Document:

FACE OF SECURITY
                             Fixed Rate Senior Note

REGISTERED                                                   REGISTERED
No. FXR - 21                                                 $8,250,000
                                                             CUSIP: 00079FAX0

     Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.

<PAGE>

                               ABN AMRO BANK N.V.
                    SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES A
                                  (Fixed Rate)

            10.50% Reverse Exchangeable Securities due July 3, 2003
                   linked to common stock of Citigroup Inc.

<TABLE>
====================================================================================================================
<S>                           <C>                          <C>                          <C>
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION           INTEREST RATE:               MATURITY DATE:
     July 3, 2002                DATE: N/A                    10.50% per annum               July 3, 2003
--------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL              INITIAL REDEMPTION           INTEREST PAYMENT             OPTIONAL
   DATE: July 3, 2002            PERCENTAGE: N/A              DATES: January 3,            REPAYMENT DATE:
                                                              2003 and July 3, 2003        N/A
--------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION            INTEREST PAYMENT             APPLICABILITY OF
U.S. Dollars                     PERCENTAGE                   PERIOD: Semi-annually        MODIFIED
                                 REDUCTION: N/A                                            PAYMENT UPON
                                                                                           ACCELERATION:
                                                                                           N/A (But see "Alternate
                                                                                           Exchange Calculation in
                                                                                           case of an Event of
                                                                                           Default")
--------------------------------------------------------------------------------------------------------------------
IF SPECIFIED                  REDEMPTION NOTICE            APPLICABILITY OF             If yes, state Issue Price:
   CURRENCY                      PERIOD: N/A                  ANNUAL INTEREST           N/A
   OTHER THAN U.S.                                            PAYMENTS: N/A
   DOLLARS, OPTION
   TO ELECT
   PAYMENT IN U.S.
   DOLLARS: N/A
--------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE                                                                           ORIGINAL YIELD TO
   AGENT: N/A                                                                           MATURITY: N/A
--------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:
   (see below)
====================================================================================================================
</TABLE>

                                       2
<PAGE>

Initial Price.........................  $38.75 per Underlying Share divided by
                                        the Exchange Factor.

Underlying Shares ....................  Common stock of the Underlying Company,
                                        par value $0.01 per share.

Underlying Company ...................  Citigroup Inc.

Minimum Denominations.................  $1,000 and integral multiples thereof.

Payment at Maturity:..................  At maturity, the Issuer shall pay or
                                        deliver for each $1,000 principal
                                        amount of Notes, either (i) a cash
                                        payment equal to $1,000, if the
                                        Determination Price on the
                                        Determination Date of the Underlying
                                        Shares is at or above the Initial
                                        Price, or (ii) the number of Underlying
                                        Shares equal to the Stock Redemption
                                        Amount, if the Determination Price on
                                        the Determination Date of the
                                        Underlying Shares is lower than the
                                        Initial Price. The Issuer shall pay
                                        cash in lieu of delivering fractional
                                        Underlying Shares in an amount equal to
                                        the corresponding fractional Closing
                                        Price of the Underlying Shares as
                                        determined by the Calculation Agent on
                                        the Determination Date.

                                        If the Issuer is required to deliver
                                        Underlying Shares pursuant to the terms
                                        of the Notes, it shall, or cause the
                                        Calculation Agent to, provide written
                                        notice to the Trustee at its New York
                                        office, on which notice the Trustee may
                                        conclusively rely, of the Stock
                                        Redemption Amount, on or prior to the
                                        Issuer Notice Date. The Issuer shall,
                                        or shall cause the Calculation Agent
                                        to, deliver such Underlying Shares
                                        (and/or Exchange Property, if
                                        applicable) to the Trustee for delivery
                                        to the Holders.

Stock Redemption Amount:..............  The Calculation Agent shall determine
                                        the Stock Redemption Amount for each
                                        $1,000 principal amount of Notes on the
                                        Determination Date by dividing $1,000
                                        by the Initial Price.

                                        The number of Underlying Shares to be
                                        delivered at maturity shall be subject
                                        to any applicable adjustments (i) to
                                        the Exchange Factor and (ii) in the
                                        Exchange Property, as

                                       3
<PAGE>

                                        defined in paragraph 5 under
                                        "Adjustment Events" below, to be
                                        delivered instead of, or in addition
                                        to, such Underlying Shares in each case
                                        as a result of any corporate event
                                        described under "Adjustment Events"
                                        below.

Determination Date:...................  The third Business Day prior to the
                                        Maturity Date, or if such day is not a
                                        Trading Day, the immediately succeeding
                                        Trading Day; provided that the
                                        Determination Date shall be no later
                                        than the second scheduled Trading Day
                                        preceding the Maturity Date,
                                        notwithstanding the occurrence of a
                                        Market Disruption Event on such second
                                        scheduled Trading Day.

Determination Price:..................  The Closing Price per Underlying Share
                                        on the Determination Date, as
                                        determined by the Calculation Agent.

Closing Price.........................  If the Underlying Shares (or any other
                                        security for which a Closing Price must
                                        be determined) are listed on a U.S.
                                        securities exchange registered under
                                        the Exchange Act, are securities of The
                                        Nasdaq National Market or are included
                                        in the OTC Bulletin Board Service (the
                                        "OTC Bulletin Board"), operated by the
                                        National Association of Securities
                                        Dealers, Inc., the Closing Price for
                                        one Underlying Share (or one unit of
                                        any such other security) on any Trading
                                        Day means (i) the last reported sale
                                        price, regular way, in the principal
                                        trading session on such day on the
                                        principal securities exchange on which
                                        the Underlying Shares (or any such
                                        other security) are listed or admitted
                                        to trading or (ii) if not listed or
                                        admitted to trading on any such
                                        securities exchange or if such last
                                        reported sale price is not obtainable
                                        (even if the Underlying Shares (or
                                        other such security) are listed or
                                        admitted to trading on such securities
                                        exchange), the last reported sale price
                                        in the principal trading session on the
                                        over-the-counter market as reported on
                                        The Nasdaq National Market or OTC
                                        Bulletin Board on such day. If the last
                                        reported sale price is not available
                                        pursuant to clause (i) or (ii) of the
                                        preceding

                                       4
<PAGE>

                                        sentence, the Closing Price for any
                                        Trading Day shall be the mean, as
                                        determined by the Calculation Agent, of
                                        the bid prices for the Underlying
                                        Shares (or any such other security)
                                        obtained from as many dealers in such
                                        security (which may include AAI or any
                                        of the Issuer's other subsidiaries or
                                        affiliates), but not exceeding three,
                                        as will make such bid prices available
                                        to the Calculation Agent. A "securities
                                        of The Nasdaq National Market" shall
                                        include securities included in any
                                        successor to such system and the term
                                        "OTC Bulletin Board Service" shall
                                        include any successor service thereto.

Issuer Notice Date....................  The Business Day immediately succeeding
                                        the Determination Date; provided that
                                        the Issuer Notice Date shall be no
                                        later than the second scheduled Trading
                                        Day preceding the Maturity Date,
                                        notwithstanding the occurrence of a
                                        Market Disruption Event on such
                                        scheduled Trading Day.

Trading Day:..........................  A day, as determined by the Calculation
                                        Agent, on which trading is generally
                                        conducted on the New York Stock
                                        Exchange, the American Stock Exchange
                                        Inc., the Nasdaq National Market, the
                                        Chicago Mercantile Exchange, and the
                                        Chicago Board of Options Exchange and
                                        in the over-the- counter market for
                                        equity securities in the United States
                                        and on which a Market Disruption Event
                                        has not occurred.

Market Disruption Event:..............  Means, with respect to the Underlying
                                        Shares:

                                               (i) a suspension, absence or
                                            material limitation of trading of
                                            the Underlying Shares on the
                                            primary market for the Underlying
                                            Shares for more than two hours of
                                            trading or during the one-half hour
                                            period preceding the close of
                                            trading in such market; or a
                                            breakdown or failure in the price
                                            and trade reporting systems of the
                                            primary market for the Underlying
                                            Shares that is, in the sole
                                            discretion of the Calculation
                                            Agent, material;

                                       5
<PAGE>

                                            or the suspension, absence or
                                            material limitation on the primary
                                            market for trading in futures or
                                            options contracts related to the
                                            Underlying Shares, if available,
                                            during the one-half hour period
                                            preceding the close of trading in
                                            the applicable market, in each case
                                            as determined by the Calculation
                                            Agent in its sole discretion; and

                                               (ii) a determination by the
                                            Calculation Agent in its sole
                                            discretion that the event described
                                            in clause (i) above materially
                                            interfered with the Issuer's
                                            ability or the ability of any of
                                            the Issuer's affiliates to unwind
                                            or adjust all or a material portion
                                            of the hedge with respect to the
                                            Notes.

                                        For purposes of determining whether a
                                        Market Disruption Event has occurred:
                                        (1) a limitation on the hours or number
                                        of days of trading will not constitute
                                        a Market Disruption Event if it results
                                        from an announced change in the regular
                                        business hours of the relevant
                                        exchange; (2) a decision to permanently
                                        discontinue trading in the relevant
                                        futures or options contract will not
                                        constitute a Market Disruption Event;
                                        (3) limitations pursuant to New York
                                        Stock Exchange Inc. Rule 80A (or any
                                        applicable rule or regulation enacted
                                        or promulgated by the New York Stock
                                        Exchange Inc., any other self-
                                        regulatory organization or the
                                        Commission of similar scope as
                                        determined by the Calculation Agent) on
                                        trading during significant market
                                        fluctuations shall constitute a
                                        suspension, absence or material
                                        limitation of trading; (4) a suspension
                                        of trading in futures or options
                                        contracts on the Underlying Shares by
                                        the primary securities market trading
                                        in such futures or options, if
                                        available, by reason of (x) a price
                                        change exceeding limits set by such
                                        securities exchange or market, (y) an
                                        imbalance of orders relating to such
                                        contracts or (z) a disparity in bid and
                                        ask quotes relating to such contracts
                                        will constitute a suspension, absence
                                        or material

                                       6
<PAGE>

                                        limitation of trading in futures or
                                        options contracts related to the
                                        Underlying Shares; and (5) a
                                        suspension, absence or material
                                        limitation of trading on the primary
                                        securities market on which futures or
                                        options contracts related to the
                                        Underlying Shares are traded will not
                                        include any time when such securities
                                        market is itself closed for trading
                                        under ordinary circumstances.

                                        The Calculation Agent shall as soon as
                                        reasonably practicable under the
                                        circumstances notify the Issuer, the
                                        Trustee, the Depository Trust Company
                                        and the Agents of the existence or
                                        occurrence of a Market Disruption Event
                                        on any day that but for the occurrence
                                        or existence of a Market Disruption
                                        Event would have been the Determination
                                        Date.

Exchange Factor.......................  The Exchange Factor shall initially be
                                        1.0, but shall be subject to adjustment
                                        by the Calculation Agent upon the
                                        occurrence of certain corporate events
                                        affecting the Underlying Shares though
                                        and including the Determination Date.
                                        See "Adjustment Events" below.

Adjustment Events:....................  The Exchange Factor or the amount paid
                                        at maturity (in the case of paragraph 5
                                        below) shall be adjusted as follows:

                                        1. If the Underlying Shares are subject
                                        to a stock split or reverse stock
                                        split, then once such split has become
                                        effective, the Exchange Factor shall be
                                        adjusted to equal the product of the
                                        prior Exchange Factor and the number of
                                        shares issued in such stock split or
                                        reverse stock split with respect to one
                                        Underlying Share.

                                        2. If the Underlying Shares are subject
                                        (i) to a stock dividend (issuance of
                                        additional Underlying Shares) that is
                                        given ratably to all holders of
                                        Underlying Shares or (ii) to a
                                        distribution of the Underlying Shares
                                        as a result of the triggering of any
                                        provision of the corporate charter of
                                        the Underlying Company, in each case
                                        other than a stock split described in
                                        paragraph 1, then once the dividend has
                                        become

                                       7
<PAGE>

                                        effective and the Underlying Shares are
                                        trading ex-dividend, the Exchange
                                        Factor shall be adjusted so that the
                                        new Exchange Factor shall equal the
                                        prior Exchange Factor plus the product
                                        of (i) the number of shares issued with
                                        respect to one Underlying Share and
                                        (ii) the prior Exchange Factor.

                                        3. There shall be no adjustments to the
                                        Exchange Factor to reflect cash
                                        dividends or other distributions paid
                                        with respect to the Underlying Shares
                                        other than Extraordinary Dividends as
                                        described below (except that
                                        distributions described in paragraph 2
                                        above shall not be subject to this
                                        paragraph). A cash dividend or other
                                        distribution with respect to the
                                        Underlying Shares shall be deemed to be
                                        an "Extraordinary Dividend" if such
                                        dividend or other distribution exceeds
                                        the immediately preceding
                                        non-Extraordinary Dividend for the
                                        Underlying Shares by an amount equal to
                                        at least 10% of the closing price of
                                        the Underlying Shares (as adjusted for
                                        any subsequent corporate event
                                        requiring an adjustment hereunder, such
                                        as a stock split or reverse stock
                                        split) on the Trading Day preceding the
                                        ex-dividend date for the payment of
                                        such Extraordinary Dividend (the
                                        "ex-dividend date"). If an
                                        Extraordinary Dividend occurs with
                                        respect to the Underlying Shares, the
                                        Exchange Factor with respect to the
                                        Underlying Shares will be adjusted on
                                        the ex- dividend date with respect to
                                        such Extraordinary Dividend so that the
                                        new Exchange Factor will equal the
                                        product of (i) the then current
                                        Exchange Factor and (ii) a fraction,
                                        the numerator of which is the Closing
                                        Price on the Trading Day preceding the
                                        ex-dividend date, and the denominator
                                        of which is the amount by which the
                                        Closing Price on the Trading Day
                                        preceding the ex-dividend date exceeds
                                        the Extraordinary Dividend Amount. The
                                        "Extraordinary Dividend Amount" with
                                        respect to an Extraordinary Dividend
                                        for the Underlying Shares shall equal
                                        (i) in the case of cash

                                       8
<PAGE>

                                        dividends or other distributions that
                                        constitute regular dividends, the
                                        amount per share of such Extraordinary
                                        Dividend minus the amount per share of
                                        the immediately preceding non-
                                        Extraordinary Dividend for the
                                        Underlying Shares or (ii) in the case
                                        of cash dividends or other
                                        distributions that do not constitute
                                        regular dividends, the amount per share
                                        of such Extraordinary Dividend. To the
                                        extent an Extraordinary Dividend is not
                                        paid in cash, the value of the non-cash
                                        component will be determined by the
                                        Calculation Agent, whose determination
                                        shall be conclusive. A distribution on
                                        the Underlying Shares described in
                                        clause (i), clause (iv) or clause (v)
                                        of paragraph 5 below that also
                                        constitutes an Extraordinary Dividend
                                        shall not cause an adjustment to the
                                        Exchange Factor pursuant to this
                                        paragraph 3.

                                        4. If the Underlying Company issues
                                        rights or warrants to all holders of
                                        the Underlying Shares to subscribe for
                                        or purchase Underlying Shares at an
                                        exercise price per share less than the
                                        Closing Price of the Underlying Shares
                                        on both (i) the date the exercise price
                                        of such rights or warrants is
                                        determined and (ii) the expiration date
                                        of such rights or warrants, and if the
                                        expiration date of such rights or
                                        warrants precedes the maturity of this
                                        Note, then the Exchange Factor shall be
                                        adjusted to equal the product of the
                                        prior Exchange Factor and a fraction,
                                        the numerator of which shall be the
                                        number of Underlying Shares outstanding
                                        immediately prior to the issuance of
                                        such rights or warrants plus the number
                                        of additional Underlying Shares offered
                                        for subscription or purchase pursuant
                                        to such rights or warrants and the
                                        denominator of which shall be the
                                        number of Underlying Shares outstanding
                                        immediately prior to the issuance of
                                        such rights or warrants plus the number
                                        of additional Underlying Shares which
                                        the aggregate offering price of the
                                        total number of shares of the
                                        Underlying Shares

                                       9
<PAGE>

                                        so offered for subscription or purchase
                                        pursuant to such rights or warrants
                                        would purchase at the Closing Price on
                                        the expiration date of such rights or
                                        warrants, which shall be determined by
                                        multiplying such total number of shares
                                        offered by the exercise price of such
                                        rights or warrants and dividing the
                                        product so obtained by such Closing
                                        Price.

                                        5. If a Reorganization Event (as
                                        defined below) occurs, each holder of
                                        Notes will receive at maturity, in
                                        respect of each $1,000 principal amount
                                        of each Note, the lesser of: (i) $1,000
                                        in cash or (ii) Exchange Property (as
                                        defined below) in an amount with a
                                        value equal to the product of the stock
                                        redemption amount times the Transaction
                                        Value (as defined below). In the case
                                        of a Reorganization Event that is the
                                        result of any issuance of tracking
                                        stock by the Underlying Company or a
                                        Spin-off Event (as defined below), the
                                        Issuer may, at its sole option, in lieu
                                        of clause (ii) above, elect to deliver
                                        Exchange Property consisting solely of
                                        the reclassified Underlying Shares (in
                                        the case of an issuance of tracking
                                        stock) or the Underlying Shares with
                                        respect to which the spun-off security
                                        was issued (in the case of a Spin-off
                                        Event) and pay the cash value of such
                                        tracking stock or spun-off security as
                                        of the determination date. If the
                                        Issuer elects to deliver cash pursuant
                                        to the immediately preceding sentence,
                                        the Issuer will provide notice to
                                        holders of Notes as soon as practicable
                                        after the date of such Reorganization
                                        Event.

                                          "Reorganization Event" means (i)
                                            there has occurred any
                                            reclassification or change with
                                            respect to the Underlying Shares,
                                            including, without limitation, as a
                                            result of the issuance of any
                                            tracking stock by the Underlying
                                            Company; (ii) the Underlying
                                            Company or any surviving entity or
                                            subsequent surviving entity of the
                                            Underlying Company (an "Underlying

                                       10
<PAGE>

                                            Company Successor") has been
                                            subject to a merger, combination or
                                            consolidation and is not the
                                            surviving entity; (iii) any
                                            statutory exchange of securities of
                                            the Underlying Company or any
                                            Underlying Company Successor with
                                            another corporation occurs (other
                                            than pursuant to clause (ii)
                                            above); (iv) the Underlying Company
                                            is liquidated; (v) the Underlying
                                            Company issues to all of its
                                            shareholders equity securities of
                                            an issuer other than the Underlying
                                            Company (other than in a
                                            transaction described in clauses
                                            (ii), (iii) or (iv) above) (a
                                            "Spin-off Event"); or (vi) a tender
                                            or exchange offer or going- private
                                            transaction is consummated for all
                                            the outstanding Underlying Shares.

                                          "Exchange Property" means
                                            securities, cash or any other
                                            assets distributed to holders of
                                            the Underlying Shares in any
                                            Reorganization Event, including, in
                                            the case of the issuance of
                                            tracking stock, the reclassified
                                            Underlying Shares and, in the case
                                            of a Spin-off Event, the Underlying
                                            Shares with respect to which the
                                            spun-off security was issued.

                                          "Transaction Value", at any date,
                                            means (i) for any cash received in
                                            any such Reorganization Event, the
                                            amount of cash received per
                                            Underlying Share; (ii) for any
                                            property other than cash or
                                            securities received in any such
                                            Reorganization Event, the market
                                            value, as determined by the
                                            calculation agent, as of the date
                                            of receipt, of such Exchange
                                            Property received for each
                                            Underlying Share; and (iii) for any
                                            security received in any such
                                            Reorganization Event (including in
                                            the case of the issuance of
                                            tracking stock, the reclassified
                                            Underlying Shares and, in the case
                                            of a Spin-off Event, the Underlying

                                       11
<PAGE>

                                            Shares with respect to which the
                                            spun-off security was issued), an
                                            amount equal to the closing price,
                                            as of the determination date, per
                                            share of such security multiplied
                                            by the quantity of such security
                                            received for each Underlying Share.

                                          If Exchange Property consists of more
                                          than one type of property, holders of
                                          Notes will receive at maturity a pro
                                          rata share of each such type of
                                          Exchange Property in proportion to
                                          the quantity of such Exchange
                                          Property received in respect of each
                                          Underlying Share. If Exchange
                                          Property includes a cash component,
                                          holders will not receive any interest
                                          accrued on such cash component. In
                                          the event Exchange Property consists
                                          of securities, those securities will,
                                          in turn, be subject to the
                                          antidilution adjustments set forth in
                                          paragraphs 1 through 5.

                                          For purposes of this paragraph 5, in
                                          the case of a consummated tender or
                                          exchange offer or going-private
                                          transaction involving Exchange
                                          Property of a particular type,
                                          Exchange Property shall be deemed to
                                          include the amount of cash or other
                                          property paid by the offeror in the
                                          tender or exchange offer with respect
                                          to such Exchange Property (in an
                                          amount determined on the basis of the
                                          rate of exchange in such tender or
                                          exchange offer or going-private
                                          transaction). In the event of a
                                          tender or exchange offer or a
                                          going-private transaction with
                                          respect to Exchange Property in which
                                          an offeree may elect to receive cash
                                          or other property, Exchange Property
                                          shall be deemed to include the kind
                                          and amount of cash and other property
                                          received by offerees who elect to
                                          receive cash.

                                        No adjustments to the Exchange Factor
                                        shall be

                                       12
<PAGE>

                                        required unless such adjustment would
                                        require a change of at least 0.1% in
                                        the Exchange Factor then in effect. The
                                        Exchange Factor resulting from any of
                                        the adjustments specified above shall
                                        be rounded to the nearest one hundred-
                                        thousandth with five one-millionths
                                        being rounded upward.

                                        No adjustments to the Exchange Factor
                                        or method of calculating the Exchange
                                        Factor shall be required other than
                                        those specified above. However, the
                                        Issuer may, at its sole discretion,
                                        cause the Calculation Agent to make
                                        additional changes to the Exchange
                                        Factor upon the occurrence of corporate
                                        or other similar events that affect or
                                        could potentially affect market prices
                                        of, or shareholders' rights in, the
                                        Underlying Shares (or other Exchange
                                        Property) but only to reflect such
                                        changes, and not with the aim of
                                        changing relative investment risk. The
                                        adjustments specified above do not
                                        cover all events that could affect the
                                        market price or the Closing Price of
                                        the Underlying Shares, including,
                                        without limitation, a partial tender or
                                        partial exchange offer for the
                                        Underlying Shares.

                                        The Calculation Agent shall be solely
                                        responsible for the determination and
                                        calculation of any adjustments to the
                                        Exchange Factor or method of
                                        calculating the Exchange Factor and of
                                        any related determinations and
                                        calculations with respect to any
                                        distributions of stock, other
                                        securities or other property or assets
                                        (including cash) in connection with any
                                        Reorganization Event described in
                                        paragraph 5 above, and its
                                        determinations and calculations with
                                        respect thereto shall be conclusive.

                                        The Calculation Agent will provide
                                        information as to any adjustments to
                                        the Exchange Factor or method of
                                        calculating the Exchange Factor upon
                                        written request by any Holder of this
                                        Note.

                                       13
<PAGE>

Alternate Exchange Calculation in       In case an Event of Default with
case of an Event of Default...........  respect to this Note shall have
                                        occurred and be continuing, the amount
                                        declared due and payable upon any
                                        acceleration of this Note shall be
                                        determined by the Calculation Agent,
                                        and shall be equal to the principal
                                        amount of this Note plus any accrued
                                        interest to but not including the date
                                        of acceleration.

Calculation Agent.....................  ABN AMRO Incorporated ("AAI"). All
                                        determinations made by the Calculation
                                        Agent will be at the sole discretion of
                                        the Calculation Agent and shall, in the
                                        absence of manifest error, be
                                        conclusive for all purposes and binding
                                        on the Holders and on the Issuer.

Additional Amounts....................  The Issuer shall, subject to certain
                                        exceptions and limitations set forth
                                        below, pay such additional amounts (the
                                        "Additional Amounts") to each holder of
                                        this Note as may be necessary in order
                                        that the net payment of the principal
                                        of this Note and any other amounts
                                        payable on this Note, after withholding
                                        for or on account of any present or
                                        future tax, assessment or governmental
                                        charge imposed upon or as a result of
                                        such payment by The Netherlands (or any
                                        political subdivision or taxing
                                        authority thereof or therein) or the
                                        jurisdiction of residence or
                                        incorporation of any successor
                                        corporation or any jurisdiction from or
                                        through which any amount is paid by the
                                        Issuer or a successor corporation, will
                                        not be less than the amount provided
                                        for in this Note to be then due and
                                        payable. The Issuer shall not, however,
                                        be required to make any payment of
                                        Additional Amounts to any such holder
                                        for or on account of:

                                       14
<PAGE>

                                        (a)   any such tax, assessment or other
                                              governmental charge that would not
                                              have been so imposed but for (i)
                                              the existence of any present or
                                              former connection between such
                                              holder (or between a fiduciary,
                                              settlor, beneficiary, member or
                                              shareholder of such holder, if
                                              such holder is an estate, a trust,
                                              a partnership or a corporation)
                                              and The Netherlands and its
                                              possessions, including, without
                                              limitation, such holder (or such
                                              fiduciary, settlor, beneficiary,
                                              member or shareholder) being or
                                              having been a citizen or resident
                                              thereof or being or having been
                                              engaged in a trade or business or
                                              present therein or having, or
                                              having had, a permanent
                                              establishment therein or (ii) the
                                              presentation, where presentation
                                              is required, by the holder of this
                                              Note for payment on a date more
                                              than 30 days after the date on
                                              which such payment became due and
                                              payable or the date on which
                                              payment thereof is duly provided
                                              for, whichever occurs later;

                                        (b)   any estate, inheritance, gift,
                                              sales, transfer or personal
                                              property tax or any similar tax,
                                              assessment or governmental charge;

                                        (c)   any tax, assessment or other
                                              governmental charge that is
                                              payable otherwise than by
                                              withholding from payments on or in
                                              respect of this Note;

                                        (d)   any tax, assessment or other
                                              governmental charge required to be
                                              withheld by any paying agent from
                                              any payment of principal of, or
                                              supplemental redemption amount on,
                                              this Note, if such payment can be
                                              made without such withholding by
                                              presentation of this Note to any
                                              other paying agent;

                                         15
<PAGE>

                                        (e)   any tax, assessment or other
                                              governmental charge that would not
                                              have been imposed but for a
                                              holder's failure to comply with a
                                              request addressed to the holder
                                              or, if different, the beneficiary
                                              of the payment, to comply with
                                              certification, information or
                                              other reporting requirements
                                              concerning the nationality,
                                              residence or identity of the
                                              holder or beneficial owner of this
                                              Note, if such compliance is
                                              required by statute or by
                                              regulation of The Netherlands (or
                                              other relevant jurisdiction), or
                                              of any political subdivision or
                                              taxing authority thereof or
                                              therein, as a precondition to
                                              relief or exemption from such tax,
                                              assessment or other governmental
                                              charge; or

                                        (f)   any combination of items (a), (b),
                                              (c), (d) or (e);

                                        nor shall Additional Amounts be paid
                                        with respect to any payment on this
                                        Note to a holder who is a fiduciary or
                                        partnership or other than the sole
                                        beneficial owner of such payment to the
                                        extent such payment would be required
                                        by the laws of The Netherlands (or
                                        other relevant jurisdiction), or any
                                        political subdivision thereof, to be
                                        included in the income, for tax
                                        purposes, of a beneficiary or settlor
                                        with respect to such fiduciary or a
                                        member of such partnership or a
                                        beneficial owner who would not have
                                        been entitled to the Additional Amounts
                                        had such beneficiary, settlor, member
                                        or beneficial owner been the holder of
                                        this Note.

     ABN AMRO Bank N.V., a public limited liability company incorporated under
the laws of The Netherlands and with corporate seat in Amsterdam (together with
its successors and assigns, the "Issuer"), for value received, hereby promises
to pay to CEDE & CO., or registered assignees, the principal sum of U.S.
$8,250,000 (UNITED STATES DOLLARS EIGHT MILLION TWO HUNDRED AND FIFTY
THOUSAND), on the Maturity Date specified above (except to the extent

                                       16
<PAGE>

redeemed or repaid prior to maturity) and to pay interest thereon at the
Interest Rate per annum specified above, from and including the Interest
Accrual Date specified above until the principal hereof is paid or duly made
available for payment weekly, monthly, quarterly, semiannually or annually in
arrears as specified above as the Interest Payment Period on each Interest
Payment Date (as specified above), commencing on the Interest Payment Date next
succeeding the Interest Accrual Date specified above, and at maturity (or on
any redemption or repayment date); provided, however, that if the Interest
Accrual Date occurs between a Record Date, as defined below, and the next
succeeding Interest Payment Date, interest payments will commence on the second
Interest Payment Date succeeding the Interest Accrual Date to the registered
holder of this Note on the Record Date with respect to such second Interest
Payment Date; and provided, further, that if this Note is subject to "Annual
Interest Payments," interest payments shall be made annually in arrears and the
term "Interest Payment Date" shall be deemed to mean the first day of March in
each year.

     Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until, but excluding the date the principal hereof has been paid or duly made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the date 15
calendar days prior to such Interest Payment Date (whether or not a Business
Day (as defined below)) (each such date a "Record Date"); provided, however,
that interest payable at maturity (or any redemption or repayment date) will be
payable to the person to whom the principal hereof shall be payable. As used
herein, "Business Day" means any day, other than a Saturday or Sunday, (a) that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close (x) in The City of New
York or (y) if this Note is denominated in a Specified Currency other than U.S.
dollars, Australian dollars or euro, in the principal financial center of the
country of the Specified Currency, or (z) if this Note is denominated in
Australian dollars, in Sydney and (b) if this Note is denominated in euro, that
is also a day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer System ("TARGET") is operating (a "TARGET Settlement Day").

     Payment of the principal of this Note, any premium and the interest due at
maturity (or any redemption or repayment date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or
in part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent, as
defined on the reverse hereof, maintained for that purpose in the Borough of
Manhattan, The City of New York, or at such other paying agency as the Issuer
may determine, in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or on any date of redemption or repayment, will be
made by U.S. dollar check mailed to the address of the person entitled thereto
as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
payable in U.S. dollars, shall be entitled to receive payments of interest,
other than interest due at maturity or on any date of redemption or repayment,
by wire

                                       17
<PAGE>

transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.

     If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing, with
respect to payments of interest, on or prior to the fifth Business Day after
the applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be; provided that, if payment of
interest, principal or any premium with regard to this Note is payable in euro,
the account must be a euro account in a country for which the euro is the
lawful currency, provided, further, that if such wire transfer instructions are
not received, such payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register; and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.

     If so indicated on the face hereof, the holder of this Note, if
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the fifth
Business Day after such Record Date or at least ten Business Days prior to the
Maturity Date or any redemption or repayment date, as the case may be. Such
election shall remain in effect unless such request is revoked by written
notice to the Paying Agent as to all or a portion of payments on this Note at
least five Business Days prior to such Record Date, for payments of interest,
or at least ten days prior to the Maturity Date or any redemption or repayment
date, for payments of principal, as the case may be.

     If the holder elects to receive all or a portion of payments of principal
of and any premium and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent (as
defined on the reverse hereof) will convert such payments into U.S. dollars. In
the event of such an election, payment in respect of this Note will be based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest bid quotation in The City of New York received by such Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign
exchange dealers (one of which may be the Exchange Rate Agent unless such
Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the
quoting dealer of U.S. dollars for the Specified Currency for settlement on
such payment date in the amount of the Specified Currency payable in the
absence of such an election to such holder and at which the applicable dealer
commits to execute a contract. If such bid quotations are not available, such
payment will be made in the

                                       18
<PAGE>

Specified Currency. All currency exchange costs will be borne by the holder of
this Note by deductions from such payments.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture, as defined on the reverse
hereof, or be valid or obligatory for any purpose.

                                       19
<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

DATED: July 3, 2002                      ABN AMRO BANK N.V.

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

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

TRUSTEE'S CERTIFICATE
   OF AUTHENTICATION

This is one of the Notes referred
   to in the within-mentioned
   Indenture.

JPMORGAN CHASE BANK,
   as Trustee

By:
   ------------------------------
    Authorized Officer

<PAGE>

                              REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Global Medium-Term Notes,
Series A, having maturities more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an Indenture, dated as of
November 27, 2000, between the Issuer and JPMorgan Chase Bank, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture) (as
may be amended or supplemented from time to time, the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities of the Issuer, the Trustee and holders of the Notes and the terms
upon which the Notes are, and are to be, authenticated and delivered. The
Issuer has appointed JPMorgan Chase Bank at its corporate trust office in The
City of New York as the paying agent (the "Paying Agent," which term includes
any additional or successor Paying Agent appointed by the Issuer) with respect
to the Notes. The terms of individual Notes may vary with respect to interest
rates, interest rate formulas, issue dates, maturity dates, or otherwise, all
as provided in the Indenture. To the extent not inconsistent herewith, the
terms of the Indenture are hereby incorporated by reference herein.

     Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof
in accordance with the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder prior to
maturity.

     If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof,
together with interest accrued and unpaid hereon to the date of redemption. If
this Note is subject to "Annual Redemption Percentage Reduction," the Initial
Redemption Percentage indicated on the face hereof will be reduced on each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction specified on the face hereof until the redemption price of this Note
is 100% of the principal amount hereof, together with interest accrued and
unpaid hereon to the date of redemption. Notice of redemption shall be mailed
to the registered holders of the Notes designated for redemption at their
addresses as the same shall appear on the Note register not less than 30 nor
more than 60 days prior to the date fixed for redemption or within the
Redemption Notice Period specified on the face hereof, subject to all the
conditions and provisions of the Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the unredeemed portion
hereof shall be issued in the name of the holder hereof upon the cancellation
hereof.

     If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments
of $1,000 or, if this Note is denominated in a Specified Currency other than
U.S. dollars, in increments of 1,000 units of such Specified Currency (provided
that any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of

<PAGE>

the holder hereof at a price equal to 100% of the principal amount to be
repaid, together with interest accrued and unpaid hereon to the date of
repayment. For this Note to be repaid at the option of the holder hereof, the
Paying Agent must receive at its corporate trust office in the Borough of
Manhattan, The City of New York, at least 15 but not more than 30 days prior to
the date of repayment, (i) this Note with the form entitled "Option to Elect
Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a
trust company in the United States setting forth the name of the holder of this
Note, the principal amount hereof, the certificate number of this Note or a
description of this Note's tenor and terms, the principal amount hereof to be
repaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Note, together with the form entitled "Option
to Elect Repayment" duly completed, will be received by the Paying Agent not
later than the fifth Business Day after the date of such telegram, telex,
facsimile transmission or letter; provided, that such telegram, telex,
facsimile transmission or letter shall only be effective if this Note and form
duly completed are received by the Paying Agent by such fifth Business Day.
Exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.

     Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise provided on
the face hereof, interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.

     In the case where the Interest Payment Date or the Maturity Date (or any
redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.

     This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured
and unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and, if denominated
in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of

<PAGE>

such Specified Currency), or any amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency, as determined by reference
to the noon dollar buying rate in The City of New York for cable transfers of
such Specified Currency published by the Federal Reserve Bank of New York (the
"Market Exchange Rate") on the Business Day immediately preceding the date of
issuance.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Trustee will not be
required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased, or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Indenture
with respect to the redemption of Notes. Notes are exchangeable at said office
for other Notes of other authorized denominations of equal aggregate principal
amount having identical terms and provisions. All such exchanges and transfers
of Notes will be free of charge, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and executed by the
registered holder in person or by the holder's attorney duly authorized in
writing. The date of registration of any Note delivered upon any exchange or
transfer of Notes shall be such that no gain or loss of interest results from
such exchange or transfer.

     In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note
of like tenor in exchange for this Note, but, if this Note is destroyed, lost
or stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.

     The Indenture provides that (a) if an Event of Default (as defined in the
Indenture) due to the default in payment of principal of, premium, if any, or
interest on, any series of debt securities issued under the Indenture,
including the series of Medium-Term Notes of which this Note forms a part,

<PAGE>

or due to the default in the performance or breach of any other covenant or
warranty of the Issuer applicable to the debt securities of such series but not
applicable to all outstanding debt securities issued under the Indenture shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of the debt securities of each affected series
(voting as a single class) may then declare the principal of all debt
securities of all such series and interest accrued thereon to be due and
payable immediately and (b) if an Event of Default due to a default in the
performance of any other of the covenants or agreements in the Indenture
applicable to all outstanding debt securities issued thereunder, including this
Note, or due to certain events of bankruptcy or insolvency of the Issuer, shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of all debt securities issued under the Indenture
then outstanding (treated as one class) may declare the principal of all such
debt securities and interest accrued thereon to be due and payable immediately,
but upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal (or premium,
if any) or interest on such debt securities) by the holders of a majority in
principal amount of the debt securities of all affected series then
outstanding.

     If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of
principal due and payable with respect to this Note shall be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Indenture prior to
the acceleration of payment of this Note, the principal amount hereof shall
equal the amount that would be due and payable hereon, calculated as set forth
in clause (i) above, if this Note were declared to be due and payable on the
date of any such vote and (iii) for the purpose of any vote of securityholders
taken pursuant to the Indenture following the acceleration of payment of this
Note, the principal amount hereof shall equal the amount of principal due and
payable with respect to this Note, calculated as set forth in clause (i) above.

     The Indenture permits the Issuer and the Trustee, with the consent of the
holders of not less than a majority in aggregate principal amount of the debt
securities of all series issued under the Indenture then outstanding and
affected (voting as one class), to execute supplemental indentures adding any
provisions to or changing in any manner the rights of the holders of each
series so affected; provided that the Issuer and the Trustee may not, without
the consent of the holder of each outstanding debt security affected thereby,
(a) extend the final maturity of any such debt security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption or repayment
thereof, or change the currency of payment thereof, or modify or amend the
provisions for conversion of any currency into any other currency, or modify or
amend the provisions for conversion or exchange of the debt security for
securities of the Issuer or other entities (other than as provided in the
antidilution provisions or other

<PAGE>

similar adjustment provisions of the debt securities or otherwise in accordance
with the terms thereof), or impair or affect the rights of any holder to
institute suit for the payment thereof without the consent of the holder of
each debt security so affected or (b) reduce the aforesaid percentage in
principal amount of debt securities the consent of the holders of which is
required for any such supplemental indenture.

     Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is
not available on such date, as of the most recent practicable date; provided,
however, that if the euro has been substituted for such Specified Currency, the
Issuer may at its option (or shall, if so required by applicable law) without
the consent of the holder of this Note effect the payment of principal of,
premium, if any, or interest on, any Note denominated in such Specified
Currency in euro in lieu of such Specified Currency in conformity with legally
applicable measures taken pursuant to, or by virtue of, the treaty establishing
the European Community (the "EC"), as amended by the treaty on European Union
(as so amended, the "Treaty"). Any payment made under such circumstances in
U.S. dollars or euro where the required payment is in an unavailable Specified
Currency will not constitute an Event of Default. If such Market Exchange Rate
is not then available to the Issuer or is not published for a particular
Specified Currency, the Market Exchange Rate will be based on the highest bid
quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the date of such payment from three recognized foreign exchange
dealers (the "Exchange Dealers") for the purchase by the quoting Exchange
Dealer of the Specified Currency for U.S. dollars for settlement on the payment
date, in the aggregate amount of the Specified Currency payable to those
holders or beneficial owners of Notes and at which the applicable Exchange
Dealer commits to execute a contract. One of the Exchange Dealers providing
quotations may be the Exchange Rate Agent unless the Exchange Rate Agent is an
affiliate of the Issuer. If those bid quotations are not available, the
Exchange Rate Agent shall determine the market exchange rate at its sole
discretion.

     The "Exchange Rate Agent," if any, shall be indicated on the face hereof.

     All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons.

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said

<PAGE>

Borough of Manhattan for the registration, transfer and exchange as aforesaid
of the Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated.

     With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting
in any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.

     No provision of this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise
agreed between the Issuer and the registered holder of this Note.

     Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.

     No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

     This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

     All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.

<PAGE>

                                 ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

             TEN COM - as tenants in common
             TEN ENT - as tenants by the entireties
             JT TEN  - as joint tenants with right of survivorship and not as
                       tenants in common

     UNIF GIFT MIN ACT - _____________________ Custodian ______________________
                                (Minor)                          (Cust)

     Under Uniform Gifts to Minors Act _____________________________
                                                 (State)

     Additional abbreviations may also be used though not in the above list.

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

<PAGE>

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

--------------------------------------------
[PLEASE INSERT SOCIAL SECURITY OR OTHER
     IDENTIFYING NUMBER OF ASSIGNEE]

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

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

--------------------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.

Dated:
      -----------------------

NOTICE:   The signature to this assignment must correspond with the name as
          written upon the face of the within Note in every particular without
          alteration or enlargement or any change whatsoever.

<PAGE>

                           OPTION TO ELECT REPAYMENT

The undersigned hereby irrevocably requests and instructs the Issuer to repay
the within Note (or portion thereof specified below) pursuant to its terms at a
price equal to the principal amount thereof, together with interest to the
Optional Repayment Date, to the undersigned at

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

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

--------------------------------------------------------------------------------
        (Please print or typewrite name and address of the undersigned)

     If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
____________; and specify the denomination or denominations (which shall not be
less than the minimum authorized denomination) of the Notes to be issued to the
holder for the portion of the within Note not being repaid (in the absence of
any such specification, one such Note will be issued for the portion not being
repaid): ____________.

Dated:
      ----------------------------------   ------------------------------------
                                           NOTICE: The signature on this Option
                                           to Elect Repayment must correspond
                                           with the name as written upon the
                                           face of the within instrument in
                                           every particular without alteration
                                           or enlargement.<PAGE>
                                                                     Exhibit 4.2

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY UNITED
STATES OF AMERICA STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I) (A) A REGISTRATION
STATEMENT IS IN EFFECT UNDER THE SECURITIES ACT WITH RESPECT TO SUCH SECURITIES,
OR (B) A WRITTEN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY IS
PROVIDED TO THE COMPANY TO THE EFFECT THAT NO SUCH REGISTRATION IS REQUIRED, AND
(II) THE TRANSFEREE (A) IS AN 'ACCREDITED INVESTOR' AS DEFINED IN RULE 501(a) OF
REGULATION D UNDER THE SECURITIES ACT, AND (B) IF REQUIRED BY LAW, IS APPROVED
BY APPLICABLE BERMUDA REGULATORY AUTHORITIES.

IN ADDITION, ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY, AND THE RIGHTS
ATTACHING TO THESE SECURITIES ARE SUBJECT TO, THE TERMS AND CONDITIONS CONTAINED
HEREIN AND IN THE BYE-LAWS OF THE COMPANY (THE "BYE-LAWS") AND THE SHAREHOLDERS
AGREEMENT DATED AS OF DECEMBER 12, 2001 (THE "SHAREHOLDERS AGREEMENT"), AS THEY
MAY BE AMENDED FROM TIME TO TIME, WHICH ARE AVAILABLE FOR EXAMINATION BY HOLDERS
OF SECURITIES AT THE REGISTERED OFFICE OF THE COMPANY. THE HOLDER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE, BY ACQUIRING AND HOLDING SUCH
SECURITIES, SHALL BE DEEMED A PARTY TO SUCH SHAREHOLDERS AGREEMENT FOR ALL
PURPOSES AND SHALL BE REQUIRED TO AGREE IN WRITING TO BE BOUND BY AND PERFORM
ALL OF THE TERMS AND PROVISIONS OF SUCH SHAREHOLDERS AGREEMENT, ALL AS MORE
FULLY PROVIDED THEREIN. IN ADDITION, ANY TRANSFEREE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE SHALL BE DEEMED TO BE A PARTY TO SUCH
SHAREHOLDERS AGREEMENT FOR ALL PURPOSES AND SHALL BE REQUIRED BY THE TRANSFEROR
TO AGREE IN WRITING TO ACQUIRE AND HOLD SUCH SECURITIES SUBJECT TO ALL OF THE
TERMS OF SUCH SHAREHOLDERS AGREEMENT, ALL AS MORE FULLY PROVIDED THEREIN, WHICH
TERMS ARE TO BE ENFORCED BY THE SHAREHOLDERS OF THE COMPANY.

                           MONTPELIER RE HOLDINGS LTD.

                             SHARE PURCHASE WARRANT

Certificate No.: W - 3                                  Date: January 3, 2002

          FOR CONSIDERATION RECEIVED, Montpelier Re Holdings Ltd., a company
organized under the laws of Bermuda with limited liability (the "Company"),
hereby grants to Banc of America Securities LLC (the "Warrant Holder") this
warrant certificate (this "Warrant") to purchase, in accordance with the terms
set forth herein, 24,472 shares (the "Warrant Shares") of the Company's common
shares, initially having a par value of US$0.01 per share (the "Common Shares"),
at a price per share equal to

<PAGE>

US$100, as adjusted from time to time pursuant to Section 2 hereof (the
"Exercise Price") but at no time shall the Exercise Price be less than the then
current par value of any share to be issued pursuant hereto.

          This Warrant is issued pursuant to a letter agreement, dated as of
December 6, 2001, between the Company and the Warrant Holder.

          This Warrant is subject to the following provisions:

          Section 1. Warrant Terms.

               (a) This Warrant is for the purchase of the Warrant Shares at the
Exercise Price.

               (b) This Warrant shall expire on the [tenth/fifth(BAS)]
anniversary of the date hereof (the "Expiration Date"). The Warrant exercise
procedure set forth in Section 3 hereof must be commenced by the Warrant Holder
by 3:30 p.m. New York City time on such Expiration Date.

          Section 2. Anti-dilution Provisions. In order to prevent dilution of
the purchase rights granted under Section 1 hereof, the Exercise Price shall be
subject to adjustment from time to time pursuant to this Section 2; provided,
however, that under no circumstances will the Exercise Price be less than the
then current par value of any share to be issued under this Warrant.

               (a) Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price, the following shall be applicable:

                    (1) Subdivision or Consolidation/Combination of Common
Shares. If the Company, at any time while this Warrant is outstanding, (a) shall
pay a stock or bonus share dividend on its Common Shares or pay any other
distribution in Common Shares, (b) subdivide the class of Common Shares into a
larger number of shares or (c) consolidate/ combine the class of Common Shares
into a smaller number of shares then the Exercise Price thereafter shall be
determined by multiplying the Exercise Price by a fraction the numerator of
which shall be the number of Common Shares (excluding treasury shares, if any)
issued and outstanding before such event and the denominator of which shall be
the number of Common Shares (excluding treasury shares, if any) issued and
outstanding after such event. Any adjustment made pursuant to this Section
2(a)(l) shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision or combination.

                    (2) Issuance of Additional Common Shares.

          In case the Company at any time or from time to time after the date
hereof shall issue or sell additional Common Shares, other than any issuance to
which Section 2(a)(1) shall apply, without consideration or for a consideration
per share less than the Fair Market Value of the Common Shares on the day
immediately prior to such issue or sale, then, and in each such

                                       2

<PAGE>

case, subject to Section 2(b)(ii), the Exercise Price shall be reduced,
concurrently with such issue or sale, to a price determined by multiplying such
Exercise Price by a fraction

          (x) the numerator of which shall be (i) the number of Common Shares
          outstanding immediately prior to such issue or sale plus (ii) the
          number of Common Shares which the aggregate consideration received by
          the Company for the total number of such additional Common Shares so
          issued or sold would purchase at such Fair Market Value of the Common
          Shares, and

          (y) the denominator of which shall be the number of Common Shares
          outstanding immediately after such issue or sale;

provided, that for the purposes of this Section 2(a)(2), treasury shares shall
not be deemed to be outstanding.

                    (3) Dividends and Distributions.

          In case the Company at any time or from time to time after the date
hereof shall declare, order, pay or make a dividend or other distribution
(including, without limitation, any distribution of other or additional stock or
other securities or property or options, warrants or other rights to purchase
Common Shares or Convertible Securities (as hereinafter defined) (other than
options granted to employees of the Company) (collectively, "Assets") by way of
dividend or spin-off, reclassification, recapitalization or similar corporate
rearrangement) on the Common Shares, other than a dividend payable in additional
Common Shares, then, and in each such case, the Company shall make the same
dividend or distribution to Warrant Holders as it makes to holders of Common
Shares pro rata based on the number of shares of Common Shares for which such
Warrants are then exercisable, and the Exercise Price shall not be adjusted in
respect thereof.

                    (4) Consolidation, Merger, etc.

                         (A) Adjustments for Consolidation, Merger, Sale of
Assets, Reorganization, etc. In case the Company after the date hereof (i) shall
consolidate or amalgamate with or merge into any other Person (as hereinafter
defined) and shall not be the continuing or surviving corporation of such
consolidation, amalgamation or merger, (ii) shall permit any other Person to
consolidate or amalgamate with or merge into the Company and the Company shall
be the continuing or surviving Person but, in connection with such
consolidation, amalgamation or merger, the Common Shares shall be changed into
or exchanged for stock or other securities of any other Person or cash or any
other property, (iii) shall transfer all or substantially all of its properties
or assets to any other Person, (iv) shall effect a capital reorganization or
reclassification of the Common Shares (other than a capital reorganization or
reclassification resulting in an adjustment to the Exercise Price as provided in
another paragraph of this Section 2), or (v) shall effect any other transaction
in which the Common Shares are changed into or exchanged for stock or other
securities of any other Person, then, except and insofar as otherwise provided
in Section 2(a)(4)(C) in the case of each such transaction, proper provision
shall be made so that, upon the basis and the terms and in the manner provided
in this Warrant, the holder of this Warrant, upon the exercise

                                       3

<PAGE>

hereof at any time after the consummation of such transaction, shall be entitled
to receive (at the aggregate Exercise Price in effect at the time of such
consummation for all Common Shares issuable upon such exercise immediately prior
to such consummation), in lieu of the Common Shares issuable upon such exercise
prior to such consummation, the amount of securities, cash or other property to
which such holder would actually have been entitled as a shareholder upon such
consummation if such holder had exercised the rights represented by this Warrant
immediately prior thereto. As used herein, "Person" shall mean an individual,
company, corporation, limited liability company, firm, partnership, trust,
estate, unincorporated association or other entity.

                         (B) Assumption of Obligations. Notwithstanding anything
contained in this Warrant or in the Shareholders Agreement to the contrary, the
Company will not effect any of the transactions described in clauses (i) through
(v) of the preceding paragraph unless, prior to the consummation thereof, each
Person (other than the Company) which may be required to deliver any stock,
securities, cash or property upon the exercise of this Warrant as provided
herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the holder of this Warrant the obligations of the Company under
this Warrant (and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release the
Company from, any continuing obligations of the Company under this Warrant).
Nothing in this Section 2(a)(4) shall be deemed to authorize the Company to
enter into any transaction not otherwise permitted by the Shareholders Agreement
or the Bye-laws.

                         (C) Qualifying Transactions. (1) In the event that,
after the date hereof, the Company shall effect a transaction of the type
contemplated by subparagraph (A) above and in connection therewith (x) the
Common Shares are exchanged in whole or in part for cash (other than cash in
lieu of fractional shares), securities (other than Voting Common Stock (as
defined below)) or other property (collectively, "Non-Common Consideration") and
(y) the Per Share Value (as defined below) exceeds the Subscription Price (as
defined below) (any such transaction being referred to herein as a "Qualifying
Transaction"), then (i) the holder of this Warrant shall receive, upon the
consummation of the Qualifying Transaction, an amount in cash equal to the
Intrinsic Value Amount and (ii) if any portion of the consideration to be
received by holders of Common Shares in such Qualifying Transaction consists of
Voting Common Stock, the holder of the Warrant, upon the exercise hereof at any
time after the consummation of such Qualifying Transaction, shall be entitled to
receive, at the aggregate exercise price determined pursuant to subparagraph
(C)(3) below, the number of shares of Voting Common Stock determined pursuant to
subparagraph (C)(3) below.

                         (2) Certain Definitions. For purposes of this Section
2(a)(4), the following terms have the following meanings.

          "Per Share Value" means the average value of the consideration to be
received in respect of each outstanding Common Share pursuant to the Qualifying
Transaction as determined by mutual agreement of the Independent Directors (as
defined in Section 2(b)(i) below) and the holders of a majority in interest of
all outstanding warrants to purchase Common Shares containing this provision,
or, if they shall fail to agree, by an Investment Bank.

                                       4

<PAGE>

          "Subscription Price" means US$100.00; provided, however, that such
amount shall be (i) adjusted in an appropriate and proportionate manner
consistent with the provisions for adjusting the Exercise Price in Section
2(a)(1) for any events that require an adjustment in the Exercise Price pursuant
to such section and (ii) reduced by an amount equal to the pre-tax value
(determined pursuant to Section 2(b)(i)) per Common Share of any dividend or
other distribution described in Section 2(a)(3).

          "Voting Common Stock" means, as to any issuer, (i) voting equity
securities of such issuer having no preference as to dividends or in a
liquidation over any other securities of such issuer, (ii) nonvoting equity
securities of such issuer which are in all other respects identical to, and are
expected to have, after completion of the Qualifying Transaction, liquidity
substantially equivalent to or greater than, the outstanding voting equity
securities of such issuer that would fit the description in the preceding clause
(i), or (iii) securities convertible into or exchangeable for the voting or
nonvoting securities described in clause (i) or (ii).

          "Intrinsic Value Amount" shall mean (i) the Applicable Black-Scholes
Value minus (ii) the Applicable Reduction, if any.

          "Applicable Black-Scholes Value" shall mean the product of (i) the
Black-Scholes Value and (ii) the Non-Common Stock Portion.

          "Non-Common Stock Portion" shall mean (i) one minus (ii) the Common
Stock Portion.

          "Common Stock Portion" means the quotient obtained by dividing (i) the
total value of the shares of Voting Common Stock to be issued in respect of the
outstanding Common Shares pursuant to the Qualifying Transaction by (ii) the
total value of the shares of Voting Common Stock and Non-Common Consideration to
be issued in respect of the outstanding Common Shares pursuant to the Qualifying
Transaction, in each case as determined by mutual agreement of the Independent
Directors and the holders of a majority in interest of all outstanding warrants
to purchase Common Shares containing this provision, or, if they shall fail to
agree, by an Investment Bank.

          "Applicable Reduction" shall mean the product of (i) the Reduction
Amount and (ii) the Non-Common Stock Portion.

          "Reduction Amount" shall mean the product of (i) the Discount Factor
and (ii) the amount by which (x) the Black-Scholes Value exceeds (y) the Total
Spread.

          "Discount Factor" shall mean (A) one minus (B) the quotient obtained
by dividing (i) the amount by which (x) the Per Share Value exceeds (y) the
Subscription Price by (ii) the amount by which (x) the Hurdle Price exceeds (y)
the Subscription Price; provided, that if the quotient determined pursuant to
clause (B) is greater than one, such quotient shall be deemed to be one.

          "Total Spread" shall mean the product of (i) the total number of
Warrant Shares purchasable pursuant to this Warrant immediately prior to the
completion of the Qualifying Transaction and (ii) the Spread.

                                       5

<PAGE>

          "Spread" shall mean the amount by which (i) the Per Share Value
exceeds (ii) the Exercise Price.

          "Hurdle Price" shall mean US$155.00; provided, however, that such
amount shall be (i) adjusted in an appropriate and proportionate manner
consistent with the provisions for adjusting the Exercise Price in Section
2(a)(1) for any events that require an adjustment in the Exercise Price pursuant
to such section and (ii) reduced by an amount equal to the pre-tax value
(determined pursuant to Section 2(b)(i)) per Common Share of any dividend or
other distribution described in Section 2(a)(3).

          "Investment Bank" means an independent nationally-recognized U.S.
investment banking firm selected by the Independent Directors with the consent
of the holders of a majority in interest of all outstanding warrants to purchase
Common Shares containing this provision (which consent shall not be unreasonably
withheld), the fees and expenses of which shall be shared equally by the Company
on the one hand and such holders on the other.

          "Black-Scholes Value" means the value of this Warrant immediately
prior to consummation of the Qualifying Transaction, as calculated by an
Investment Bank, using the Black-Scholes calculation method for valuing options
and the following assumptions:

        Volatility =          as determined by the Investment Bank but in no
                              event more than 30%

        Risk Free Rate =      the then current effective U.S. Federal government
                              interest rate for a bond or note with a remaining
                              time to maturity equal to the Term of the Warrant
                              then in effect, but in no event more than 5%

        Dividend Yield =      0%

        Exercise Price =      the Exercise Price in effect immediately
                              prior to the consummation of the Qualifying
                              Transaction

        Term of the Warrant = the lesser of five years and the remaining term
                              of the Warrant, measured from the date of
                              completion of the Qualifying Transaction to the
                              Expiration Date

The underlying security price for purposes of the Black-Scholes calculation
shall be the Per Share Value.

          Exhibit C to this Warrant contains examples illustrating certain of
the calculations required by this Section 2(a)(4)(C).

                         (3) Voting Common Stock Consideration. In the event of
a Qualifying Transaction in which any portion of the consideration to be
received by holders of Common Shares in such Qualifying Transaction consists of
Voting Common Stock, then

                                       6

<PAGE>

proper provision shall be made so that, upon the basis and the terms and in the
manner provided in this Warrant, the holder of this Warrant, upon the exercise
hereof at any time after the consummation of such Qualifying Transaction, shall
be entitled to receive (at the aggregate exercise price determined pursuant to
this subparagraph (3)) a number of shares of Voting Common Stock equal to the
product of (i) the product of (x) the aggregate number of Warrant Shares
purchasable pursuant to this Warrant immediately prior to the completion of the
Qualifying Transaction and (y) the Common Stock Portion and (ii) the Calculated
Exchange Ratio. The aggregate exercise price of this Warrant after the
consummation of such Qualifying Transaction shall be equal to the product of (i)
the aggregate Exercise Price of this Warrant for the number of Warrant Shares
purchasable pursuant to this Warrant immediately prior to the completion of the
Qualifying Transaction and (ii) the Common Stock Portion.

For purposes of this subparagraph (3):

          "Calculated Exchange Ratio" means the quotient obtained by dividing
(i) the Per Share Value by (ii) the Average Closing Price of the Voting Common
Stock.

          "Average Closing Price" means (a) the average of the closing prices
per share of the Voting Common Stock on the national securities exchange or
automated quotation system on which such stock is then listed for the 10
consecutive trading days immediately preceding the closing date of the
Qualifying Transaction, or (b) if such Voting Common Stock is not so listed, the
fair market value per share of such Voting Common Stock, determined by mutual
agreement of the Independent Directors and the holders of a majority in interest
of all outstanding warrants to purchase Common Shares containing this provision,
or, if they shall fail to agree, by an Investment Bank.

                         (4) Cancellation of Warrant. In the event of a
Qualifying Transaction in which the Common Stock Portion is zero, then the
holder of this Warrant shall surrender this Warrant at the time of payment of
the Intrinsic Value Amount, whereupon this Warrant shall be cancelled and all
rights hereunder shall expire. In the event of a Qualifying Transaction in which
the Common Stock Portion is more than zero, then the holder of this Warrant
shall surrender this Warrant at the time of payment of the Intrinsic Value
Amount in exchange for a warrant of like tenor representing the right to
purchase the number of shares of Voting Common Stock determined pursuant to
Section 2(a)(4)(C)(3) at the aggregate exercise price as determined pursuant to
Section 2(a)(4)(C)(3).

                         (5) Cash Elections; etc. In the event that the type of
consideration to be received per Common Share in a Qualifying Transaction is
subject to the election of the holders thereof, such election permits such
holder to elect to receive Voting Common Stock and there is no limitation on the
number of shares of Voting Common Stock to be issued in the Qualifying
Transaction, then (i) after the consummation of such transaction this Warrant
shall be exercisable solely for Voting Common Stock, (ii) such transaction shall
not be deemed to constitute a Qualifying Transaction and (iii) the provisions of
Section 2(a)(4)(A) shall apply.

                         (6) In the case of a Qualifying Transaction in which
any portion of the consideration to be received by the holders of Common Shares
consists of

                                       7

<PAGE>

Voting Common Stock, the holder of this Warrant and the Company shall use all
reasonable efforts to cause this Warrant to become exercisable solely for Voting
Common Stock and, if the Person who shall be issuing Voting Common Stock in such
transaction agrees in writing that this Warrant shall be exercisable solely for
Voting Common Stock, then (i) such transaction shall not be deemed to constitute
a Qualifying Transaction and (ii) the provisions of Section 2(a)(4)(A) shall
apply.

               (b) Other Provisions Applicable to Adjustments under this
Section.

          The following provisions shall be applicable to the making of
adjustments to the number of Warrant Shares for which the Warrant is exercisable
provided for in this Section 2.

                         (i) Computation of Asset Value and Fair Market Value
     for Purposes of Section 2. To the extent that the Company shall distribute
     Assets other than cash, except as herein otherwise expressly provided, then
     the value of such Assets shall be determined by mutual agreement of the
     Independent Directors and the holders of a majority in interest of all
     outstanding warrants to purchase Common Shares containing this provision,
     or, if they shall fail to agree, by an Investment Bank. The "Fair Market
     Value" of the Common Shares at any given time shall mean (a) if the Common
     Shares are listed on a securities exchange (or quoted in a securities
     quotation system), the average closing sale price of the Common Shares on
     such exchange (or in such quotation system), or, if the Common Shares are
     listed on (or quoted in) more than one exchange (or quotation system), the
     average closing sale price of the Common Shares on the principal securities
     exchange (or quotation system) on which the Common Shares are then traded,
     or, if the Common Shares are not then listed on a securities exchange (or
     quotation system) but are traded in the over-the-counter market, the
     average of the latest bid and asked quotations for the Common Shares in
     such market, in each case for the last five trading days immediately
     preceding the day on which such Fair Market Value is determined in
     accordance with the applicable provision of this Section 2 or (b) if no
     such closing sales prices or quotations are available because such shares
     are not publicly traded or otherwise, the fair value of such shares as
     determined by mutual agreement of the Independent Directors and the holders
     of a majority in interest of all outstanding warrants to purchase Common
     Shares containing this provision, or, if they shall fail to agree, by an
     Investment Bank. As used herein, the term "Independent Director" shall mean
     each member of the Board of Directors of the Company that is not (x) a
     director, officer or employee of any Warrant Holder or any affiliate of any
     Warrant Holder, (y) the holder of a 10% or greater equity interest in any
     Warrant Holder or any affiliate of any Warrant Holder or (z) a member of
     the immediate family of any director, officer or employee of any Warrant
     Holder or any holder of a 10% or greater equity interest in any such
     Warrant Holder or any affiliate of any Warrant Holder.

                         (ii) When Adjustment to Be Made. The adjustments
     required by this Section 2 shall be made whenever and as often as any
     specified event requiring an adjustment shall occur, except that any
     adjustment of the number of Common Shares for which the Warrant is
     exercisable that would otherwise be required may be postponed (except in
     the case of a subdivision or combination of shares of the Common Shares, as
     provided for in Section 2(a)(1)) up to but not beyond the Expiration

                                       8

<PAGE>

     Date if such adjustment either by itself or with other adjustments not
     previously made adds or subtracts less than 1% of the Warrant Shares
     immediately prior to the making of such adjustment. Any adjustment
     representing a change of less than such minimum amount (except as
     aforesaid) which is postponed shall be carried forward and made as soon as
     such adjustment, together with other adjustments required by this Section 2
     and not previously made, would result in a minimum adjustment or on the
     date of exercise. For the purpose of any adjustment, any specified event
     shall be deemed to have occurred at the close of business on the date of
     its occurrence.

                         (iii) Fractional Interest; Rounding. In computing
     adjustments under this Section 2, fractional interests in Common Shares
     shall be taken into account to the nearest 1/10th of a share, and
     adjustments in the Exercise Price shall be made to the nearest $.01.

                         (iv) Certain Exclusions. No adjustment in the number of
     Common Shares purchasable under this Warrant or the Exercise Price therefor
     shall be made as a result of (x) any adjustment in the number of Common
     Shares purchasable under any other warrant or the exercise price
     thereunder, or (y) for the issuance of any employee stock options or any
     Common Shares issuable under employee stock options, employee stock
     purchase plans, or any other form of equity based compensation granted to
     employees of the Company.

                         (v) Computation of Consideration. For the purposes of
     this Section 2,

                              (A) the consideration for the issue or sale of any
          additional Common Shares shall, irrespective of the accounting
          treatment of such consideration,

                                   (x) insofar as it consists of cash, be
               computed at the net amount of cash received by the Company,

                                   (y) insofar as it consists of property
               (including securities) other than cash, be computed at the fair
               value thereof at the time of such issue or sale, as determined by
               mutual agreement of the Independent Directors and the holders of
               a majority in interest of all outstanding warrants to purchase
               Common Shares containing adjustment provisions of like tenor to
               the applicable adjustment provision contained in this Warrant,
               or, if they shall fail to agree, by an Investment Bank, and

                                   (z) in case additional Common Shares are
               issued or sold together with other stock or securities or other
               assets of the Company for a consideration which covers both, be
               the portion of such consideration so received, computed as
               provided in clauses (x) and (y) above, allocable to such
               additional Common Shares, all as determined in good faith by
               mutual agreement of the Independent Directors and the holders of
               a majority in interest of all outstanding warrants to purchase
               Common Shares containing

                                       9

<PAGE>

     adjustment provisions of like tenor to the applicable adjustment provision
     contained in this Warrant, or, if they shall fail to agree, by an
     Investment Bank;

                              (B) additional Common Shares deemed, pursuant to
          Section 2(c), to have been issued, relating to Options and Convertible
          Securities, shall be deemed to have been issued for a consideration
          per share determined by dividing

                    (x) the total amount, if any, received and receivable by the
               Company as consideration for the issue, sale, grant or assumption
               of the Options or Convertible Securities in question, plus the
               minimum aggregate amount of additional consideration (as set
               forth in the instruments relating thereto, without regard to any
               provision contained therein for a subsequent adjustment of such
               consideration to protect against dilution) payable to the Company
               upon the exercise in full of such Options or the conversion or
               exchange of such Convertible Securities or, in the case of
               Options for Convertible Securities, the exercise of such Options
               for Convertible Securities and the conversion or exchange of such
               Convertible Securities, in each case computing such consideration
               as provided in the foregoing subdivision (A),

                    by

                    (y) the maximum number of Common Shares (as set forth in the
               instruments relating thereto, without regard to any provision
               contained therein for a subsequent adjustment of such number)
               issuable upon the exercise of such Options or the conversion or
               exchange of such Convertible Securities; and

                              (C) additional Common Shares deemed to have been
          issued pursuant to Section 2(a)(1), relating to stock dividends, stock
          splits, etc., shall be deemed to have been issued for no
          consideration.

               (c) Treatment of Options and Convertible Securities.

          In case the Company at any time or from time to time after the date
hereof shall issue, sell, grant or assume, or shall fix a record date for the
determination of holders of any class of securities of the Company other than
the Common Shares entitled to receive, any (x) options, warrants or other rights
to purchase Common Shares (other than options granted to employees) or
Convertible Securities (as defined below) ("Options") or (y) securities
convertible into or exchangeable for Common Shares ("Convertible Securities"),
then, and in each such case, the maximum number of additional Common Shares (as
set forth in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed for purposes of Section 2(a)(2) to be additional Common Shares issued as
of the time of such issue, sale, grant or assumption or, in case such a record
date shall have been fixed, as of the close of

                                       10

<PAGE>

business on such record date (or, if the Common Shares trade on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading); provided,
that such additional Common Shares shall not be deemed to have been issued
unless the consideration per share (determined pursuant to section 2(b)(v))
would be less than the Fair Market Value on the date immediately prior to such
issue, sale, grant or assumption or immediately prior to the close of business
on such record date (or, if the Common Shares trade on an ex-dividend basis, on
the date prior to the commencement of ex-dividend trading), as the case may be,
and provided, further, that in any such case in which additional Common Shares
are deemed to be issued:

                         (i) no further adjustment of the Exercise Price shall
be made upon the subsequent issue or sale of Convertible Securities or Common
Shares upon the exercise of such Options or the conversion or exchange of such
Convertible Securities;

                         (ii) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Company, or decrease or increase in
the number of additional Common Shares issuable, upon the exercise, conversion
or exchange thereof (by change of rate or otherwise), the Exercise Price
computed upon the original issue, sale, grant or assumption thereof (or upon the
occurrence of the record date, or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options, or the rights of conversion or exchange under such
Convertible Securities, which are outstanding at such time;

                         (iii) upon the expiration (or purchase by the Company
and cancellation or retirement) of any such Options which shall not have been
exercised or the expiration of any rights of conversion or exchange under any
such Convertible Securities which (or purchase by the Company and cancellation
or retirement of any such Convertible Securities the rights of conversion or
exchange under which) shall not have been exercised, the Exercise Price computed
upon the original issue, sale, grant or assumption thereof (or upon the
occurrence of the record date, or date prior to the commencement of ex-dividend
trading, as the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such cancellation or
retirement, as the case may be), be recomputed as if:

                              (A) in the case of Options for Common Shares or
          Convertible Securities, the only additional Common Shares issued or
          sold were the additional Common Shares, if any, actually issued or
          sold upon the exercise of such Options or the conversion or exchange
          of such Convertible Securities and the consideration received therefor
          was (x) an amount equal to (1) the consideration actually received by
          the Company for the issue, sale, grant or assumption of all such
          Options, whether or not exercised, plus (2) the consideration actually
          received by the Company upon such exercise, minus (3) the
          consideration paid by the Company for any purchase of such Options
          which were not exercised, or (y) an amount equal to (1) the
          consideration actually received by the Company for the issue or sale
          of all such Convertible Securities which were actually converted or
          exchanged, plus (2) the additional consideration, if any, actually
          received by the Company upon such conversion or exchange, minus

                                       11

<PAGE>

          (3) the consideration paid by the Company for any purchase of such
          Convertible Securities the rights of conversion or exchange under
          which were not exercised, and

                              (B) in the case of Options for Convertible
          Securities, only the Convertible Securities, if any, actually issued
          or sold upon the exercise of such Options were issued at the time of
          the issue, sale, grant or assumption of such Options, and the
          consideration received by the Company for the additional Common Shares
          deemed to have then been issued was an amount equal to (x) the
          consideration actually received by the Company for the issue, sale,
          grant or assumption of all such Options, whether or not exercised,
          plus (y) the consideration deemed to have been received by the Company
          (pursuant to section 2(b)(v)) upon the issue or sale of such
          Convertible Securities with respect to which such Options were
          actually exercised, minus (z) the consideration paid by the Company
          for any purchase of such Options which were not exercised;

                         (iv) no readjustment pursuant to subdivision (ii) or
(iii) above shall have the effect of increasing the Exercise Price by an amount
in excess of the amount of the adjustment thereof originally made in respect of
the issue, sale, grant or assumption of such Options or Convertible Securities;
and

                         (v) in the case of any such Options which expire by
their terms not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Exercise Price shall be made until the
expiration or exercise of all such Options, whereupon such adjustment shall be
made in the manner provided in subdivision (iii) above.

               (d) Adjustment in Number of Warrant Shares. Upon each adjustment
of the Exercise Price pursuant to Sections 2(a)(1) or 2(a)(2), the number of
Common Shares for which this Warrant is exercisable shall be adjusted by
multiplying the number of Common Shares for which this Warrant was exercisable
prior to such adjustment by a fraction (i) whose numerator is the Exercise Price
in effect immediately prior to such adjustment and (ii) whose denominator is the
Exercise Price in effect immediately after such adjustment.

               (e) Other Dilutive Events. In case any event shall occur as to
which the provisions of Section 2 are not strictly applicable but the failure to
make any adjustment would not fairly protect the purchase rights (including the
rights provided under Section 2(a)(4)(C)) represented by this Warrant in
accordance with the essential intent and principles of such Sections, then, in
each such case, the Independent Directors of the Company shall appoint an
Investment Bank, which shall give its opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles established in Section
2, necessary to preserve, without dilution, the purchase rights represented by
this Warrant. Upon receipt of such opinion, the Company will promptly mail a
copy thereof to the holder of this Warrant and shall make the adjustments
described therein.

               (f) Notices. Immediately upon any adjustment of the Exercise
Price, the Company shall give, or cause to be given, written notice thereof,
executed by the Chief

                                       12

<PAGE>

Financial Officer (or, if none, the Chief Executive Officer or President) of the
Company, to the Warrant Holder, setting forth in reasonable detail and
certifying the event requiring the adjustment, the method by which the
adjustment was calculated, the number of Warrant Shares for which the Warrant is
exercisable and the Exercise Price after giving effect to such adjustment. The
Company shall keep at its registered office copies of all such written notices
and cause the same to be available for inspection during normal business hours
by the Warrant Holder. The Company shall give, or cause to be given, written
notice to the Warrant Holder at least 20 days prior to the date on which the
Company closes its books or takes a record (i) with respect to any dividend or
distribution upon Common Shares, (ii) with respect to any pro rata subscription
offer to holders of Common Shares or (iii) for determining rights to vote with
respect to any transaction described in Section 2(a)(4), dissolution or
liquidation. The Company shall also give, or cause to be given, written notice
to the Warrant Holder at least 20 days prior to the date on which any
transaction described in Section 2(a)(4) shall take place.

          Section 3.    Exercise of Warrant

               (a) Exercise Procedure. The Warrant Holder may exercise all or a
portion of this Warrant for all or a portion of the Warrant Shares at any time
and from time to time commencing after the date hereof until 3:30 p.m. New York
City time, on the Expiration Date by irrevocably surrendering at the registered
office of the Company this Warrant and a completed Exercise Agreement
(substantially in the form of Exhibit A attached hereto) setting forth the
number of Warrant Shares being exercised, and by paying the Exercise Price in
one of the following manners:

                         (i) Cash Exercise. The Warrant Holder shall deliver
     immediately available funds or a cashiers check payable to the Company
     equal to the Exercise Price per Warrant Share exercised in the Exercise
     Agreement; or

                         (ii) Cashless Exercise. After the date of issuance of
     this Warrant, if the Common Shares are listed on a national securities
     exchange, automated quotation system or are available for sale in the
     over-the-counter market and the provisions of Section 42A of the Bermuda
     Companies Act 1981, as amended (or other like statutory provision which may
     affect the Company's ability to repurchase its Common Shares or to give
     effect to a cashless exercise of this Warrant), may be satisfied by the
     Company, the Warrant Holder shall have the right to surrender this Warrant
     to the Company (including that portion of the Warrant in payment of the
     Exercise Price to effect such cashless exercise) together with a notice of
     cashless exercise, in which event the Company shall exchange such portion
     of the Warrant subject to the Exercise Agreement, as the circumstances
     require in order for such number of Common Shares to be issued, determined
     as follows:

                    X = Y multiplied by (A-B)/A

                    where:

                    X = the number of Common Shares to be issued to the Warrant
                    Holder

                                       13

<PAGE>

                    Y = the number of Warrant Shares with respect to which this
                    Warrant is being exercised in the Exercise Agreement

                    A = the average of the per share Market Price of the Common
                    Shares for the five (5) trading days immediately prior to
                    (but not including) the date of exercise (but not less than
                    the then par value of the Common Shares)

                    B = the Exercise Price

If the foregoing calculation results in a negative number, then no Warrant
Shares shall be issued.

For purposes of Rule 144 promulgated under the Securities Act only, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired and the full
purchase price therefore paid by the Warrant Holder, and the holding period for
the Warrant Shares shall be deemed to have been commenced on the issue date to
the extent permitted by Rule 144.

For purposes hereof, "Market Price" means on any particular date (i) the closing
bid price per Common Share on such date on the national securities exchange or
automated quotation system on which the Common Shares are then listed or if
there is no such price on such date, then the closing bid price on such exchange
or quotation system on the date nearest preceding such date, or (ii) if the
Common Shares are not then listed on a national securities exchange or automated
quotation system, the closing bid price for each Common Share in the
over-the-counter market, as reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions of
reporting prices) at the close of business on such date.

               (b) The Company shall cause certificates for the Warrant Shares
to be issued in the name of and delivered to the Warrant Holder, or subject to
the transfer restrictions referred to in the legend endorsed hereon, as the
Warrant Holder may direct, as soon as practicable and in any event within ten
(10) business days after (i) receipt by the Company of the items required by
Section 3(a) for the respective method or methods of exercise, and (ii) where
applicable, compliance with Section 42A of the Bermuda Companies Act 1981 (and
the Company shall use reasonable efforts to complete the requirements of such
Section 42A as quickly as possible). Unless this Warrant has expired or all of
the purchase rights represented hereby have been exercised, the Company shall
prepare a new Warrant, substantially identical hereto, representing the rights
formerly represented by this Warrant which have not expired or been exercised
and shall, within such ten business day period, deliver such new Warrant to such
Warrant Holder.

               (c) Any Warrant Shares issuable upon the proper exercise of this
Warrant shall be deemed to have been issued to the Warrant Holder on the latest
of (i) the date the Company receives the completed Exercise Agreement and
payment of the Exercise Price, if any, (ii) where applicable, the date the
Company has complied with the requirements of Section 42A of the Companies Act
1981, and (iii) upon entry of the Warrant Holder's name into the Register of
Members of the Company, and the Warrant Holder shall be deemed for all purposes
to have become the record holder of such Common Shares on such date.

                                       14

<PAGE>

               (d) The issuance of certificates for the Warrant Shares shall be
made without charge to the Warrant Holder for any issuance tax in respect
thereof or other cost incurred by the Company in connection with such exercise
and the related issuance of the Warrant Shares.

               (e) The Company shall at all times reserve and keep available
such number of authorized but unissued Common Shares, solely for the purpose of
issuance upon exercise of this Warrant, as are issuable upon exercise of this
Warrant. All Warrant Shares shall, when issued, be duly and validly issued,
fully paid and nonassessable (meaning that no further sums are required to be
paid by the holders thereof in connection with the issue thereof) and free from
all taxes, liens and charges. The Company shall take such actions as may be
necessary to assure that the Warrant Shares may be so issued without violation
of any applicable law or governmental regulation or any requirements of any
securities exchange upon which its shares may be listed (except for official
notice of issuance which shall be immediately delivered by the Company upon each
such issuance).

               (f) Without prejudice to the rights of the Warrant Holders as
signatory to the Shareholders Agreement as set forth in Section 5 hereof, the
Company shall have the option, in its sole discretion, to deliver Warrant Shares
which are (i) subject to the securities law transfer restrictions referred to in
the legend endorsed hereon or (ii) subject to a registration statement filed
under the Securities Act.

          Section 4. Warrant Transfer Restrictions; Right of First Refusal. (a)
Subject to the transfer conditions referred to in the legend endorsed hereon,
this Warrant and all rights hereunder are transferable, in whole or in part,
without charge to the Warrant Holder, upon surrender of this Warrant with a
properly executed Assignment (substantially in the form of Exhibit B hereto) at
the registered office of the Company; provided, however, that (i) such transfer
shall comply with Bye-law 65 of the Bye-laws and Section 3 of the Shareholders
Agreement and (ii) prior to such transfer, the transferee shall enter into the
Shareholders Agreement with the Company.

               (b) Except for dispositions permitted under any of subsections
(ii) through (iv) of the third sentence of Section 3(a) of the Shareholders
Agreement, if at any time the Warrant Holder desires to Transfer (the "Seller")
any Warrants owned by it, then such Seller shall deliver written notice of its
intention to sell (a "Seller's Notice") to both the Company and each other
holder of a Warrant of like tenor to this Warrant, setting forth such Seller's
desire to make such sale (which shall be for cash, cash equivalents or
marketable securities only), the prospective transferee, the number of Warrant
Shares to be issued upon proper exercise of the Warrant proposed to be sold (the
"Offered Warrant"), the price ("Offer Price") at which such Seller proposes to
dispose of the Offered Warrant, and the other material terms of such Transfer
and the Company shall deliver a copy of the Seller's Notice to each shareholder
(other than any Warrant Holder) of the Company which is then a party to the
Shareholders Agreement (the "Signatories"). For purposes of computing the Offer
Price, cash equivalents shall be valued at their face amount and marketable
securities shall be valued at the average of their closing prices for the last
five Business Days prior to the date of the Seller's Notice.

                                       15

<PAGE>

               (c) Upon the receipt of the Seller's Notice, each other warrant
holder shall then have the right to purchase at the Offer Price all, or, subject
to subsection (f) below, any portion of the Offered Warrant, pro rata among such
warrant holders so electing on the basis of the number of Common Shares to be
issued upon proper exercise of the warrant owned by such warrant holder
(assuming exercise of all outstanding warrants); provided, however, that in the
event any such other warrant holder does not purchase any or all of its pro rata
portion of the remaining Offered Warrant, then the other warrant holders shall
have the right, on such pro rata basis, to purchase such unpurchased Offered
Warrant until all of such Offered Warrant is purchased or until such warrant
holders do not desire to purchase any more of such Offered Warrant. If the other
warrant holders have not elected to purchase any, or have purchased less than
all, of the Offered Warrant, the Company shall then have the right to purchase
at the Offer Price all, or subject to subsection (g) below, any portion of the
Offered Warrant not theretofore subscribed to by the other warrant holders. If
the other warrant holders and the Company have not elected to purchase any, or
have purchased less than all, of the Offered Warrant, the Signatories shall then
have the right to purchase at the Offer Price all, or subject to subsection (g)
below, any portion of the Offered Warrant not theretofore subscribed to by the
other warrant holders or the Company. The Company may also designate an
alternate purchaser to subscribe for any balance. The option to purchase in
favor of the warrant holders, the Company, the Signatories and the Company's
designee granted in this Section 4(c) is referred to herein as the "First
Refusal Option."

               (d) (i) The other warrant holders' First Refusal Option shall be
exercisable by the delivery of notice to the Seller and the Company, with copies
to each other warrant holder (at the address provided by the Company) (the "Pro
Rata Purchase Notice") within 15 days from the date of receipt of the Seller's
Notice. The Pro Rata Purchase Notice shall also specify the portion of the
Offered Warrant, if any, in addition to such warrant holder's pro rata portion
of the Offered Warrant, which such warrant holder desires to purchase in the
event there is an aggregate undersubscription for the Offered Warrant. If the
other warrant holders fail to deliver a Pro Rata Purchase Notice or if the
Seller agrees with the other warrant holders that they may purchase less than
all of the Offered Warrant, then within the 7 day period after the due date of
the Pro Rata Purchase Notice, the Company shall have the option to purchase such
amount of the Offered Warrant not subscribed by the other warrant holders by
written notice (the "Company's Notice") to the Seller. The First Refusal Option
of the other warrant holders pursuant to this subsection (d) shall terminate if
unexercised 15 days after receipt of the Seller's Notice and the First Refusal
Option of the Company pursuant to this subsection (d) shall terminate if
unexercised 7 days after the due date of the Pro Rata Purchase Notice.

          (ii) The Signatories' First Refusal Option shall be exercisable by the
delivery of notice to the Seller and the Company, with copies to each warrant
holder (at the address provided by the Company) (the "Pro Rata Signatories
Notice") within 7 days from the due date of the Company's Notice. The Pro Rata
Signatories Notice shall also specify the portion of the Offered Warrant, if
any, in addition to such Signatory's pro rata portion of the Offered Warrant,
which such Signatory desires to purchase in the event there is an aggregate
undersubscription for the Offered Warrant. If the Signatories fail to deliver a
Pro Rata Signatories Notice or if the Seller agrees with the Signatories that
they may purchase less than all of the Offered Warrant, then within the 7 day
period after the due date of the Company's Notice, any alternative purchaser
designated by the Company shall have the option to purchase such amount of the
Offered

                                       16

<PAGE>

Warrant not subscribed by the Signatories by the delivery of written notice to
the Seller. The First Refusal Options of the Signatories and the Company's
designee pursuant to this subsection (d) shall terminate if unexercised within
the period described above.

               (e) In the event that the warrant holders, the Company, the
Signatories and/or the Company's designee exercise their First Refusal Options
with respect to the Offered Warrant, then the Seller must sell the Offered
Warrant to such warrant holders, to the Company, to the Signatories and/or the
Company's designee, as applicable, within 15 days after the date of the receipt
of the Pro Rata Purchase Notice, the Company notice received by the Seller, the
Pro Rata Signatories Notice or the Company's designee's notice, as applicable
(in each case, subject to any extension reasonably necessary to obtain
regulatory approvals, if being diligently pursued).

               (f) Unless the Seller shall have consented to the purchase of
less than all of the Offered Warrant, none of the other warrant holders, the
Company, the Signatories or the Company's designee may purchase any part of the
Offered Warrant unless all of the Offered Warrant is purchased by them
separately or together.

               (g) If all notices required to be given pursuant to subsections
(b) through (d) above have been duly given and the warrant holders, the Company,
the Signatories and the Company's designee shall have determined not to exercise
their respective First Refusal Options, then the Seller shall have the right,
for a period of 60 days after expiration of the last applicable option period
specified in subsection (d), to sell to the prospective transferee set forth in
the Seller's Notice the Offered Warrant remaining unsold at or above the Offer
Price and on the other terms and provisions set forth in the Seller's Notice.

               (h) Upon the consummation of any purchase by the other warrant
holders hereunder, the Company, the Signatories or the Company's designee of the
Offered Warrant, the Seller shall deliver the Offered Warrant sold duly
endorsed, or accompanied by written instruments of transfer, free and clear of
any liens and encumbrances, against delivery of the Offer Price in cash.

               (i) The provisions of this Section 4 are intended to be for the
benefit of, and shall be enforceable by, the other warrant holders and the
Signatories, who shall be deemed to be third party beneficiaries of this Section
4.

                                       17

<PAGE>

          Section 5. Shareholders Agreement; Registration Rights. The Warrant
Holder, as signatory to the Shareholders Agreement, shall have the rights set
forth in Section 4 of such Agreement with respect to this Warrant and any
Warrant Shares issued hereunder.

          Section 6. Amendment and Waiver. Except as otherwise provided herein,
the provisions of this Warrant may be amended only if the Company has obtained
the written consent of the Warrant Holder.

          Section 7. Descriptive Heading. The descriptive headings of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.

          Section 8. Definitions. Terms used in this Warrant unless otherwise
defined herein shall have the meaning ascribed to them in the Shareholders
Agreement.

          Section 9. Governing Law. This Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York except to the extent where the laws of any other jurisdiction are referred
to herein. Each party hereby irrevocably submits to the nonexclusive
jurisdiction of the courts of New York for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that (i) it is not personally subject
to the jurisdiction of any such court, and/or (ii) that such suit, action or
proceeding is not brought in the proper forum. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Warrant and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.

          Section 10. Complete Agreement; Severability. Except as otherwise
expressly set forth herein, this Warrant embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way. In case any provision of this Warrant
shall be invalid, illegal or unenforceable, such invalidity, illegality, or
unenforceability shall not in any way affect or impair any other provision of
this Warrant.

          Section 11. Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, facsimile, or air courier guaranteeing overnight delivery.

     If to the Company:               Montpelier Re Holdings Ltd.,
                                      2 Clarendon House
                                      Church Street
                                      Hamilton HM 11
                                      Bermuda
                                      Attention: Secretary

                                       18

<PAGE>

     With a copy to:                  LeBoeuf, Lamb, Greene & MacRae, L.L.P.
                                      125 W 55th Street
                                      New York, New York 10019
                                      Attention: Michael Groll, Esq.

     If to the Warrant Holder:        Banc of America Securities LLC
                                      9 West 57th Street
                                      25th Floor
                                      New York, NY  10019
                                      Attention:  Antonio Ursano

All such notices and communications shall be deemed to have been duly given when
delivered by hand, if personally delivered; five business days after the date of
deposit in the Bermuda or United States of America mail, if mailed by
first-class air mail; when receipt is acknowledged by the recipient facsimile
machine, if sent by facsimile; and three business days after being delivered to
a next-day air courier.

                                       19

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
attested by its duly authorized officer and to be dated the date of issuance
hereof.

                                        MONTPELIER RE HOLDINGS LTD.

                                        By:       /s/ Anthony Taylor
                                            --------------------------------
                                        Name:  Anthony Taylor
                                        Title: Chief Executive Officer

Accepted and Agreed to:
Banc of America Securities LLC
------------------------------

By:    /s/ Antonio Ursano Jr.
     ---------------------------
     Name:  Antonio Ursano Jr.
     Title: Managing Director

<PAGE>

EXHIBIT A

EXERCISE AGREEMENT

To:  MONTPELIER RE HOLDINGS LTD.

The undersigned hereby: (1) irrevocably elects to subscribe for and offers to
purchase ________ Common Shares of Montpelier Re Holdings Ltd., pursuant to
Warrant No. __ heretofore issued to ____________________ on ____________, 2001;
(2) [chose either (a) or (b)] (a) encloses a payment of $100 per share (as
adjusted pursuant to the provisions of the Warrant) which reflects a payment
pursuant to Section 3(a)(i) of the Warrant; or (b) elects a cashless exercise
pursuant to Section 3(a)(ii) of the Warrant (as adjusted pursuant to the
provisions of the Warrant) and (3) requests that a certificate for the relevant
number of Common Shares be issued in the name of the undersigned and delivered
to the undersigned at the address specified below.

Dated:                                Name: ____________________________
                                      Address: _________________________
                                               _________________________
                                      By: ______________________________
                                          Name:
                                          Title:

<PAGE>

EXHIBIT B

ASSIGNMENT

Subject to Bye-laws 64 to 66 of the Bye-laws and to Section 3 of the
Shareholders Agreement, for value received, _______________________________
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant (Certificate No.:______) with respect to the number of
Common Shares subject to such Warrant as set forth below, unto:

Names of Assignee                Address                          No. of Shares

Dated:                                    Signature ___________________________

                                          Address _____________________________

                                          Witness _____________________________

<PAGE>

EXHIBIT C

The following two examples illustrate certain of the calculations in Section
2(a)(4)(C) of the Warrant. These examples assume that: the Warrant is for 100
shares; the Exercise Price is $100 per share; the Subscription Price is $100;
and the Hurdle Price is $155.

Example A

Per Share Value:  $140
Non-Common Stock Portion:   0.30
Average Closing Price:  $47
Spread:  $40
Total Spread:  $4,000
Black Scholes Value:  $4,500

Applicable Black Scholes Value = $4,500 x .30 = $1,350
Applicable Reduction = Reduction Amount (136.35) x .30 = $40.90
Reduction Amount = Discount Factor (.2727) x $500 = $136.35
Discount Factor = (x) One minus (y) .7273 = .2727
Intrinsic Value Amount = $1,309.10
Post-merger Warrant = 208.51 shares at aggregate exercise price of $7,000
       (in-the-money value = $2,799.97)

Example B

Per Share Value:  $300
Non-Common Stock Portion:  0.40
Average Closing Price:  $97
Spread:  $200
Total Spread:  $20,000
Black Scholes Value:  $23,000

Applicable Black Scholes Value = $23,000 x .40 = $9,200
Applicable Reduction = Reduction Amount (0) x .40 = $0
Reduction Amount = Discount Factor (0) x $3,000 = $0
Discount Factor = (x) One minus (y) [$200/55 = 3.6364 but not more than one] = 0
Intrinsic Value Amount = $9,200
Post-merger Warrant = 185.567 shares at aggregate exercise price of $6,000
       (in-the-money value = $11,999.99)

<PAGE>
                                    AMENDMENT

     AMENDMENT, dated as of February 11, 2002 (this "Amendment"), between
Montpelier Re Holdings Ltd. (the "Company") and Bank of America Corporation (the
"Warrant Holder"), to the Warrant dated January 3, 2002 (the "Warrant") issued
by the Company to the Warrant Holder.

     WHEREAS, the Company and the Warrant Holder have agreed to amend the
Warrant in the manner set forth herein, which amendment is expected to eliminate
any need for the Warrant to be accounted for as a liability of the Company under
U.S. generally accepted accounting principles and therefore reflect the initial
intent of the parties.

     NOW, THEREFORE, the parties hereby agree as follows:

     SECTION 1. Amendment. (a) Section 2(a)(4)(B) of the Warrant is hereby
amended by inserting the words ", or upon payment of the Intrinsic Value Amount,
in each case" after the words "exercise of this Warrant" in the first sentence
thereof.

     (b) Section 2(a)(4)(C)(1) of the Warrant is hereby amended by deleting the
words "in cash" from subclause (i) of the first sentence thereof and adding,
after the end of such first sentence, the following:

          "Any payment of the Intrinsic Value Amount will be made (i) if the
          Non-Common Consideration consists of cash, then in cash, (ii) if the
          Non-Common Consideration consists of a form of consideration other
          than cash, then in such form of consideration or (iii) if the
          Non-Common Consideration consists of a combination of cash and another
          form of consideration, then in a combination of cash and such other
          form of consideration, in equivalent proportions to the proportions of
          cash and such other form of consideration received in such Qualifying
          Transaction by holders of Common Shares in the aggregate. Any
          valuation of Non-Common Consideration required for purposes of the
          preceding sentence shall be equal to the value thereof as determined
          for purposes of the definition of "Per Share Value" pursuant to
          subparagraph (C)(2) below. Notwithstanding the foregoing, in the case
          of Non-Common Consideration consisting of shares of capital stock
          having a par value, if the value thereof per share determined for
          purposes of the definition of "Per Share Value" is less than the par
          value thereof, then the maximum number of such shares required to be
          issued in payment of any portion of the Intrinsic Value Amount shall
          not exceed a number equal to such portion of the Intrinsic Value
          Amount divided by such par value (with any fractional share paid in
          cash)."

     (c) Section 2(a)(4)(C)(4) of the Warrant is hereby amended by inserting the
words "in consideration for and" after the words "surrender this Warrant" in the
first sentence thereof and

<PAGE>

by inserting the words "in consideration for such payment and" after the words
"Intrinsic Value Amount" in the second sentence thereof.

     SECTION 2. Miscellaneous. (a) Continuing Effect. Except as expressly
amended hereby, the Warrant shall remain in full force and effect in accordance
with its terms.

     (b) Governing Law. This Amendment shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York.

     (c) Counterparts. This Amendment may be executed by the parties hereto in
separate counterparts, each of which shall be an original, and all of which when
taken together shall be deemed to constitute one instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.

                                       MONTPELIER RE HOLDINGS LTD.

                                       By:  /s/
                                            ------------------------------------
                                              Title:  Financial Controller

                                       BANK OF AMERICA CORPORATION

                                       By:  /s/
                                            ------------------------------------
                                              Title: Bank of America
                                                     Managing Director

                                       2

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