Document:

Exhibit 10.61

                                                           EXECUTION COUNTERPART

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

              AMENDMENT NO. 2, dated as of March 15, 2002, between XL CAPITAL
LTD, a company incorporated under the laws of the Cayman Islands, British West
Indies ("XL CAPITAL"), X.L. AMERICA, INC., a Delaware corporation ("XL
AMERICA"), XL INSURANCE (BERMUDA) LTD (formerly XL Insurance Ltd), a Bermuda
limited liability company ("XL Insurance"), XL EUROPE LTD, a company
incorporated under the laws of Ireland ("XL EUROPE"), and XL RE LTD, a Bermuda
limited liability company ("XL RE" and, together with XL Capital, XL America, XL
Insurance and XL Europe, each an "ACCOUNT PARTY" and each a "GUARANTOR" and,
collectively, the "ACCOUNT PARTIES" and the "GUARANTORS"; the "Account Parties"
and the Guarantors being collectively referred to as the "OBLIGORS"), the
Lenders party hereto and JPMORGAN CHASE BANK (formerly The Chase Manhattan
Bank), as Administrative Agent for the Lenders (in such capacity, together with
its successors in such capacity, the "ADMINISTRATIVE AGENT").

              The Obligors, the Lenders and the Administrative Agent are parties
to a Letter of Credit and Reimbursement Agreement dated as of June 29, 2001, as
amended as of September 26, 2001 (the "AGREEMENT"), providing, subject to the
terms and conditions thereof, for the issuance of letters of credit for the
account of the Account Parties in an aggregate face amount not exceeding
$1,000,000,000. The Obligors, the Lenders and the Administrative Agent wish to
amend the Agreement in certain respects and, accordingly, the parties hereto
hereby agree as follows:

              Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment No. 2, terms defined in the Agreement are used herein as defined
therein.

              Section 2. AMENDMENTS. Effective as provided in Section 4 below,
the Agreement is hereby amended as follows:

              2.01.  References in the Agreement (including references to the
Agreement as amended hereby) to "this Agreement" (and indirect references such
as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be
references to the Agreement as amended hereby.

              2.02.  Section 6.01 is hereby amended to read in its entirety as
follows:

              "SECTION 6.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. Each
       Account Party will furnish to the Administrative Agent and each Lender:

              (a)    within 135 days after the end of each fiscal year of each
       Account Party

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       1
<PAGE>

       except for XL America (but in the case of XL Capital, within 100 days
       after the end of each fiscal year of XL Capital), the audited
       consolidated balance sheet and related statements of operations,
       stockholders' equity and cash flows of such Account Party and its
       consolidated Subsidiaries as of the end of and for such year, setting
       forth in each case in comparative form the figures for the previous
       fiscal year (if such figures were already produced for such corresponding
       period or periods) (it being understood that delivery to the Lenders of
       XL Capital's Report on Form 10-K filed with the SEC shall satisfy the
       financial statement delivery requirements of this paragraph (a) to
       deliver the annual financial statements of XL Capital so long as the
       financial information required to be contained in such Report is
       substantially the same as the financial information required under this
       paragraph (a)), all reported on by independent public accountants of
       recognized national standing (without a "going concern" or like
       qualification or exception and without any qualification or exception as
       to the scope of such audit) to the effect that such consolidated
       financial statements present fairly in all material respects the
       financial condition and results of operations of such Account Party and
       its consolidated Subsidiaries on a consolidated basis in accordance with
       GAAP or (in the case of XL Europe, XL Insurance and XL Re) SAP, as the
       case may be, consistently applied;

              (b)    by June 15 of each year, (i) an unaudited consolidating
       balance sheet and related statements of operations, stockholders' equity
       and cash flows of XL America and its consolidated Subsidiaries as of the
       end of and for such year, setting forth in each case in comparative form
       the figures for the previous fiscal year (if such figures were already
       produced for such corresponding period or periods), all certified by a
       Financial Officer of XL America as presenting fairly in all material
       respects the financial condition and results of operations of XL America
       and its consolidated Subsidiaries on a consolidated basis in accordance
       with GAAP consistently applied, subject to normal year-end audit
       adjustments and the absence of footnotes, and (ii) audited statutory
       financial statements for each insurance subsidiary of XL America reported
       on by independent public accountants of recognized national standing
       (without a "going concern" or like qualification or exception and without
       any qualification or exception as to the scope of such audit) to the
       effect that such audited consolidated financial statements present fairly
       in all material respects the financial condition and results of
       operations of such insurance subsidiaries in accordance with SAP,
       consistently applied;

              (c)    within 60 days after the end of each of the first three
       fiscal quarters of each fiscal year of such Account Party, the
       consolidated balance sheet and related statements of operations,
       stockholders' equity and cash flows of such Account Party and its
       consolidated Subsidiaries as of the end of and for such fiscal quarter
       and the then elapsed portion of the fiscal year, setting forth in each
       case in comparative form the figures for (or, in the case of the balance
       sheet, as of the end of) the corresponding

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       2
<PAGE>

       period or periods of the previous fiscal year (if such figures were
       already produced for such corresponding period or periods), all certified
       by a Financial Officer of such Account Party as presenting fairly in all
       material respects the financial condition and results of operations of
       such Account Party and its consolidated Subsidiaries on a consolidated
       basis in accordance with GAAP or (in the case of XL Europe, XL Insurance
       and XL Re) SAP, as the case may be, consistently applied, subject to
       normal year-end audit adjustments and the absence of footnotes (it being
       understood that delivery to the Lenders of XL Capital's Report on Form
       10-Q filed with the SEC shall satisfy the financial statement delivery
       requirements of this paragraph (c) to deliver the quarterly financial
       statements of XL Capital so long as the financial information required to
       be contained in such Report is substantially the same as the financial
       information required under this paragraph (c));

              (d)    concurrently with any delivery of financial statements
       under clause (a), (b) or (c) of this Section, a certificate signed on
       behalf of each Account Party by a Financial Officer (i) certifying as to
       whether a Default has occurred and, if a Default has occurred, specifying
       the details thereof and any action taken or proposed to be taken with
       respect thereto, (ii) setting forth reasonably detailed calculations
       demonstrating compliance with Sections 7.03, 7.05, 7.06 and 7.07 and
       (iii) stating whether any change in GAAP or (in the case of XL Europe, XL
       Insurance, XL Re and any insurance subsidiary of XL America) SAP or in
       the application thereof has occurred since the date of the audited
       financial statements referred to in Section 4.04 and, if any such change
       has occurred, specifying the effect of such change on the financial
       statements accompanying such certificate;

              (e)    concurrently with any delivery of financial statements
       under clauses (a) and (b)(ii) of this Section, a certificate of the
       accounting firm that reported on such financial statements stating
       whether they obtained knowledge during the course of their examination of
       such financial statements of any Default (which certificate may be
       limited to the extent required by accounting rules or guidelines);

              (f)    promptly after the same become publicly available, copies
       of all periodic and other reports, proxy statements and other materials
       filed by such Account Party or any of its respective Subsidiaries with
       the SEC, or any Governmental Authority succeeding to any or all of the
       functions of said Commission, or with any U.S. or other securities
       exchange, or distributed by such Account Party to its shareholders
       generally, as the case may be;

              (g)    concurrently with any delivery of financial statements
       under clause (a), (b) or (c) of this Section, a certificate of a
       Financial Officer of XL Capital, setting forth on a consolidated basis
       for XL Capital and its consolidated Subsidiaries as of the end of the
       fiscal year or quarter to which such certificate relates (i) the
       aggregate book value

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       3
<PAGE>

       of assets which are subject to Liens permitted under Section 7.03(g) and
       the aggregate book value of liabilities which are subject to Liens
       permitted under Section 7.03(g)(it being understood that the reports
       required by paragraphs (a), (b) and (c) of this Section shall satisfy the
       requirement of this clause (i) of this paragraph (g) if such reports set
       forth separately, in accordance with GAAP, line items corresponding to
       such aggregate book values) and (ii) a calculation showing the portion of
       each of such aggregate amounts which portion is attributable to
       transactions among wholly-owned Subsidiaries of XL Capital; and

              (h)    promptly following any request therefor, such other
       information regarding the operations, business affairs and financial
       condition of XL Capital or any of its Subsidiaries, or compliance with
       the terms of this Agreement, as the Administrative Agent or any Lender
       may reasonably request."

              2.03.  Schedule V is hereby deleted and replaced with Schedule V
attached to this Amendment No. 2 and the reference to "as of the date hereof" in
the first sentence of Section 4.13 is amended to read "as of September 30,
2001".

              Section 3. REPRESENTATIONS AND WARRANTIES. Each Account Party
hereby represents and warrants to the Administrative Agent and the Lenders that
(i) the representations and warranties set forth in Article IV of the Agreement
are, on the date hereof, true and complete as if made on the date hereof (and
after giving effect to this Amendment No. 2) and as if each reference in said
Article IV to "this Agreement" includes reference to this Amendment No. 2 and
(ii) both immediately prior to and as of the date hereof, no Default has
occurred and is continuing.

              Section 4. CONDITIONS PRECEDENT. The amendments to the Agreement
set forth in Section 2 above shall become effective, as of the date hereof, upon
the satisfaction of the following conditions precedent:

              4.01.  EXECUTION BY ALL PARTIES. This Amendment No. 2 shall have
been executed and delivered by each of the Obligors and the Required Lenders.

              4.02.  OTHER DOCUMENTS. Receipt by the Administrative Agent of
such other documents as the Administrative Agent or special New York counsel to
JPMorgan Chase Bank may reasonably request.

              Section 5. MISCELLANEOUS. Except as herein provided, the Agreement
shall remain unchanged and in full force and effect. Nothing in this Amendment
No. 2 shall constitute a waiver of any rights and/or remedies that the Lenders
and/or the Administrative Agent may have under the Agreement and nothing
contained herein shall obligate the Lenders to grant any future waiver of any
provision of the Agreement. XL Capital shall pay all

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       4
<PAGE>

reasonable expenses incurred by the Administrative Agent, including the
reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy
LLP, special New York counsel to JPMorgan Chase Bank, in connection with the
preparation, negotiation, execution and delivery of this Amendment No. 2. This
Amendment No. 2 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 2 by signing any such
counterpart. This Amendment No. 2 shall be governed by, and construed in
accordance with, the law of the State of New York.

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       5
<PAGE>

              IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 2 to be duly executed and delivered as of the day and year first above
written.

                                  X.L. AMERICA, INC.,
                                  as an Account Party and a Guarantor

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

                                  XL INSURANCE (BERMUDA) LTD,
                                  as an Account Party and  a Guarantor

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

                                  XL EUROPE LTD,
                                  as an Account Party and a Guarantor

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

                                   XL RE LTD,
                                   as an Account Party and a Guarantor

                                   By:
                                      ------------------------------------------
                                      Name:  John W. Hume
                                      Title: EVP & Chief Financial Officer

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       6
<PAGE>

                  IN WITNESS WHEREOF, XL Capital has caused this Amendment No. 2
to be duly executed as a Deed by an authorized officer as of the day and year
first above written.

                                  EXECUTED AS A DEED by XL CAPITAL LTD,
                                  as an Account Party and a Guarantor

                                  ----------------------------------------------
                                  witness

                                  By:
                                     -------------------------------------------
                                     Name:  Brian M. O'Hara
                                     Title: President & CEO

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       7
<PAGE>

                                  LENDERS

                                  JPMORGAN CHASE BANK
                                  Individually and as Administrative Agent

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

                                  CITIBANK, N.A.

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

                                  MELLON BANK, N.A.

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

                                  BANK OF AMERICA, N.A.

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

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       8
<PAGE>

                                  BANK ONE, NA

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

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

                                  BARCLAYS BANK PLC

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

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

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

                                  CREDIT LYONNAIS NEW YORK BRANCH

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

                                  DEUTSCHE BANK AG
                                  New York and/or Cayman Islands Branch
                                  By:
                                     -------------------------------------------
                                     Name:
                                     Title:

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       9
<PAGE>

                                  DRESDNER BANK AG, NEW YORK AND
                                  GRAND CAYMAN BRANCHES

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

                                  FLEET NATIONAL BANK

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

                                  LLOYDS TSB BANK PLC

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

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

                                  ABN AMRO BANK N.V., LONDON BRANCH

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

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

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       10
<PAGE>

                                  BANCO SANTANDER CENTRAL HISPANO, S.A.

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

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

                                  COMERICA BANK

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

                                  FIRST UNION NATIONAL BANK

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

                                  NATIONAL WESTMINSTER BANK PLC

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

                                  STATE STREET BANK AND TRUST COMPANY

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

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       11
<PAGE>

                                  ING BANK N.V., LONDON BRANCH

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

         AMENDMENT NO. 2 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
                                       12AMENDMENT NO. 1 TO LETTER OF CREDIT FACILITY AND REIMBURSEMENT AGREEMENT

              AMENDMENT NO. 1 dated as of March 21, 2002 between XL CAPITAL LTD,
a company incorporated under the laws of the Cayman Islands, British West Indies
("THE ACCOUNT PARTY"), X.L. AMERICA, INC., a Delaware corporation ("XL
AMERICA"), XL INSURANCE (BERMUDA) LTD, a Bermuda limited liability company ("XL
INSURANCE"), XL EUROPE LTD, a company incorporated under the laws of Ireland
("XL EUROPE"), and XL RE LTD, a Bermuda limited liability company ("XL RE" and,
together with the Account Party in its capacity as a Guarantor, XL America, XL
Insurance and XL Europe, each a "GUARANTOR" and, collectively, the "GUARANTORS";
the Guarantors and the Account Party being collectively referred to as the
"OBLIGORS"), and CITIBANK INTERNATIONAL PLC, as agent and trustee for the
Lenders, the "AGENT" and "SECURITY TRUSTEE".

              The Obligors, the Lenders, the Agent and Salomon Brothers
International Limited as Arranger are parties to a Letter of Credit Facility and
Reimbursement Agreement dated November 20, 2001 (the "Agreement"), providing,
subject to the terms and conditions thereof, for the issuance of letters of
credit for the account of the Account Party in an aggregate face amount not
exceeding (pound)324,000,000. The Obligors and the Agent wish to amend the
Agreement in certain respects and accordingly the parties hereto hereby agree as
follows:

              Clause 1. DEFINITIONS. Except as otherwise defined in this
Amendment No. 1, terms defined in the Agreement are used herein as defined
therein.

              Clause 2. AMENDMENTS. Effective as provided in Clause 4 below, the
Agreement is hereby amended as follows:

              2.01.  References in the Agreement (including references to the
Agreement as amended hereby) to "this Agreement" (and indirect references such
as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be
references to the Agreement as amended hereby.

              2.02.  Clause 18.1 is hereby amended to read in its entirety as
follows:

              "18.1. Each Obligor will furnish to the Agent and each Lender:

              (a)    within 135 days after the end of each fiscal year of each
Obligor except for XL America (but in the case of the Account Party, within 100
days after the end of each fiscal year of the Account Party), the audited
consolidated balance sheet and related statements of operations, stockholders'
equity and cash flows of such Obligor and its consolidated Subsidiaries as of
the end of and for such year, setting forth in each case in comparative form the
figures for the previous fis-

         AMENDMENT NO. 1 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
<PAGE>
                                      -2-

cal year (if such figures were already produced for such corresponding period or
periods) (it being understood that delivery to the Lenders of the Account
Party's Report on Form 10-K filed with the SEC shall satisfy the financial
statement delivery requirements of this paragraph (a) to deliver the annual
financial statements of the Account Party so long as the financial information
required to be contained in such Report is substantially the same as the
financial information required under this paragraph (a)), all reported on by
independent public accountants of recognized national standing (without a GOING
CONCERN or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of such Obligor and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP or (in the case of
XL Europe, XL Insurance and XL Re) SAP, as the case may be, consistently
applied;

              (b)    by June 15 of each year, (i) an unaudited consolidating
balance sheet and related statements of operations, stockholders' equity and
cash flows of XL America and its consolidated Subsidiaries as of the end of and
for such year, setting forth in each case in comparative form the figures for
the previous fiscal year (if such figures were already produced for such
corresponding period or periods), and (ii) audited statutory financial
statements for each insurance subsidiary of XL America reported on by
independent public accountants of recognized national standing (without a GOING
CONCERN or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such audited
consolidated financial statements present fairly in all material respects the
financial condition and results of operations of such insurance subsidiaries in
accordance with SAP, consistently applied;

              (c)    within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of such Obligor, the consolidated balance
sheet and related statements of operations, stockholders' equity and cash flows
of such Obligor and its consolidated Subsidiaries as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for (or, in the case of the balance
sheet, as of the end of) the corresponding period or periods of the previous
fiscal year (if such figures were already produced for such corresponding period
or periods), all certified by a Financial Officer of such Obligor as presenting
fairly in all material respects the financial condition and results of
operations of such Obligor and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP or (in the case of XL Europe, XL Insurance and XL
Re) SAP, as the case may be, consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes (it being understood that
delivery to the Lenders of the Account Party's Report on Form 10-Q filed with
the SEC shall satisfy the financial statement delivery requirements of this
paragraph (c) to deliver the quarterly financial statements of the Account Party
so long as the financial information required to be contained in such Report is
substantially the same as the financial information required under this
paragraph (c));

         AMENDMENT NO. 1 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
<PAGE>

                                      -3-

              (d)    concurrently with any delivery of financial statements
under Clause 18.1 (a), (b) or (c), a certificate signed on behalf of each
Obligor by a Financial Officer (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Clauses 19.3
(LIENS), 19.5 (RATIO OF TOTAL FUNDED DEBT TO TOTAL CAPITALIZATION), 19.6
(CONSOLIDATED NET WORTH) and 19.7 (INDEBTEDNESS) and (iii) stating whether any
change in GAAP or (in the case of XL Europe, XL Insurance and XL Re) SAP or in
the application thereof has occurred since the date of the audited financial
statements referred to in Clause 17.5 (a) and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;

              (e)    concurrently with any delivery of financial statements
under Clause 18.1 (a), a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);

              (f)    promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed by
such Obligor or any of its respective Subsidiaries with the SEC, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any U.S. or other securities exchange, or distributed by
such Obligor to its shareholders generally, as the case may be;

              (g)    concurrently with any delivery of financial statements
under Clause 18.1 (a), (b) or (c), a certificate of a Financial Officer of the
Account Party, setting forth on a consolidated basis for the Account Party and
its consolidated Subsidiaries as of the end of the fiscal year or quarter to
which such certificate relates (i) the aggregate book value of assets which are
subject to Liens permitted under Clause 19.3(g) (LIENS) and the aggregate book
value of liabilities which are subject to Liens permitted under Clause
19.3(g)(it being understood that the reports required by paragraphs (a), (b) and
(c) of this Clause shall satisfy the requirement of this clause (i) of this
Clause 18.1(g) if such reports set forth separately, in accordance with GAAP,
line items corresponding to such aggregate book values) and (ii) a calculation
showing the portion of each of such aggregate amounts which portion is
attributable to transactions among wholly-owned Subsidiaries of the Account
Party; and

              (h)    promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Account Party or any of its Subsidiaries, or compliance with the terms of
this Agreement, as the Agent or any Lender may reasonably request."

              Clause 3. REPRESENTATIONS AND WARRANTIES. Each Obligor hereby
represents and warrants to the Agent and the Lenders that (i) the
representations and warranties set forth in Clause 17 of the Agreement are, on
the date hereof, true and complete as if made on the date hereof (and after

         AMENDMENT NO. 1 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
<PAGE>
                                      -4-

giving effect to this Amendment No. 1) and as if each reference in said Clause
17 to "this Agreement" includes reference to this Amendment No. 1 and (ii) both
immediately prior to and as of the date hereof, no Default has occurred and is
continuing.

              Clause 4. CONDITIONS PRECEDENT. The amendments to the Agreement
set forth in Clause 2 above shall become effective, as of the date hereof, upon
the satisfaction of the following conditions precedent:

              4.01. EXECUTION BY ALL PARTIES. This Amendment No. 1 shall have
been executed and delivered by each of the Obligors and the Agent in accordance
with Clause 23.3 of the Agreement.

              Clause 5. MISCELLANEOUS. Except as herein provided, the Agreement
shall remain unchanged and in full force and effect. Nothing in this Amendment
No. 1 shall constitute a waiver of any rights and/or remedies that the Lenders
and/or the Agent may have under the Agreement and nothing contained herein shall
obligate the Lenders to grant any future waiver of any provision of the
Agreement. The Account Party shall pay all reasonable expenses incurred by the
Agent, including the reasonable fees, charges and disbursements of Freshfields,
Bruckhaus Deringer, special English counsel to the Agent, in connection with the
preparation, negotiation, execution and delivery of this Amendment No. 1. This
Amendment No. 1 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 1 by signing any such
counterpart. This Amendment No. 1 shall be governed by, and construed in
accordance with, the laws of England and Wales. Clause 29.2 (JURISDICTION) and
Clause 31 (THIRD PARTY RIGHTS) of the Agreement shall be deemed incorporated in
this Amendment No. 1 (with such conforming changes as the context requires) as
if set out herein.

         AMENDMENT NO. 1 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
<PAGE>
                                      -5-

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
duly executed and delivered as of the day and year first above written.

ACCOUNT PARTY

EXECUTED as a DEED
by XL CAPITAL LTD

By:      JERRY DE ST. PAER

In the presence of:        PAMELA PAYNTER

GUARANTORS

EXECUTED as a DEED
by XL CAPITAL LTD

By:      JERRY DE ST. PAER

In the presence of:        PAMELA PAYNTER

SIGNED for and on behalf of X.L. AMERICA, INC.

By:      NICHOLAS M. BROWN, JR

Title:   PRESIDENT AND CEO

SIGNED for and on behalf of XL INSURANCE (BERMUDA) LTD

By:      CRISTOPHER COELHO

Title:   SVP, CHIEF FINANCIAL OFFICER

         AMENDMENT NO. 1 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
<PAGE>
                                      -6-

SIGNED for and on behalf of XL EUROPE LTD

By:      FIONA MULDOON

Title:   CFO AND COMPANY SECRETARY

SIGNED for and on behalf of XL RE LTD

By:      HENRY KEELING

Title:   PRESIDENT AND CEO

AGENT

SIGNED for and on behalf of CITIBANK INTERNATIONAL PLC

By:      PAUL GIBBS

Address: 335 STRAND
                  LONDON
                  WC2R 1LS

Fax:              +44 207 500 4482/4484
Tel:              +44 207 500 4712
Attention:        SONIA GOSPARINI, LOANS AGENCY

         AMENDMENT NO. 1 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
<PAGE>

                                      -7-

SECURITY TRUSTEE

SIGNED for and on behalf of CITIBANK INTERNATIONAL PLC

By:      PAUL GIBBS

Address: 335 STRAND
         LONDON
         WC2R 1LS

Fax:              +44 207 500 4482/4484
Tel:              +44 207 500 4712
Attention:        SONIA GOSPARINI, LOANS AGENCY

         AMENDMENT NO. 1 TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

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