effect on the ability of
any Credit Party to perform its obligations  under the Credit Documents to which
it is a party.
                                      -10-
<PAGE>

                  (b) Except as would not result in a material  liability,  each
Foreign  Pension Plan has been  maintained in  substantial  compliance  with its
terms and with the requirements of any and all applicable laws, statutes, rules,
regulations and orders and has been maintained, where required, in good standing
with applicable regulatory authorities. Except as would not result in a material
liability,  all  contributions  required  to be made with  respect  to a Foreign
Pension Plan have been timely made. Neither Holdings nor any of its Subsidiaries
has incurred any material  obligation in connection  with the  termination of or
withdrawal  from any Foreign  Pension Plan.  Except as set forth in Annex I, the
present value of the accrued benefit  liabilities  (whether or not vested) under
each Foreign  Pension Plan,  determined as of the end of each of Holding's,  the
Borrower's and the Account  Party's most recently ended fiscal year on the basis
of  actuarial  assumptions,  each of which is  reasonable,  did not  exceed  the
current  value of the assets of such  Foreign  Pension  Plan  allocable  to such
benefit liabilities.

                  2.14  Subsidiaries.  (a) Annex II hereto lists each Subsidiary
of Holdings (and the direct and indirect ownership interest of Holdings therein)
and also  identifies the owner thereof in each case existing on the  Restatement
Effective Date (after giving effect to the Transaction).  Except as set forth on
Annex II, all such Subsidiaries are direct or indirect Wholly-Owned Subsidiaries
of Holdings.

                  (b)  There  are  no  restrictions  on  Holdings  or any of its
Subsidiaries  which prohibit or otherwise restrict the transfer of cash or other
assets from any  Subsidiary  of  Holdings to  Holdings,  any  Subsidiary  of the
Borrower to the Borrower,  or any Subsidiary of the Account Party to the Account
Party,  other than  prohibitions or restrictions  existing under or by reason of
(i) this Holdings  Guaranty,  the other Credit  Documents,  the Trenwick  Senior
Notes, (ii) Legal  Requirements,  (iii) customary  non-assignment  provisions in
contracts  entered into in the ordinary  course of business and consistent  with
past practices, and (iv) purchase money obligations for property acquired in the
ordinary  course of business,  so long as such  obligations  are permitted under
this Holdings Guaranty.

                                      -11-
<PAGE>

                  2.15 Intellectual Property,  etc. Each of Holdings and each of
its  Subsidiaries  own or  possess  the  right  to  use  all  material  patents,
trademarks,  servicemarks,  trade names, copyrights,  licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of their
respective businesses as presently conducted and as proposed to be conducted.

                  2.16  Pollution  and Other  Regulations.  Each of Holdings and
each of its  Subsidiaries  are in  compliance  with  all  laws  and  regulations
relating to pollution and environmental  control,  equal employment  opportunity
and employee safety in all domestic and foreign  jurisdictions in which Holdings
and each of its  Subsidiaries  is presently  doing  business,  and Holdings will
comply  and cause  each of its  Subsidiaries  to  comply  with all such laws and
regulations  which  may be  imposed  in the  future  in  jurisdictions  in which
Holdings  and each its  Subsidiaries  may then be doing  business;  in each case
other than those the non-compliance  with which is not reasonably likely to have
a Material Adverse Effect.

                  2.17 Labor Relations;  Collective Bargaining  Agreements.  (a)
Set  forth  on  Annex  III  is  a  list  and  description  (including  dates  of
termination)  of all  collective  bargaining and similar  agreements  between or
applicable  to  Holdings  and  any of its  Subsidiaries  and  any  union,  labor
organization or other  bargaining  agent in respect of the employees of Holdings
and/or any of its Subsidiaries on the Restatement Effective Date.

                  (b) Neither Holdings nor any of its Subsidiaries is engaged in
any unfair labor practice that is reasonably  likely to have a Material  Adverse
Effect.  (i) There is no  significant  unfair labor practice  complaint  pending
against Holdings or any of its Subsidiaries or threatened in writing against any
of them, before the National Labor Relations Board, and no significant grievance
or  significant  arbitration  proceeding  arising out of or under any collective
bargaining  agreement is now pending against Holdings or any of its Subsidiaries
or  threatened  in writing  against  any of them,  (ii) there is no  significant
strike,  labor dispute,  slowdown or stoppage pending against Holdings or any of
its  Subsidiaries  or  threatened  in  writing  against  Holdings  or any of its
Subsidiaries   and  (iii)  to  the  best   knowledge  of   Holdings,   no  union
representation  question exists with respect to the employees of Holdings or any
of its Subsidiaries, except (with respect to any matter specified in clause (i),
(ii) or (iii) above,  either individually or in the aggregate) such as could not
reasonably be expected to have a Material Adverse Effect.

                  2.18  Capitalization.  (a) On the Restatement  Effective Date,
and  after  giving  effect  to  the  Transaction  and  the  other   transactions
contemplated  hereby,  the  authorized  capital  stock of  Holdings  consists of
150,000,000 shares of capital stock comprised of (i) common stock having a $0.10
par value per share, 36,648,022 shares of which shall be issued and outstanding,
and (ii) preferred stock having a $0.10 par value per share, none of which shall
be issued  and  outstanding.  As of the  Restatement  Effective  Date,  all such
outstanding  shares of Holdings have been duly and validly  issued and are fully
paid and  nonassessable.  On the  Restatement  Effective  Date and after  giving
effect  to the  Transaction  and the  other  transactions  contemplated  hereby,
Holdings  does  not  have   outstanding  any  securities   convertible  into  or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance  (contingent or otherwise) of, or any calls,  commitments or claims
of any character  relating to, its capital stock,  except for options,  warrants
and grants outstanding in the aggregate amounts set forth on Annex IV.

                                      -12-
<PAGE>

                  2.19 Indebtedness. Annex V sets forth a true and complete list
of all Indebtedness  outstanding  under Sections 4.04(c) and (i) of Holdings and
each of its  Subsidiaries  as of the  Restatement  Effective  Date (after giving
effect to the Transaction),  in each case showing the aggregate principal amount
thereof,  the  name  of the  lender  in  respect  thereof  and  the  name of the
respective  borrower  and any other  entity  which has  directly  or  indirectly
guaranteed such Indebtedness.

                  2.20 Compliance with Statutes,  etc.  Holdings and each of its
Subsidiaries  is in compliance  with all applicable  statutes,  regulations  and
orders  of,  and  all  applicable  restrictions  imposed  by,  all  Governmental
Authorities  in respect of the conduct of its business and the  ownership of its
property (including  compliance with all applicable  environmental laws), except
those the noncompliance  with which, in the aggregate,  is not reasonably likely
to have a Material Adverse Effect.

                  2.21 Insurance Licenses.  Each Regulated Insurance Company has
obtained  and  maintains  in full force and effect all licenses and permits from
all regulatory  authorities  necessary to operate in the  jurisdictions in which
such Regulated Insurance Company operates, in each case other than such licenses
and permits the failure of which to obtain or maintain,  individually  or in the
aggregate, is not reasonably likely to have a Material Adverse Effect.

                  SECTION 3.  Affirmative  Covenants.  Holdings hereby covenants
and agrees that on the Restatement Effective Date and thereafter, for so long as
the Credit  Agreement is in effect and until the Total Commitment and the Letter
of Credit are  terminated and all the Loans and Unpaid  Drawings,  together with
interest, Fees and all other Obligations incurred hereunder, are paid in full:

                  3.01  Information Covenants.  Holdings  will  furnish or cause
 to be furnished to each Bank:

                  (a) Annual Financial Statements.  (i) As soon as available and
         in any event  within 90 days  after  the close of each  fiscal  year of
         Holdings  (x)  the  consolidated  balance  sheet  of  Holdings  and its
         Subsidiaries,  in each case,  as at the end of such fiscal year and the
         related consolidated  statements of income, of stockholders' equity and
         of cash flows for such  fiscal year and (y) the  consolidating  balance
         sheet of Holdings and its Subsidiaries as at the end of the fiscal year
         and the related  consolidating  statements of income,  of stockholders'
         equity and of cash flows for such fiscal year; in each case prepared in
         accordance  with GAAP and  setting  forth  comparative  figures for the
         preceding   fiscal  year,  and,  in  the  case  of  such   consolidated
         statements,  examined by independent  certified  public  accountants of
         recognized national standing whose opinion shall not be qualified as to
         the scope of audit or as to the status of Holdings and its Subsidiaries
         as a going concern, together with a certificate of such accounting firm
         stating  that in the course of its  regular  audit of the  business  of
         Holdings and its Subsidiaries,  which audit was conducted in accordance
         with GAAP,  such  accounting  firm has  obtained  no  knowledge  of any
         Default or Event of Default which has occurred and is continuing or, if
         in the  opinion  of such  accounting  firm such a  Default  or Event of
         Default has  occurred and is  continuing,  a statement as to the nature
         thereof.

                                      -13-
<PAGE>

                           (ii) As soon as available  and in any event within 90
                  days  after the close of each  fiscal  year of each  Regulated
                  Insurance Company which is a Material  Subsidiary,  the Annual
                  Statement  (prepared in  accordance  with SAP) for such fiscal
                  year of such Regulated  Insurance  Company,  as filed with the
                  Applicable  Insurance  Regulatory Authority in compliance with
                  the requirements  thereof (or a report  containing  equivalent
                  information  for  any  Regulated   Insurance  Company  not  so
                  required to file the foregoing with the  Applicable  Insurance
                  Regulatory Authority) together with the opinion thereon of the
                  Chief Financial  Officer or other  Authorized  Officer of such
                  Regulated Insurance Company stating that such Annual Statement
                  presents  fairly  in  all  material   respects  the  financial
                  condition  and  results  of   operations  of  such   Regulated
                  Insurance Company in accordance with SAP.

                           (iii) As soon as available and in any event within 90
                  days after the close of each fiscal year of  Holdings,  a copy
                  of  the  "Statement  of  Actuarial  Opinion"  and  "Management
                  Discussion and Analysis" for each Regulated  Insurance Company
                  which  is  a  Material   Subsidiary  and  Domestic  Subsidiary
                  (prepared in accordance  with SAP) for such fiscal year and as
                  filed with the Applicable  Regulatory  Insurance  Authority in
                  compliance  with  the   requirements   thereof  (or  a  report
                  containing equivalent  information for any Regulated Insurance
                  Company  not so  required  to  file  the  foregoing  with  the
                  Applicable Regulatory Insurance Authority).

                  (b) Quarterly Financial  Statements.  (i) As soon as available
         and in any event  within  45 days  after the close of each of the first
         three quarterly  accounting periods in each fiscal year of Holdings (x)
         the consolidated  balance sheet of Holdings and its Subsidiaries at the
         end of such fiscal quarter and the related  consolidated  statements of
         income,  of  stockholders'  equity and of cash flows for such quarterly
         period and for the  elapsed  portion of the fiscal  year ended with the
         last day of such  quarterly  period and (y) the  consolidating  balance
         sheet of  Holdings  and its  Subsidiaries  as at the end of such fiscal
         quarter  and  the  related  consolidating   statements  of  income,  of
         stockholders'  equity and of cash flows for such  quarterly  period and
         for the  elapsed  portion of the fiscal year ended with the last day of
         such quarterly period;  in each case setting forth comparative  figures
         for the  related  periods in the prior  fiscal  year,  and all of which
         shall be prepared in  accordance  with GAAP and  certified by the Chief
         Financial Officer or other Authorized  Officer of Holdings,  subject to
         changes resulting from normal year-end audit adjustments.

                           (ii) As soon as available  and in any event within 45
                  days  after  the close of each of the  first  three  quarterly
                  accounting  periods  in each  fiscal  year  of each  Regulated
                  Insurance  Company which is a Material  Subsidiary,  quarterly
                  financial  statements  (prepared in  accordance  with SAP) for
                  such fiscal period of such  Regulated  Insurance  Company,  as
                  filed  with the  Applicable  Insurance  Regulatory  Authority,
                  together  with the  opinion  thereon  of the  Chief  Financial
                  Officer  or  other   Authorized   Officer  of  such  Regulated
                  Insurance  Company  stating  that  such  financial  statements
                  present   fairly  in  all  material   respects  the  financial
                  condition  and  results  of   operations  of  such   Regulated
                  Insurance Company in accordance with SAP.

                                      -14-
<PAGE>

                  (c) Financial Plans,  etc. No later than 45 days following the
         first  day of  each  fiscal  year of  Holdings,  copies  of the  annual
         financial plan or budget for such fiscal year prepared by management of
         Holdings for its internal use and distributed to the Board of Directors
         of  Holdings.  Together  with each  delivery  of  financial  statements
         pursuant  to Section  3.01(a)(ii)  and  (b)(ii),  a  comparison  of the
         current year to date  financial  results  (other than in respect of the
         balance  sheets  included  therein)  against  the plans  required to be
         submitted pursuant to this clause (c) shall be presented.

                  (d) Officer's Certificates. At the time of the delivery of the
         financial  statements  provided for in Sections 3.01(a)(i) and (ii) and
         (b)(i) and (ii), a certificate of the Chief Financial  Officer or other
         Authorized  Officer of  Holdings to the effect that no Default or Event
         of Default  exists or, if any  Default or Event of Default  does exist,
         specifying the nature and extent thereof,  which  certificate shall set
         forth the calculations  required to establish  whether Holdings and its
         Subsidiaries  were in compliance  with the  provisions of Sections 4.12
         through 4.16, inclusive,  as at the end of such fiscal year or quarter,
         as the case may be.

                  (e)  Notice of  Default or  Litigation.  Promptly,  and in any
         event  within  five  Business  Days  after   Holdings  or  any  of  its
         Subsidiaries obtains knowledge thereof, (x) notice of the occurrence of
         any event which constitutes a Default or Event of Default, which notice
         shall specify the nature thereof,  the period of existence  thereof and
         what action Holdings, the Borrower or the Account Party,  respectively,
         proposes to take with respect  thereto and (y) promptly  after Holdings
         or any of its Subsidiaries  obtains  knowledge  thereof,  notice of any
         outstanding litigation or governmental or regulatory proceeding pending
         against Holdings or any of its Subsidiaries  which is reasonably likely
         to have a Material Adverse Effect,  or a material adverse effect on the
         ability  of any  Credit  Party to perform  its  respective  obligations
         hereunder or under any other Credit Document.

                  (f)      Reserve  Reports.  Promptly  upon receipt  thereof,
         a copy of each report submitted to Holdings or any of  its Subsidiaries
         by any independent actuary with respect to reserve adequacy.

                  (g) Reserve Adequacy Report. Promptly following a request from
         the Administrative  Agent or the Required Banks (which request may only
         be made when an Event of Default has  occurred  and is  continuing),  a
         report  prepared  by  an  independent   actuarial  consulting  firm  of
         recognized   professional  standing  reasonably   satisfactory  to  the
         Administrative  Agent  or the  Required  Banks,  as the  case  may  be,
         reviewing the adequacy of reserves of each Regulated  Insurance Company
         determined in accordance  with SAP, which firm shall be provided access
         to or copies of all reserve  analyses  and  valuations  relating to the
         insurance   business  of  each  Regulated   Insurance  Company  in  the
         possession of or available to Holdings or any of its Subsidiaries.

                  (h)      Annual Report or Managed  Syndicate.   As soon as the
         same  becomes  available,  but in any event  within 90 days  after  the
         end of each year of  account  of  the  Managed  Syndicate,  the  annual
         report in respect thereof.

                                      -15-
<PAGE>

                  (i) Business Plan and Realistic Disaster Scenarios for Managed
         Syndicate.  As soon as the same becomes  available,  the business  plan
         prepared in relation to the Managed  Syndicate  and (if  separate)  the
         Realistic Disaster Scenarios relating thereto.

                  (j)      Syndicate  Quarterly  Report.  As  soon  as the  same
         becomes  available,  the  Syndicate  Quarterly  Report  for the Managed
         Syndicate.

                  (k) Other  Regulatory  Statements  and  Reports.  Promptly (A)
         after receipt  thereof,  copies of all triennial  examinations and risk
         adjusted capital reports of any Regulated Insurance Company,  delivered
         to  such  Person  by any  Applicable  Insurance  Regulatory  Authority,
         insurance commission or similar regulatory authority, (B) after receipt
         thereof,  written notice of any assertion by any  Applicable  Insurance
         Regulatory Authority or any governmental agency or agencies substituted
         therefor,  as to a violation of any Legal  Requirement by any Regulated
         Insurance Company which is reasonably likely to have a Material Adverse
         Effect,  (C) after receipt thereof,  a copy of the final report to each
         Regulated  Insurance  Company from the NAIC for each fiscal year, as to
         such Regulated  Insurance  Company's  compliance or noncompliance  with
         each of the NAIC Tests, (D) after receipt thereof, a copy of any notice
         of termination,  cancellation or recapture of any Reinsurance Agreement
         or Retrocession  Agreement to which a Regulated  Insurance Company is a
         party to the extent such  termination  or  cancellation  is  reasonably
         likely to have a Material  Adverse Effect,  (E) and in any event within
         ten Business Days after receipt thereof, copies of any notice of actual
         suspension,  termination  or revocation of any license of any Regulated
         Insurance  Company by any Applicable  Insurance  Regulatory  Authority,
         including any request by an Applicable  Insurance  Regulatory Authority
         which  commits a Regulated  Insurance  Company to take or refrain  from
         taking any action or which  otherwise  affects  the  authority  of such
         Regulated Insurance Company to conduct its business,  except where such
         suspension,  termination or revocation is not reasonably likely to have
         a Material  Adverse  Effect,  and (F) in any event  within ten Business
         Days  after  Holdings  or  any of its  Subsidiaries  obtains  knowledge
         thereof,  notice of any actual changes in the insurance laws enacted in
         any state in which any Regulated  Insurance  Company is domiciled which
         is reasonably likely to have a Material Adverse Effect.

                  (l) Other  Information.  Promptly upon filing thereof with the
         SEC or  transmission  thereof,  as the case may be, copies of any final
         registrations and documents,  and other reports specified in Section 13
         and  15(d)  of  the  Exchange  Act  filed  by  Holdings  or  any of its
         Subsidiaries  (other than any  registration  statement on Form S-8) and
         copies of all financial  statements and proxy statements,  and material
         notices and reports,  as Holdings or any of its Subsidiaries shall send
         to analysts  generally or the holders of their  capital  stock in their
         capacity as such  holders  (in each case to the extent not  theretofore
         delivered to the Banks pursuant to this Agreement) and, with reasonable
         promptness,  such other information or existing documents (financial or
         otherwise)  as the  Administrative  Agent or any  Bank  may  reasonably
         request from time to time.

                  3.02 Books,  Records and Inspections.  Holdings will, and will
cause  each  of  its   Subsidiaries   to,   permit   officers   and   designated
representatives of the Administrative Agent or any Bank to visit and inspect any
of the  properties or assets of Holdings and its  Subsidiaries  in  whomsoever's

                                      -16-
<PAGE>

possession  (but only to the extent Holdings or such Subsidiary has the right to
do so to the extent in the  possession  of another  Person),  and to examine the
books of account of Holdings  and its  Subsidiaries  and  discuss  the  affairs,
finances and accounts of Holdings and its  Subsidiaries  with, and be advised as
to the  same  by,  its  and  their  officers  and  independent  accountants  and
independent  actuaries,  if any,  all at such  reasonable  intervals  and during
business hours,  upon reasonable  prior notice and to such reasonable  extent as
the  Administrative  Agent or any Bank may request.  All such visits shall be at
the expense of the Administrative  Agent or the respective Bank unless and until
a Default or Event of Default exists.

                  3.03  Insurance.  Holdings  will,  and will  cause each of its
Subsidiaries  to, at all times  maintain in full force and effect  insurance  in
such amounts,  covering such risks and liabilities and with such  deductibles or
self-insured retentions as are in accordance with normal industry practice.

                  3.04 Payment of Taxes.  Holdings will pay and  discharge,  and
will cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and  governmental  charges  or  levies  imposed  upon it or upon its  income  or
profits,  or upon any  properties  belonging  to it,  prior to the date on which
penalties  attach  thereto,  and all lawful claims for sums that have become due
and payable which, if unpaid,  might become a Lien not otherwise permitted under
Section  4.03(a);  provided  that neither  Holdings nor any of its  Subsidiaries
shall be required to pay any such tax,  assessment,  charge, levy or claim which
is being contested in good faith and by proper  proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.

                  3.05  Corporate  Franchises.  Holdings will do, and will cause
each of its  Subsidiaries  to do,  or cause to be done,  all  things  reasonably
necessary to preserve and keep in full force and effect its respective corporate
existence,  rights  and  authority,  except  where the  failure  to do so is not
reasonably  likely  to  have  a  Material  Adverse  Effect;  provided  that  any
transaction  permitted  by  Section  4.02 will not  constitute  a breach of this
Section 3.05.

                  3.06  Compliance with Statutes,  etc.  Holdings will, and will
cause  each  of its  Subsidiaries  to,  comply  with  all  applicable  statutes,
regulations  and orders  of, and all  applicable  restrictions  imposed  by, all
Government Authorities, in respect of the conduct of its respective business and
the  ownership  of  its  respective  property  (including  applicable  statutes,
regulations,  orders and restrictions  relating to  environmental  standards and
controls)  other than  those the  non-compliance  with  which is not  reasonably
likely to have a Material Adverse Effect.

                  3.07 ERISA.  As soon as possible and, in any event,  within 15
days after Holdings,  any Subsidiary of Holdings or any ERISA Affiliate knows or
has reason to know of the  occurrence  of any of the  following,  Holdings  will
deliver to each of the Banks a  certificate  of the chief  financial  officer of
Holdings setting forth the full details as to such occurrence and the action, if
any,  that  Holdings,   the  Borrower,   the  Account  Party,  their  respective
Subsidiaries or such ERISA  Affiliate is required or proposes to take,  together
with any notices  required or  proposed  to be given or filed by  Holdings,  the
Borrower,   the  Account  Party  or  such   respective   Subsidiary,   the  Plan
administrator  or such  ERISA  Affiliate,  to or  with  the  PBGC  or any  other
government  agency, or a Plan or Multiemployer  Plan participant and any notices
received  by  Holdings,   the  Borrower,  the  Account  Party,  such  respective
Subsidiary or such ERISA Affiliate from the PBGC or any other government agency,

                                      -17-
<PAGE>

or a Plan  or  Multiemployer  Plan  participant  with  respect  thereto:  that a
Reportable Event has occurred (except to the extent that Holdings, the Borrower,
or the Account Party has  previously  delivered to the Banks a  certificate  and
notices (if any) concerning such event pursuant to the next clause hereof); that
a  contributing  sponsor (as defined in Section  4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting  requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation  Section  4043 is  reasonably  expected to occur with respect to such
Plan within the  following  30 days;  that an  accumulated  funding  deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA,  has been
incurred or an application may reasonably  expected to be or has been made for a
waiver or modification of the minimum funding  standard  (including any required
installment  payments) or an extension of any amortization  period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; except as
would not result in a material  liability that any  contribution  required to be
made with respect to a Plan,  Multiemployer Plan or Foreign Pension Plan has not
been  timely  made;  that a Plan  has  been or may be  terminated,  reorganized,
partitioned or declared  insolvent  under Title IV of ERISA;  that a Plan has an
Unfunded Current  Liability;  that proceedings are reasonably  expected to be or
have been  instituted  to  terminate  or appoint a trustee to  administer a Plan
which is subject to Title IV of ERISA;  that a  proceeding  has been  instituted
pursuant  to Section  515 of ERISA to  collect a  delinquent  contribution  to a
Multiemployer  Plan;  that  Holdings,  any  Subsidiary  of Holdings or any ERISA
Affiliate  will or are  reasonably  expected  to incur  any  material  liability
(including any indirect, contingent, or secondary liability) to or on account of
the  termination of a Plan under Section 4062,  4063,  4064, or 4069 of ERISA or
with respect to the  withdrawal  from a  Multiemployer  Plan under Section 4201,
4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),  4971,
4975 or 4980 of the Code or  Section  409,  502(i)  or  502(l)  of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2)  of the Code) under  Section  4980B of the Code; or that Holdings or
any  Subsidiary  of Holdings  may incur any material  liability  pursuant to any
employee  welfare  benefit  plan (as  defined  in  Section  3(1) of ERISA)  that
provides  benefits to retired employees or other former employees (other than as
required  by  Section  601 of ERISA) or any Plan or any  Foreign  Pension  Plan.
Holdings  will deliver to each of the Banks copies of any records,  documents or
other  information  that must be  furnished to the PBGC with respect to any Plan
pursuant to Section  4010 of ERISA.  Holdings  will also  deliver to each of the
Banks a complete  copy of the annual  report (on Internal  Revenue  Service Form
5500-series)  of each Plan  (including,  to the  extent  required,  the  related
financial and actuarial statements and opinions and other supporting statements,
certifications,  schedules  and  information)  required  to be  filed  with  the
Internal Revenue Service.  In addition to any certificates or notices  delivered
to the Banks pursuant to the first sentence hereof, copies of annual reports and
any records, documents or other information required to be furnished to the PBGC
or any other  government  agency,  and any material  notices  received by any of
Holdings,  any of its  Subsidiaries  or any ERISA  Affiliate  from any  relevant
government  agency  with  respect  to any Plan or any  Foreign  Pension  Plan or
received from any government agency or plan  administrator or sponsor or trustee
with respect to any Multiemployer  Plan shall be delivered to the Banks no later
than 15 days after the date such annual  report has been filed with the Internal
Revenue Service or such records, documents and/or information has been furnished
to the PBGC or any other  government  agency or such notice has been received by

                                      -18-
<PAGE>

any of Holdings, any of its Subsidiaries or the ERISA Affiliate,  as applicable.
Holdings  and each of its  Subsidiaries  shall  ensure that all Foreign  Pension
Plans  administered by it or into which it makes payments obtains or retains (as
applicable)  registered  status under and as required by  applicable  law and is
administered  in a  timely  manner  in  all  respects  in  compliance  with  all
applicable laws except where the failure to do any of the foregoing would not be
reasonably  likely to result in a material  adverse  effect  upon the  business,
operations,  condition  (financial or otherwise) or prospects of Holdings or any
of its Subsidiaries.

                  3.08 Performance of Obligations. Holdings will, and will cause
each  of its  Subsidiaries  to,  perform  in all  material  respects  all of its
obligations  under the terms of each mortgage,  indenture,  security  agreement,
other debt instrument and material  contract by which it is bound or to which it
is a party;  provided,  that  the  failure  to pay any  Indebtedness  shall  not
constitute  a breach of this  Section 3.08 unless it shall give rise to an Event
of Default under Section 9.04 of the Credit Agreement.

                  3.09 Good Repair.  Holdings  will,  and will cause each of its
Subsidiaries  to,  ensure that its material  properties  and  equipment  used or
useful in its business in whomsoever's  possession they may be, are kept in good
repair,  working order and condition,  normal wear and tear  excepted,  and that
from time to time there are made in such  properties  and  equipment all needful
and proper repairs, renewals, replacements,  extensions,  additions, betterments
and  improvements  thereto,  to  the  extent  and in the  manner  customary  for
companies in similar businesses.

                  3.10 End of Fiscal Years; Fiscal Quarters.  Holdings will, for
financial  reporting  purposes,  cause (i) each of its, and each of its Domestic
Subsidiaries',  fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Domestic Subsidiaries', fiscal quarters to end on March 31,
June 30, September 30 and December 31 of each year.

                  3.11  Maintenance of Licenses and Permits.  Holdings will, and
will cause each of its  Subsidiaries  to,  maintain  all  permits,  licenses and
consents  as may be  required  for the  conduct  of its  business  by any state,
federal or local government  agency or  instrumentality  except where failure to
maintain the same is not reasonably likely to have a Material Adverse Effect.

                  3.12 Mandatory  Prepayments.  In the event that any prepayment
is required to be made pursuant to the terms of Section  4.02(i)(b),  (c) or (d)
of the Credit Agreement, Holdings will, and will cause its Subsidiaries to, take
all actions necessary to enable the Borrower to make the required  prepayment in
a timely  manner  (including  by  making  the net cash  proceeds  of any  equity
issuance,  Asset Sale or  Indebtedness  incurrence  referred to in such Sections
available to the Borrower).

                  SECTION 4. Negative  Covenants.  Holdings hereby covenants and
agrees that on the Restatement Effective Date and thereafter, for so long as the
Credit  Agreement is in effect and until the Total  Commitment and the Letter of
Credit are terminated and all Loans and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder, are paid in full:

                                      -19-
<PAGE>

                  4.01 Changes in Business.  Holdings and its Subsidiaries  will
not engage in any business  other than the property and casualty  insurance  and
reinsurance  business  and any other  businesses  engaged in by Holdings and its
Subsidiaries  as of the  Restatement  Effective Date (after giving effect to the
Transaction) and activities related, ancillary or complimentary thereto.

                  4.02 Fundamental Changes; Acquisitions. (a) Holdings will not,
and will not permit any of its Material  Subsidiaries  to, wind up, liquidate or
dissolve its affairs,  or enter into any transaction of merger or consolidation,
or sell or otherwise  dispose of all or  substantially  all of its assets to any
other Person,  provided  that (x) Holdings may merge with another  Person if (i)
Holdings is the  corporation  surviving such merger and (ii)  immediately  after
giving effect to such merger, no Default or Event of Default shall have occurred
and is  continuing;  (y)  Subsidiaries  of Holdings  may merge with one another,
provided that Holdings' ownership percentage of the surviving entity is at least
equal to Holdings'  ownership  percentage of the Subsidiary party to such merger
in which  Holdings owns the greater  percentage  equity  interest  prior to such
merger; and (z) the Transaction shall be permitted.

                  (b)  Holdings  will  not,  and  will  not  permit  any  of its
Subsidiaries to, purchase,  lease or otherwise  acquire (in one transaction or a
series of related transactions) all or any part of the property or assets of any
Person  (excluding any purchases,  leases or other  acquisitions  of property or
assets in, and for use in, the  ordinary  course of business) or agree to do any
of the  foregoing  at any  future  time,  except  that  the  following  shall be
permitted:

                 (i)     The  investments,  acquisitions  and  transfers  or
dispositions  of  property  permitted pursuant to Section 4.05;

                (ii)  Any  Regulated   Insurance  Company  may  enter  into  any
         Insurance Contract,  Reinsurance Agreement or Retrocession Agreement in
         the  ordinary   course  of  business  in  accordance  with  its  normal
         underwriting,  indemnity  and  retention  policies,  provided  that  no
         Regulated Insurance Company shall enter into any Financial  Reinsurance
         Agreements  unless  the  Indebtedness   arising  under  such  Financial
         Reinsurance Agreements is permitted under Section 4.04(i); and

               (iii) so long as no Default or Event of  Default  then  exists or
         would  result  therefrom,  Holdings  and its  Subsidiaries  may acquire
         assets  or the  capital  stock of any  Person  (any  such  acquisitions
         permitted by this clause (iii), a "Permitted  Acquisition"),  provided,
         that (A) such Person (or the assets so acquired) was, immediately prior
         to such  acquisition,  engaged (or used)  primarily  in the  businesses
         permitted  pursuant to Section 4.01, (B) each such acquisition shall be
         for an amount  not  greater  than the fair  market  value  thereof  (as
         determined  in good faith by the Board of Directors of  Holdings),  (C)
         the aggregate amount (both cash and non-cash,  including  capital stock
         of Holdings)  expended by Holdings and its  Subsidiaries  for Permitted
         Acquisitions  after the  Restatement  Effective  Date  shall not exceed
         $400,000,000,   (D)  on  a  pro  forma  basis  determined  as  if  such
         acquisition  had been  consummated on the date occurring  twelve months
         prior to the last day of the most  recently  ended  fiscal  quarter  of
         Holdings,  Holdings and its Subsidiaries  would have been in compliance
         with Sections 4.12 through 4.16 of this Holdings Guaranty as of, or for
         the relevant period ended on, the last day of such fiscal quarter,  and
         (E) on a pro forma basis  determined  as if such  acquisition  had been
         consummated, the covenants contained in Sections 4.12 through 4.16 will
         continue to be met for the  twelve-month  period following the last day
         of the fiscal quarter ended after the date of the  consummation of such
         acquisition.

                                      -20-
<PAGE>

                  4.03 Liens.  Holdings will not, and will not permit any of its
Subsidiaries to, create,  incur, assume or suffer to exist any Lien upon or with
respect to any  property  or assets of any kind (real or  personal,  tangible or
intangible)  of  Holdings  or any of  its  Subsidiaries  whether  now  owned  or
hereafter  acquired,  or  sell  any  such  property  or  assets  subject  to  an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets  (including  sales of accounts  receivable  or notes with  recourse to
Holdings or any of its  Subsidiaries) or assign any right to receive income,  or
file or permit the filing of any financing  statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute relating to
any such property, except:

                  (a) Liens for taxes and other assessments not yet due or being
         contested  in good  faith  and by  appropriate  proceedings  for  which
         adequate  reserves  (in the good faith  judgment of the  management  of
         Holdings) have been established;

                  (b) Liens in  respect  of  property  or assets  imposed by law
         which  were  incurred  in the  ordinary  course  of  business,  such as
         carriers',  warehousemen's and mechanics' Liens and other similar Liens
         arising in the ordinary course of business, and (x) which do not in the
         aggregate  materially detract from the value of such property or assets
         or  materially  impair the use thereof in the operation of the business
         of Holdings or any of its Subsidiaries or (y) which are being contested
         in good faith by appropriate  proceedings,  which  proceedings have the
         effect of  preventing  the  forfeiture or sale of the property or asset
         subject to such Lien;

                  (c) Cash  collateral  requirements  in respect of outstanding
         Letters of Credit pursuant to the Credit Agreement and the other Credit
         Documents;

                  (d) Liens in existence on the Restatement Effective Date which
         are  listed,  and  the  property  subject  thereto  on the  Restatement
         Effective Date described,  in Annex VI, together with any extensions or
         renewals  thereof  so  long  as  the  obligations  secured  and  assets
         encumbered  by such Liens are not  increased  in  connection  with such
         extension  or  renewal  by more  than  $5,000,000  (provided  that  the
         securities subject to any such Lien may be replaced by other securities
         of no greater principal amount);

                  (e) Liens arising from judgments,  decrees or attachments in
         circumstances  not constituting an Event of Default under Section 9.08
         of the Credit Agreement;

                  (f) Liens (other than any Lien  imposed by ERISA)  incurred or
         deposits  made in the ordinary  course of business in  connection  with
         workers' compensation, unemployment insurance and other types of social
         security,   or  to  secure  the   performance  of  tenders,   statutory
         obligations,   surety  and  appeal  bonds,  bids,  leases,   government
         contracts,   performance   and   return-of-money   bonds,   Reinsurance
         Agreements,  Retrocession  Agreements  and  other  similar  obligations
         incurred in the ordinary  course of business  (exclusive of obligations
         in respect of the payment for borrowed money);

                                      -21-
<PAGE>

                  (g) Leases or subleases  granted to others not  interfering in
         any  material  respect  with the  business  of  Holdings  or any of its
         Subsidiaries  and any interest or title of a lessor under any lease not
         in violation of this Holdings Guaranty;

                  (h) Easements,  rights-of-way,  restrictions, minor defects or
         irregularities  in title and other similar charges or encumbrances  not
         interfering  in any material  respect with the ordinary  conduct of the
         business of Holdings or any of its Subsidiaries;

                  (i) Liens arising  from  UCC  financing  statements  regarding
         leases not in violation of this Holdings Guaranty;

                  (j) Liens on pledges or deposits of cash or securities made by
         any  Regulated  Insurance  Company  as  a  condition  to  obtaining  or
         maintaining  any  licenses  issued  to it by any  Applicable  Insurance
         Regulatory Authority;

                  (k)  Liens  arising  pursuant  to  purchase  money  mortgages,
         Capital Leases or security interests securing Indebtedness representing
         the purchase  price (or financing of the purchase  price within 90 days
         after the respective purchase) of assets acquired after the Restatement
         Effective  Date,  provided  that (i) any such Liens  attach only to the
         assets so  purchased,  (ii) the  Indebtedness  secured by any such Lien
         does not exceed  100%,  nor is less than 80%, of the lesser of the fair
         market value or the purchase price of the property  being  purchased at
         the  time  of  the  incurrence  of  such  Indebtedness  and  (iii)  the
         Indebtedness  secured  thereby is permitted to be incurred  pursuant to
         Section 4.04(b);

                  (l)  Liens on  property  or  assets  acquired  pursuant  to an
         acquisition,  or on property or assets of a  Subsidiary  of Holdings in
         existence  at the time  such  Subsidiary  is  acquired  pursuant  to an
         acquisition, provided that (i) any Indebtedness that is secured by such
         Liens is permitted to exist under  Section  4.04(f) and (ii) such Liens
         are not incurred in connection with or in contemplation or anticipation
         of such acquisition and do not attach to any other asset of Holdings or
         any of its Subsidiaries; and

                  (m) Liens  consisting of customary  set-off rights or bankers'
         liens on amounts on deposit and securing  reimbursement  obligations in
         respect of letters of credit  issued for the account of Holdings or any
         of its  Subsidiaries,  whether arising by contract or operation of law,
         to the extent incurred in the ordinary course of business.

                  4.04 Indebtedness.  Holdings will not, and will not permit any
of its Subsidiaries to, contract,  create,  incur, assume or suffer to exist any
Indebtedness, except:

                  (a)    Indebtedness incurred pursuant to the Credit  Agreement
         and the other Credit Documents;

                  (b)    Capitalized  Lease  Obligations  and  Indebtedness  of
         Holdings  and  its  Subsidiaries incurred pursuant to purchase money
         Liens permitted under Section 4.03(k);

                                      -22-
<PAGE>

                  (c)  Indebtedness  in existence on the  Restatement  Effective
         Date which is listed in Annex V,  together with  extension,  renewal or
         refinancing  thereof  so  long  as the  principal  amount  of any  such
         Indebtedness  is not  increased  as a  result  of any  such  extension,
         renewal or refinancing;

                  (d)  Obligations  of  any  Regulated  Insurance  Company  with
         respect  to (i)  letters  of  credit  securing  obligations  (A)  under
         Reinsurance  Agreements and (B) required by Lloyd's entered into in the
         ordinary  course of business of any such Regulated  Insurance  Company,
         (ii)  letters of credit  issued in lieu of  deposits  to satisfy  Legal
         Requirements  or (iii) letters of credit or surety bonds issued in lieu
         of  depositing  securities  with any  Applicable  Insurance  Regulatory
         Authority to satisfy regulatory requirements; in any case to the extent
         such  letters  of credit  are not drawn  upon or, if and to the  extent
         drawn upon,  such drawing is reimbursed no later than 10 days following
         receipt by  Holdings  or such  Subsidiary  of notice of payment on such
         letter of credit;

                  (e)  Indebtedness  under  Interest  Rate  Agreements  or Other
         Hedging  Agreements  entered  into in  respect  of the  Obligations  or
         otherwise  in the  conduct  of its  business  and not  for  speculative
         purposes;

                  (f)  Indebtedness of Holdings or a Wholly-Owned  Subsidiary of
         Holdings acquired  pursuant to an acquisition (or Indebtedness  assumed
         at the  time of a  permitted  acquisition  of an  asset  securing  such
         Indebtedness),  and any refinancing of such Indebtedness so long as the
         principal  amount  thereof  is not  increased,  provided  that (i) such
         Indebtedness was not incurred in connection with or in contemplation of
         such   acquisition,   (ii)  such   Indebtedness   does  not  constitute
         Indebtedness  for borrowed money,  it being  understood and agreed that
         Capitalized Lease Obligations and purchase money Indebtedness shall not
         constitute  Indebtedness for borrowed money for purposes of this clause
         (i), and (iii) at the time of such acquisition,  such Indebtedness does
         not exceed 10% of the total  value of the assets of the  Subsidiary  so
         acquired, or of the assets so acquired, as the case may be;

                  (g)  Indebtedness constituting  a loan  from  Holdings or any
         Wholly-Owned  Subsidiary  to Holdings or any Wholly-Owned Subsidiary;

                  (h)  Indebtedness  consisting  of senior  notes  issued by the
         Borrower in an  aggregate  outstanding  principal  amount not to exceed
         $200,000,000,  so long as the maturity date of any such senior notes is
         no earlier than December 31, 2005; and

                  (i)  Other  Indebtedness of   Holdings  and  its  Subsidiaries
         in an aggregate outstanding principal amount not  to exceed $50,000,000
         at any time.

                  4.05 Advances,  Investments and Loans.  Holdings will not, and
will not  permit  any of its  Subsidiaries  to,  lend  money or  credit  or make
advances  to any  Person,  or  purchase  or acquire  any stock,  obligations  or
securities  of, or any other interest in, or make any capital  contribution  to,
any Person, except:

                                      -23-
<PAGE>

                  (a)      The Transaction shall be permitted;

                  (b) Holdings and its  Subsidiaries may make investments (i) in
         accordance with Holdings' and its Subsidiaries'  investment  guidelines
         as in effect on the  Restatement  Effective Date (in the form delivered
         to the  Banks  on or prior to such  date)  or (ii) in  accordance  with
         modified  investment  guidelines  from  time  to  time  so long as such
         modified guidelines are not materially less restrictive on Holdings and
         its Subsidiaries than those referred to in clause (i) above;

                  (c)  Holdings  and  its  Subsidiaries  may  acquire  and  hold
         receivables  owing  to them in the  ordinary  course  of  business  and
         payable or dischargeable in accordance with customary trade terms;

                  (d) Loans  and  advances  to  employees  for  business-related
         travel expenses,  moving expenses and other similar  expenses,  in each
         case incurred in the ordinary course of business;

                  (e) The  transactions  described  in  Section   4.02  shall be
         permitted;

                  (f) Any Regulated  Insurance  Company may make  investments in
         companies  which are  Wholly-Owned  Subsidiaries of such Person (or any
         other  Subsidiary of such Person created or acquired in accordance with
         Section 4.09) but only to the extent that any such  investment,  at the
         time  made,  does  not  reduce  Statutory  Surplus  of  such  Regulated
         Insurance Company;

                  (g)   Investments pursuant to commitments in effect as of the
         Restatement Effective Date and  described (as to matter and amount) on
         Annex VII;

                  (h)   Investments   acquired   by   Holdings  or  any  of  its
         Subsidiaries  (x) in exchange for any other investment held by Holdings
         or such  Subsidiary in connection  with or as a result of a bankruptcy,
         workout, reorganization or recapitalization of the issuer of such other
         investment,  (y) as a result of a foreclosure by Holdings or any of its
         Subsidiaries  with respect to any secured  investment or other transfer
         of title with  respect to any secured  investment  in default or (z) in
         settlement  of  delinquent  obligations  of, and other  disputes  with,
         customers and suppliers arising in the ordinary course of business;

                  (i)  Investments existing on  the  Restatement Effective  Date
         which are identified on Annex VII;

                  (j) Holdings may acquire and hold  obligations  of one or more
         officers or employees  of Holdings or its  Subsidiaries  in  connection
         with such  officers'  or  employees'  acquisition  of shares of capital
         stock of  Holdings or options to  purchase  shares of capital  stock of
         Holdings  so  long  as no  cash  is  paid  by  Holdings  or  any of its
         Subsidiaries in connection with the acquisition of any such obligations
         and such obligations;

                  (k) Investments consisting of intercompany loans to the extent
         permitted  under Section 4.04(g);

                                      -24-
<PAGE>

                  (l) Investments by Holdings in  Wholly-Owned Subsidiaries, and
         investments  by  Wholly-Owned  Subsidiaries  in  other   Wholly-Owned
         Subsidiaries;

                  (m) Investments consisting of prepaid expenses;

                  (n) Investments  consisting of non-cash consideration received
         in connection  with a sale of assets  permitted  under Section 4.02 (it
         being understood and agreed that the consideration  received in respect
         of any such asset sale shall be at least 75% cash); and

                  (o)  additional   investments   (including   such   additional
         investments  identified  pursuant to this Section 4.05(o) in Annex VII)
         in an aggregate  outstanding amount not to exceed, at the time any such
         investment  is made,  an amount equal to 5% of the  invested  assets of
         Holdings and its Subsidiaries at such time.

                  4.06  Dividends,  etc.  (a)  Holdings  will not,  and will not
permit any of its  Subsidiaries  to,  declare or pay any  dividends  (other than
dividends  payable  solely in common stock of such Person) or return any capital
to, its  stockholders  or authorize or make any other  distribution,  payment or
delivery of property or cash to its  stockholders  as such,  or redeem,  retire,
purchase or otherwise acquire, directly or indirectly, for a consideration,  any
shares of any class of its capital  stock now or hereafter  outstanding  (or any
warrants for or options or stock  appreciation  rights in respect of any of such
shares), or set aside any funds for any of the foregoing  purposes,  or purchase
or otherwise  acquire or permit any of its Subsidiaries to purchase or otherwise
acquire  for  consideration  any  shares  of any class of the  capital  stock of
Holdings  or any of its  Subsidiaries,  as the  case  may be,  now or  hereafter
outstanding (or any options or warrants or stock  appreciation  rights issued by
such  Person  with  respect  to  its  capital   stock)  (all  of  the  foregoing
"Dividends"), except that:

                 (i)     Any  Subsidiary  of  Holdings  may pay  cash  dividends
         to its  parent if such parent is Holdings or a Wholly-Owned  Subsidiary
         of Holdings;

                (ii)  Holdings may redeem or purchase  its capital  stock at any
         time so long as no Default  or Event of Default  exists at such time or
         would exist  immediately  after  giving  effect to such  redemption  or
         purchase;

                (iii)  Holdings may pay cash  dividends on its capital  stock in
         any fiscal  quarter,  provided that the  aggregate  amount of dividends
         paid in any  fiscal  quarter  shall not  exceed an amount  equal to the
         greater of (A) $0.26  multiplied  by the number of shares of  Holdings'
         common stock  outstanding  as of the record date  declared by Holdings'
         Board of Directors for such fiscal quarter; provided that to the extent
         there is more than one record date for such fiscal  quarter,  the first
         record date for such fiscal  quarter shall be used in  determining  the
         numbers of shares of such Holdings'  common stock  outstanding for such
         period  and (B) an  amount,  if  positive,  equal  to 50% of  Holdings'
         Consolidated   Net  Income  for  the  four  most   recently   completed
         consecutive  fiscal quarters of Holdings ending on the last day of such
         fiscal  quarter  (taken  as one  accounting  period)  divided  by four;
         provided  that no  dividends  may be  paid  pursuant  to  this  Section
         4.06(a)(iii)  if any Default or Event of Default  exists at the time of
         the payment of such cash  dividends  or would exist  immediately  after
         giving effect thereto;

                                      -25-

<PAGE>

                (iv) LaSalle Re Holdings or Holdings may pay regularly  accruing
         dividends on its LaSalle  Preferred  Stock in accordance with the terms
         thereof so long as no  Default or Event of Default  exists at such time
         or would exist  immediately  after giving effect to the payment of such
         dividend; and

                (v)LaSalle  Re Holdings or Holdings may pay  regularly  accruing
         dividends on its  preferred  stock issued  pursuant to the terms of the
         Cat E Put Securities in accordance with the terms thereof so long as no
         Default  or  Event  of  Default  exists  at such  time or  would  exist
         immediately after giving effect to the payment of such dividend.

                  (b)  Holdings  will  not,  and  will  not  permit  any  of its
Subsidiaries to, create or otherwise cause or suffer to exist any encumbrance or
restriction  which  prohibits  or  otherwise  restricts  (i) the  ability of any
Subsidiary  to (A)  pay  dividends  or  make  other  distributions  or  pay  any
Indebtedness  owed to Holdings or any of its  Subsidiaries,  as applicable,  (B)
make loans or  advances  to  Holdings  or any  Subsidiary,  as  applicable,  (C)
transfer  any of its  properties  or assets to  Holdings or any  Subsidiary,  as
applicable,  or (D) guarantee the Obligations or (ii) the ability of Holdings or
any Subsidiary of Holdings to create,  incur, assume or suffer to exist any Lien
upon its property or assets to secure the Obligations,  other than  prohibitions
or  restrictions  existing under or by reason of (I) this Holdings  Guaranty and
the other  Credit  Documents,  (II) the  Trenwick  Senior  Notes (III) and Legal
Requirements.

                  4.07 Transactions with Affiliates. Holdings will not, and will
not  permit  any  Subsidiary  to,  enter  into  any  transaction  or  series  of
transactions  with  any  Affiliate   (excluding  Holdings  or  any  Wholly-Owned
Subsidiary  of Holdings)  other than on terms and  conditions  substantially  as
favorable to Holdings or such  Subsidiary  as would be obtainable by Holdings or
such  Subsidiary  at the time in a comparable  arm's-length  transaction  with a
Person other than an Affiliate.

                  4.08  Issuance of Stock.  (a)  Holdings  will not  directly or
indirectly issue, sell, assign,  pledge, or otherwise encumber or dispose of any
shares of its capital stock or other equity  securities (or warrants,  rights or
options to acquire shares or other equity  securities),  except (i) the issuance
of common  stock (and  warrants,  options  and other  rights to  acquire  common
stock),  so long as no Event of Default  occurs under Section 9.09 of the Credit
Agreement,  (ii) the issuance of preferred stock, so long as (x) no part of such
preferred stock is mandatorily  redeemable (whether on a scheduled basis or as a
result of the  occurrence  of any event or  circumstance)  and (y) any dividends
associated  with such  preferred  stock are solely payable in kind and (iii) the
issuance  of  preferred  stock in  accordance  with  the  terms of the Cat E Put
Securities.

                  (b) Holdings will not permit any of its Subsidiaries  directly
or indirectly to issue, sell,  assign,  pledge, or otherwise encumber or dispose
of any shares of its capital  stock or other  equity  securities  (or  warrants,
rights  or  options  to  acquire  shares  or other  equity  securities)  of such
Subsidiary,  except (i) to Holdings or to a Wholly-Owned Subsidiary of Holdings,
and (ii) to qualify directors if required by applicable law.

                                      -26-
<PAGE>

                  4.09 Creation of  Subsidiaries.  Holdings  shall not create or
acquire any Subsidiary  other than (i) Regulated  Insurance  Companies which are
direct or indirect Wholly-Owned Subsidiaries of Holdings; and (ii) Non-Regulated
Companies which are not Subsidiaries of any Regulated Insurance Company, so long
as such new Subsidiary executes a counterpart of the Subsidiary Guaranty (to the
extent such Subsidiary is a Domestic Subsidiary and a Material  Subsidiary).  In
addition,  at the request of the Administrative  Agent, each new Subsidiary that
is required to execute any Credit  Document shall execute and deliver,  or cause
to be executed  and  delivered,  all other  relevant  documentation  of the type
described in Section 5 of the Credit Agreement as such new Subsidiary would have
had to deliver if such new  Subsidiary  were a Credit  Party on the  Restatement
Effective Date.

                  4.10  Partnership Agreements.  Holdings will not  enter  into
any  partnership  agreement  as a general partner.

                  4.11 Prepayments of Indebtedness, Modifications of Agreements,
etc.  Holdings will not, and will not permit any of its Subsidiaries to:

                  (a) make (or give any notice in respect thereof) any voluntary
         or optional  payment or prepayment or  redemption  or  acquisition  for
         value of (including,  without limitation, by way of depositing with the
         trustee with respect  thereto  money or  securities  before due for the
         purpose of payment  when due) or exchange of, any  Contingent  Interest
         Notes or Trust Preferred Notes; and/or

                  (b) amend or modify (or permit the  amendment or  modification
         of) any of the  terms or  provisions  of the  documents  or  agreements
         evidencing  or governing  the  Contingent  Interest  Notes or the Trust
         Preferred Notes.

                  4.12 Leverage Ratio. Holdings will not permit the ratio of (i)
Consolidated  Indebtedness  of Holdings to (ii)  Consolidated  Total  Capital of
Holdings at any time to be greater than 0.325:1.00.

                  4.13  Interest  Coverage  Ratio.  Holdings will not permit the
Interest  Coverage  Ratio for any Test Period  ending  during a period set forth
below to be less than the ratio set forth opposite such period below:

                             Period                                 Ratio
                             ------                                 -----
                Fiscal Year ending 12/31/00                       2.50:1.00
                Fiscal Year ending 12/31/01                       2.75:1.00
                Thereafter                                        3.00:1.00

                  4.14  Minimum  Risk Based  Capital.  (a)  Holdings  will not
permit the Risk Based Capital Ratio for Trenwick America Reinsurance Corporation
to be less than 325%.

                                      -27-
<PAGE>

                  (b) Holdings  will not permit the Risk Based Capital Ratio for
any  Regulated  Insurance  Company  which is a Domestic  Subsidiary  (other than
Trenwick America Reinsurance Corporation) to be less than 300%.

                  4.15  Minimum Combined Statutory Surplus.  Holdings  will  not
permit the Regulated Insurance Companies, collectively, on a Combined  basis, to
have Statutory Surplus at any time of less than $700,000,000.

                  4.16 Minimum  Consolidated  Tangible Net Worth.  Holdings will
not permit its  Consolidated  Tangible Net Worth at any time to be less than the
sum of (i) $560,000,000,  plus (ii) 50% of Consolidated Net Income (if positive)
from and after October 1, 2000 to the last day of the then most  recently  ended
fiscal quarter.

                  SECTION 5.  Miscellaneous.
                              -------------

                  5.01 Payment of Expenses,  etc.  Holdings hereby agrees to pay
all reasonable  out-of-pocket  costs and expenses of each Guaranteed Creditor in
connection  with  the  enforcement  of  this  Holdings  Guaranty,   and  of  the
Administrative  Agent  in  connection  with any  amendment,  waiver  or  consent
relating  hereto  (including,   without  limitation,  the  reasonable  fees  and
disbursements of counsel (including the allocated costs and expenses of in-house
counsel)  employed  by any of the  Guaranteed  Creditors  or the  Administrative
Agent, as the case may be).

                  5.02  Right  of  Setoff.  In  addition  to any  rights  now or
hereafter  granted  under  applicable  law  or  otherwise,  and  not  by  way of
limitation of any such rights,  upon the occurrence and  continuance of an Event
of Default,  each Guaranteed  Creditor is hereby  authorized at any time or from
time to time, without presentment,  demand,  protest or other notice of any kind
to  Holdings or to any other  Person,  any such notice  being  hereby  expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Guaranteed
Creditor  (including,  without  limitation,  by  branches  and  agencies of such
Guaranteed  Creditor  wherever  located)  to or for the credit or the account of
Holdings  against and on account of the  Obligations and liabilities of Holdings
to such Guaranteed Creditor or any other Guaranteed Creditor under this Holdings
Guaranty  or  under  any of  the  other  Credit  Documents,  including,  without
limitation,   all  interests  in  Obligations  of  Holdings  purchased  by  such
Guaranteed  Creditor  or any  other  Guaranteed  Creditor  pursuant  to  Section
13.06(b)  of the  Credit  Agreement,  and all  other  claims  of any  nature  or
description arising out of or connected with this Holdings Guaranty or any other
Credit Document,  irrespective of whether or not such Guaranteed  Creditor shall
have made any demand  hereunder and although said  Obligations,  liabilities  or
claims,  or any of them,  shall be  contingent  or  unmatured.  Each  Guaranteed
Creditor is hereby  designated the agent of all other  Guaranteed  Creditors for
purposes of effecting set off pursuant to this Section 5.02 and Holdings  hereby
grants to each Guaranteed  Creditor for such  Guaranteed  Creditor's own benefit
and as agent for all other Guaranteed  Creditors a continuing  security interest
in any and all deposits,  accounts or moneys of Holdings maintained from time to
time with such Guaranteed Creditor.

                  5.03 Notices.  Except as otherwise  expressly provided herein,
all notices and other communications  provided for hereunder shall be in writing
(including facsimile  communication) and mailed,  telecopied or delivered, if to
Holdings, at the address specified opposite its signature below; if to any Bank,
at its address specified for such Bank on Annex II to the Credit Agreement;  or,

                                      -28-
<PAGE>

at such other address as shall be designated by any party in a written notice to
the other parties hereto. All such notices and  communications  shall be mailed,
telecopied,  sent by overnight  courier or delivered by hand and shall be deemed
to have been  given on the date of  receipt if  delivered  by hand or  overnight
courier or sent by telecopy,  or the date that is five Business Days after being
deposited in the mail, postage prepaid,  in each case delivered,  sent or mailed
(properly  addressed)  to such  party as  provided  in this  Section  5.03 or in
accordance  with the last  unrevoked  notice from such party given in accordance
with  this  Section  5.03;  provided  that  notices  and  communications  to the
Administrative  Agent shall be  effective  when  received by the  Administrative
Agent.

                  5.04 Benefit of the Agreement. This Holdings Guaranty shall be
binding  upon  Holdings  and its  successors  and assigns and shall inure to the
benefit of the Guaranteed Creditors and their successors and assigns.

                  5.05 No Waiver;  Remedies  Cumulative.  No failure or delay on
the part of any Guaranteed  Creditor in exercising any right, power or privilege
hereunder  or under any other Credit  Document and no course of dealing  between
Holdings and any  Guaranteed  Creditor  shall operate as a waiver  thereof;  nor
shall any single or partial exercise of any right, power or privilege  hereunder
or under any other  Credit  Document  preclude  any  other or  further  exercise
thereof or the  exercise of any other  right,  power or  privilege  hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not  exclusive of any rights or remedies  which any  Guaranteed  Creditor  would
otherwise  have.  No notice to or demand on Holdings  in any case shall  entitle
such  Person to any other or  further  notice  or  demand  in  similar  or other
circumstances  or constitute a waiver of the rights of the Guaranteed  Creditors
to any other or further action in any circumstances without notice or demand.

                  5.06 Calculations. The financial statements to be furnished to
the Banks pursuant  hereto shall be made and prepared in accordance with GAAP or
SAP, as the case may be,  consistently  applied  throughout the periods involved
(except as set forth in the notes  thereto or as otherwise  disclosed in writing
by  Holdings  to the  Banks).  In  addition,  except as  otherwise  specifically
provided  herein,  all  computations  determining  compliance  with  Section  4,
including  definitions  used therein,  shall utilize  accounting  principles and
policies in effect from time to time;  provided that (i) if any such  accounting
principle  or  policy  (whether  GAAP or SAP or both)  shall  change  after  the
Restatement Effective Date, Holdings shall give reasonable notice thereof to the
Administrative  Agent and each of the Banks and if within 30 days following such
notice Holdings,  the Administrative  Agent or the Required Banks shall elect by
giving  written  notice of such  election  to the  other  parties  hereto,  such
computations  shall not give effect to such change unless and until the Holdings
Guaranty shall be amended  pursuant to Section 13.12 of the Credit  Agreement to
give effect to such change, and (ii) if at any time the computations determining
compliance  with Section 4 utilize  accounting  principles  different from those
utilized in the financial  statements then being furnished to the Banks pursuant
to  Section  3.01,   such   financial   statements   shall  be   accompanied  by
reconciliation work-sheets.

                                      -29-
<PAGE>

                  5.07 GOVERNING LAW;  SUBMISSION TO  JURISDICTION;  VENUE.  (a)
THIS HOLDINGS  GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES  HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS HOLDINGS  GUARANTY
MAY BE BROUGHT  IN THE  COURTS OF THE STATE OF NEW YORK OR OF THE UNITED  STATES
FOR THE SOUTHERN  DISTRICT OF NEW YORK,  AND, BY EXECUTION  AND DELIVERY OF THIS
HOLDINGS GUARANTY, HOLDINGS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY,  GENERALLY AND UNCONDITIONALLY,  THE NON-EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS.  HOLDINGS HEREBY FURTHER  IRREVOCABLY  WAIVES ANY CLAIM
THAT ANY SUCH COURTS LACK JURISDICTION OVER HOLDINGS, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS HOLDINGS  GUARANTY
BROUGHT IN ANY OF THE AFORESAID COURTS,  THAT ANY SUCH COURT LACKS  JURISDICTION
OVER HOLDINGS.  HOLDINGS FURTHER IRREVOCABLY  CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED  COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,  POSTAGE PREPAID,  TO
HOLDINGS AT ITS ADDRESS FOR NOTICES  PURSUANT TO SECTION  5.03,  SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.  HOLDINGS HEREBY IRREVOCABLY WAIVES
ANY  OBJECTION  TO SUCH  SERVICE OF PROCESS AND FURTHER  IRREVOCABLY  WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING  HEREUNDER THAT SERVICE
OF PROCESS WAS IN ANY WAY INVALID OR  INEFFECTIVE.  NOTHING  HEREIN SHALL AFFECT
THE RIGHT OF THE ADMINISTRATIVE  AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER
MANNER  PERMITTED BY LAW OR TO COMMENCE LEGAL  PROCEEDINGS OR OTHERWISE  PROCEED
AGAINST HOLDINGS IN ANY OTHER JURISDICTION.

                  (b) HOLDINGS HEREBY  IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR  PROCEEDINGS  ARISING OUT OF OR IN  CONNECTION  WITH THIS  HOLDINGS  GUARANTY
BROUGHT  IN THE  COURTS  REFERRED  TO IN CLAUSE  (A) ABOVE  AND  HEREBY  FURTHER
IRREVOCABLY  WAIVES  AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH  ACTION OR  PROCEEDING  BROUGHT  IN ANY SUCH  COURT HAS BEEN  BROUGHT IN AN
INCONVENIENT FORUM.

                  5.08  Counterparts.  This Holdings Guaranty may be executed in
any number of  counterparts  and by the  different  parties  hereto on  separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts  executed by all the parties  hereto shall be lodged with  Holdings
and the Administrative Agent.

                  5.09  Headings  Descriptive.   The  headings  of  the  several
sections and subsections of this Holdings  Guaranty are inserted for convenience
only  and  shall  not in any way  affect  the  meaning  or  construction  of any
provision of this Holdings Guaranty.

                                      -30-
<PAGE>

                  5.10 Amendment or Waiver.  Neither this Holdings  Guaranty nor
any provision  hereof may be changed,  waived,  discharged or terminated  except
with the written  consent of Holdings and the  Required  Banks (or to the extent
required by Section 13.12 of the Credit  Agreement,  with the written consent of
each Bank).

                  5.11  Confidentiality.  The Administrative Agent and each Bank
shall hold all non-public  information  furnished by or on behalf of Holdings in
connection with such Bank's  evaluation of whether to become a Bank hereunder or
obtained  by such Bank  pursuant  to the  requirements  of the Credit  Documents
("Confidential  Information")  in accordance  with its  customary  procedure for
handling confidential information of this nature and in accordance with safe and
sound banking or lending practices; provided that any Bank and/or its affiliates
may  disclose  any  such  Confidential   Information  (a)  to  their  respective
affiliates,  directors,  officers,  employees,  auditors or counsel for purposes
related to the  Credit  Documents  and the  transactions  contemplated  thereby,
provided that the Bank disclosing such confidential information pursuant to this
clause  (a)  shall  remain  liable  for  any  non-permitted  disclosure  of such
information  by any such  employee,  director,  agent,  attorney,  accountant or
professional  advisor, (b) as has become generally available to the public other
than as a result of  disclosure  in violation of this Section  5.11,  (c) as has
become available to such Bank or any such affiliate on a non-confidential  basis
from a source other than Holdings and their respective affiliates, provided that
the source is not known by such Bank to be  prohibited  from  transmitting  such
information to such Bank by a contractual, legal or fiduciary obligation, (d) as
may be required or appropriate in any report,  statement or testimony  submitted
to any municipal,  state or Federal  regulatory  body having or claiming to have
jurisdiction  over such Bank  and/or its  affiliates,  (e) as may be required or
appropriate  in respect to any  summons or subpoena  or in  connection  with any
litigation or other judicial  process (it being  understood  that, to the extent
reasonably  practicable and legally permitted under the circumstances,  Holdings
shall  be  given  prior  notice  and an  opportunity  to  contest  any  proposed
disclosure  pursuant to this clause  (e)),  (f) in order to comply with any law,
order,  regulation or ruling applicable to such Bank and/or its affiliates,  and
(g) to any permitted  prospective or actual  syndicate  member or participant in
the  Loans,  provided  that  such  prospective  or  actual  syndicate  member or
participant  agrees  with  the  respective  assigning  Bank to be  bound  by the
provisions  of this  Section  5.11.  The  provisions  of this Section 5.11 shall
survive any termination of this Holdings Guaranty.

                  5.12  WAIVER  OF  JURY  TRIAL.  EACH  OF THE  PARTIES  TO THIS
HOLDINGS GUARANTY HEREBY  IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION,  PROCEEDING OR COUNTERCLAIM  ARISING OUT OF OR RELATING TO THIS HOLDINGS
GUARANTY,  THE  CREDIT  DOCUMENTS  OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY OR
THEREBY.

                  5.13 Judgment Currency.  (a) Holdings'  Obligations  hereunder
and under the other Credit Documents to make payments in the applicable Approved
Currency (the "Obligation Currency") shall not be discharged or satisfied by any
tender or recovery  pursuant to any judgment  expressed in or converted into any
currency  other than the  Obligation  Currency,  except to the extent  that such
tender or recovery results in the effective receipt by the Administrative  Agent
or the respective Bank of the full amount of the Obligation  Currency  expressed
to be payable  to the  Administrative  Agent or such Bank  under  this  Holdings
Guaranty or the other  Credit  Documents.  If, for the purpose of  obtaining  or
enforcing  judgment  against  Holdings in any court or in any  jurisdiction,  it
becomes necessary to convert into or from a Judgment Currency,  an amount due in
the Obligation  Currency,  the conversion shall be made at the Relevant Currency
Equivalent,  and,  in the case of other  currencies,  the rate of  exchange  (as
quoted by the Administrative Agent or if the Administrative Agent does not quote
a rate  of  exchange  on  such  currency,  by a known  dealer  in such  currency
designated  by the  Administrative  Agent)  determined,  in each case, as of the
Judgment Currency Conversion Date.

                                      -31-
<PAGE>

                  (b) If there is a change  in the rate of  exchange  prevailing
between the Judgment Currency  Conversion Date and the date of actual payment of
the amount due,  Holdings jointly and severally  covenants and agrees to pay, or
cause to be paid, such additional amounts, if any (but in any event not a lesser
amount)  as may be  necessary  to ensure  that the amount  paid in the  Judgment
Currency,  when  converted  at the rate of  exchange  prevailing  on the date of
payment,  will produce the amount of the  Obligation  Currency  which could have
been purchased with the amount of Judgment  Currency  stipulated in the judgment
or judicial  award at the rate of exchange  prevailing on the Judgment  Currency
Conversion Date.

                  (c)  For  purposes  of  determining   the  Relevant   Currency
Equivalent  or any other rate of exchange for this  Section,  such amounts shall
include any premium and costs  payable in  connection  with the  purchase of the
Obligation Currency.

                  5.14 Availability of Documents.  Holdings acknowledges that an
executed (or  conformed)  copy of each of the Credit  Documents,  Interest  Rate
Agreements and Other Hedging Agreements has been made available to its principal
executive officers and such officers are familiar with the contents thereof.

                  IN WITNESS  WHEREOF,  each of the parties  hereto has caused a
counterpart  of this  Holdings  Guaranty to be duly executed and delivered as of
the date first above written.

                                                   TRENWICK GROUP LTD.

                                                   By: /s/ James F. Billet, Jr.
                                                       -------------------------
                                                   Title: Chairman, President
                                                          and Chief Executive
                                                          Officer

Accepted and Agreed to:

THE CHASE MANHATTAN BANK,
as Administrative Agent

By: /s/ Donald Rands
   ------------------------------------------
     Title: Vice President

                                      -32-

<PAGE>

                                                                    SCHEDULE I

                                   DEFINITIONS

                  "Account  Party" shall have the meaning  provided in the first
paragraph of the Credit Agreement.

                  "Administrative  Agent" shall have the meaning provided in the
first  paragraph of the Credit  Agreement and shall include any successor to the
Administrative   Agent  appointed  pursuant  to  Section  11.09  of  the  Credit
Agreement.

                  "Affected Eurodollar Loans" shall have the meaning provided in
Section 4.02(ii)(b) of the Credit Agreement.

                  "Affiliate" shall mean, with respect to any Person,  any other
Person  directly or  indirectly  controlling  (including  but not limited to all
directors  and  officers  of such  Person),  controlled  by, or under  direct or
indirect common control with, such Person. A Person shall be deemed to control a
corporation if such Person possesses,  directly or indirectly,  the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such  corporation,  whether  through the ownership of
voting securities, by contract or otherwise.

                  "Alternate   Currency"  shall  mean  each  Primary   Alternate
Currency and each Other Alternate Currency.

                  "Alternate Currency Letter of Credit" shall mean the Letter of
Credit to the extent denominated in an Alternate Currency.

                  "Alternate  Currency  Loan"  shall  mean  any  Revolving  Loan
denominated in an Alternate Currency.

                  "Annual  Statement" shall mean the annual financial  statement
required to be filed by any  Regulated  Insurance  Company  with the  Applicable
Insurance Regulatory Authority.

                  "Applicable  Commitment  Fee  Percentage"  shall mean, for any
day,  the  percentage  set forth below  opposite the  Applicable  Period then in
effect:

                  Applicable Period         Applicable Commitment Fee Percentage

                  Category A Period                      0.200%
                  Category B Period                      0.250%
                  Category C Period                      0.300%
                  Category D Period                      0.375%
                  Category E Period                      0.500%

<PAGE>

                  "Applicable  Credit  Rating" shall mean (i) the Moody's Credit
Rating and the S&P Credit Rating, if the same; (ii) if the Moody's Credit Rating
and the S&P  Credit  Rating  differ  by one  rating  level,  the  higher of such
Ratings; and (iii) if the Moody's Credit Rating and the S&P Credit Rating differ
by two or more rating levels,  the Applicable  Credit Rating shall be one rating
level  below the higher of such  Ratings.  If only one Rating  Agency  rates the
senior  unsecured  debt of the  Borrower,  such rating  shall be the  Applicable
Credit Rating unless the other Rating Agency ceased rating such senior unsecured
debt at the request of the Borrower,  in which case the Applicable Credit Rating
shall be deemed to be below BBB-/Baa3.

                  "Applicable  Insurance Regulatory  Authority" shall mean, when
used  with  respect  to any  Regulated  Insurance  Company,  (x)  the  insurance
department or similar  administrative  authority or agency located in each state
or other  jurisdiction  (foreign or domestic) in which such Regulated  Insurance
Company is domiciled, (y) the insurance department,  authority or agency in each
state or other  jurisdiction  (foreign  or  domestic)  in which  such  Regulated
Insurance Company is licensed, to the extent it has regulatory jurisdiction over
such  Regulated  Insurance  Company,  and (z) any Federal or national  insurance
regulatory  department,  authority  or agency  that may be created  and that has
regulatory jurisdiction over such Regulated Insurance Company.

                  "Applicable  Lloyd's  Coming  in Line  Date"  shall  mean  the
Lloyd's Coming in Line Date occurring in November, 2000; provided that if in any
year in which the Applicable  Lloyd's Coming in Line Date is scheduled to occur,
the expiration  date of any Letter of Credit is extended in accordance  with the
terms thereof as provided in Section 2.05(a) of the Credit  Agreement,  then the
Applicable  Lloyd's  Coming in Line Date shall be extended to the Lloyd's Coming
in Line Date occurring in the immediately succeeding year (e.g., if in 2000, the
expiration  date of any Letter of Credit is extended  from  December 31, 2004 to
December 31, 2005 as provided in Section  2.05(a) of the Credit  Agreement,  the
Applicable Lloyd's Coming in Line Date shall be extended from the Lloyd's Coming
in Line Date  occurring  in  November,  2000 to the Lloyd's  Coming in Line Date
occurring in November, 2001).

                  "Applicable  Margin"  shall  mean,  for any day,  the rate per
annum set forth below opposite the Applicable Period then in effect:

                                                     Applicable Margin
                  Applicable Period         Eurodollar Loans     Base Rate Loans

                  Category A Period             1.10%                  0.00%
                  Category B Period             1.30%                  0.05%
                  Category C Period             1.50%                  0.25%
                  Category D Period             1.75%                  0.50%
                  Category E Period             2.00%                  0.75%

                  "Applicable  Period" shall mean,  at any time,  the period set
forth below then in effect:

<PAGE>

                  Applicable Period                Criteria
                  -----------------                --------
                  Category A Period       The Applicable Credit Rating is
                                          A-/A3 or above.
                  Category B Period       The Applicable Credit Rating is
                                          BBB+/Baa1.
                  Category C Period       The Applicable Credit Rating is
                                          BBB/Baa2.
                  Category D Period       The Applicable Credit Rating is
                                          BBB-/Baa3.
                  Category E Period       None of a Category A Period,  a
                                          Category B Period,  a Category C
                                          Period  nor  a  Category  D Period
                                          is in effect at such time.

Notwithstanding  anything to the  contrary set forth  above,  if neither  Rating
Agency rates the  unsecured  senior debt of the  Borrower,  then the  Applicable
Period shall be a Category E Period.

                  "Approved  Bank"  shall  have  the  meaning  provided  in  the
definition of "Cash Equivalents."

                  "Approved  Company"  shall have the  meaning  provided  in the
definition of "Cash Equivalents."

                  "Approved Credit  Institution" shall mean a credit institution
within the meaning of the First Council  Directive on the co-ordination of laws,
regulations and administrative  provisions relating to the taking up and pursuit
of the business of credit institutions (No.  77/780/EEC) which has been approved
by the Council of Lloyd's for the purpose of providing guarantees and issuing or
confirming letters of credit comprising a Member's Funds at Lloyd's.

                  "Approved  Currency" shall mean each of Dollars,  each Primary
Alternate Currency and each Other Alternate Currency.

                  "Asset   Sale"   shall  mean  any  sale,   transfer  or  other
disposition  effected on or after the Restatement  Effective Date by Holdings or
any of its  Subsidiaries  of (i) any  capital  stock or equity  securities  of a
Subsidiary of Holdings or (ii) any other asset, in each case to any Person other
than  Holdings or any of its  Wholly-Owned  Subsidiaries  (other than (a) sales,
transfers or other  dispositions in the ordinary course of business,  (b) sales,
transfers or other  dispositions of investments  made or maintained  pursuant to
Section 4.05(b), (g), (i) and (o) of the Holdings Guaranty, and (c) other sales,
transfers and dispositions  the Net Available  Proceeds from which do not exceed
$1,000,000).

                  "Assignment and Assumption  Agreement"  shall have the meaning
provided in Section 13.04(b) of the Credit Agreement.

<PAGE>

                  "Associated  Cost  Rate"  shall  mean,  with  respect  to each
Interest Period for Pounds Sterling-denominated Loans, the costs (expressed as a
percentage  rounded up to the nearest four decimal  places and as  determined on
the first day of such Interest Period and any three month anniversary thereof by
the Administrative  Agent) of compliance with then existing  requirements of the
Bank of England in respect of Loans denominated in Pounds Sterling.

                  "Authorized  Control  Level"  shall mean  "Authorized  Control
Level" as defined by the NAIC from time to time and as applied in the context of
the  Risk  Based  Capital  Guidelines  promulgated  by the  NAIC  (or  any  term
substituted therefor by the NAIC).

                  "Authorized  Officer" shall mean, as to any Person, any senior
officer of such  Person  designated  as such in  writing by such  Person to, and
found acceptable by, the Administrative Agent.

                  "Bank" shall have the meaning  provided in the first paragraph
of the Credit Agreement.

                  "Bank  Default" shall mean (i) the refusal (which has not been
retracted)  of a Bank to make  available  its  portion of any  Borrowing  or any
Letter of Credit  drawing  or (ii) a Bank  having  notified  the  Administrative
Agent,  Holdings,  the Borrower and/or the Account Party that it does not intend
to comply with its  obligations  under the Credit  Agreement with respect to its
Revolving Loan Commitment or L/C Commitment, in the case of either clause (i) or
(ii) above,  as a result of the  appointment of a receiver or  conservator  with
respect to such Bank at the  direction  or request of any  regulatory  agency or
authority.

                  "Bankruptcy  Code" shall have the meaning  provided in Section
9.05 of the Credit Agreement.

                  "Base  Rate" at any time shall mean the higher of (x) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate as in effect at
such time and (y) the Prime Lending Rate as in effect at such time.

                  "Base Rate Loan" shall mean each Loan bearing  interest at the
rates provided in Section 1.08(a) of the Credit Agreement.

                  "Benchmark  Statement"  shall mean,  as of any date, an annual
financial  statement of the  Regulated  Insurance  Companies  which are Domestic
Subsidiaries as would be prepared as of such date utilizing the identical format
utilized by Trenwick America  Reinsurance  Corporation in preparing its December
31, 1999 Annual  Statement  filed with the Insurance  Department of the State of
Connecticut,  with each page,  line item and column of a Benchmark  Statement to
contain the same type of information,  computed in the same manner, as contained
in the identically numbered page, line item and column of such Annual Statement.

                  "Borrower"  shall  have  the  meaning  provided  in the  first
paragraph of the Credit Agreement.

<PAGE>
                  "Borrowing"  shall mean the  incurrence by the Borrower of one
Type of Loan (A)  denominated  in Dollars that are Base Rate Loans on a pro rata
basis  from all of the  Banks  and (B) of a single  Approved  Currency  that are
Eurodollar  Loans on a pro rata  basis from all of the Banks on a given date (or
resulting from  conversions  on a given date),  having in the case of Eurodollar
Loans the same Interest Period,  provided that Base Rate Loans incurred pursuant
to Section  1.10(b)  of the Credit  Agreement  shall be  considered  part of any
related Borrowing of Eurodollar Loans.

                  "Business  Combination   Agreement"  shall  have  the  meaning
provided in the recitals to the Credit Agreement.

                  "Business  Day" shall mean (i) for all purposes  other than as
covered by clause (ii) below, any day,  excluding  Saturday,  Sunday and any day
which shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other  governmental  actions to close, and
(ii) with respect to all notices and  determinations  in  connection  with,  and
payments of principal, interest on Unpaid Drawings and other amounts, Eurodollar
Loans and Alternate  Currency Letters of Credit, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in the London interbank market and with respect to any notices or determinations
in respect of Euros,  which is customarily a "Business Day" for such notices and
determinations.

                  "Capital Lease" as applied to any Person, shall mean any lease
of any  property  (whether  real,  personal  or mixed) by that  Person as lessee
which,  in conformity  with GAAP,  is, or is required to be,  accounted for as a
capital lease on the balance sheet of that Person.

                  "Capitalized  Lease  Obligations" of any Person shall mean all
obligations of such Person under Capital Leases in each case taken at the amount
thereof accounted for as liabilities in accordance with GAAP.

                  "Cash   Equivalents"  shall  mean  (i)  securities  issued  or
directly and fully  guaranteed or insured by the United States of America or any
agency or  instrumentality  thereof  (provided that the full faith and credit of
the United States of America is pledged in support thereof) having maturities of
not  more  than  one  year  from  the  date of  acquisition,  (ii)  U.S.  dollar
denominated  time deposits,  certificates of deposit and bankers  acceptances of
(x) any FDIC insured bank, in amounts up to the FDIC insured limit, (y) any Bank
having  capital  and  surplus  in  excess  of  $500,000,000  or the U.S.  dollar
equivalent thereof or (z) any bank whose short-term commercial paper rating from
S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or
the equivalent  thereof (any such bank, an "Approved  Bank"),  in each case with
maturities  of not  more  than one year  from  the  date of  acquisition,  (iii)
commercial paper issued by any Bank or Approved Bank or by the parent company of
any Bank or Approved Bank and commercial  paper issued by, or guaranteed by, any
industrial or financial company with a short-term  commercial paper rating of at
least A-1 or the  equivalent  thereof  by S&P or at least P-1 or the  equivalent
thereof by Moody's (any such company, an "Approved  Company"),  or guaranteed by
any  industrial  company with a long term unsecured debt rating of at least A or
A2, or the equivalent of each thereof,  from S&P or Moody's, as the case may be,
and in each case maturing within six months after the date of acquisition,  (iv)
commercial paper of any United States municipal, state or local government rated
at least A-1 or the equivalent  thereof by S&P or at least P-1 or the equivalent
thereof by Moody's and maturing  within one year after the date of  acquisition,
(v) any fund or funds  investing  solely in investments of the type described in
clauses  (i) through  (iv) above,  and (vi)  agreements  to sell and  repurchase
direct  obligations of, or obligations that are fully guaranteed as to principal
and interest by, the U.S. Treasury,  such agreements to be with primary treasury
dealers,  to be evidenced by standard  industry forms and to have  maturities of
not  more  than six  months  from the  date of  commencement  of the  repurchase
transaction.

<PAGE>

                  "Cash  Proceeds"  shall mean,  with respect to any Asset Sale,
the  aggregate  cash  payments  (including  any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset Sale,
other than the portion of such deferred payment constituting  interest, but only
as and when received) received by Holdings and/or any Subsidiary from such Asset
Sale,  provided that any such proceeds  received in currency  other than Dollars
shall be converted  into Dollars at the spot  exchange  rate for the currency in
question  on the date of receipt by  Holdings  and/or its  Subsidiaries  of such
proceeds.

                  "Cat  E Put  Securities"  shall  mean  the  securities  issued
pursuant to the Catastrophe Equity Securities  Issuance Option Agreement,  dated
July 1, 1997, among LaSalle Re Holdings, European Reinsurance Company of Zurich,
Allianz Aktiengesellschaft, Continental Casualty Company and CIC-Hilldale, Inc.,
as the  same may be  amended,  modified  or  supplemented  from  time to time in
accordance with the terms thereof and hereof.

                  "Change  in Law" shall have the  meaning  provided  in Section
9.06 of the Credit Agreement.

                  "Change  of  Control"  shall  mean (i) any  Person or  "group"
(within the meaning of Rule 13d-5 of the Securities  Exchange Act of 1934, as in
effect on the date hereof),  shall (A) have acquired beneficial ownership of 30%
or more on a  fully  diluted  basis  of the  economic  and  voting  interest  in
Holdings'  capital  stock  or  (B)  have  obtained  the  power  (whether  or not
exercised)  to elect a  majority  of  Holdings'  directors;  (ii)  the  Board of
Directors of Holdings  shall not consist of a majority of Continuing  Directors;
or (iii)  Holdings  shall  (A) at any time  cease to have  beneficial  ownership
(direct or indirect) of 100% on a fully diluted basis of the economic and voting
interest in both the Borrower's and the Account  Party's capital stock or (B) at
any time cease to have the power  (whether or not exercised) to elect a majority
of both the Borrower's and the Account Party's directors.

                  "Chase" shall mean The Chase Manhattan Bank, together with its
successors by merger.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
amended from time to time, and the  regulations  promulgated  and rulings issued
thereunder.  Section references to the Code are to the Code, as in effect on the
Restatement Effective Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.

<PAGE>

                  "Combined"  shall mean, when used with reference to any amount
or financial  statement,  such amount as determined,  or financial  statement as
prepared,  on a  combined  basis  for all of the  specified  Persons  and  their
respective  Subsidiaries;  provided that any such amount or financial  statement
determined or prepared for any specified Person and its Subsidiaries  separately
shall be determined or prepared on a consolidated  basis in accordance with GAAP
or SAP, as the case may be.

                  "Commitment"  shall  mean,  with  respect to each  Bank,  such
Bank's  Revolving  Loan  Commitment  (if any) and such Bank's L/C Commitment (if
any).

                  "Confidential  Bank  Memorandum"  shall mean the  Confidential
Bank Memorandum,  dated May 2000,  distributed to Banks and prospective Banks in
connection with the Credit Agreement.

                  "Confidential  Information" shall have the meaning provided in
Section 13.15 of the Credit  Agreement (for purposes of such Section) or Section
5.11 of the Holdings  Guaranty (for purposes of such  Section),  as the case may
be.

                  "Consolidated  Indebtedness"  shall  mean,  at any  time,  the
aggregate  outstanding  principal amount of all Indebtedness of Holdings and its
Subsidiaries at such time determined on a consolidated  basis in accordance with
GAAP, but excluding  therefrom (i) the Contingent Interest Notes, (ii) the Trust
Preferred  Securities (but including  therein the portion,  if any, of the Trust
Preferred  Securities which exceeds 15% of Consolidated Total Capital) and (iii)
the Letters of Credit and all letters of credit issued under Section  4.04(d) of
the Holdings Guaranty (so long as no drawing has occurred thereunder) .

                  "Consolidated Interest Expense" shall mean, for any period and
as to any  Person,  the sum,  without  duplication,  of (i) total cash  interest
expense  (including  interest  paid  in  connection  with  the  Trust  Preferred
Securities and the interest component in respect of Capital Lease Obligations in
accordance  with GAAP) of such  Person and its  Subsidiaries  during such period
determined on a consolidated basis in accordance with GAAP,  including,  without
limitation,  all  commissions,  discounts  and other fees and charges  owed with
respect to letters of credit and  bankers'  acceptance  financing  and net costs
under Interest Rate  Agreements,  but excluding  however,  any  amortization  of
deferred financing costs plus (ii) all dividends on preferred stock paid by such
Person during such period.

                  "Consolidated  Net  Income"  shall mean,  for any period,  the
consolidated  net after tax income (or loss) of  Holdings  and its  Subsidiaries
determined in accordance with GAAP.

                  "Consolidated  Net  Worth"  shall  mean,  with  respect to any
Person,  the Net  Worth of such  Person  and its  Subsidiaries  determined  on a
consolidated  basis in accordance with GAAP after appropriate  deduction for any
minority interests in Subsidiaries (but, for purposes of determining  compliance
with  Section  4.12 of the  Holdings  Guaranty,  without any  deduction  for the
minority  interest in LaSalle Re Holdings  represented by the LaSalle  Preferred
Stock).

<PAGE>

                  "Consolidated  Tangible Net Worth" shall mean,  as of the date
of any  determination  thereof,  Consolidated Net Worth of Holdings at such time
less  the  amount  of  all  intangible  items,  including,  without  limitation,
goodwill,  franchises,  licenses, patents,  trademarks, trade names, copyrights,
service marks, brand names, write-ups of assets and any unallocated excess costs
of investments in Subsidiaries  over equity in underlying net assets at dates of
acquisition.

                  "Consolidated  Total Capital" shall mean, at any time, the sum
of (i)  Consolidated  Indebtedness  (determined  without  giving  effect  to the
enumerated  exclusions  set forth in clauses (i) and (ii)  therein) at such time
and (ii) Consolidated Net Worth of Holdings at such time.

                  "Contingent Interest Notes" shall mean the Contingent Interest
Notes Due June 30, 2006 originally  issued by Piedmont  Management  Company Inc.
and in  respect  of which the  Borrower  is the  obligor  as of the  Restatement
Effective Date.

                  "Contingent  Obligations"  shall mean,  as to any Person,  any
obligation   of  such  Person   guaranteeing   or  intended  to  guarantee   any
Indebtedness,  leases, dividends or other obligations ("primary obligations") of
any other  Person (the  "primary  obligor") in any manner,  whether  directly or
indirectly,  including,  without  limitation,  any  obligation  of such  Person,
whether or not  contingent,  (a) to purchase any such primary  obligation or any
property  constituting  direct or indirect security therefor,  (b) to advance or
supply funds (i) for the purchase or payment of any such primary  obligation  or
(ii) to maintain  working  capital or equity  capital of the primary  obligor or
otherwise to maintain the net worth or solvency of the primary  obligor,  (c) to
purchase property,  securities or services primarily for the purpose of assuring
the owner of any such primary  obligation of the ability of the primary  obligor
to make payment of such primary  obligation  or (d)  otherwise to assure or hold
harmless the owner of such primary  obligation  against loss in respect thereof;
provided,  however,  that the term Contingent  Obligation  shall not include (x)
endorsements  of instruments for deposit or collection in the ordinary course of
business  or (y)  any  obligations  of any  Regulated  Insurance  Company  under
Insurance   Contracts,   Reinsurance   Agreements  or  Retrocession   Agreements
(including  any Liens  with  respect  thereto).  The  amount  of any  Contingent
Obligation  shall be deemed to be an amount equal to the stated or  determinable
amount of the primary obligation in respect of which such Contingent  Obligation
is made or, if not stated or determinable,  the maximum  reasonably  anticipated
liability  in respect  thereof  (assuming  such  Person is  required  to perform
thereunder) as determined by such Person in good faith.

                  "Continuing  Bank" shall mean each Original Bank with either a
(i) Revolving Loan Commitment or (ii) L/C Commitment under the Credit Agreement.

                  "Continuing Directors" shall mean the directors of Holdings on
the  Restatement  Effective  Date and each  other  director  if such  director's
nomination for the election to the Board of Directors of Holdings is recommended
by a majority of the then Continuing Directors.

                  "Conversion  Date"  shall  mean the  364th day  following  the
Restatement Effective Date.

<PAGE>

                  "Credit Agreement" shall mean the Credit Agreement dated as of
November 24, 1999 and amended and restated as of September  27, 2000,  among the
Borrower,  the Account Party, the Syndication Agent, the Documentation Agent and
the Administrative  Agent, as the same may be amended,  modified or supplemented
from time to time.

                  "Credit  Documents"  shall  mean  the  Credit  Agreement,  the
Holdings Guaranty, the Notes and the Subsidiary Guaranty.

                  "Credit  Event" shall mean the making of any  Revolving  Loan,
the issuance of any Letter of Credit or an increase in the Stated  Amount of any
Letter of Credit.

                  "Credit Party" shall mean each of Holdings,  the Borrower, the
Account Party and each Subsidiary Guarantor.

                  "Default"  shall mean any event,  act or condition  which with
notice or lapse of time, or both, would constitute an Event of Default.

                  "Defaulting  Bank" shall mean any Bank with respect to which a
Bank Default is in effect.

                  "Dividends" shall have the meaning provided in Section 4.06 of
the Holdings Guaranty.

                  "Documentation  Agent" shall have the meaning  provided in the
first paragraph of the Credit Agreement.

                  "Dollar   Equivalent"   shall  mean,   at  any  time  for  the
determination  thereof,  the amount of Dollars which could be purchased with the
amount of the relevant  Alternate  Currency  involved in such computation at the
spot exchange rate  therefor as quoted by the  Administrative  Agent as of 11:00
A.M.  (London  time) on the date  three  Business  Days prior to the date of any
determination thereof for purchase on such date.

                  "Dollars"  and the "$" shall mean freely  transferable  lawful
money of the United States.

                  "Domestic  Subsidiary"  shall mean each Subsidiary of Holdings
which is not a Foreign Subsidiary.

                  "EBITDA"   shall   mean,   for  any   Specified   Foreign   or
Non-Regulated  Company for any period,  the earnings  before  interest  expense,
taxes,  depreciation and amortization of such Specified Foreign or Non-Regulated
Company for such period  determined  in  accordance  with GAAP on a  stand-alone
(i.e.,  non-consolidated)  basis and  without  giving  effect  to any  dividends
received  by  such  Specified   Foreign  or   Non-Regulated   Company  from  its
Subsidiaries.

                  "EMU Legislation"  shall mean the legislative  measures of the
European Council for the introduction of, changeover to or operation of a single
or unified European currency.

<PAGE>

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974,  as  amended  from  time to time and the  regulations  promulgated  and
rulings  issued  thereunder.  Section  references  to ERISA are to ERISA,  as in
effect on the Restatement Effective Date and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.

                  "ERISA  Affiliate"  shall  mean each  person  (as  defined  in
Section 3(9) of ERISA) which  together with Holdings or a Subsidiary of Holdings
would be deemed to be a "single  employer"  (i)  within  the  meaning of Section
414(b) or (c) of the Code,  and for the purpose of Section  302 of ERISA  and/or
Section 412, 4971, 4977 and/or each "applicable section" under Section 414(t)(z)
of the code, within the meaning of Section 414(b), (c), (m) or (o) of the Code.

                  "Euro   Equivalent"   shall   mean,   at  any   time  for  the
determination  thereof,  the amount of Euros which could be  purchased  with the
amount  of  Dollars  involved  in such  computation  at the spot  exchange  rate
therefor as quoted by the Administrative Agent as of 11:00 A.M. (London time) on
the date three Business Days prior to the date of any determination  thereof for
purchase on such date.

                  "Euro LIBOR" shall mean, for each Interest  Period  applicable
to any Loan  denominated in Euros,  the rate per annum that appears on page 3750
(or other appropriate page if such currency does not appear on such page) of the
Dow  Jones  Telerate  Screen  (or any  successor  page) for Euro  deposits  with
maturities  comparable to such Interest Period as of 11:00 A.M. (London time) on
the date which is three Business Days prior to the commencement of such Interest
Period or, if such a rate does not appear on the Dow Jones  Telerate  Screen (or
any successor page), the offered  quotations to first-class  banks in the London
interbank  market  by Chase  for Euro  deposits  of  amounts  in same day  funds
comparable  to the  outstanding  principal  amount of such Loan with  maturities
comparable to such Interest Period  determined as of 11:00 A.M. (London time) on
the date which is three Business Days prior to the commencement of such Interest
Period.

                  "Eurodollar Loan" shall mean each Loan that at the election of
any Borrower is bearing  interest at the rate provided in Section 1.08(b) of the
Credit Agreement.

                  "Euros" shall mean the single currency of participating member
states of the European Union.

                  "Event of Default" shall have the meaning  provided in Section
9 of the Credit Agreement.

                  "Federal Funds  Effective  Rate" shall mean for any period,  a
fluctuating per annum interest rate equal for each day during such period to the
weighted  average of the rates on  overnight  Federal  Funds  transactions  with
members of the Federal  Reserve  System  arranged by Federal Funds  brokers,  as
published  for such day (or,  if such day is not a  Business  Day,  for the next
preceding  Business  Day) by the Federal  Reserve Bank of New York,  or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations  for such day on such  transactions  received  by the  Administrative
Agent from three Federal Funds  brokers of recognized  standing  selected by the
Administrative Agent.

<PAGE>

                  "Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01 of the Credit Agreement.

                  "Financial  Reinsurance  Agreement"  shall mean a  reinsurance
agreement  covering any  transaction  in which any Regulated  Insurance  Company
cedes business that does not meet the conditions for  reinsurance  accounting as
provided by the Financial  Accounting  Standards Board in Statement of Financial
Accounting  Standards  No.  113,  as the  same  may  be  revised,  replaced,  or
supplemented from time to time.

                  "Foreign  Pension Plan" shall mean any plan, fund  (including,
without  limitation,  any superannuation  fund) or other similar program,  other
than social security or social insurance,  established or maintained outside the
United  States of America  by  Holdings  or any one or more of its  Subsidiaries
primarily for the benefit of employees of Holdings or such Subsidiaries residing
outside the United States of America,  which plan, fund or other similar program
provides,   or  results  in,   retirement   income,  a  deferral  of  income  in
contemplation of retirement or severance or termination payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.

                  "Foreign  Subsidiary"  shall mean each  Subsidiary of Holdings
that is incorporated  under the laws of any  jurisdiction  other than the United
States of America, any State thereof or any territory thereof.

                  "Funds  at  Lloyd's"  shall  have  the  meaning  provided   in
paragraph 4 of the Membership  Byelaw (No. 17 of 1993).

                  "GAAP" shall mean generally accepted accounting  principles in
the United States of America; it being understood and agreed that determinations
in  accordance  with GAAP for  purposes of Section 4 of the  Holdings  Guaranty,
including  defined  terms as used therein,  are subject (to the extent  provided
therein) to Section 5.06 of the Holdings Guaranty.

                  "Governmental  Authority" shall mean any nation or government,
any state or other  political  subdivision  thereof  and any  entity  exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to government.

                  "Guaranteed    Creditors"   shall   mean   and   include   the
Administrative  Agent, the Issuing Agent,  each Bank and each Person (other than
any  Credit  Party)  party  to an  Interest  Rate  Agreement  or  Other  Hedging
Agreements.

                  "Guaranties"  shall mean the Holdings  Guaranty,  the Trenwick
America Guaranty and the Subsidiary Guaranty.

<PAGE>

                  "Guarantor" shall mean each of Holdings, the Borrower and each
Subsidiary Guarantor.

                  "Holdings" shall mean Trenwick Group Ltd., a company organized
under the laws of Bermuda.

                  "Holdings  Cash Flow" shall mean,  for any period,  the sum of
(i) for each Specified  Regulated  Insurance  Company,  the aggregate  amount of
ordinary dividends which such Specified Regulated Insurance Company could pay to
its  parent  corporation  under  Legal  Requirements  as of the last day of such
period (determined as if (x) such Specified  Regulated Insurance Company had not
paid any ordinary  dividends  during such period and (y) each Subsidiary of such
Specified Regulated Insurance Company which is a Regulated Insurance Company had
paid dividends to its parent  corporation  during such period in an amount equal
to the maximum amount of dividends payable by such Subsidiary during such period
under  applicable  Legal   Requirements)   plus  the  aggregate  amount  of  any
extraordinary  dividends  actually paid by such  Specified  Regulated  Insurance
Company to its parent  corporation  during such period,  (ii) for each Specified
Foreign  or  Non-Regulated  Company,  the  EBITDA of such  Specified  Foreign or
Non-Regulated  Company  for such  period,  (iii) tax  sharing  payments  made by
Regulated  Insurance  Companies  which are  Domestic  Subsidiaries  directly  to
Holdings or any Specified  Non-Regulated  Company  during such period (less cash
taxes paid by Holdings during such period), and (iv) payments during such period
of  principal  and  interest  on surplus  notes  issued by  Regulated  Insurance
Companies  which  are  Domestic   Subsidiaries  to  Holdings  or  any  Specified
Non-Regulated Company.

                  "Holdings Guaranty" shall have the meaning provided in Section
5.20 of the Credit Agreement.

                  "Indebtedness" of any Person shall mean (without  duplication)
(i) all  indebtedness  of such  Person for  borrowed  money,  (ii) the  deferred
purchase  price of assets or  services  which in  accordance  with GAAP would be
shown on the liability side of the balance sheet of such Person,  (iii) the face
amount of all  letters of credit  issued for the  account  of such  Person  and,
without  duplication,  all drafts drawn  thereunder,  (iv) all Indebtedness of a
second  Person  secured by any Lien on any property  owned by such first Person,
whether or not such Indebtedness has been assumed,  (v) the principal portion of
all Capitalized Lease  Obligations of such Person,  (vi) all obligations of such
Person to pay a specified  purchase  price for goods or services  whether or not
delivered or accepted, i.e., take-or-pay and similar obligations,  (vii) the net
termination  obligations of such Person under Interest Rate Agreements and Other
Hedging  Agreements,  calculated  as of  any  date  as if  such  agreement  were
terminated  as of  such  date,  (viii)  all  obligations  of such  Person  under
Financial  Reinsurance  Agreements and (ix) all  Contingent  Obligations of such
Person;  provided that Indebtedness shall not include trade payables  (including
obligations  under  insurance  contracts and  reinsurance  payables) and accrued
expenses, in each case arising in the ordinary course of business.

                  "Insurance  Business"  shall  mean one or more  aspects of the
business of selling, issuing or underwriting insurance or reinsurance.

<PAGE>

                  "Insurance  Contract"  shall mean any  insurance  contract  or
policy  issued by a  Regulated  Insurance  Company  but shall  not  include  any
Reinsurance Agreement or Retrocession Agreement.

                  "Interest Coverage Ratio" shall mean, for any Test Period, the
ratio of (a)  Holdings  Cash  Flow  for such  Test  Period  to (b)  Consolidated
Interest  Expense of Holdings  for such Test Period;  provided  that (i) for the
Test Period ending on or about December 31, 2000,  Consolidated Interest Expense
and the portion of Holdings Cash Flow determined by reference to EBITDA shall be
the actual  such  amounts  calculated  for such Test Period  multiplied  by 4.00
(other than the portion of  Consolidated  Interest  Expense for such Test Period
incurred  in  connection  with the Trust  Preferred  Securities  which  shall be
multiplied by 2.00), (ii) for the Test Period ending on or about March 31, 2001,
Consolidated  Interest  Expense and the portion of Holdings Cash Flow determined
by reference to EBITDA shall be the actual such amounts calculated for such Test
Period  multiplied by 2.00 and (iii) for the Test Period ending on or about June
30, 2001,  Consolidated  Interest  Expense and the portion of Holdings Cash Flow
determined  by reference  to EBITDA shall be the actual such amounts  calculated
for such Test Period  multiplied by 1.33 (other than the portion of Consolidated
Interest  Expense for such Test Period  incurred  in  connection  with the Trust
Preferred  Securities  which  shall be the  actual  such  amounts  for such Test
Period).
                  "Interest  Period" shall mean,  with respect to any Eurodollar
Loan, the interest period applicable  thereto, as determined pursuant to Section
1.09 of the Credit Agreement.

                  "Interest  Rate  Agreement"  shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.

                  "Issuing  Agent" shall  mean  Chase  Manhattan   International
Limited.

                  "Issuing  Country" shall have the meaning  provided in Section
13.18 of the Credit Agreement.

                  "Judgment Currency" shall have the meaning provided in Section
13.17(a) of the Credit Agreement.

                  "Judgment  Currency  Conversion  Date"  shall have the meaning
provided in Section 13.17(a) of the Credit Agreement.

                  "LaSalle Business Combination" shall have the meaning provided
in the recitals to the Credit Agreement.

                  "LaSalle  Business  Combination   Agreement"  shall  have  the
meaning provided in the recitals to the Credit Agreement.

<PAGE>

                  "LaSalle  Business  Combination   Agreement"  shall  have  the
meaning provided in the recitals to the Credit Agreement.

                  "LaSalle  Business  Combination   Documents"  shall  mean  the
LaSalle  Business  Combination  Agreement  and  each  of the  other  agreements,
documents and instruments  entered into in connection with the LaSalle  Business
Combination.

                  "LaSalle Credit  Agreement"  shall mean the Credit  Agreement,
dated December 1, 1995,  among LaSalle Re Holdings,  the financial  institutions
party thereto from time to time, and Chase, as administrative agent, as the same
has been amended, supplemented or modified from time to time.

                  "LaSalle  Preferred  Stock"  shall mean the Series A Preferred
Stock of LaSalle Re Holdings.

                  "LaSalle  Re" shall have the meaning  provided in the recitals
to the Credit Agreement.

                  "LaSalle Re Holdings"  shall have the meaning  provided in the
recitals to the Credit Agreement.

                  "L/C Bank" shall mean each Bank with an L/C Commitment.

                  "L/C  Commitment"  shall mean,  with respect to each Bank, the
amount set forth  opposite  such Bank's name on Annex I of the Credit  Agreement
directly below the column entitled "L/C  Commitment," as the same may be reduced
from time to time or terminated  pursuant to Sections 3.02, 3.03 and/or 9 of the
Credit Agreement.

                  "L/C  Commitment  Fee"  shall  have the  meaning  provided  in
Section 3.01(b) of the Credit Agreement.

                  "L/C Exposure" of any L/C Bank at any time shall mean such L/C
Bank's L/C Percentage of the aggregate Stated Amount of all outstanding  Letters
of Credit at such time.

                  "L/C Issuance  Expiration  Date" shall mean the earlier of (i)
the  Applicable  Lloyd's  Coming in Line Date and (ii) the first date on which a
Notice of  Non-Extension  is  delivered  to Lloyd's in  accordance  with Section
2.05(a) of the Credit Agreement.

                  "L/C Maturity  Date" shall mean, at any time, the later of (i)
December  31, 2004 and (ii) the latest  expiration  date of any Letter of Credit
issued in accordance with the terms of the Credit Agreement.

                  "L/C Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the L/C Commitment of such
Bank at such time and the  denominator  of which is the Total L/C  Commitment at
such time,  provided that if the L/C  Percentage of any Bank is to be determined
after the Total L/C Commitment has been terminated,  then the L/C Percentages of
the Banks shall be determined  immediately  prior (and without giving effect) to
such termination.

<PAGE>

                  "L/C Supportable Obligations"  shall mean the  obligations of
Holdings or its  Subsidiaries  to Lloyd's.

                  "Legal Requirements" shall mean all applicable laws, rules and
regulations made by any governmental  body or regulatory  authority  (including,
without  limitation,  any  Applicable  Insurance  Regulatory  Authority)  having
jurisdiction over Holdings or a Subsidiary of Holdings.

                  "Lending  Affiliate"  shall mean,  with respect to any Person,
any other  Person (i) directly or  indirectly  controlling  (including,  but not
limited to, all directors, officers and partners of such Person), controlled by,
or under  direct or  indirect  common  control  with,  such  Person or (ii) that
directly or indirectly owns more than 50% of any class of the voting  securities
or capital stock of or equity interests in such Person. A Person shall be deemed
to control another Person if such Person possesses,  directly or indirectly, the
power to direct or cause the  direction of the  management  and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.

                  "Letter of Credit" shall have the meaning  provided in Section
2.01(a) of the Credit Agreement.

                  "Letter  of Credit Fee" shall have the  meaning  provided in
Section  3.01(c)  of the Credit Agreement.

                  "Letter of Credit  Outstandings"  shall mean, at any time, the
sum of, without duplication,  (i) the aggregate Stated Amount of all outstanding
Letters  of Credit  and (ii) the  aggregate  amount of all  Unpaid  Drawings  in
respect of all Letters of Credit.

                  "Letter of Credit  Request"  shall have the  meaning provided
in Section  2.02(a) of the Credit Agreement.

                  "LIBOR"  shall mean (i) with respect to any Borrowing of Loans
denominated in Dollars or a Primary  Alternate  Currency,  the relevant interest
rate,  i.e.,  U.S.  LIBOR,  Pounds  Sterling  LIBOR or Euro  LIBOR and (ii) with
respect to any Borrowing of Loans  denominated in an Other  Alternate  Currency,
such  rate per annum as shall be agreed  upon at the time such  Other  Alternate
Currency is approved.

                  "Lien" shall mean any  mortgage,  pledge,  security  interest,
encumbrance,  lien or charge of any kind (including any agreement to give any of
the foregoing,  any conditional  sale or other title retention  agreement or any
lease in the nature thereof).

                  "Lloyd's"  shall mean the Society  incorporated by Lloyd's Act
1871 by the name of Lloyd's.

<PAGE>

                  "Lloyd's  Coming in Line Date" shall mean,  for any year,  the
Lloyd's  coming in line date for such  year  (which  date  shall  occur  between
November  20 and  November  30 of each  year,  and for  purposes  of the  Credit
Agreement  shall be  deemed  to occur on  November  30 of any year if it has not
otherwise occurred by such date).

                  "Loan" shall mean (i) prior to the Conversion Date,  Revolving
Loans, and (ii) on or after the Conversion Date, Term Loans.

                  "Managed Syndicate" shall mean each underwriting  syndicate at
Lloyd's in which either (i) any Subsidiary of Holdings is acting as the managing
agent for such  syndicate  or (ii)  Holdings and its  Subsidiaries  collectively
provide 50% or more of the underwriting capital for such syndicate.

                  "Margin  Stock" shall have the meaning  provided in Regulation
U.

                  "Material Adverse Effect" shall mean a material adverse effect
on the business,  operations,  property or condition (financial or otherwise) of
Holdings  and its  Subsidiaries  taken as a whole  after  giving  effect  to the
Transaction.

                  "Material  Indebtedness"  shall have the  meaning  provided in
Section 9.04 of the Credit Agreement.

                  "Material  Subsidiary"  shall mean any  Subsidiary of Holdings
whose  total  assets or total  revenues  exceed 4% of the total  assets or gross
revenues, respectively, of Holdings and its Subsidiaries on a consolidated basis
as of the most recent  fiscal  quarter end and for the most recent four  quarter
period, respectively, determined in accordance with GAAP.

                  "Member" shall mean an underwriting member of Lloyd's.

                  "Minimum  Borrowing  Amount" shall mean (i) for any Loans that
are Dollar  denominated,  $5,000,000,  and if in excess thereof,  shall be in an
integral Dollar denominated  multiple of $1,000,000,  and (ii) for any Revolving
Loans that are Alternate  Currency Loans,  an amount in the respective  Approved
Currency  having  a  Dollar  Equivalent  (determined  at the  time a  Notice  of
Borrowing  is received or a  prepayment  made) of  $5,000,000,  and if in excess
thereof,  shall  be  in a  Dollar  Equivalent  multiple  of  $1,000,000  in  the
respective Approved Currency.

                  "Moody's" shall mean Moody's Investors Service, Inc. and its
successors.

                  "Moody's  Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers)  assigned by Moody's to the senior  unsecured  long-term  debt of the
Borrower. If the foregoing rating shall be changed by Moody's, such change shall
be effective  for purposes of this  definition on the Business Day following the
day on which Moody's announces such change.

<PAGE>

                  "Multiemployer  Plan"  shall  mean any  multiemployer  plan as
defined in Section  4001(a)(3)  of ERISA,  which is a pension plan as defined in
Section 3(2) of ERISA and which  Holdings,  a Subsidiary of Holdings or an ERISA
Affiliate  maintains,  contributes  to or has an obligation  to  contribute  (or
maintained,  contributed  to or had an  obligation  to contribute to in the last
five years).

                  "NAIC"  shall  mean  the  National  Association  of  Insurance
Commissioners or any successor organization thereto.

                  "NAIC  Tests"  shall  mean  the  ratios  and  other  financial
measurements  developed by the NAIC under its Insurance  Regulatory  Information
System, as in effect from time to time.

                  "Net  Available  Proceeds"  shall mean (i) with respect to any
Asset Sale consummated by a Regulated  Insurance  Company,  the Surplus Increase
with respect to such Regulated Insurance Company as a result of such Asset Sale,
(ii) with respect to any Asset Sale consummated by Holdings or any Non-Regulated
Company which is not a Subsidiary of a Regulated Insurance Company, the Net Cash
Proceeds  resulting   therefrom  and  (iii)  with  respect  to  any  Asset  Sale
consummated  by a  Non-Regulated  Company  which is a Subsidiary  of a Regulated
Insurance Company, an amount equal to the dividend that such Regulated Insurance
Company  would be permitted  to pay in  accordance  with the Legal  Requirements
applicable to it as a result of the receipt by such Regulated  Insurance Company
of a dividend from such  Non-Regulated  Insurance  Company in an amount equal to
the Net Cash Proceeds resulting from such Asset Sale; in each case as determined
in  good  faith  by  Holdings  and  certified  in  writing  by  Holdings  to the
Administrative   Agent   (showing  the   calculation   thereof  and   supporting
assumptions)  on or prior to the date on which  Holdings or any Subsidiary is to
receive the initial proceeds from such Asset Sale.

                  "Net Cash  Proceeds"  shall  mean,  with  respect to any Asset
Sale,  the Cash  Proceeds  resulting  therefrom net of (a) cash expenses of sale
(including payment of principal, premium and interest on Indebtedness other than
the Loans required to be repaid as a result of such Asset Sale), (b) incremental
taxes paid or payable as a result thereof and (c) amounts provided as a reserve,
in  accordance  with GAAP,  against any  liabilities  under any  indemnification
obligations,  purchase price  adjustments or similar items  associated with such
Asset Sale,  in each case as  determined in good faith by Holdings and certified
in writing by Holdings to the  Administrative  Agent  (showing  the  calculation
thereof and supporting assumptions) on or prior to the date on which Holdings or
any Subsidiary is to receive the initial proceeds from such Asset Sale.

                  "Net  Worth"  shall  mean,  as to any  Person,  the sum of its
capital stock (including,  without limitation,  its preferred stock), capital in
excess of par or stated value of shares of its capital stock (including, without
limitation, its preferred stock), retained earnings and any other account which,
in accordance with GAAP, constitutes  stockholders equity, but excluding (i) any
treasury stock and (ii) the effects of Financial Accounting Statement No. 115.

<PAGE>

                  "New Bank" shall mean each of the Persons listed on Annex I to
the Credit Agreement which is not a Continuing Bank.

                  "Non-Defaulting  Bank"  shall  mean  any  Bank  other  than  a
Defaulting Bank.

                  "Non-Regulated Company" shall mean each Subsidiary of Holdings
which is not a Regulated Insurance Company.

                  "Note" shall mean and include  each  promissory  note,  in the
form  agreed  by  the  Borrower  and  the  Administrative  Agent  prior  to  the
Restatement  Effective Date, to the extent issued pursuant to Section 1.05(b) of
the Credit Agreement.

                  "Notice of  Borrowing"  shall  have the  meaning  provided  in
Section 1.03 of the Credit Agreement.

                  "Notice of  Conversion"  shall have the  meaning  provided  in
Section 1.06 of the Credit Agreement.

                  "Notice of  Non-Extension"  shall have the meaning provided in
Section 2.05 of the Credit Agreement.

                  "Notice  Office"  shall mean the office of the  Administrative
Agent at One Chase Manhattan Plaza, New York, New York 10081,  Attention:  Linda
Hill, Telephone (212) 552-7935,  Facsimile: (212) 552-7490, or such other office
as the  Administrative  Agent may  designate to  Holdings,  the Borrower and the
Account Party and the Banks from time to time.

                  "Obligation  Currency"  shall  have the  meaning  provided  in
Section 13.17(a) of the Credit Agreement.

                  "Obligations"  shall  mean all  amounts,  direct or  indirect,
contingent or absolute, of every type or description,  and at any time existing,
owing  to the  Administrative  Agent or any Bank  pursuant  to the  terms of the
Credit Agreement or any other Credit Document.

                  "Original Bank" shall mean each Person which was a Bank under,
and as defined in, the Original Credit Agreement.

                  "Original Credit Agreement" shall have the meaning provided in
the recitals to the Credit Agreement.

                  "Original  Letter of Credit"  shall mean all letters of credit
issued  pursuant to the Original  Credit  Agreement which are outstanding on the
Restatement Effective Date.

                  "Original  Loans" shall mean the Loans  under,  and as defined
in, the Original Credit Agreement.

<PAGE>

                  "Other Alternate  Currency" shall mean any freely transferable
currency other than any Primary Alternate Currency,  to the extent such currency
is approved by the Administrative Agent and each Bank.

                  "Other  Hedging  Agreements"  shall mean any foreign  exchange
contracts,  currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.

                  "Payment  Office" shall mean the office of the  Administrative
Agent c/o The Loan and Agency Services Group,  One Chase  Manhattan  Plaza,  8th
Floor,  New York, New York 10081,  Attention:  Linda Hill,  Telephone No.: (212)
552-7935,   Facsimile   No.:   (212)  552-7490  or  such  other  office  as  the
Administrative  Agent may  designate  to the Borrower and the Banks from time to
time.

                  "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.

                  "Permitted  Acquisition"  shall have the  meaning  provided in
Section 4.02(c) of the Holdings Guaranty.

                  "Person"  shall  mean  any  individual,   partnership,   joint
venture, firm,  corporation,  limited liability company,  association,  trust or
other  enterprise  or any  government  or political  subdivision  or any agency,
department or instrumentality thereof.

                  "Plan"  shall mean any pension plan as defined in Section 3(2)
of ERISA other than a Foreign  Pension Plan or a  Multiemployer  Plan,  which is
maintained  or  contributed  to by  (or  to  which  there  is an  obligation  to
contribute of) Holdings or a Subsidiary of Holdings or an ERISA  Affiliate,  and
each such plan for the five year period immediately following the latest date on
which Holdings,  or a Subsidiary of Holdings or an ERISA  Affiliate  maintained,
contributed to or had an obligation to contribute to such plan.

                  "Pounds Sterling" shall mean freely  transferable lawful money
of the United Kingdom.

                  "Pounds Sterling  Equivalent"  shall mean, at any time for the
determination  thereof,  the amount of Pounds  Sterling which could be purchased
with the amount of Dollars  involved in such  computation  at the spot  exchange
rate  therefor  as quoted by Chase as of 11:00  A.M.  (London  time) on the date
three Business Days prior to the date of any determination  thereof for purchase
on such date.

                  "Pounds  Sterling  LIBOR"  shall  mean,  with  respect to each
Interest Period for any Loan  denominated in Pounds  Sterling,  (I) the rate per
annum that appears on page 3750 (or other appropriate page if such currency does
not appear on such  page) of the Dow Jones  Telerate  Screen (or any  successive
page)  with  maturities  comparable  to such  Interest  Period as of 11:00  A.M.
(London time) on the date which is the commencement date of such Interest Period
or, if such a rate does not appear on page 3750 (or such other appropriate page)
of the Dow Jones Telerate Screen (or any successor page) the offered  quotations
to  first-class  banks in the London  interbank  EuroDollar  market by Chase for
Pounds  Sterling  deposits  of  amounts  in same  day  funds  comparable  to the
outstanding  principal  amount of such Loans with maturities  comparable to such
Interest Period  determined as of 11:00 A.M.  (London time) on the date which is
the  commencement of such Interest Period plus (II) the Associated Cost Rate for
such Loans for such Interest Period.

<PAGE>

                  "Primary Alternate Currency" shall mean each of Pounds
Sterling and Euros.

                  "Prime Lending Rate" shall mean the rate of interest per annum
which Chase announces from time to time as its prime commercial  lending rate in
effect at its  principal  office in New York  City,  the Prime  Lending  Rate to
change when and as such prime commercial lending rate changes. The Prime Lending
Rate is a reference rate and does not  necessarily  represent the lowest or best
rate actually charged to any customer.  Chase may make commercial loans or other
loans at rates of interest at, above or below the Prime Lending Rate.

                  "Principal  Amount" shall mean (i) the stated principal amount
of each Loan  denominated  in Dollars  and/or (ii) the Dollar  Equivalent of the
stated  principal  amount of each  Alternate  Currency  Loan, as the context may
require.

                  "Projections" shall mean the financial projections,  dated May
2000 and delivered by Trenwick to the Banks in May 2000.

                  "Quarterly  Statement"  shall  mean  the  quarterly  financial
statement  required  to be filed by any  Regulated  Insurance  Company  with the
Applicable Regulatory Insurance Authority.

                  "Rated Ongoing Regulated Subsidiary" shall mean each Regulated
Insurance  Company  which has an A.M.  Best  claims  paying  rating  (including,
without   limitation,   Trenwick  America  Reinsurance   Corporation,   Trenwick
International  Limited, The Insurance  Corporation of New York, Dakota Specialty
Insurance Company and Chartwell  Insurance Company,  but excluding any Regulated
Insurance  Company  (including  any of the  aforementioned  companies)  if  such
Company is not being  employed in the writing of new  insurance  or  reinsurance
business following the consummation of the LaSalle Business Combination).

                  "Rating Agency" shall mean S&P or Moody's as the case may be.

                  "Realistic   Disaster   Scenario"  shall  mean  any  realistic
disaster  scenario  presented  in a business  plan  prepared  in relation to the
Managed Syndicate under paragraph 57A(a) of the Underwriting Agents Bylaw (No. 4
of 1984)  which shows the  potential  impact  upon the  Managed  Syndicate  of a
catastrophic event.

                  "Refinancing" shall mean the payment of all loans, accrued but
unpaid interest,  premiums, fees, commissions,  expenses and other amounts owing
under the Original Credit Agreement,  in each case on the Restatement  Effective
Date.

<PAGE>

                  "Register"  shall have the meaning provided in Section 1.05 of
the Credit Agreement.

                  "Regulated  Insurance  Company"  shall mean any  Subsidiary of
Holdings  (including,  without limitation,  Subsidiaries  acquired or created in
connection  with  the  LaSalle  Business  Combination),  whether  now  owned  or
hereafter  acquired,  that is  authorized  or  admitted  to carry on or transact
Insurance Business in any jurisdiction (domestic or foreign) and is regulated by
any Applicable Insurance Regulatory Authority.

                  "Regulation  D"  shall  mean  Regulation  D of  the  Board  of
Governors of the Federal  Reserve  System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.

                  "Regulation  T"  shall  mean  Regulation  T of  the  Board  of
Governors  of the  Federal  Reserve  System  from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

                  "Regulation  U"  shall  mean  Regulation  U of  the  Board  of
Governors  of the  Federal  Reserve  System  from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

                  "Regulation  X"  shall  mean  Regulation  X of  the  Board  of
Governors  of the  Federal  Reserve  System  from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.

                  "Reinsurance  Agreement"  shall mean any agreement,  contract,
treaty or other arrangement whereby one or more insurers, as reinsurers,  assume
liabilities  under insurance  policies or agreements issued by another insurance
or reinsurance company or companies.

                  "Relevant   Currency   Equivalent"   shall   mean  the  Dollar
Equivalent, the Euro Equivalent or the Pounds Sterling Equivalent.

                  "Replaced  Bank"  shall have the  meaning  provided in Section
1.13 of the Credit Agreement.

                  "Replacement  Bank" shall have the meaning provided in Section
1.13 of the Credit Agreement.

                  "Reportable  Event"  shall mean an event  described in Section
4043(c)  of ERISA  with  respect  to a Plan that is subject to Title IV of ERISA
other than those  events as to which the 30-day  notice  period is waived  under
subsection .22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.

                  "Required  Banks" shall mean  Non-Defaulting  Banks the sum of
whose  Revolving Loan  Commitment (or, after the Total Revolving Loan Commitment
has  been  terminated,  outstanding  Revolving  Loans  or  Term  Loans)  and L/C
Commitment (or, after the Total L/C Commitment has been  terminated,  the amount
of any Unpaid Drawings owing to such Non-Defaulting Banks) constitute a majority
of the sum of (i)  the  Total  Revolving  Loan  Commitment  less  the  aggregate
Revolving  Loan  Commitments  of Defaulting  Banks,  if any, or, after the Total
Revolving Loan Commitment has been terminated,  the total outstanding  Revolving
Loans or Term Loans of  Non-Defaulting  Banks) and (ii) the Total L/C Commitment
or, after the Total L/C Commitment  has been  terminated,  the aggregate  Unpaid
Drawings.

<PAGE>

                  "Restatement  Effective Date" shall have the meaning  provided
in Section 13.10 of the Credit Agreement.

                  "Retrocession  Agreement" shall mean any agreement,  contract,
treaty or other  arrangement  whereby  one or more  insurers or  reinsurers,  as
retrocessionaires,   assume   liabilities  of  reinsurers  under  a  Reinsurance
Agreement or other retrocessionaires under another Retrocession Agreement.

                  "Revolving  Loan" shall have the  meaning  provided in Section
1.01(a) of the Credit Agreement.

                  "Revolving Loan  Commitment"  shall mean, with respect to each
Bank,  the amount set forth  opposite  such Bank's name in Annex I of the Credit
Agreement directly below the column entitled "Revolving Loan Commitment," as the
same may be reduced from time to time or terminated  pursuant to Sections  3.02,
3.03 and/or 9 of the Credit Agreement.

                  "Risk  Based  Capital  Ratio"  shall mean,  for any  Regulated
Insurance  Company,  the ratio (expressed as a percentage),  at any time, of the
Total  Adjusted  Capital of such Regulated  Insurance  Company to the Authorized
Control Level of such Regulated Insurance Company.

                  "RL Commitment Fee" shall have the meaning provided in Section
3.01(a) of the Credit Agreement.

                  "S&P"  shall  mean  Standard  & Poor's  Ratings  Group and its
successors.

                  "S&P  Credit  Rating"  shall mean the  rating  level (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers)  assigned  by S&P to  the  senior  unsecured  long-term  debt  of the
Borrower.  If the foregoing rating shall be changed by S&P, such change shall be
effective for purposes of this  definition on the Business Day following the day
on which S&P announces such change.

                  "SAP"  shall mean,  with  respect to any  Regulated  Insurance
Company, the accounting  procedures and practices prescribed or permitted by the
Applicable  Insurance  Regulatory  Authority of the state or other  jurisdiction
(domestic or foreign) in which such Regulated Insurance Company is domiciled; it
being  understood  and agreed that  determinations  in  accordance  with SAP for
purposes of Section 4 of the Holdings Guaranty,  including defined terms as used
therein,  are subject (to the extent  provided  therein) to Section  5.06 of the
Holdings Guaranty.

<PAGE>

                  "Scheduled  Repayments"  shall have the  meaning  provided  in
Section 4.02(i)(a) of the Credit Agreement.

                  "SEC" shall mean the Securities and Exchange Commission or any
successor thereto.

                  "SEC  Regulation  D" shall mean  Regulation  D as  promulgated
under the Securities Act of 1933, as amended,  as the same may be in effect from
time to time.

                  "Section  4.04(b)(ii)  Certificate"  shall  have  the  meaning
provided in Section 4.04(b)(ii) of the Credit Agreement.

                  "Specified  Foreign or Non-Regulated  Company" shall mean each
Regulated Insurance Company which is a Foreign Subsidiary (other than LaSalle Re
Holdings) and each Non-Regulated Company, in each case which is not a Subsidiary
of any Regulated Insurance Company which is a Domestic Subsidiary.

                  "Specified    Non-Regulated    Company"    shall   mean   each
Non-Regulated  Company  which is not a  Subsidiary  of any  Regulated  Insurance
Company.

                  "Specified   Regulated  Insurance  Company"  shall  mean  each
Regulated Insurance Company which (i) is a Domestic Subsidiary and (ii) is not a
Subsidiary   of  any  other   Regulated   Insurance   Company;   provided   that
notwithstanding  the  foregoing,  LaSalle  Re shall be deemed to be a  Specified
Regulated Insurance Company.

                  "Stated  Amount" shall mean, at any time, (i) if the Letter of
Credit is denominated in Dollars, the maximum amount available to be drawn under
the Letter of Credit  (regardless  of whether any  conditions  for drawing could
then be met) and (ii) if the Letter of Credit is an Alternative  Currency Letter
of Credit,  the Dollar  Equivalent of the maximum  amount  available to be drawn
under the Letter of Credit  (regardless  of whether any  conditions  for drawing
could then be met).

                  "Statutory  Surplus" shall mean, at any date for any Regulated
Insurance  Company,  (a) the total  amount as would be shown on line 27, page 3,
column 1 of a Benchmark  Statement for such Regulated Insurance Company prepared
as of such date, in the case of a Domestic Subsidiary,  and (b) the total amount
of  statutory  surplus  of such  Regulated  Insurance  Company  as of such  date
determined in accordance with SAP, in the case of a Foreign Subsidiary.

                  "Subsidiary"  of any  Person  shall mean and  include  (i) any
corporation  more than 50% of whose stock of any class or classes  having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation  (irrespective  of  whether or not at the time stock of any class or
classes of such  corporation  shall have or might have voting power by reason of
the happening of any  contingency)  is at the time owned by such Person directly
or  indirectly  through  Subsidiaries  and  (ii) any  partnership,  association,
limited  liability  company,  joint venture or other entity in which such Person
directly or indirectly through Subsidiaries has more than a 50% equity or voting
interest at the time. Unless otherwise expressly provided, all references herein
to "Subsidiary" shall mean a Subsidiary of Holdings.

<PAGE>

                  "Subsidiary  Guarantor" shall mean (a) LaSalle Re Holdings and
(b) each Domestic  Subsidiary of the Borrower which is a  Non-Regulated  Company
and a Material Subsidiary.

                  "Subsidiary  Guaranty"  shall  have the  meaning  provided  in
Section 5.08 of the Credit Agreement.

                  "Surplus Increase" shall mean, with respect to each Asset Sale
effected by a Regulated Insurance Company,  the increase in Statutory Surplus of
such Regulated Insurance Company as a result of such Asset Sale.

                  "Syndication  Agent"  shall have the  meaning  provided in the
first paragraph of the Credit Agreement.

                  "Taxes" shall have the meaning  provided in Section 4.04(a) of
the Credit Agreement.

                  "Term Loan" shall mean each  Revolving  Loan that is converted
into a term loan on the  Conversion  Date  pursuant  to  1.01(b)  of the  Credit
Agreement.

                  "Term Loan Maturity Date" shall mean the fifth  anniversary of
the Restatement Effective Date.

                  "Test Period" shall mean (i) for any determination made on and
prior to June 30,  2001,  the period from October 1, 2000 to the last day of the
fiscal quarter of Holdings then last ended,  provided that the first Test Period
shall end on December 31, 2000, and (ii) for any determination  made thereafter,
the four  consecutive  fiscal  quarters of Holdings ended on the last day of the
most recently ended fiscal quarter of Holdings (taken as one accounting period).

                  "Total Adjusted  Capital" shall mean "Total Adjusted  Capital"
as defined by the NAIC as of December  31, 1997 and as applied in the context of
the Risk Based Capital Guidelines promulgated by the NAIC.

                  "Total  Commitment"  shall mean the sum of the Total Revolving
Loan Commitment and Total L/C Commitment.

                  "Total  L/C  Commitment"   shall  mean  the  sum  of  the  L/C
Commitments of each of the L/C Banks.

                  "Total  Revolving Loan  Commitment"  shall mean the sum of the
Revolving Loan Commitments of each of the Banks.

<PAGE>

                  "Total Unutilized L/C Commitment" shall mean, at any time, the
sum of the Unutilized L/C Commitments of the L/C Banks at such time.

                  "Total  Unutilized  Revolving Loan Commitment"  shall mean, at
any time, (i) the Total Revolving Loan Commitment at such time less (ii) the sum
of the aggregate  Principal  Amount of all Revolving  Loans  outstanding at such
time.

                  "Transaction"  shall  mean,  collectively,   (i)  the  LaSalle
Business Combination, (ii) the Refinancing, (iii) the incurrence by the Borrower
of the Revolving Loans hereunder, (iv) the issuance of Letter of Credits for the
account of the Account Party hereunder on the Restatement Effective Date and (v)
the payment of fees and expenses in connection with the foregoing.

                  "Transaction  Documents"  shall  mean,  collectively,  (i) the
LaSalle Business Combination Documents and (ii) the Credit Documents.

                  "Trenwick"  shall have the meaning provided in the recitals to
the Credit Agreement.

                  "Trenwick  America  Guaranty"  shall mean the  guaranty of the
Borrower pursuant to Section 12 of the Credit Agreement.

                  "Trenwick  Senior Notes" shall mean the 6.70% Senior Notes due
April 1, 2003 issued by the  Trenwick and  subsequently  assumed by the Borrower
pursuant to the documentation governing the Trenwick Senior Notes at the time of
the consummation of the LaSalle Business Combination.

                  "Trust  Preferred  Securities"  shall  mean the  8.82%  Junior
Subordinated  Deferrable  Interest Debentures issued by Trenwick pursuant to the
Indenture,  dated  as of  January  31,  1997,  between  Trenwick  and The  Chase
Manhattan  Bank, as Trustee which  Debentures  have been assumed by the Borrower
pursuant to the terms of such Indenture at the time of the  consummation  of the
LaSalle  Business  Combination,  and all securities  issued by Trenwick  Capital
Trust I pursuant to the Amended and Restated  Declaration of Trust,  dated as of
January 31, 1997.

                  "Type" shall mean any type of Loan  determined with respect to
currency and the interest option applicable thereto.

                  "Unfunded  Current  Liability"  of any  Plan  shall  mean  the
amount,  if any, by which the value of the  accumulated  plan benefits under the
Plan  determined  on a plan  termination  basis  in  accordance  with  actuarial
assumptions  at such  time  consistent  with  those  prescribed  by the PBGC for
purposes of Section  4044 of ERISA,  exceeds  the fair market  value of all plan
assets  allocable to such  liabilities  under Title IV of ERISA  (excluding  any
accrued but unpaid contributions).

                  "Unpaid  Drawing"  shall have the meaning  provided in Section
2.03(a) of the Credit Agreement.

<PAGE>

                  "Unutilized  L/C  Commitment"  with respect to any Bank at any
time shall mean such  Bank's L/C  Commitment  at such time less such  Bank's L/C
Exposure at such time.

                  "Unutilized  Revolving  Loan  Commitment"  with respect to any
Bank at any time shall mean such Bank's  Revolving Loan  Commitment at such time
less the aggregate  outstanding  Principal Amount of all Revolving Loans made by
such Bank at such time.

                  "U.S. LIBOR" shall mean for each Interest Period applicable to
a Loan  denominated in Dollars (other than a Base Rate Loan), the rate per annum
that  appears on page 3750 of the Dow Jones  Telerate  Screen (or any  successor
page) for Dollar deposits with maturities  comparable to such Interest Period as
of 11:00 A.M.  (London time) on the date which is two Business Days prior to the
commencement  of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Jones  Telerate  Screen (or any  successor  page),  the  offered
quotations  to  first-class  banks in the London  interbank  market by Chase for
Dollar  deposits  of amounts  in same day funds  comparable  to the  outstanding
principal amount of such Dollar  denominated Loan with maturities  comparable to
such Interest Period determined as of 11:00 A.M. (London time) on the date which
is two Business Days prior to the commencement of such Interest Period.

                  "Wholly-Owned   Subsidiary"  of  any  Person  shall  mean  any
Subsidiary  of such  Person  to the  extent  all of the  capital  stock or other
ownership  interests  in such  Subsidiary,  other than  directors'  or nominees'
qualifying shares, is owned directly or indirectly by such Person.

                  "Written"  or "in  writing"  shall  mean any  form of  written
communication or a communication by means of telex, facsimile device,  telegraph
or cable.

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