Document:

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                                                                   Exhibit 10.14

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

                   EUROPEAN REINSURANCE CORPORATION OF AMERICA

                            (the "Insurance Company")

                            POLICY NUMBER: 980-01-00

                  RESTATEMENT OF THE EXCESS ASBESTOS INDEMNITY
                                INSURANCE POLICY

                                  DECLARATIONS

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

                                             together with its successors and
                                             permitted assigns.

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

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

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

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

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

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

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

                                           If to the Insured, to:

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

                                           If to the Insurance Company, to:

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

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

SECTION 1.        INSURING AGREEMENT

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

SECTION 2.        DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                    (a)     a written release,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 3.        LIMITS OF INSURANCE

3.1.     AGGREGATE LIMIT OF INDEMNITY

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

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

3.2.     ANNUAL SUBLIMIT

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

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

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

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

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

3.3.     PER CLAIMANT LIMIT

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

3.4.     PER CLAIMANT AVERAGE AMOUNT

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

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

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

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

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

SECTION 4.        RETENTION

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

SECTION 5.        PREMIUM

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

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

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

SECTION 6.        EXCLUSIONS

This Policy does not cover:

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

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

         (C)      Any Insurance Coverage Claim.
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                                       7

SECTION 7.        EXPERIENCE VALUES

7.1.     SETTLEMENT DATE

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

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

         (ii)     March 3rd of that calendar year.

7.2.     ANNUAL SETTLEMENT

On the Settlement Date, the Insurance Company shall:

         1.       Calculate:

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

                  b.       Any Loss Offset payable pursuant to Section 7.6;

                  c.       The remaining Retention;

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

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

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

         2.       Report to the Insured:

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

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

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

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

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

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

         At each Settlement Date, the Insurance Company shall:

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

         2.       Determine the lesser of:

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

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

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

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

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

                  a.       the Disputed Net Loss, and

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

7.4.     DATE CONVENTION; AMOUNTS

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

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

7.5.     PRECISE YEARS

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

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

7.6.     LOSS OFFSET

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

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

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

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

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

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

7.7.     EXPERIENCE VALUE

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

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

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

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

                  Plus

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

                  Less

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

7.8.     REFERENCE VALUE

         (A)      TOTAL REFERENCE VALUE

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

         (B)      ORDER OF LOSS ATTRIBUTION

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

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

         (C)      REDUCED REFERENCE VALUE

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

         (D)      REFERENCE VALUE A

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

                  (1)      REFERENCE INDEX A

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

                  (2)      REFERENCE INDEX UNIT VALUE A

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

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

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

                  (3)      NUMBER OF UNITS OF THE REFERENCE INDEX A

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

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

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

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

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

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

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

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

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

                  (5)      REDUCED REFERENCE VALUE A

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

         (E)      REFERENCE VALUE B

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

                  (1)      REFERENCE INDEX B

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

                  (2)      REFERENCE INDEX UNIT VALUE B

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

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

                  (3)      NUMBER OF UNITS OF THE REFERENCE INDEX B

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

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

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

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

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

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

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

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

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

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

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

                           where

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

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

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

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

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

         (5)      REDUCED REFERENCE VALUE B

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

SECTION 8.        CONDITIONS

8.1.     REPORTING OF AND PAYMENT FOR LOSS

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

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

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

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

8.2.     SETTLEMENT OF NATIONAL CLASS ACTION

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

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

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

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

         (C)      For the purposes of this Section 8.2:

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

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

8.3.     COMMUTATION

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

8.4.     DIRECT ACTIONS

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

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

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

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

8.5.     NON-TRANSFERABILITY

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

8.6.     ARBITRATION

Except as otherwise agreed upon by the parties in writing:

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

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

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

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

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

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

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

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

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

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

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

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

8.7.     OTHER INSURANCE

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

8.8.     AMENDMENT

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

8.9.     CONFIDENTIALITY

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

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

8.10.    NOTICE

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

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

8.11.    CAPTIONS AND CATCHLINES

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

8.12.    RIGHT OF OFFSET

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

8.13.    SALVAGE, SUBROGATION AND OTHER RECOVERIES

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

8.14.    CHOICE OF LAW

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

8.15.    NO WAIVER

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

8.16.    CONSTRUCTION

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

8.17.    REPRESENTATION OF INSURED

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

8.18.    COUNTERPARTS

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

8.19.    CURRENCY

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

8.20.    TERMS OF POLICY CONFORMED TO STATUTE.

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

8.21.    TAXATION OF FOREIGN PERSONS.

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

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

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

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

8.22.    PREMIUM TAXES

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

8.23.    DATES AND TIMES

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

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

                                  METROPOLITAN LIFE INSURANCE COMPANY

                                  BY: _______________________________________

                                  Name: _____________________________________

                                  Title: ____________________________________

                                  EUROPEAN REINSURANCE CORPORATION OF AMERICA

                                  BY: _______________________________________

                                  Name: _____________________________________

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

                                       A-1
<PAGE>   27
                                   SCHEDULE B
                                SETTLED POLICIES

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

         A RESTATEMENT OF THE EXCESS ASBESTOS INDEMNITY INSURANCE POLICY

                  ISSUED TO METROPOLITAN LIFE INSURANCE COMPANY

                                       BY

                   EUROPEAN REINSURANCE CORPORATION OF AMERICA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

METROPOLITAN LIFE INSURANCE COMPANY

BY:

NAME:

TITLE:

EUROPEAN REINSURANCE CORPORATION OF AMERICA

BY:

NAME:

TITLE:<PAGE>   1
                                                                   Exhibit 10.15

                               RESTATEMENT OF THE
                            AGGREGATE EXCESS OF LOSS
                              REINSURANCE AGREEMENT
                  (hereinafter referred to as the "Agreement")

                                     between

                       METROPOLITAN LIFE INSURANCE COMPANY
                               One Madison Avenue
                            New York, New York 10010
                   (hereinafter referred to as the "Company")

                                       AND

                       STOCKWOOD REINSURANCE COMPANY LTD.
                           Carleton Court, High Street
                              Bridgetown, Barbados
                  (hereinafter referred to as the "Reinsurer")

TYPE:               Aggregate Excess of Loss Reinsurance.

EFFECTIVE DATE:     The Effective Date of this Agreement shall be 12:01 a.m.,
                    New York City Time, December 31, 1998.

TERM:               This Agreement shall remain in force and the Term of this
                    Agreement shall be from the Effective Date of this Agreement
                    until the earliest of (A) December 31, 2008; (B) the
                    exhaustion of the Overall Aggregate Limit; or (C) the
                    Effective Date of Commutation of this Agreement.

COVERAGE:           Part A Coverage:

                    The Reinsurer shall indemnify the Company for Part A Covered
                    Losses.

                    Part B Coverage:

                    The Reinsurer shall indemnify the Company for Part B Covered
                    Losses.
<PAGE>   2
BUSINESS
COVERED:            Part A Business Covered:

                    Amounts paid or to be paid by the Company as life insurance
                    benefits, cash values or otherwise to its life insurance
                    policyholders and annuity contract holders, or beneficiaries
                    or proper assignees thereof, where such amounts arise out of
                    policies or contracts issued by the Company but are in
                    addition to the amounts anticipated at the time the policies
                    or contracts were issued; and, where such amounts are
                    payable pursuant to judgments in, or settlements of,
                    lawsuits or other proceedings (including without limitation
                    administrative proceedings) alleging that the Company or its
                    agents engaged in improper sales practices.

                    Part B Business Covered:

                    Except as otherwise provided in this section, Part B
                    Business Covered shall mean all death benefits for policies
                    listed in the Company's Notice Business Policy Master File
                    (NBPMF) that were issued and delivered in the Part B Subject
                    Territory prior to January 1, 1997, and were in force as of
                    the Effective Date with a policy account code of: (1)
                    premium paying (Policy Account Code =1), (2) fully paid up
                    (Policy Account Code =2), or (3) single premium (Policy
                    Account Code =9). Policies on (a) the nonforfeiture reduced
                    paid up option (Policy Account Code =3) as of the Effective
                    Date or on any other date during the Term of this Agreement
                    and policies on (b) the nonforfeiture extended term
                    insurance option (Policy Account Code =5) as of the
                    Effective Date or on any other date during the Term of this
                    Agreement are excluded from coverage under this Agreement.
                    Policy forms identified by the Company's plan code "Estate
                    Saver" are also excluded from coverage under this Agreement.
                    All other policy riders and benefits are covered by this
                    Agreement except for the Accidental Death Benefit (ADB),
                    Disability Waiver of Premium Benefit (DW), Applicant's
                    Waiver of Premium Benefit (AWB), and Additional Insurance
                    (AI).

SUBJECT
TERRITORY:          Part A Subject Territory:

                    The Reinsurer's liability shall be limited to policies or
                    contracts issued for delivery in the fifty (50) States of
                    the United States of America, the District of Columbia, or
                    Canada for losses occurring

                                       -2-
<PAGE>   3
                    in the fifty (50) States of the United States of America,
                    the District of Columbia, or Canada.

                    Part B Subject Territory:

                    The Reinsurer's liability shall be limited to policies
                    issued for delivery in the fifty (50) States of the United
                    States of America and the District of Columbia for losses
                    occurring in the fifty (50) States of the United States of
                    America and the District of Columbia.

SUBJECT LOSSES:     Part A Subject Losses:

                    Part A Subject Losses shall mean all Part A Ultimate Net
                    Loss with Claim Dates on or after the Effective Date of this
                    Agreement arising from claims made against the Company on or
                    prior to December 31, 1999 in respect of the Part A Business
                    Covered hereunder.

                    Part B Subject Losses:

                    Part B Subject Losses shall mean all Part B Ultimate Net
                    Loss paid by the Company on or after the Effective Date of
                    this Agreement as a result of deaths occurring on or after
                    the Effective Date and on or prior to December 31, 1999 in
                    respect of the Part B Business Covered hereunder.

COVERED LOSSES:     Part A Covered Losses:

                    Subject to the Overall Aggregate Limit and the Part A
                    Aggregate Sublimit, Part A Covered Losses shall mean Fifty
                    Percent (50%) of Part A Subject Losses in excess of the Part
                    A Aggregate Retention.

                    Part B Covered Losses:

                    Subject to the Overall Aggregate Limit and the Part B
                    Sublimit, Part B Covered Losses shall mean Fifty Percent
                    (50%) of Part B Subject Losses in excess of the Part B
                    Aggregate Retention.

RETENTIONS:         Part A Aggregate Retention:

                    Three Hundred Eighty Five Million Dollars ($385,000,000) in
                    the aggregate.

                                       -3-
<PAGE>   4
                    Part B Aggregate Retention:

                    Five Hundred Six Million Dollars ($506,000,000), plus the
                    Company's statutory policy reserves released upon death of
                    an insured or otherwise.

SUBLIMITS:          Part A Aggregate Sublimit:

                    The maximum amount of Part A Covered Losses indemnified
                    under this Agreement shall be limited to Two Hundred Seventy
                    Five Million Dollars ($275,000,000).

                    This Part A Aggregate Sublimit is the maximum amount payable
                    by the Reinsurer for Part A Covered Losses under this
                    Agreement. Under no circumstances will the Reinsurer be
                    obligated to pay more than this amount in respect of Part A
                    Covered Losses.

                    Part B Sublimit

                    The maximum amount of Part B Covered Losses indemnified
                    under this Agreement shall be limited to Two Million Five
                    Hundred Thousand Dollars ($2,500,000) for any individual
                    insured.

OVERALL AGGREGATE
LIMIT:              The Overall Aggregate Limit for the sum of Part A Covered
                    Losses and Part B Covered Losses combined under this
                    Agreement shall equal Three Hundred Twenty Five Million
                    Dollars ($325,000,000).

                    This Overall Aggregate Limit is the maximum amount payable
                    by the Reinsurer under this Agreement, excluding payments
                    for commutation under this Agreement.

REINSURANCE
PREMIUM:            The Reinsurance Premium shall equal Two Hundred Sixty Four
                    Million Five Hundred Thousand Dollars ($264,500,000) and
                    shall be payable in full and without deduction by the
                    Company on or before December 31, 1998. The date the
                    Reinsurance Premium is paid shall be referred to as the
                    "Premium Payment Date". The Reinsurance Premium shall be
                    payable in cash by federal wire transfer in immediately
                    available non-reversible United States Federal Funds to an
                    account specified by the Reinsurer.

                    The Reinsurance Premium shall be considered fully earned
                    when received in the account specified by the Reinsurer.

                                       -4-
<PAGE>   5
                    The Reinsurance Premium is a net amount and includes no
                    allowance for commissions, brokerage, taxes or any other
                    costs which may arise in connection with this Agreement or
                    the Business Covered hereunder. Any such amounts shall
                    remain the sole responsibility of the Company.

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

SETTLEMENT
DATES:              The first Settlement Date shall be the later of April 1,
                    2000, or if such day is not a Business Day, then the first
                    Business Day thereafter, or, the thirtieth day after the
                    Reinsurer's receipt of the Company's Loss Report for the
                    period from the Effective Date to December 31, 1999. The
                    Settlement Date for calendar year 2000 and each calendar
                    year thereafter shall be the later of April 1 of the
                    following calendar year or if such day is not a Business
                    Day, then the first Business Day thereafter, or, the
                    thirtieth day after the Reinsurer's receipt of the Company's
                    Loss Report for the prior calendar year, or if such day is
                    not a Business Day, then the first Business Day thereafter.

BUSINESS DAYS:      Business Day shall mean any day other than a Saturday, a
                    Sunday or a day on which banking institutions in New York,
                    New York, or the Islands of Bermuda are authorized or
                    obligated by law, regulation or executive order to be
                    closed.

EXPERIENCE
BALANCE:            The Reinsurer shall establish and maintain a notional
                    Experience Balance during the time that this Agreement is in
                    effect and whose balance shall be determined in accordance
                    with this Experience Balance section.

                    The Experience Balance at the Premium Payment Date shall be
                    equal to Two Hundred Sixty One Million Five Hundred Thousand
                    United States Dollars ($261,500,000).

                    The Experience Balance at the first Settlement Date shall be
                    equal to:

                              The Experience Balance at the Premium Payment Date
                              multiplied by (1.0 plus the annual compounded
                              yield on the one (1) year United States Treasury
                              Bill as of the close of

                                       -5-
<PAGE>   6
                              business on the Premium Payment Date) raised to
                              the power of the actual number of days from the
                              Premium Payment Date to and including the first
                              Settlement Date divided by the actual number of
                              days in the current calendar year, multiplied by
                              (1.0 plus (the Federal Funds rate divided by the
                              actual number of days in the current calendar
                              year)) for each day between April 1, 2000 and the
                              first Settlement Date,

                              LESS

                              Covered Losses due from the Reinsurer from and
                              including the Premium Payment Date (through and
                              including the Settlement Date).

                    The Experience Balance at each Settlement Date thereafter
                    shall be equal to:

                              The Experience Balance at the end of the prior
                              Settlement Date multiplied by (1.0 plus the annual
                              compounded yield on the one (1) year United States
                              Treasury Bill maturing closest to April 1 of the
                              current calendar year) raised to the power of the
                              actual number of days from the prior Settlement
                              Date to April 1 of the current calendar year
                              divided by the actual number of days in the
                              current calendar year, multiplied by (1.0 plus
                              (the Federal Funds rate divided by the actual
                              number of days in the current calendar year)) for
                              each day between April 1 of the current calendar
                              year to and including the Settlement Date divided
                              by the actual number of days in the current
                              calendar year,

                              LESS

                              Covered Losses due from the Reinsurer from but not
                              including the prior Settlement Date through and
                              including the current Settlement Date.

ULTIMATE NET LOSS:  (a)       Part A Ultimate Net Loss:

                              Part A Ultimate Net Loss as used herein shall mean
                              the actual sum of all Claim Amounts with Claim
                              Dates on or after the Effective Date in settlement
                              of all losses arising in respect of the Part A
                              Business Covered after making deductions for all
                              recoveries, all salvage, and all claims upon other
                              reinsurances, which inure to the benefit of the

                                       -6-
<PAGE>   7
                              Reinsurer under this Agreement, whether
                              collectable or not, and shall include Allocated
                              Loss Adjustment Expenses paid by the Company.

                              Part B Ultimate Net Loss:

                              Part B Ultimate Net Loss as used herein shall mean
                              the actual sum paid by the Company on or after the
                              Effective Date in settlement of all death claims
                              arising in respect of the Part B Business Covered
                              after making deductions for all recoveries, all
                              salvage, and all claims upon other reinsurances,
                              which inure to the benefit of the Reinsurer under
                              this Agreement, whether collectable or not.

                    (b)       All salvages, recoveries, reinsurance or payments
                              recovered or received subsequent to a loss
                              settlement under this Agreement shall be applied
                              as if recovered or received prior to the aforesaid
                              settlement and all necessary adjustments shall be
                              made by the parties hereto.

                    (c)       Nothing in this definition shall be construed to
                              mean that losses are not recoverable hereunder
                              until the Part A Ultimate Net Loss and Part B
                              Ultimate Net Loss of the Company has been
                              ascertained.

CLAIM AMOUNT:                 Claim Amount as used herein shall mean for each
                              claim, the sum of the amount paid by the Company
                              on the Claim Date plus the amount reserved by the
                              Company on the Claim Date on the basis of New York
                              State statutorily prescribed mortality, morbidity
                              or interest rates, arising in respect of the Part
                              A Business Covered.

CLAIM DATE:                   Claim Date as used herein shall mean the date of
                              judgment in, or settlement of, a lawsuit or other
                              proceeding (including without limitation
                              administrative proceedings) arising in respect of
                              the Part A Business Covered.

CLAIMS HANDLING:    (a)       The Company shall have the sole and absolute
                              authority with respect to the administration,
                              defense, settlement and payment of Part A Covered
                              Losses, subject to the terms and conditions of
                              this Agreement.

                    (b)       The Company shall retain the sole and absolute
                              authority with respect to the administration,
                              defense, settlement and payment of Part B Covered
                              Losses.

                                       -7-
<PAGE>   8
                    (c)       In furtherance of the commonality of interest
                              evidenced by the execution of this Agreement, the
                              Company agrees that the Company or the Company's
                              designated counsel shall provide the Reinsurer
                              with updated information concerning the present
                              and future handling of the Part A Covered Losses
                              on a quarterly basis to allow the Reinsurer to
                              properly reserve and project payments under this
                              Agreement and as otherwise reasonably required by
                              the Reinsurer.

ALLOCATED
LOSS ADJUSTMENT
EXPENSES:                     Allocated Loss Adjustment Expenses as used herein
                              shall mean all allocated expenses incurred by the
                              Company on or after the Effective Date in
                              connection with the investigation, settlement,
                              defense or mitigation of any claim or loss which
                              is the subject matter of the Part A Business
                              Covered, and shall exclude salaries and fees of
                              adjusters, attorneys or other persons who are
                              employees of the Company, or its designated claims
                              adjusters, attorneys on permanent retainer, office
                              expenses, overhead or other unallocated expenses.

COMMUTATION:                  This Agreement may be irrevocably commuted by the
                              Company on (i) December 31, 2008 or, (ii) in the
                              event that after December 31, 1999 the Experience
                              Balance exceeds the remaining Part A Aggregate
                              Sublimit during the calendar year ("Effective Date
                              of Commutation"), subject to ninety (90) days
                              prior written notice to the Reinsurer. Within
                              ninety (90) days of such Effective Date of
                              Commutation, upon receipt from the Company of a
                              full release in form and substance reasonably
                              satisfactory to the Reinsurer, then the Reinsurer
                              shall pay to the Company a Commutation Settlement
                              equal to Ninety Nine Percent (99%) multiplied by
                              the positive Experience Balance, if any, at the
                              Settlement Date following Commutation, less all
                              amounts due and payable by the Company to the
                              Reinsurer, under this or any related agreement and
                              the Reinsurer and the Company shall be fully and
                              finally released from all liability and
                              obligations under or in connection with this
                              Agreement.

REPORTS AND
REMITTANCES:                  Within sixty (60) days after the end of each
                              calendar quarter during the Term of this
                              Agreement, the Company shall

                                       -8-
<PAGE>   9
                              provide the Reinsurer with copies of all loss
                              reports received or prepared by the Company in
                              connection with the Business Covered during that
                              calendar quarter. In addition to the above, within
                              sixty (60) days after the end of each calendar
                              quarter, the Company shall provide to the
                              Reinsurer a written Loss Report, providing, in a
                              format acceptable to the Reinsurer and the
                              Company, the following information in respect of
                              the Business Covered hereunder, for Part A
                              Business Covered:

                              (1)       The amount of Subject Losses paid by the
                                        Company during that calendar quarter.

                              (2)       The net amount of Subject Losses payable
                                        but unpaid by the Company as at the end
                                        of the calendar quarter (the "Net
                                        Subject Loss").

                              (3)       The Company's estimate of reserves for
                                        Net Subject Loss and Allocated Loss
                                        Adjustment Expenses, as at the end of
                                        that calendar quarter.

                              (4)       And such other information as may be
                                        agreed to by the Company and the
                                        Reinsurer.

                    In addition to the above, within sixty (60) days after the
                    end of each calendar quarter, the Company shall provide to
                    the Reinsurer a written Loss Report, providing, in a format
                    acceptable to the Reinsurer, the following information in
                    respect of the Business Covered hereunder for Part B
                    Business Covered:

                              (1)       The face amount of death claims paid
                                        during the calendar quarter.

                              (2)       The face amount of death claims reported
                                        but not paid as of the end of that
                                        calendar quarter.

                              (3)       Statutory reserves released in the
                                        calendar quarter on death claims paid.

                              (4)       Statutory reserves released in the
                                        calendar quarter on death claims
                                        reported but not paid.

                                       -9-
<PAGE>   10
                              (5)       The face amount of death claims during
                                        the calendar quarter ceded to other
                                        reinsurers.

                              (6)       Statutory reserves released in the
                                        calendar quarter on death claims ceded
                                        to other reinsurers.

                              (7)       Policy level detail (as detailed in
                                        items (1) through (6) above) for
                                        individual insureds with Subject Losses
                                        in excess of Five Million Dollars
                                        ($5,000,000).

                              (8)       The Company's estimate of IBNR losses as
                                        at the end of that calendar quarter.

                    Each Loss Report shall provide both the cumulative position
                    from the Effective Date through the end of that calendar
                    quarter and the changes within the calendar quarter. The
                    first such quarterly Loss Report shall be due by June 1,
                    1999 for the period from the Effective Date through March
                    31, 1999.

                    Within sixty (60) days after the end of each calendar year,
                    the Company shall furnish the Reinsurer with a written
                    Annual Report, providing, in a format acceptable to the
                    Reinsurer, the Subject Losses paid by the Company for that
                    calendar year in respect of the Business Covered hereunder
                    separately for the Part A Business Covered and Part B
                    Business Covered.

                    Covered Losses due from the Reinsurer shall be paid by the
                    Reinsurer to the Company on the Settlement Date for the
                    calendar year.

                    All remittances shall be made by federal wire transfer in
                    immediately available non-reversible United States Federal
                    Funds to an account specified by the receiving party.

SECURITY:           1. Security:

                    Upon the Company's written request and expense, the
                    Reinsurer shall provide security to the Company adjusted at
                    each Settlement Date in an amount equal to the Experience
                    Balance as of such Settlement Date, if any, by providing
                    access to funds held in Trust or Letters of Credit or any
                    combination thereof, for the benefit of the Company, in
                    accordance with the provisions set forth in this SECURITY
                    Article.

                                      -10-
<PAGE>   11
                    2. Letter of Credit:

                    (A)       Upon the written request of the Company, the
                              Reinsurer agrees that it will be the applicant for
                              and provide the Company with a Letter or Letters
                              of Credit, adjusted at each Settlement Date, in an
                              amount no less than the Experience Balance, as of
                              such Settlement Date if any. The cost of such
                              Letter(s) of Credit, if any, shall be borne by the
                              Company.

                    (B)       The Reinsurer and the Company agree that the
                              Letter(s) of Credit provided by the Reinsurer
                              pursuant to the provisions of this Agreement may
                              be drawn upon at any time, notwithstanding any
                              other provisions in this Agreement, and shall be
                              utilized by the Company or any successor by
                              operation of law of the Company including, without
                              limitation, any liquidator, rehabilitator,
                              receiver, or conservator of the Company only for
                              one or more of the following purposes:

                              (i)       to reimburse the Company for the
                                        Reinsurer's share of premiums returned
                                        to the owners of policies reinsured
                                        under this Agreement, on account of
                                        cancellations of such policies;

                              (ii)      to reimburse the Company for the
                                        Reinsurer's share of surrenders and
                                        benefits or losses paid by the Company
                                        under the terms and provisions of the
                                        policies reinsured under this Agreement.

                              (iii)     to fund an account with the Company in
                                        an amount at least equal to the
                                        deduction, for reinsurance ceded, from
                                        the Company's liabilities for
                                        reinsurance ceded under this Agreement.
                                        Such amount shall be limited to the
                                        Experience Balance. Such amount shall
                                        include, but not be limited to, amounts
                                        for policy reserves, reserves for claims
                                        and losses incurred (including losses
                                        incurred but not reported), reserves for
                                        loss adjustment expenses and reserves
                                        for unearned premiums, but shall not
                                        exceed the amount of the obligations of
                                        the Reinsurer under this Agreement; and

                                      -11-
<PAGE>   12
                              (iv)      to pay any other amounts payable to the
                                        Company under this Agreement.

                    All of the foregoing shall be applied without diminution
                    because of insolvency on the part of the Company or the
                    Reinsurer.

                    (C)       Should amounts be held pursuant to (B)(iii) above,
                              then the Company shall pay interest at the Prime
                              Rate on such funds as may be held from time to
                              time.

                    (D)       Should any amounts drawn down on the Letters of
                              Credit be in excess of the actual amounts required
                              for (B)(i), (B)(ii), or (B)(iii) above, or should
                              any amounts subsequently be determined not to be
                              due under (B)(iv) above, then such excess amounts
                              and amounts not due shall be returned to the
                              Reinsurer forthwith and the Company shall pay
                              interest at the Prime Rate on such funds from the
                              date they were drawn down to the date they are
                              returned.

                    (E)       Any interest calculated pursuant to the provisions
                              of paragraphs (C) and (D) above shall be offset
                              against any other obligations of the Reinsurer.

                    3. Trust Funds:

                    (A)       Upon the written request of the Company, the
                              Reinsurer may at its option provide funds in Trust
                              for the benefit of the Company, adjusted at each
                              Settlement Date as an alternative or supplement to
                              Letter(s) of Credit. The cost of such Trust Funds,
                              if any, shall be borne by the Company.

                    (B)       The assets deposited in the trust account shall be
                              valued, according to their current fair market
                              value, and shall consist only of cash (United
                              States legal tender), certificates of deposit
                              (issued by a United States bank and payable in
                              United States legal tender), and investments of
                              the types permitted by the Delaware Insurance
                              Laws, provided that such investments are issued by
                              an institution that is not the parent, subsidiary,
                              or affiliate of either the Reinsurer or the
                              Company.

                    (C)       Prior to depositing assets into the Trust account,
                              the Reinsurer shall execute assignments,
                              endorsements in blank, or transfer legal title to
                              the trustee of all shares, obligations or any
                              other assets requiring assignments, in order that
                              the

                                      -12-
<PAGE>   13
                              Company, or the trustee upon the direction of the
                              Company, may whenever necessary negotiate any such
                              assets without consent or signature from the
                              Reinsurer or any other entity.

                    (D)       All settlements of account between the Company and
                              the Reinsurer shall be made in cash or its
                              equivalent.

                    (E)       The Reinsurer and the Company agree that the
                              assets in the Trust account, established by the
                              Reinsurer pursuant to the provisions of this
                              Agreement, may be withdrawn by the Company at any
                              time, notwithstanding any other provisions in this
                              Agreement, and shall be utilized and applied by
                              the Company or any successor by operation of law
                              of the Company including, without limitation, any
                              liquidator, rehabilitator, receiver or conservator
                              of the Company only for one or more of the
                              following purposes:

                              (i)       to reimburse the Company for the
                                        Reinsurer's share of premiums returned
                                        to the owners of policies reinsured this
                                        Agreement, on account of cancellations
                                        of such policies;

                              (ii)      to reimburse the Company for the
                                        Reinsurer's share of surrenders and
                                        benefits or losses paid by the Company
                                        pursuant to the provisions of the
                                        policies reinsured under this Agreement;

                              (iii)     to fund an account with the Company in
                                        an amount at least equal to the
                                        deduction, for reinsurance ceded, from
                                        the Company's liabilities for
                                        reinsurance ceded under this Agreement.
                                        Such amount shall be limited to the
                                        Experience Balance. Such amount shall
                                        include, but not be limited to, amounts
                                        for policy reserves, reserves for claims
                                        and losses incurred (including losses
                                        incurred but not reported), reserves for
                                        loss adjustment expenses and reserves
                                        for unearned premiums, but shall not
                                        exceed the amount of the obligations of
                                        the Reinsurer under this Agreement; and

                              (iv)      to pay any other amounts payable to the
                                        Company under this Agreement.

                    All of the foregoing shall be applied without diminution
                    because of

                                      -13-
<PAGE>   14
                    insolvency on the part of the Company or the Reinsurer.

                    (F)       The Company shall give the Reinsurer the right to
                              seek approval from the Company to withdraw from
                              the aforementioned Trust account all or any part
                              of the assets contained therein and transfer such
                              assets to the Reinsurer, provided:

                              (i)       The Reinsurer shall at the time of such
                                        withdrawal, replace the withdrawn assets
                                        with other qualified assets having a
                                        market value equal to the market value
                                        of the assets withdrawn so as to
                                        maintain at all times the deposit equal
                                        to the Experience Balance, or

                              (ii)      after such withdrawal and transfer, the
                                        market value of the Trust account is no
                                        less than one-hundred-two percent (102%)
                                        of the Experience Balance.

                    (G)       Should amounts be held pursuant to (E)(iii) above,
                              then the Company shall pay interest at the Prime
                              Rate on such funds as may be held from time to
                              time.

                    (H)       Should any amounts withdrawn from the Trust
                              account be in excess of the actual amounts
                              required for (E)(i), (E)(ii), or (E)(iii) above,
                              or should any amounts subsequently be determined
                              not to be due under (E)(iv) above, then such
                              excess amounts and amounts not due shall be
                              returned to the Reinsurer forthwith and the
                              Company shall pay interest at the Prime Rate on
                              such funds from the date they were drawn down to
                              the date they are returned.

                    (I)       Any interest calculated pursuant to the provisions
                              of paragraphs (G) and (H) above shall be offset
                              against any other obligations of the Reinsurer.

                    4. Other Forms of Security:

                    The Reinsurer may, at its option, as an alternative or
                    supplement to Letter(s) of Credit and Trust Funds, provide
                    security in any other form that would permit the Company to
                    take credit for the reinsurance ceded hereunder in the
                    amount of the Experience Balance.

                    5. Prime Rates:

                                      -14-
<PAGE>   15
                    Prime Rates shall be determined for each Business Day in New
                    York City, and for non-business days shall equal the Prime
                    Rate as determined for the most recent preceding Business
                    Day. The BANK PRIME LOAN rates as published in "FEDERAL
                    RESERVE statistical release H.15(519) SELECTED INTEREST
                    RATES" and the PRIME RATES as published in The Wall Street
                    Journal shall be the primary sources for the Prime Rates.
                    When either or both sources publish such a rate for a
                    Business Day, the Prime Rate shall be the maximum of such
                    published rates. If neither source publishes such a rate for
                    a Business Day, the Prime Rate shall be the maximum of the
                    rates publicly announced by major banks in New York City as
                    their "Prime Rates" applicable to such day.

INSOLVENCY:         1. Reinsurer's Obligation:

                    In the event of the insolvency of the Company, the
                    reinsurance afforded by this Agreement shall be payable by
                    the Reinsurer on the basis of the liability of the Company
                    under the Business Covered, without diminution because of
                    such insolvency, directly to the Company or its liquidator,
                    receiver, conservator, or statutory successor, except (a)
                    where this Agreement specifically provides another payee of
                    such reinsurance in the event of the insolvency of the
                    Company and (b) where the Reinsurer, with the consent of the
                    direct insured or insureds, has assumed such policy
                    obligations of the Company as direct obligations of the
                    Reinsurer to the payees under such policies and in
                    substitution for the obligations of the Company to such
                    payees.

                    2. Reinsurer's Notice and Defense of Claims:

                    The Reinsurer shall be given written notice of the pendency
                    of each claim or loss which may involve the reinsurance
                    afforded by this Agreement within a reasonable time after
                    such claim or loss is filed in the insolvency proceedings.
                    The Reinsurer shall have the right to investigate each such
                    claim or loss and interpose at its own expense, in the
                    proceeding where the claim or loss is to be adjudicated, any
                    defense which it may deem available to the Company or its
                    liquidator, receiver, conservator, or statutory successor.
                    If more than one Reinsurer is involved, they may designate
                    one Reinsurer to act for all.

                                      -15-
<PAGE>   16
                    3. Defense Expense:

                    The expense thus incurred by the Reinsurer shall be
                    chargeable, subject to court approval, against the insolvent
                    Company as part of the expense of liquidation to the extent
                    of a proportionate share of the benefit which may accrue to
                    the Company solely as a result of the defense undertaken by
                    the Reinsurer.

                    4. Offset:

                    Any debts or credits, liquidated or unliquidated, in favor
                    of or against either party under this Agreement on the date
                    of the receivership or liquidation order (except where the
                    obligation was purchased by or transferred to be used as an
                    offset) are deemed mutual debts or credits and shall be set
                    off with the balance only to be allowed or paid. Although
                    such claim on the part of either party may be unliquidated
                    or undetermined in amount on the date of the entry of the
                    receivership or liquidation order, such claim will be
                    regarded as being in existence as of such date and any
                    credits or claims then in existence and held by the other
                    party may be offset against it.

                    5. Rights of Parties:

                    Nothing hereinabove set forth in this Insolvency Article
                    shall in any way change the relationship or status of the
                    parties hereto, nor enlarge the obligations of either party
                    to each other except as specifically hereinabove provided,
                    to wit, to pay the statutory successor on the basis of the
                    amount of liability determined in the liquidation or
                    receivership proceeding, rather than on the basis of the
                    actual amount of loss (dividends) paid by the liquidator,
                    receiver, conservator, or statutory successor to allowed
                    claimants. Nor, except as hereinabove specifically provided,
                    shall anything in this Insolvency Article in any manner
                    create any obligation or establish any right against the
                    Reinsurer in favor of any third parties or any other persons
                    not parties to this Agreement.

ARBITRATION:        Except as otherwise agreed upon by the parties:

                    1.        Resolution of Disputes: Any dispute between the
                              Company and the Reinsurer arising out of the
                              provisions of this Agreement, or concerning its
                              interpretation or validity, whether arising before
                              or after termination of this Agreement, shall be
                              submitted to arbitration in the manner set forth
                              in this Article. Either party may initiate
                              arbitration

                                      -16-
<PAGE>   17
                              of any such dispute by giving written notice to
                              the other party, by registered or certified mail,
                              return receipt requested, of its intention to
                              arbitrate and of its appointment of an arbitrator
                              in accordance with subsection (3) of this Article.

                    2.        Composition of Panel: Unless the parties agree
                              upon a single arbitrator within fifteen (15) days
                              after the receipt of a notice of intention to
                              arbitrate, all disputes shall be submitted to an
                              arbitration panel composed of two arbitrators and
                              an umpire, chosen in accordance with subsections
                              (3) and (4) of this Article.

                    3.        Appointment of Arbitrators: The members of the
                              arbitration panel shall be chosen from
                              disinterested persons having knowledge of the
                              insurance, reinsurance and financial issues
                              relevant to the matters in dispute. The party
                              requesting arbitration (hereinafter referred to as
                              the "requesting party") shall appoint an
                              arbitrator and give written notice thereof, by
                              registered or certified mail, return receipt
                              requested, to the other party (hereinafter
                              referred to as the "respondent") together with its
                              notice of intention to arbitrate. Unless a single
                              arbitrator is agreed upon within fifteen (15) days
                              after the receipt of the notice of intention to
                              arbitrate, the respondent shall, within thirty
                              (30) days after receiving such notice, also
                              appoint an arbitrator and notify the requesting
                              party thereof in a like manner. Before instituting
                              a hearing, the two arbitrators so appointed shall
                              choose an umpire. If, within twenty (20) days
                              after they are both appointed, the arbitrators
                              fail to agree upon the appointment of an umpire,
                              the umpire shall be appointed by the President of
                              the American Arbitration Association.

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

                    5.        Involvement of Other Reinsurers:

                              (a) If more than one Reinsurer of this Agreement
                              is involved in the same dispute, all such
                              Reinsurers shall

                                      -17-
<PAGE>   18
                              constitute and act as one party for purposes of
                              this Article and communication shall be made by
                              the Company to each of the Reinsurers constituting
                              the one party; provided, however, nothing herein
                              shall impair the right of such Reinsurers to
                              assert several, rather than joint, defenses or
                              claims, nor be construed as changing the liability
                              of the Reinsurers under the terms of this
                              Agreement from several to joint.

                              (b) If the Company is involved in a dispute under
                              the terms of this Agreement and in one or more
                              separate disputes with one or more other insurers
                              or reinsurers in which common questions of law or
                              fact are in issue, the Company or Reinsurer, at
                              their option, may join with such other insurers or
                              reinsurers in a common arbitration proceeding
                              under the terms of this Article. If the Company
                              and such other insurers or reinsurers have
                              commenced arbitration, the Reinsurers may at its
                              option join such proceeding for the determination
                              of the dispute between the Company and Reinsurer.

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

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

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

                                      -18-
<PAGE>   19
                    9.        Arbitration Award: The arbitration panel shall
                              render its decision within sixty (60) days after
                              conclusion of the hearing, which decision shall be
                              in writing, stating the reasons therefor. The
                              decision of the majority of the panel shall be
                              final and binding on the parties to the
                              proceeding. Judgment on the award may be entered
                              in any court of competent jurisdiction, and
                              execution of any monetary judgment may occur in
                              any jurisdiction.

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

                    11.       Limit of Authority of Arbitration Panel: The
                              arbitration panel does not have the authority to
                              award punitive, multiplied, or exemplary damages,
                              other similar damages or any extra contractual
                              damages of any nature or description whatsoever
                              except to the extent claimed as Subject Loss under
                              this Agreement, and each of the Company and the
                              Reinsurer expressly waives all rights to punitive,
                              multiplied, or exemplary damages, other similar
                              damages or any extra contractual damages of any
                              nature or description whatsoever except to the
                              extent claimed as a Subject Loss under this
                              Agreement.

WAIVER OF PUNITIVE
  DAMAGES:                    The Company and the Reinsurer agree that in no
                              event shall either party be entitled to any award
                              against the other of punitive, multiplied, or
                              exemplary damages, other similar damages or any
                              extra contractual damages of any nature or
                              description whatsoever, and each of the Company
                              and the Reinsurer both expressly waives all rights
                              to punitive, multiplied, or exemplary damages,
                              other similar damages or any extra contractual
                              damages of any nature or description whatsoever
                              except to the extent claimed as a Subject Loss
                              under this Agreement.

EXCLUSIONS:         (A)       Ex Gratia Payments: Part B Covered Losses under
                              this Agreement shall exclude any Ex Gratia
                              Payments except to the extent consented to by the
                              Reinsurer. "Ex Gratia Payments" as used herein
                              means a claim payment not required by the terms of
                              the underlying insurance policies covered by this
                              Agreement.

                                      -19-
<PAGE>   20
                    (B)       Insolvency Funds: The Reinsurer shall not be
                              obligated to pay to the Company any share of any
                              liability of the Company arising, by contract,
                              operation of law, or otherwise, from participation
                              or membership of the Company or any of its
                              affiliates, whether voluntary or involuntary, in
                              any insolvency fund or from reimbursement of any
                              person for any such liability. "Insolvency Fund"
                              includes any guaranty or insolvency fund, plan,
                              pool, association, or other arrangement howsoever
                              denominated, established or governed, which
                              provides for any assessment of or payment or
                              assumption by any person of part or all of any
                              claim, debt, charge, fee, or other obligation of
                              any insurer, or its successors or assigns which
                              has been declared to be insolvent, or which is
                              otherwise deemed unable to meet any claim, debt,
                              charge, fee or other obligation in whole or in
                              part.

                    (C)       Assessments: This Agreement does not cover
                              assessments of any nature whatsoever levied
                              against the Company.

                    (D)       Dividends: The Reinsurer shall not participate in
                              the determination of, nor reimburse the Company
                              for, any policyholder or other dividends paid by
                              the Company.

                    (E)       Assumed Reinsurance: This Agreement does not cover
                              reinsurance assumed by the Company.

REINSURANCE
INTERMEDIARY:       Swiss Re Atrium Corporation, 55 East 52 Street, 42nd Floor,
                    NewYork, New York 10055, U.S.A., is hereby recognized as the
                    Reinsurance Intermediary for all business under this
                    Agreement.

                    All communications, including but not limited to notices,
                    reports, and statements, relating to this Agreement, shall
                    be transmitted to the Company and the Reinsurer through the
                    Intermediary.

                    All payments, including but not limited to premiums, losses,
                    loss adjustment expenses, and salvages and settlements,
                    relating to this Agreement shall be made directly between
                    the Company and the Reinsurer, and not through any
                    Intermediary.

AMENDMENTS:         This Agreement may be amended only by mutual consent of the
                    parties expressed in a written addendum executed by the
                    parties with the same formalities as this Agreement, and
                    such addendum

                                      -20-
<PAGE>   21
                    shall be deemed to be an integral part of this Agreement and
                    binding on the parties hereto.

ACCESS TO RECORDS:  The Reinsurer shall have the right to examine, at any
                    reasonable time, all papers, books, accounts, documents and
                    other records of the Company or any agent or employee of the
                    Company including any claims adjuster or any other person
                    acting on behalf of the Company relating to the business
                    covered hereunder. Upon the Reinsurer's request, the Company
                    shall supply the Reinsurer, at the Reinsurer's expense, with
                    copies of the whole or any part of such papers, books,
                    accounts, documents and other records relating to the
                    business covered hereunder. The Reinsurer's right of
                    inspection under this Access to Records section shall
                    continue to exist after termination of this Agreement as
                    long as one of the parties hereto has a claim against any
                    other arising from this Agreement.

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

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

CURRENCY:           All payments hereunder shall be made in United States
                    Dollars. All monetary amounts herein are in United States
                    Dollars. All reports and accounts hereunder shall be
                    rendered in United States Dollars. For the purpose of this
                    Agreement, where the Company pays amounts in currencies
                    other than United States Dollars, such amounts shall be
                    converted into United States Dollars at the actual rate of
                    exchange at which such amounts are entered in the Company's
                    books.

DISCLOSURES
AND APPROVALS:      The Company represents and warrants with respect to this
                    Agreement and the transactions hereunder and with respect to
                    any insurance and reinsurance which is covered by this
                    Agreement and all transactions thereunder, that all
                    disclosures, approvals and expiry of waiting periods which
                    are necessary or appropriate under any applicable law or
                    regulation have been made or obtained, or will be made or
                    obtained in a timely manner.

                                      -21-
<PAGE>   22
ERRORS AND
OMISSIONS:          Inadvertent errors and omissions of any nature made by
                    either party shall neither increase nor reduce the liability
                    of either party from what that liability would have been had
                    no such error or omission taken place. Upon discovery, the
                    party committing an error or omission shall correct such
                    error or supply such omission retroactively to the extent
                    possible to the time such error or omission occurred, and
                    advise the other party thereof as soon as possible.

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

OTHER
REINSURANCES:       The existence or collectibility of any other reinsurance of
                    the Company (past, present, or future) shall in no way cause
                    any liability of the Reinsurer hereunder to be payable
                    earlier or to be greater than would have been the case in
                    the absence of such reinsurance and the risk of
                    uncollectibility of reinsurance shall be with the Company.

PARTIES TO THIS
AGREEMENT:          This is an Agreement for indemnity reinsurance solely
                    between the Company and the Reinsurer. The acceptance of
                    reinsurance hereunder shall not create any right or legal
                    relationship whatsoever between the Reinsurer and the
                    policyholder, the insured or the beneficiary under any
                    policy reinsured hereunder. The Company shall be and remain
                    solely liable to the policyholder, the insured or the
                    beneficiary under any policy reinsured hereunder.

RIGHT OF OFFSET:    Both the Company and the Reinsurer shall have, and may
                    exercise, at any time the right to offset any balance or
                    balances due the other. Such offset may only include
                    balances due under this Agreement and any other agreements
                    heretofore or hereafter entered into between the Company and
                    the Reinsurer, regardless of whether such balances are in
                    respect of premiums, or losses or otherwise, and regardless
                    of the capacity of any party, whether as reinsurer or
                    reinsured, under the various agreements involved.

                                      -22-
<PAGE>   23
SALVAGE,
SUBROGATION,
AND OTHER
RECOVERIES:         In the event of the payment of any indemnity by the
                    Reinsurer under this Agreement, the Reinsurer shall be
                    subrogated, to the extent of such payment, to all of the
                    rights of the Company against any person or entity legally
                    responsible for damages for the losses paid by the Company.
                    The Company agrees to enforce such rights, but in case the
                    Company refuses or neglects to do so, the Reinsurer is
                    hereby authorized and empowered to bring any appropriate
                    action in the name of the Company or the Company's
                    policyholders or otherwise to enforce such rights. In
                    determining the amount of salvage, subrogation and other
                    recoveries, there shall first be deducted from any amount
                    recovered the expenses incurred in effecting the recovery.
                    The whole of the balance shall then be applied in reduction
                    of the original losses paid by the Company and the Covered
                    Losses and the Experience Balance shall be determined or
                    redetermined accordingly. Any overpayment made by the
                    Reinsurer because of the computation of loss before the
                    application of such a recovery shall be refunded promptly by
                    the Company but no later than three (3) Business Days after
                    receipt of notice of such overpayment.

TAXES:              The Company shall be liable for all taxes, except income and
                    profit taxes of the Reinsurer, on amounts paid to the
                    Reinsurer under the terms of this Agreement, and shall
                    indemnify and hold the Reinsurer harmless for any taxes
                    which the Reinsurer may become obligated to pay on the
                    Company's behalf.

FEDERAL EXCISE
TAX:                In the event that any Federal Excise Tax is due with respect
                    to any amounts due under this Agreement, the Company agrees
                    to pay such tax in addition to any amounts due under this
                    Agreement and agrees to remit such tax to the United States
                    Internal Revenue Service and shall indemnify and hold the
                    Reinsurer harmless for any such taxes which the Reinsurer
                    may become obligated to pay.

NO WAIVER:          No consent or waiver, express or implied, by any other party
                    to or of any breach or default by any other party in the
                    performance of its obligations hereunder shall be construed
                    to be a consent or waiver to or of any other breach or
                    default in the performance of obligations by such other
                    party hereunder. Failure on the part of any party to
                    complain of any act or failure to act of any other party or
                    to declare any other party in default, irrespective of how
                    long

                                      -23-
<PAGE>   24
                    such failure continues, shall not constitute a waiver by
                    such first party of its rights hereunder.

GOVERNING LAW:      It is agreed that, subject to the express provisions of this
                    Agreement to the contrary, this Agreement shall be governed
                    by the substantive laws of the State of Delaware, without
                    regard to its principles of conflict of laws.

SERVICE OF SUIT:    Submission To Jurisdiction: It is agreed that in the event
                    of the failure of the Reinsurer to pay any amount claimed to
                    be due under this Agreement, the Reinsurer, at the request
                    of the Company, will submit to the jurisdiction of any Court
                    of competent jurisdiction within the United States of
                    America and will comply with all requirements necessary to
                    give such Court jurisdiction; and all matters arising
                    hereunder shall be determined in accordance with the law and
                    practice of such Court and the Reinsurer will abide by the
                    final decision of such Court or of any Appellate Court in
                    the event of an appeal.

                    Service of Process: It is further agreed that service of
                    process in any suit instituted against the Reinsurer arising
                    out of this Agreement, may be made upon Morgan, Lewis &
                    Bockius LLP, 101 Park Avenue, New York, New York 10178-0060,
                    U.S.A., Attention: F. Sedgwick Browne, and that in such suit
                    the Reinsurer will abide by the final decision of such Court
                    or of any Appellate Court in the event of an appeal.

                    Appearance: Morgan, Lewis & Bockius LLP are authorized and
                    directed to accept service of process on behalf of the
                    Reinsurer in any such suit and/or upon the request of the
                    Company to give a written undertaking to the Company that
                    they will enter a general appearance upon the Reinsurer's
                    behalf in the event such a suit shall be instituted.

                    Insurance Official As Attorney For Service of Process:
                    Further, pursuant to any statute of any State, Territory or
                    District of the United States of America which makes
                    provision therefor, the Reinsurer hereby designates the
                    Superintendent, Commissioner or Director of Insurance or
                    other officer specified for that purpose in the statute, or
                    his successor or successors in office, as their true and
                    lawful attorney upon whom may be served any lawful process
                    in any action, suit or proceeding instituted by or on behalf
                    of the Company or any beneficiary hereunder arising out of
                    this Agreement, and hereby designates Morgan, Lewis &
                    Bockius LLP as the party to whom the said officer is
                    authorized to mail such

                                      -24-
<PAGE>   25
                    process or a true copy thereof.

REPRESENTATIONS:    The Company acknowledges that, at the Reinsurer's request,
                    it has provided the Reinsurer with the Company Data
                    described in Schedule 1 prior to the execution of this
                    Agreement by the Reinsurer. The Company represents that all
                    factual information contained in the Company Data is
                    substantially complete and accurate as of the date the
                    document containing the information was prepared. The
                    Company further represents that any assumptions made in
                    preparing the Company Data were based upon informed judgment
                    and are consistent with sound actuarial principles. The
                    Company further represents that it is not aware of any
                    omissions, errors, changes or discrepancies which would
                    materially affect the Company Data. The Reinsurer has relied
                    on such data and the foregoing representations in entering
                    into this Agreement.

WARRANTY:           The Company warrants that the Business Covered and all
                    agreements relating thereto shall not be amended in any
                    manner whatsoever without the prior and express written
                    consent of the Reinsurer.

DATES AND TIMES:    All dates and times contained in this Agreement, unless
                    otherwise specified, are New York, New York time.

                                      -25-
<PAGE>   26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives in Hamilton, Bermuda effective as of
December 31, 1998.

                                            METROPOLITAN LIFE INSURANCE COMPANY

                                            BY: ________________________________

                                            Name: ______________________________

                                            Title: _____________________________

                                            STOCKWOOD REINSURANCE COMPANY LTD.

                                            BY: ________________________________

                                            Name: ______________________________

                                            Title: _____________________________
<PAGE>   27
                                                                      SCHEDULE 1

                                   SCHEDULE 1

The Company Data provided to Stockwood Reinsurance Company Ltd. includes the
following information:

(A) The following e-mails and attachments thereto:

          December 14, 1998 e-mail from Joseph Dunn to Mary Rohe, "Re: Revised
          Traditional Ordinary Calendar Year Exposure and Paid Death Claims"

          December 15, 1998 e-mail from Ronald Rubnich to Mary Rohe, "Trad Ord
          Exposure"

          December 22, 1998 e-mail from Richard Daillak to Mary Rohe, "Net
          amount at risk basis data"

          December 23, 1998 e-mail from Richard Daillak to Mary Rohe, "MetLife
          Business Definition"

          December 23, 1998 e-mail from Richard Daillak to Mary Rohe, "Re:
          MetLife Business Definition"

          December 23, 1998 e-mail from Richard Daillak to Mary Rohe, "9 mos of
          1998, exposure by attained age and sex"

          December 28, 1998 e-mail from Richard Daillak to Mary Rohe,
          "Metromatic & COLI"

          December 28, 1998 e-mail from Richard Daillak to Mary Rohe, "9 mos
          1998 exposure and death experience"

(B) The following facsimile transmission:

          December 14, 1998 facsimile from Paul Schmieder to Mary Rohe, "Re
          Information on Traditional Ordinary Large-sized Policies

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