Document:

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                                                                Exhibit 10.14.25

02.24.00

                  FIRST AMENDMENT TO LETTER OF CREDIT FACILITY
                           AND REIMBURSEMENT AGREEMENT

            THIS FIRST AMENDMENT TO LETTER OF CREDIT FACILITY AND REIMBURSEMENT
AGREEMENT, dated as of February 25, 2000 (this "Amendment"), by and among XL
Insurance Ltd, XL Capital Ltd, XL EUROPE LTD (formerly know as XL Europe), XL
Mid Ocean Reinsurance Ltd, THE BROCKBANK GROUP Plc and XL INVESTMENTS LTD
(collectively, the "XL Parties"), MELLON BANK, N.A., as Issuing Bank (in such
capacity, the "Issuing Bank") and as Agent ( in such capacity, the "Agent"), and
the banks listed on the signature pages hereto (collectively, the "Banks").

                              W I T N E S S E T H:

            WHEREAS, the XL Parties, the Banks, the Issuing Bank and the Agent
are parties to a Letter of Credit Facility and Reimbursement Agreement, dated as
of June 30, 1999 (the "Reimbursement Agreement"), pursuant to which the Banks
have agreed, on the terms and subject to the conditions described therein, to
extend credit to certain of the XL Parties by participating in letters of credit
issued for the account of such XL Parties by the Issuing Bank; and

            WHEREAS, the XL Parties have requested the Banks to make certain
additional changes to the Reimbursement Agreement, including changes to permit
XL Europe to become a Grantor under the Pledge Agreement; and

            WHEREAS, the Banks are willing to amend the Reimbursement Agreement
as set forth below; and

            WHEREAS, capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Reimbursement Agreement;

            NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:

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            SECTION 1. Amendments to Reimbursement Agreement.

            (a) The definition of the term "Custodian" appearing in Section 1.01
of the Reimbursement Agreement is hereby amended by inserting therein,
immediately after the phrase "as Custodian for" appearing therein, the phrase
"XL Europe,".

            (b) The definition of the term "Pledge Agreement" appearing in
Section 1.01 of the Reimbursement Agreement is hereby amended by inserting
therein, immediately before the period at the end thereof, the phrase "including
by the First Amendment thereto adding XL Europe as a Grantor thereunder".

            (c) Section 1.01 of the Reimbursement Agreement is hereby amended by
adding thereto, in appropriate alphabetical sequence, the following definitions:

                        "Asset Accumulation Lien" means a Lien on amounts
                  received, and on actual and imputed investment income on such
                  amounts received, relating and identified to specific
                  insurance payment liabilities or to liabilities arising in the
                  ordinary course of any Credit Party's or Subsidiary's business
                  as an insurance or reinsurance company or corporate member of
                  Lloyd's or as a provider of financial services or contracts,
                  or the proceeds thereof, in each case held in a segregated
                  trust or other account and securing such liabilities;
                  provided, that in no case shall an Asset Accumulation Lien
                  secure Indebtedness and any Lien which secures Indebtedness
                  shall not be an Asset Accumulation Lien.

                        "Total Adjusted Funded Debt" shall have the meaning
                  given that term in Section 6.06 hereof.

                        "XL Europe" shall mean XL Europe Ltd, a company
                  incorporated under the laws of Ireland and formerly known as
                  XL Europe.

            (d) Section 3.07 of the Reimbursement Agreement is hereby amended by
inserting therein, immediately after the phrase "in the case of" appearing in
the first sentence thereof of, the phrase "XL Europe (from and after the date of
the First Amendment to the Pledge Agreement),".

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            (e) Section 5.01 of the Reimbursement Agreement is hereby amended by
      adding at the end thereof a new paragraph (j) thereof to read as follows:

                              (j) Information Regarding Asset Accumulation
                  Liens. At the time of furnishing each certificate furnished
                  pursuant to paragraph (c) of this Section 5.01, a statement,
                  certified as true and correct by a principal 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 (A)
                  the aggregate book value of assets which are subject to Asset
                  Accumulation Liens and the aggregate book value of liabilities
                  which are secured by Asset Accumulation Liens (it being
                  understood that the reports required by paragraphs (a) and (b)
                  of this Section 5.01 shall satisfy the requirement of this
                  clause (A) of this paragraph (j) if such reports set forth
                  separately, in accordance with GAAP, line items corresponding
                  to such aggregate book values) and (B) a calculation showing
                  the portion of each of such aggregate amounts which portion is
                  attributable to transactions among wholly-owned Subsidiaries
                  of XL Capital.

            (f) Section 6.03 of the Reimbursement Agreement is hereby amended by
      deleting the period at the end of paragraph (g) thereof and replacing it
      with the phrase "; or" and by adding at the end of such Section a new
      paragraph (h) to read as follows:

                              (h) Asset Accumulation Liens.

            (g) Section 7.01(k) of the Reimbursement Agreement is hereby amended
by inserting therein, immediately after the phrase "binding obligation of" the
second time it appears therein, the phrase "XL Europe,".

            (h) Section 9.14(f) of the Reimbursement Agreement is hereby amended
by inserting therein, immediately after the phrase "release XL Investments or XL
Mid Ocean" appearing therein, the phrase "or XL Europe".

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            (i) Section 6.06 of the Reimbursement Agreement is hereby amended as
follows:

                        6.06. Ratio of Total Adjusted Funded Debt to
                  Consolidated Capital. XL Capital will not permit its ratio of
                  (i) Total Adjusted Funded Debt to (ii) the sum of Total
                  Adjusted Funded Debt plus Consolidated Net Worth to be greater
                  than 0.35 at any time. As used herein, the term "Total
                  Adjusted Funded Debt" shall mean, at any time, the sum of (x)
                  Total Funded Debt at such time plus (y) the aggregate undrawn
                  face amount of all letters of credit (as to which
                  reimbursement obligations are not secured by marketable
                  securities with a value at least equal to the face amount of
                  such letters of credit) issued for the account of, or
                  guaranteed by, XL Capital or any of its Consolidated
                  Subsidiaries at such time (irrespective of whether the
                  beneficiary thereof is an Affiliate).

            SECTION 2. Direction to enter into Amendments. The Required Banks
and the Issuing Bank hereby authorize and direct the Agent to enter into the
following amendments to Transaction Documents which are entered into by the
relevant Credit Parties: (i) an amendment to the Pledge Agreement whereby XL
Europe becomes a Grantor thereunder, whereby securities entitlements pledged by
XL Europe under the Pledge Agreement and otherwise meeting the requirements of
the Pledge Agreement shall be "Pledged Securities" under the Pledge Agreement
and whereby wording changes necessary to reflect three, rather than two,
Grantors under the Pledge Agreement are made, the effectiveness of such
amendment to be conditioned upon the satisfaction of conditions, to be stated in
such amendment, which are substantially similar to those applicable to XL
Investments and XL Mid Ocean as Grantors under the Pledge Agreement under
Section 4.01(a), 4.01(b)(i), 4.01(c), 4.01(d), 4.01(f) and 4.01(g) of the
Reimbursement Agreement and (ii) an amendment to one of the Custodian's
Acknowledgments referred to in the Pledge Agreement, or an additional
Custodian's Acknowledgement substantially in the form of the Custodian's
Acknowledgments referred to in the Pledge Agreement and previously delivered to
the Agent, covering custodial securities accounts maintained by XL Europe under
the Master Custody Agreement referred to in the Pledge Agreement.

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            SECTION 3. Conditions to Effectiveness. This First Amendment shall
become effective upon the execution and delivery hereof by the XL Parties, the
Required Banks, the Issuing Bank and the Agent.

            SECTION 4. Effect of Amendment. The Reimbursement Agreement, as
amended by this Amendment, is in all respects ratified, approved and confirmed
and shall, as so amended, remain in full force and effect.

            SECTION 5. Governing Law. This Amendment shall be deemed to be a
contract under the laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and construed and enforced in accordance with the laws of
said Commonwealth.

            SECTION 6. Counterparts. This Amendment may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.

            IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.

XL INSURANCE LTD, as an Account Party and a Guarantor

By: /s/ Clive R. Tobin
    ---------------------------------
      (Signature)
Name: Clive R. Tobin
      -------------------------------
Title: President
       ------------------------------

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XL MID OCEAN REINSURANCE LTD, as an Account Party and a Guarantor

By: /s/ Henry Keeling
    ---------------------------------
       (Signature)
Name: H.C.V. Keeling
      -------------------------------
Title: President
       ------------------------------

XL EUROPE LTD, as an Account Party

By: /s/ J. Walker Rainey
    ---------------------------------
       (Signature)
Name: J. Walker Rainey
      -------------------------------
Title: Chief Financial Officer
       ------------------------------

THE BROCKBANK GROUP Plc, as an Account Party

By: /s/ James T. Gerry
    ---------------------------------
      (Signature)
Name: James T. Gerry
      -------------------------------
Title: Director
       ------------------------------

XL INVESTMENTS LTD, as a Guarantor

By: /s/ C.V. Greetham
    ---------------------------------
      (Signature)
Name: C.V. Greetham
      -------------------------------
Title: Senior V.P. & CEO
       ------------------------------

XL CAPITAL LTD, as an Account Party and a Guarantor

By: /s/ Brian M. O'Hara
    ---------------------------------
      (Signature)
Name: Brian M. O'Hara
      -------------------------------
Title: President & CEO
       ------------------------------

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MELLON BANK, N.A., as a Bank, as Issuing Bank and as Agent

By: /s/ Karla Maloof
    ---------------------------------
      (Signature)
Name: Karla Maloof
      -------------------------------
Title: Vice President
       ------------------------------

DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES

By: /s/ John S. McGill
    ---------------------------------
      (Signature)
Name: John S. McGill
      -------------------------------
Title: Director
       ------------------------------

By: /s/ Alan Krouk
    ---------------------------------
      (Signature)
Name: Alan Krouk
      -------------------------------
Title: Assistant Vice President
       ------------------------------

THE BANK OF NOVA SCOTIA

By: /s/ John Hopmans
    ---------------------------------
      (Signature)
Name: John Hopmans
      -------------------------------
Title: Managing Director
       ------------------------------

CREDIT LYONNAIS NEW YORK BRANCH

By: /s/ Sebastian Rocco
    ---------------------------------
      (Signature)
Name: Sebastian Rocco
      -------------------------------
Title: Senior Vice President
       ------------------------------

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BANK OF AMERICA, N.A.

By: /s/ Debra Basler
    ---------------------------------
      (Signature)
Name: Debra Basler
      -------------------------------
Title: Vice President
       ------------------------------

THE BANK OF BERMUDA LIMITED

By: /s/H. Frost
    ---------------------------------
      (Signature)
Name: H. Frost
      -------------------------------
Title: Vice President
       ------------------------------

BANQUE NATIONALE DE PARIS

By: /s/ Phil Truesdale
    ---------------------------------
      (Signature)
Name: Phil Truesdale
      -------------------------------
Title: Vice President
       ------------------------------

By: /s/ Veronique Marcus
    ---------------------------------
      (Signature)
Name: Veronique Marcus
      -------------------------------
Title: Vice President
       ------------------------------

FLEET NATIONAL BANK

By: /s/ Anson Harris
    ---------------------------------
      (Signature)
Name: Anson Harris
      -------------------------------
Title: Vice President
       ------------------------------

ROYAL BANK OF CANADA

By: /s/ V. Abdelmessih
    ---------------------------------
      (Signature)
Name: V. Abdelmessih
      -------------------------------
Title: Senior Manager
       ------------------------------

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                                                                Exhibit 10.14.26

                                  $150,000,000

                            LETTER OF CREDIT FACILITY
                           AND REIMBURSEMENT AGREEMENT

                                      AMONG

               XL INSURANCE LTD and XL MID OCEAN REINSURANCE LTD,
                               as Account Parties,

                                       AND

       XL CAPITAL LTD, XL INSURANCE LTD and XL MID OCEAN REINSURANCE LTD,
                                 as Guarantors,

                                       AND

          MELLON BANK, N.A., DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
        ISLANDS BRANCHES, FIRST UNION NATIONAL BANK, FLEET NATIONAL BANK
                     and BANK ONE, NA (MAIN OFFICE CHICAGO)
                                as Issuing Banks

                                       AND

                               MELLON BANK, N.A.,
                            as Agent and as Arranger

                                       AND

                              FLEET NATIONAL BANK,
                             as Documentation Agent

                                   DATED AS OF
                                December 30, 1999

<PAGE>

                                Table of Contents

Section                                Title                         Page
-------                                -----                         ----

ARTICLE I        DEFINITIONS; CONSTRUCTION........................     1

   1.01          Certain Definitions..............................     1
   1.02          Construction.....................................     7
   1.03          Accounting Principles............................     7

ARTICLE II       THE LETTER OF CREDIT FACILITY....................     8

   2.01          Letters of Credit................................     8
   2.02          Commitment Fee; Reduction of the Committed
                 Amounts..........................................     9
   2.03          Procedure for Issuance and Amendment of Letters
                 of Credit........................................     9
   2.04          Certain Provisions in Letters of Credit..........    10
   2.05          Account Party's Reimbursement Obligations........    11
   2.06          Extensions of Expiration Date....................    11
   2.07          Obligations Absolute.............................    11
   2.08          Further Assurances...............................    12
   2.09          Letter of Credit Applications....................    12
   2.10          Certain Provisions Relating to the Issuing Banks.    12
   2.11          Payments Generally; Interest and Interest on
                 Overdue Amounts..................................    13
   2.12          Additional Compensation in Certain Circumstances.    14
   2.13          Taxes............................................    15

ARTICLE III      REPRESENTATIONS AND WARRANTIES...................    16

   3.01          Organization and Qualification...................    16
   3.02          Corporate Power and Authorization................    17
   3.03          Financial Information............................    17
   3.04          Litigation.......................................    17
   3.05          No Adverse Changes...............................    17
   3.06          No Conflicting Laws or Agreements; Consents and
                 Approvals........................................    17
   3.07          Execution and Binding Effect.....................    17
   3.08          Taxes............................................    18
   3.09          Use of Proceeds..................................    18
   3.10          Permits, Licenses and Rights.....................    18
   3.11          Accurate and Complete Disclosure.................    18
   3.12          Absence of Violations............................    18
   3.13          Environmental Matters............................    18
   3.14          Not an Investment Company........................    18
   3.15          Year 2000 Compliance.............................    18

ARTICLE IV       CONDITIONS.......................................    19

   4.01          Effectiveness....................................    19
   4.02          Issuance of Letters of Credit....................    20

ARTICLE V        AFFIRMATIVE COVENANTS............................    20

   5.01          Reporting and Information Requirements...........    20

                                       i
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   5.02          Preservation of Existence and Franchises.........    22
   5.03          Insurance........................................    22
   5.04          Maintenance of Properties........................    22
   5.05          Payment of Taxes and Other Potential Charges and
                 Priority Claims Payment of Other Current
                 Liabilities......................................    22
   5.06          Financial Accounting Practices...................    23
   5.07          Compliance with Applicable Laws..................    23
   5.08          Use of Proceeds..................................    23
   5.09          Continuation Of and Change In Business...........    23
   5.10          Visitation.......................................    23

ARTICLE VI       NEGATIVE COVENANTS...............................    23

   6.01          Mergers and Acquisitions.........................    23
   6.02          Dispositions of Assets...........................    24
   6.03          Liens............................................    24
   6.04          Transactions With Affiliates.....................    25
   6.05          Business.........................................    25
   6.06          Ratio of Total Funded Debt to Consolidated
                 Tangible Net Worth...............................    25
   6.07          Consolidated Tangible Net Worth..................    25
   6.08          Indebtedness.....................................    25
   6.09          Claims-Paying Ratings............................    26
   6.10          Private Act......................................    26

ARTICLE VII      EVENTS OF DEFAULT................................    26

   7.01          Events of Default................................    26

ARTICLE VIII     THE AGENT........................................    28

   8.01          Appointment......................................    28
   8.02          General Nature of Agent's Duties.................    28
   8.03          Exercise of Powers...............................    28
   8.04          General Exculpatory Provisions...................    29
   8.05          Administration by the Agent......................    29
   8.06          Issuing Bank Not Relying on Agent or Other
                 Issuing Banks....................................    30
   8.07          Indemnification..................................    30
   8.08          Agent in its Individual Capacity.................    31
   8.09          Successor Agent..................................    31
   8.10          Additional Agents................................    31
   8.11          Calculations.....................................    31
   8.12          Documentation Agent..............................    32

ARTICLE IX       MISCELLANEOUS....................................    32

   9.01          No Implied Waiver etc............................    32
   9.02          Set-Off..........................................    32
   9.03          Survival of Provisions...........................    32
   9.04          Expenses and Fees; Indemnity.....................    32
   9.05          Severability; Inconsistent Provisions............    33
   9.06          Holidays.........................................    33
   9.07          Notices, etc.....................................    33
   9.08          Forum Selection and Consent to Jurisdiction......    34
   9.09          Waiver of Jury Trial.............................    34
   9.10          Governing Law....................................    34

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   9.11          Validity and Enforceability......................    34
   9.12          Counterparts.....................................    34
   9.13          Successors and Assigns; Participations;
                 Assignments......................................    34
   9.14          Amendments and Waivers...........................    37
   9.15          Judgment Currency................................    37
   9.16          Records..........................................    38
   9.17          Confidentiality..................................    38
   9.18          Sharing of Collections                               38

ARTICLE X        GUARANTEE........................................    39

   10.01         The Guarantee....................................    39
   10.02         Obligations Unconditional........................    39
   10.03         Reinstatement....................................    40
   10.04         Remedies.........................................    40
   10.05         Continuing Guarantee.............................    40
   10.06         No Restrictions..................................    40

Exhibit A   Forms of Continuing Letter of Credit Agreement
Exhibit B   Form of Transfer Supplement
Exhibit C   Form of Opinions of Counsel
Exhibit D   Form of Compliance Certificate
Exhibit E   Forms of Letter of Credit Application
Exhibit F   Form of First Set of Related Letters of Credit

Schedule 2.01(b)  Form of Evergreen Provision
Schedule 3.01     Subsidiaries
Schedule 6.03(a)  Liens

                                      iii

<PAGE>

      LETTER OF CREDIT FACILITY AND REIMBURSEMENT AGREEMENT, dated as of
December 30, 1999, by and between XL INSURANCE LTD, a Bermuda limited liability
corporation ("XL Insurance") and XL MID OCEAN REINSURANCE LTD, a Bermuda limited
liability corporation ("XL Mid Ocean"), as Account Parties; XL CAPITAL LTD, a
corporation organized under the laws of the Cayman Islands, British West Indies
("XL Capital"), XL Insurance and XL Mid Ocean, as Guarantors; Mellon Bank, N.A.,
a national banking association ("Mellon"), Deutsche Bank, AG, New York and/or
Cayman Islands Branches, First Union National Bank, Fleet National Bank and Bank
One, NA (Main Office Chicago), as Issuing Banks; Mellon, as Agent for the
Issuing Banks hereunder and as Arranger; and Fleet National Bank, as
Documentation Agent.

                              PRELIMINARY STATEMENT

      WHEREAS, the Issuing Banks have agreed to make available to the Account
Parties a Letter of Credit Facility upon all of the terms and conditions herein
set forth;

      NOW, THEREFORE, in consideration of their mutual agreements hereinafter
set forth and intending to be legally bound hereby, the Account Parties, the
Guarantors, the Agent, the Arranger and each Issuing Bank agree as follows.

                                    ARTICLE I

                            DEFINITIONS: CONSTRUCTION

      1.01. Certain Definitions. In addition to other words and terms defined
elsewhere in this Agreement, as used herein the following words and terms shall
have the following meanings, respectively, unless the context hereof otherwise
clearly requires:

      "Account Parties" shall mean XL Insurance and XL Mid Ocean and "Account
Party" shall mean one of them.

      "Affiliate" shall mean an entity which is directly or indirectly
controlled by an Account Party or which controls an Account Party or which is
under common control with any of the Account Parties.

      "Agent" means Mellon, in its capacity as Agent hereunder.

      "Aggregate Letter of Credit Undrawn Availability" at any time shall mean
the aggregate amount of the Letter of Credit Undrawn Availability for all
Letters of Credit at such time.

      "Aggregate Letter of Credit Unreimbursed Draws" at any time shall mean the
aggregate amount of Letter of Credit Unreimbursed Draws for all Letters of
Credit at such time.

      "Agreement" shall mean this Letter of Credit Facility and Reimbursement
Agreement as amended, modified or supplemented from time to time.

      "Applicable Interest Rate" as used herein shall mean the Prime Rate.

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      "Arranger" means Mellon, in its capacity as Arranger hereunder.

      "Assets" at any time shall mean the assets of any Credit Party, as the
context requires, at such time, determined in accordance with GAAP or SAP, as
appropriate.

      "Bank Parties" shall mean the Issuing Banks, the Arranger and the Agent.

      "Bermuda Companies Law" shall mean The Companies Act of 1981 of Bermuda,
as amended, and the regulations promulgated thereunder.

      "Bermuda Insurance Law" shall mean The Insurance Act of 1978 of Bermuda,
as amended, and the regulations promulgated thereunder.

      "Business Day" shall mean any day other than a Saturday, Sunday, public
holiday under the laws of the Commonwealth of Pennsylvania or of Bermuda or
other day on which banking institutions are authorized or obligated to close in
Pittsburgh, Pennsylvania or Bermuda.

      "Capitalized Lease Obligation" shall mean any lease obligation which is
required to be capitalized in accordance with GAAP.

      "CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time.

      "Change in Control" shall mean the occurrence of any of the following
events or conditions: (a) any Person or group of Persons (as used in Sections 13
and 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations thereunder) shall have become the beneficial owner
(as defined in rules promulgated by the Securities and Exchange Commission) of
more than 40% of the voting securities of XL Capital; (b) the sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of XL Capital; or (c)
a majority of the members of XL Capital's Board of Directors are persons who are
then serving on the Board of Directors without having been elected by the Board
of Directors or having been nominated for election by its shareholders.

      "Closing Date" shall mean December 30, 1999.

      "Commitment Fee" shall have the meaning assigned to that term in Section
2.02(a) hereof.

      "Consolidated Net Worth" shall mean at any date the consolidated
stockholders' equity of XL Capital and its Consolidated Subsidiaries.

      "Consolidated Subsidiaries" of a Person shall mean those Subsidiaries of
such Person the accounts of which are consolidated with the accounts of such
Person in accordance with GAAP.

      "Consolidated Tangible Net Worth" shall mean at any date the consolidated
stockholders' equity of XL Capital and its Consolidated Subsidiaries less their
consolidated Intangible Assets, all determined as of such date. For purposes of
this definition "Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to November 30, 1998, in the book value
of any asset owned by XL Capital or a Consolidated Subsidiary and (ii) all
unamortized debt discount and expense, unamortized deferred charges, deferred
acquisition costs, goodwill, patents, trademarks, service marks, trade names,
anticipated

                                       2
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future benefit of tax loss carry-forwards, copyrights, organization or
developmental expenses and other intangible assets.

      "Continuing Letter of Credit Agreements" shall mean the letter of credit
agreement executed and delivered by the Account Parties, one for each Issuing
Bank which requires such an agreement, substantially in the form set forth on
Exhibit A hereto and "Continuing Letter of Credit Agreement" shall mean one of
them.

      "Credit Parties" means the Account Parties and the Guarantors and "Credit
Party" means any of them.

      "Current Expiration Date" shall have the meaning assigned to that term in
Section 2.06 hereof.

      "Dollar," "Dollars" and the symbol $ shall mean lawful money of the United
States of America.

      "Environmental Concern Materials" shall mean (a) any flammable substance,
explosive, radioactive material, hazardous material, hazardous waste, toxic
substance, solid waste, pollutant, contaminant or any related material, raw
material, substance, product or by-product of any substance specified in or
regulated or otherwise affected by any Environmental Law (including but not
limited to any "hazardous substance" as defined in CERCLA or any similar Law),
(b) any toxic chemical or other substance from or related to industrial,
commercial or institutional activities, and (c) asbestos, gasoline, diesel fuel,
motor oil, waste and used oil, heating oil and other petroleum products or
compounds, polychlorinated biphenyls, radon and urea formaldehyde.

      "Environmental Law" shall mean any Law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or protection of the
environment, including natural resources, (b) exposure of Persons, including but
not limited to employees, to Environmental Concern Materials, (c) protection of
the public health or welfare from the effects of products, by-products, wastes,
emissions, discharges or releases of Environmental Concern Materials or (d)
regulation of the manufacture, use or introduction into commerce of
Environmental Concern Materials, including their manufacture, formulation,
packaging, labeling, distribution, transportation, handling, storage or
disposal.

      "Event of Default" shall mean any of the Events of Default described in
Article VII hereof.

       "Expiration Date" shall mean the Business Day immediately preceding the
first anniversary of the Closing Date, as the same may be extended in accordance
with Section 2.06 hereof.

      "Extension Request" shall have the meaning set forth in Section 2.06
hereof.

      "GAAP" shall have the meaning set forth in Section 1.03 hereof.

      "Guaranteed Obligations" shall have the meaning assigned to that term in
Section 10.01 hereof.

      "Guarantors" shall mean XL Capital , XL Insurance and XL Mid Ocean and
"Guarantor" shall mean any one of them.

      "Guaranty Equivalents" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any

                                       3
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Indebtedness of any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any property constituting security therefor
for the purpose of assuring the holder of such Indebtedness, (ii) to advance or
provide funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance sheet
condition of such other Person (including without limitation keepwell
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Equivalent hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Equivalent is made.

      "Indebtedness" of a Person shall mean (it being understood, for the
avoidance of doubt, that insurance payment liabilities, as such, and liabilities
arising in the ordinary course of such Person's business as an insurance or
reinsurance company or corporate member of Lloyds or as a provider of financial
services or contracts (in each case other than in connection with the provision
of financing to such Person or any of such Person's Affiliates) shall not be
deemed to constitute Indebtedness):

            (i) all indebtedness or liability for or on account of money
      borrowed by, or for or on account of deposits with or advances to (but not
      including accrued pension costs, deferred income taxes or accounts payable
      of) such Person;

            (ii) all obligations (including contingent liabilities) of such
      Person evidenced by bonds, debentures, notes, banker's acceptances or
      similar instruments;

            (iii) all indebtedness or liability for or on account of property or
      services purchased or acquired by such Person;

            (iv) any amount secured by a Lien on property owned by such Person
      (whether or not assumed) and Capitalized Lease Obligations of such Person
      (without regard to any limitation of the rights and remedies of the holder
      of such Lien or the lessor under such Capitalized Lease to repossession or
      sale of such property);

            (v) the maximum available amount of all standby letters of credit
      issued for the account of such Person and, without duplication, all drafts
      drawn thereunder (to the extent unreimbursed; and

            (vi) all Guaranty Equivalents of such Person.

      "Insurance Subsidiary" means any, present or future, direct or indirect
Subsidiary of any Account Party that offers insurance products, including but
not limited to certain of the Account Parties.

      "Issuing Banks" shall mean Mellon, Deutsche Bank, AG, New York and/or
Cayman Islands Branches, First Union National Bank, Fleet National Bank and Bank
One, NA (Main Office Chicago), subject to the provisions of Section 9.13 hereof
pertaining to Persons becoming or ceasing to be Issuing Banks, and "Issuing
Bank" shall mean any of them.

      "Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.

      "LC Request" shall have the meaning assigned to such term in Section
2.03(a)(i) hereof.

      "LC Request Amount" shall have the meaning assigned to such term in
Section 2.03(a)(i) hereof.

                                       4
<PAGE>

      "Letter of Credit" shall mean each letter of credit issued by an Issuing
Bank for the account of one or more of the Account Parties pursuant to this
Agreement, each as amended, modified or supplemented from time to time.

      "Letter of Credit Application" shall have the meaning given that term in
Section 2.03(a)(ii) hereof.

      "Letter of Credit Committed Amount" shall have the meaning given that term
in Section 2.01(a) hereof.

      "Letter of Credit Commitment" shall mean, with respect to an Issuing Bank,
the obligation of such Issuing Bank to issue Letters of Credit hereunder.

      "Letter of Credit Commitment Percentage" for each Issuing Bank shall mean
a fraction, expressed as percentage, the numerator of which is such Issuing
Bank's Letter of Credit Committed Amount and the denominator of which is the
aggregate Letter of Credit Committed Amounts of all of the Issuing Banks.

      "Letter of Credit Exposure" at any time shall mean the sum at such time of
(a) the Aggregate Letter of Credit Unreimbursed Draws, (b) the Aggregate Letter
of Credit Undrawn Availability and (c) the aggregate Stated Amount of Letters of
Credit which have been requested by an Account Party to be issued hereunder but
are not yet so issued.

      "Letter of Credit Fee" shall have the meaning given that term in Section
2.01(d) hereof.

      "Letter of Credit Reimbursement Obligation" with respect to a Letter of
Credit means the obligation of the applicable Account Party to reimburse the
applicable Issuing Bank for drawings on such Letter of Credit, together with
interest thereon, and "Letter of Credit Reimbursement Obligations" shall mean
all such obligations with respect to all Letters of Credit.

      "Letter of Credit Undrawn Availability" with respect to a Letter of Credit
at any time shall mean the maximum amount available to be drawn under such
Letter of Credit at such time or thereafter, regardless of the existence or
satisfaction of any conditions or limitations on drawing (including, without
limitation, the amount of drafts presented but not yet paid).

      "Letter of Credit Unreimbursed Draw" with respect to a Letter of Credit at
any time shall mean the amount at such time of a payment made by the applicable
Issuing Bank under such Letter of Credit, to the extent not repaid by the
applicable Account Party.

      "Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, including but not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.

      "Material Adverse Effect" shall mean the occurrence of an event (including
any adverse determination in any litigation, arbitration, or governmental
investigation or proceeding), which has or could reasonably be expected to have
a materially adverse effect on: (a) the assets, business, financial condition or
operations of a Credit Party and its Subsidiaries taken as a whole; or (b) the
ability of a Credit Party to perform any of its payment or other material
obligations under this Agreement; or (c) the legality, validity, binding effect
or enforceability against a Credit Party of any Transaction Document that by its
terms purports to bind such Credit Party.

      "Obligations" shall mean, collectively, the Letter of Credit Reimbursement
Obligations and the obligations of each and every Account Party to pay all fees,
indemnities and all other

                                       5
<PAGE>

liabilities of such Account Party arising pursuant to the terms of this
Agreement or the other Transaction Documents.

      "Office," when used in connection with the Agent, shall mean its office
located at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, or at such
other office or offices of the Agent or branch, subsidiary or affiliate thereof
as may be designated in writing from time to time by the Agent to the Account
Parties and the Issuing Banks.

      "Official Body" shall mean any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.

      "Permitted Liens" shall mean the Liens described in paragraphs (a) through
(g) of Section 6.03.

      "Person" shall mean an individual, corporation, partnership, trust,
unincorporated association, joint venture, joint-stock company, government
(including political subdivisions), official body or agency, or any other
entity.

      "Potential Default" shall mean any event or condition referenced in
Article VII hereof which with notice, passage of time or both would constitute
an Event of Default.

      "Prime Rate" shall mean the interest rate per annum announced from time to
time by the Agent as its prime rate, such rate to change automatically effective
as of the effectiveness of each announced change in such prime rate (it being
understood that such Prime Rate may be greater or less than other interest rates
charged by the Agent to other borrowers and is not solely based or dependent
upon the interest rate which the Agent may charge any particular borrower or
class of borrower).

      "Private Act" shall mean separate legislation enacted in Bermuda with the
intention that such legislation applies specifically to a Credit Party in whole
or in part.

      "Pro Rata" means from and to the Issuing Banks in accordance with their
respective Letter of Credit Commitment Percentages.

      "Purchasing Bank" shall have the meaning assigned to that term in Section
9.13(c) hereof.

      "Register" shall have the meaning given that term in Section 9.13(d)
hereof.

      "Regular Payment Date" shall mean the last day of each March, June,
September and December after the date hereof, or, if such last day is not a
Business Day, the next succeeding Business Day.

      "Related Letters of Credit" shall mean the Letters of Credit which
together make up a Set of Related Letters of Credit and "Related Letter of
Credit" means one of them.

      "Required Issuing Banks" shall mean at any time Issuing Banks which have
at least 51% of the aggregate Letter of Credit Commitments outstanding at such
time.

      "SAP" shall mean, as to each Account Party and each Insurance Subsidiary,
the statutory accounting practices prescribed or permitted by the relevant
Official Body for such Account Party's or such Insurance Subsidiary's domicile
for the preparation of Annual Statements and other Default reports by insurance
corporations of the same type as such Account Party or such Insurance Subsidiary
in effect on the date such statements or reports are to be prepared.

                                       6
<PAGE>

      "Set of Related Letters of Credit" shall mean collectively the Letters of
Credit issued by the Issuing Banks at substantially the same time in response to
an LC Request, each having a face value equal to the applicable Issuing Bank's
Pro Rata share of the applicable LC Request Amount.

      "Standard Notice" shall mean an irrevocable notice provided to the Agent
at no later than 10:00 o'clock a.m., Pittsburgh time, on a Business Day.
Standard Notice shall be in writing (including telex, facsimile or cable
communication) or by telephone (to be subsequently confirmed in writing) in any
such case, effective upon receipt by the Agent.

      "Stated Amount" shall mean, with respect to a Letter of Credit, the
maximum face or stated amount of such Letter of Credit, irrespective of whether
such maximum amount is available for drawing at the time in question.

      "Subsidiary" of a Person at any time shall mean any corporation of which a
majority (by number of shares or number of votes) of any class of outstanding
capital stock normally entitled to vote for the election of one or more
directors (regardless of any contingency which does or may suspend or dilute the
voting rights of such class) is at such time owned directly or indirectly by
such Person or one or more Subsidiaries of such Person.

      "Total Funded Debt" of a Person at any time shall mean all Indebtedness of
such person which would at such time be classified in whole or in part as a
liability on the balance sheet of such person in accordance with GAAP.

      "Transaction Document" or "Transaction Documents" shall mean this
Agreement, each Letter of Credit and any other documents or instruments executed
and delivered in connection herewith or therewith.

      "Transfer Supplement" shall have the meaning given that term in Section
9.13(c)(iv) hereof.

      "Valuation Date" shall mean the last Business Day of each month.

      1.02. Construction. Unless the context of this Agreement otherwise clearly
requires, "or" has the inclusive meaning represented by the phrase "and/or".
References in this Agreement to "determination" by the Agent include estimates
by the Agent in good faith, without gross negligence and without manifest error
(in the case of quantitative determinations) and beliefs held by the Agent in
good faith and without gross negligence (in the case of qualitative
determinations). The words "hereof," "herein," "hereunder" and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation hereof in any respect.
Section, subsection and exhibit references are to this Agreement unless
otherwise specified.

      1.03. Accounting Principles. (a) As used herein, "GAAP" shall mean
generally accepted accounting principles as such principles shall be in effect
in the United States of America, at the Relevant Date, subject to the other
provisions of this Section 1.03. As used herein, "Relevant Date" shall mean the
date a relevant computation or determination is to be made or the date of
relevant financial statements, as the case may be.

      (b) Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters shall be made, and all
financial statements to be delivered pursuant to this Agreement shall be
prepared, in accordance with GAAP or SAP, as the context requires (including
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP or SAP, as
appropriate.

                                       7
<PAGE>

      (c) If any change in GAAP or SAP after the date of this Agreement is or
shall be required to be applied to transactions then or thereafter in existence,
and a violation of one or more financial covenants of this Agreement shall have
occurred (or in the opinion of the Required Issuing Banks would be likely to
occur) which would not have occurred or be likely to occur if no change in
accounting principles had taken place, the parties agree in such event to
negotiate in good faith an amendment of this Agreement which shall approximate
to the extent possible the economic effect of the original financial covenants
after taking into account such change in GAAP or SAP, as appropriate.

      (d) Without in any manner limiting the provisions of this Section 1.03, if
any change in GAAP or SAP occurs after the date of this Agreement and such
change in GAAP or SAP would have materially changed an Account Party's reported
financial results or position from that reflected in such Account Party's
financial statements most recently prepared prior to such change, such Account
Party shall notify the Agent as soon as practicable.

                                   ARTICLE II

                          THE LETTER OF CREDIT FACILITY

      2.01. Letters of Credit.

      (a) Letter of Credit Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Issuing
Bank agrees to issue Letters of Credit (each of which shall be requested by the
applicable Account Party to be one of a Set of Related Letters of Credit) for
the account of an Account Party at any time or from time to time on or after the
date hereof and to but not including the Expiration Date (it being understood
that Letters of Credit may be outstanding for the account of one or more of the
Account Parties at any time); provided, however, that the failure of an Issuing
Bank to issue a Letter of Credit which is requested by the applicable Account
Party to be one of a Set of Related Letters of Credit shall not relieve any
other Issuing Bank of its obligation to issue a Letter of Credit which is
requested by the applicable Account Party to be one of such Set of Related
Letters of Credit. No Issuing Bank shall be obligated to issue any Letter of
Credit if, after such Letter of Credit is issued, such Issuing Bank's Letter of
Credit Exposure upon such issuance would exceed the Issuing Bank's Letter of
Credit Committed Amount. Each Issuing Bank's "Letter of Credit Committed Amount"
at any time shall be equal to the amount set forth as its "Initial Letter of
Credit Committed Amount" below its name on the signature pages hereof, as such
amount may have been reduced under Section 2.02(b) hereof at such time, and
subject to transfer to or from another Issuing Bank as provided in Section 9.13
hereof.

      (b) Terms of Letters of Credit. The Account Parties shall not request to
be issued, and no Issuing Bank shall be obligated to issue, any Letter of Credit
except within the following limitations: (i) each Letter of Credit shall have an
expiration date no later than 12 months after the date of issuance thereof;
provided, however, that any Letter of Credit may have an "evergreen" provision
having substantially the effect set forth on Schedule 2.01(b) hereof, (ii) each
Letter of Credit shall be denominated in Dollars, (iii) each Letter of Credit
shall be payable only against sight drafts (and not time drafts); and (iv) each
Letter of Credit shall contain the words required by, and shall otherwise comply
with, Section 2.04 hereof.

      (c) Form of Letters of Credit. No Issuing Bank shall be obligated to issue
any letter of credit which is unsatisfactory in form, substance or beneficiary
to any of the Issuing Banks in the exercise of its reasonable judgment
consistent with its customary practice.

                                       8
<PAGE>

      (d) Letter of Credit Fee. Each Account Party shall pay or cause to be paid
to the Agent for the account of each Issuing Bank a fee (the "Letter of Credit
Fee") for Letters of Credit (based on a year of 360 days and actual days
elapsed), for each Letter of Credit issued for the account of such Account Party
by such Issuing Bank for each day from and including the date of issuance
thereof to and including the date of expiration or termination thereof, on the
Letter of Credit Undrawn Availability on such day at a rate per annum equal to
0.35%. Such Letter of Credit Fee shall be due and payable for the preceding
period for which such fee has not been paid on each of the following dates: (i)
each Regular Payment Date, (ii) the date of each drawing on such Letter of
Credit, and (iii) the date of expiration or termination of such Letter of
Credit.

      (e) Purpose of Letters of Credit. The Account Parties agree that each
Letter of Credit shall be used by the Account Party for whom it is issued as a
standby letter of credit, to support the Account Parties' reinsurance program
with NAC Re Corporation in the ordinary course of business of such Account
Party.

      (f) Administration Fees. Each Account Party shall pay to the Agent, for
the account of each Issuing Bank, such other administration, maintenance,
amendment, drawing and negotiation fees as are customarily charged by such
Issuing Bank to its customers generally at the time in question (a list of which
customary charges as of the date of this Agreement has been provided by the
Issuing Banks to XL Insurance) or are otherwise agreed between such Issuing Bank
and the Account Parties.

      (g) Arrangement Fee. XL Capital agrees to pay to Mellon an arrangement fee
in the amount and at the time previously agreed between XL Capital and Mellon.

      2.02. Commitment Fee; Reduction of the Committed Amounts.

      (a) Commitment Fee. XL Insurance agrees to pay to the Agent for the
account of each Issuing Bank a commitment fee (the "Commitment Fee") for each
day during the period from the Closing Date to and including the Expiration Date
calculated (based on a year of 360 days and actual days elapsed) at a per annum
rate equal to 0.07% payable on the unused portion of such Issuing Bank's Letter
of Credit Committed Amount in effect on such day. Such fee shall be payable on
each Regular Payment Date and on the Expiration Date for the preceding period
for which such fee has not been paid.

      (b) Reduction of the Committed Amounts. XL Capital may at any time or from
time to time reduce Pro Rata the Letter of Credit Committed Amounts of the
Issuing Banks to an aggregate amount (which may be zero) not less than the
Letter of Credit Exposure. Any reduction of the Letter of Credit Committed
Amounts shall be in an aggregate minimum amount of $5,000,000 and in an amount
which is an integral multiple of $1,000,000. Reduction of the Letter of Credit
Committed Amounts shall be made by providing not less than five Business Days'
notice (which notice shall be irrevocable) to such effect to the Agent, which
will promptly advise the Issuing Banks of such notice. After the date specified
in such notice, the Commitment Fee shall be calculated upon the Letter of Credit
Committed Amounts as so reduced.

      2.03. Procedure for Issuance and Amendment of Letters of Credit.

      (a) Request for Issuance. An Account Party may from time to time request,
upon at least three Business Days' notice, the Issuing Banks to issue a Set of
Related Letters of Credit by:

            (i) delivering to the Agent a written request to such effect (an "LC
      Request"), specifying the date on which such Set of Related Letters of
      Credit is to be issued, the expiration date thereof, the aggregate amount
      requested (the "LC Request Amount") and the Stated Amount of each Related
      Letter of Credit (which Stated Amount shall be equal to the applicable
      Issuing Bank's Pro Rata share of the LC Request Amount), and

                                       9
<PAGE>

            (ii) delivering to each Issuing Bank a completed application, in the
      form annexed hereto as Exhibit E, or in such other form as is from time to
      time be required by each such Issuing Bank in accordance with its
      customary practice with respect to its customers generally (a "Letter of
      Credit Application"), together with such other certificates, documents and
      other papers as are specified in such application.

Upon receiving any such notice, the Agent shall promptly notify each Issuing
Bank and furnish to each Issuing Bank the proposed form of Letter of Credit to
be issued and the Stated Amount and term of such proposed Letter of Credit to be
issued by such Issuing Bank. The Agent shall determine, as of the close of
business on the Business Day before such proposed issuance, whether such
proposed Set of Related Letters of Credit complies with the limitations set
forth in Section 2.01 hereof. If such limitations set forth in Section 2.01 are
not satisfied or if the Required Issuing Banks have given notice to the Agent to
cease issuing Letters of Credit pursuant to Section 2.03(c) hereof or the the
Agent shall have received written notice from an Account Party that the
conditions set forth in Section 4.02(a) are not satisfied, the Agent shall
notify each Issuing Bank (in writing or by telephone promptly confirmed in
writing) that such Issuing Bank is not obligated to issue such Letter of Credit.
If an Issuing Bank issues a Letter of Credit, it shall deliver the original of
such Letter of Credit to the beneficiary thereof or as the Account Party shall
otherwise direct, and shall promptly notify the Agent thereof and furnish a copy
thereof to the Agent.

      (b) Request for Extension or Increase. An Account Party may from time to
time, by a request sent to the Agent, request the Issuing Banks to extend (or
request the Issuing Banks to permit the extension, by failing to provide a
nonrenewal notice to the beneficiary, of) the expiration date of a Set of
Related Letters of Credit or increase (or, with the consent of the beneficiary,
decrease) the Stated Amounts of or the amounts available to be drawn on such
Related Letters of Credit; provided however, that any such increase (or
decrease, as the case may be) shall be made Pro Rata. Such extension or increase
shall for all purposes hereunder be treated as though such Account Party had
requested issuance of replacement Related Letters of Credit (except only that
the Issuing Banks may, if they all so elect, issue a notice of extension or
increase with respect to an outstanding Set of Related Letters of Credit in lieu
of issuing a new Set of Related Letters of Credit in substitution for an
outstanding Set of Related Letters of Credit).

      (c) Limitations on Issuance. As between the Agent, on the one hand, and
the Issuing Banks, on the other hand, the Agent shall not authorize issuance of
any Letter of Credit if the Agent shall have received, at least two Business
Days before authorizing such issuance, from the Required Issuing Banks an
unrevoked written notice that any condition precedent set forth in Section 4.02
will not be satisfied as of the time of such issuance and expressly requesting
that the Agent direct the Issuing Banks to cease to issue Letters of Credit.
Absent such notice, or unless the Agent determines that the applicable
limitations set forth in Section 2.01 hereof are not satisfied, the Agent shall
be justified and fully protected, as against the Issuing Banks, in authorizing
an Issuing Bank to issue such a Letter of Credit, notwithstanding any subsequent
notices to the Agent, any knowledge of an Event of Default or Potential Default,
any knowledge of failure of any condition specified in Section 4.02 hereof to be
satisfied, any other knowledge of the Agent, or any other event, condition or
circumstance whatsoever.

      2.04. Certain Provisions in Letters of Credit. (a) The first Set of
Related Letters of Credit issued hereunder shall be in substantially the form
set forth on Exhibit F hereto.

      (b) Each Letter of Credit requested to be issued hereunder shall be
requested to contain the following language, with the blanks appropriately
filled:

            This letter of credit is being issued at substantially the same time
            as each of ________________________ [name other Issuing Banks] is
            issuing its letter of credit to the Beneficiary for the account of
            the Account Party (this letter of credit and all such other letters
            of credit being referred to collectively as the "Related Letters of
            Credit") and the aggregate stated amount of the Related Letters of
            Credit is $_____________.

                                       10
<PAGE>

In addition, each Letter or Credit shall provide that drawings on such Letter of
Credit must be accompanied by a certificate of the beneficiary thereof which
states as follows:

            Concurrently with this drawing, Beneficiary is drawing on each other
            Related Letter of Credit referred to in the letter of credit to
            which this drawing relates. The respective amounts of all such
            concurrent drawings on the Related Letters of Credit (including the
            letter of credit to which this drawing relates) are ratable in
            accordance with the respective stated amounts of the respective
            Related Letters of Credit.

      2.05. Account Party's Reimbursement Obligations. Each Account Party hereby
agrees to reimburse each Issuing Bank, by making payment to the Agent for the
account of such Issuing Bank in accordance with Section 2.11(a) hereof on the
date of each payment made by such Issuing Bank under any Letter of Credit issued
for such Account Party's account (or, if later, the date which is one Business
Day after notice of such payment or of the drawing giving rise to such payment
is given to XL Capital), without, protest or demand, all of which are hereby
waived, and an action therefor shall immediately accrue. Each Account Party
agrees that it will make such payment to the Agent for the account of the
applicable Issuing Bank in the same currency as the currency of the payment by
such Issuing Bank under such Letter of Credit. To the extent such payment is not
timely made, such Account Party hereby agrees to pay to the Agent, for the
account of the applicable Issuing Bank, on demand, interest on any Letter of
Credit Unreimbursed Draws for each day from and including the date of such
payment by such Issuing Bank until paid (before and after judgment) in
accordance with Section 2.11(a) hereof, at the rate per annum set forth in
Section 2.11(b) hereof. If the Agent receives payment on account of Letter of
Credit Reimbursement Obligations in an amount less than the full amount of
Letter of Credit Reimbursement Obligations then outstanding and owing to the
Issuing Banks, the amount so received will be applied by the Agent ratably in
accordance with the respective amounts of Letters of Credit Reimbursement
Obligations owing to the respective Issuing Banks.

      2.06 Extensions of Expiration Date. XL Capital may, at its option, give
the Agent and the Issuing Banks written notice (an "Extension Request") at any
time not more than ninety days, nor less than thirty days, prior to the
Expiration Date in effect at such time (the "Current Expiration Date") of XL
Capital's desire to extend the Expiration Date to a date which is not later than
364 days after the Current Expiration Date. Each Issuing Bank which agrees to
such Extension Request shall deliver to the Agent its express written consent
thereto no later than fifteen days prior to the Current Expiration Date. No
extension shall become effective unless the express written consent thereto by
all of the Issuing Banks is received by the Agent on or before the fifteenth day
prior to the Current Expiration Date. If all of the Issuing Banks shall have
consented to such Extension Request, then, on the Current Expiration Date, the
Expiration Date shall be deemed to have been extended to, and shall be, the date
specified in such Extension Request.

      2.07. Obligations Absolute. The payment obligations of the Account Parties
under Section 2.05 shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following circumstances:

      (a) any lack of validity or enforceability of this Agreement, any Letter
of Credit or any Transaction Document against an Account Party;

      (b) the existence of any claim, set-off, defense or other right which any
Account Party, any Guarantor or any other Person may have at any time against
any beneficiary or transferee of any Letter of Credit (or any Persons for whom
any such beneficiary or transferee may be acting), any Issuing Bank, or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or any unrelated transaction;

      (c) any draft, certificate, statement or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;

                                       11
<PAGE>

      (d) payment by an Issuing Bank under any Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit, or payment by an Issuing Bank under the Letter of Credit
in any other circumstances in which conditions to payment are not met, except
any such wrongful payment resulting solely from the gross negligence or willful
misconduct of such Issuing Bank; or

      (e) any other event, condition or circumstance whatever, whether or not
similar to any of the foregoing, except if the same results solely from the
gross negligence or willful misconduct of an Issuing Bank.

Each Account Party bears the risk of, and neither the Issuing Banks, nor any of
their directors, officers, employees or agents, shall be liable or responsible
for any of, the foregoing matters, the use which may be made of any Letter of
Credit, or acts or omissions of the beneficiary or any transferee in connection
therewith, except for such person's gross negligence or willful misconduct.

      2.08. Further Assurances. Each Account Party and each Guarantor hereby
agrees, from time to time, to do and perform any and all acts and to execute any
and all further instruments reasonably requested by any Issuing Bank more fully
to effect the purposes of this Agreement and the issuance of the Letters of
Credit hereunder.

      2.09. Letter of Credit Applications. The representations, warranties and
covenants by the Account Parties under, and the rights and remedies of the
respective Issuing Banks under, any Continuing Letter of Credit Agreement and
any Letter of Credit Application relating to any Letter of Credit are in
addition to, and not in limitation or derogation of, representations, warranties
and covenants by the Account Parties under, and rights and remedies of the
Issuing Banks under, this Agreement, the Transaction Documents, and applicable
Law. In the event of any inconsistency between the terms of this Agreement and
any Letter of Credit Application, this Agreement shall prevail.

      2.10. Certain Provisions Relating to the Issuing Banks.

      (a) General. No Issuing Bank shall have any duties or responsibilities
except those expressly set forth in this Agreement and the other Transaction
Documents, and no implied duties or responsibilities on the part of any Issuing
Bank shall be read into this Agreement or any Transaction Document or shall
otherwise exist. The duties and responsibilities of the Issuing Banks to the
other Bank Parties under this Agreement and the other Transaction Documents
shall be mechanical and administrative in nature, and no Issuing Bank shall have
a fiduciary relationship in respect of any Bank Party or any other Person. No
Issuing Bank shall be liable for any action taken or omitted to be taken by it
under or in connection with this Agreement or any other Transaction Document,
unless caused by its own gross negligence or willful misconduct. No Issuing Bank
shall be under any obligation to ascertain, inquire or give any notice relating
to (i) the performance or observance of any of the terms or conditions of this
Agreement or any other Transaction Document on the part of any Account Party,
(ii) the business, operations, condition (financial or otherwise) or prospects
of the Account Parties or any other Person, or (iii) the existence of any Event
of Default or Potential Default. No Issuing Bank shall be under any obligation,
either initially or on a continuing basis, to provide the Agent or any other
Bank Party with any notices, reports or information of any nature, whether in
its possession presently or hereafter, except for such notices, reports and
other information expressly required by this Agreement to be so furnished. No
Issuing Bank shall be responsible for the execution, delivery, effectiveness,
enforceability, genuineness, validity or adequacy of this Agreement or any other
Transaction Document.

      (b) Administration. Each Issuing Bank may rely upon any notice or other
communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any Transaction
Document) purportedly made by or on behalf of the proper party or parties, and
no Issuing

                                       12
<PAGE>

Bank shall have any duty to verify the identity or authority of any Person
giving such notice or other communication. Each Issuing Bank may consult with
legal counsel (including, without limitation, in-house counsel for such Issuing
Bank or in-house or other counsel for the Account Parties), independent public
accountants and any other experts selected by it from time to time, and no
Issuing Bank shall be liable for any action taken or omitted to be taken in good
faith in accordance with the advice of such counsel, accountants or experts.
Whenever any Issuing Bank shall deem it necessary or desirable that a matter be
proved or established with respect to any Account Party or Bank Party, such
matter may be established by a certificate of such Account Party or Bank Party,
as the case may be, and such Issuing Bank may conclusively rely upon such
certificate. No Issuing Bank shall be deemed to have any knowledge or notice of
the occurrence of any Event of Default or Potential Default unless such Issuing
Bank has received notice from a Bank Party or any Credit Party referring to this
Agreement, describing such Event of Default or Potential Default, and stating
that such notice is a "notice of default". If any Issuing Bank receives such a
notice, such Issuing Bank shall give prompt notice thereof to the Agent.

      (c) Issuing Bank in its Individual Capacity. Each Issuing Bank and its
affiliates may, without liability to account, make loans to, accept deposits
from, acquire debt or equity interests in, act as trustee under indentures of,
act as agent under other credit facilities for, and engage in any other business
with, any Credit Party and any stockholder, subsidiary or affiliate of any
Credit Party, as though such Issuing Bank were not an Issuing Bank hereunder.

      2.11. Payments Generally; Interest and Interest on Overdue Amounts.

      (a) Payments Generally. All payments to be made by an Account Party in
respect of fees, indemnity, expenses or other amounts due from such Account
Party hereunder or under any Transaction Document shall be payable in Dollars at
12:00 o'clock Noon, Pittsburgh time, on the day when due without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue, without setoff, counterclaim,
withholding or other deduction of any kind or nature. Except for payments under
Sections 2.12, 2.13 and 9.04 hereof, such payments shall be made to the Agent at
its Office in Dollars in funds immediately available at such Office. Payments
under Sections 2.12, 2.13 and 9.04 hereof shall be made to the applicable
Issuing Bank at such domestic account as it shall specify to the Account Parties
from time to time in funds immediately available at such account. Any payment or
prepayment received by the Agent or such Issuing Bank after 12:00 o'clock Noon,
Pittsburgh time, on any day shall be deemed to have been received on the next
succeeding Business Day. The Agent shall distribute to the Issuing Banks all
such payments received by it from an Account Party as promptly as practicable
after receipt by the Agent.

      (b) Interest and Interest on Overdue Amounts. Interest on Letter of Credit
Reimbursement Obligations shall accrue at a rate per annum (based on a year of
360 days and actual days elapsed) which for each day shall be equal to the
then-current Applicable Interest Rate beginning on the day that the related
Letter of Credit payment is made and shall be due and payable on the day that
the Letter of Credit Reimbursement Obligation is due and payable in accordance
with Section 2.05(a) hereof. To the extent permitted by law, after there shall
have become due (by acceleration or otherwise) fees, indemnity, expenses or any
other amounts due from the Account Parties hereunder or under any other
Transaction Document, such amounts shall bear interest for each day until paid
(before and after judgment), payable on demand, at a rate per annum (in each
case based on a year of 360 days and actual days elapsed) which for each day
shall be equal to 2% above the then-current Applicable Interest Rate. To the
extent permitted by law, interest accrued on any amount which has become due
hereunder or under any Transaction Document shall compound on a day-by-day
basis, and hence shall be added daily to the overdue amount to which such
interest relates.

      2.12. Additional Compensation in Certain Circumstances. If the
introduction of or any change in, or any change in the interpretation or
application of, any Law, regulation or guideline by

                                       13
<PAGE>

any Official Body charged with the interpretation or administration thereof or
compliance with any request or directive of any applicable Official Body
(whether or not having the force of law):

            (i) subjects any Issuing Bank to any tax or changes the basis of
      taxation with respect to this Agreement, the Letters of Credit or payments
      by the Account Parties of fees or other amounts due from the Account
      Parties hereunder or under the other Transaction Documents (except for
      taxes on the overall net income or overall gross receipts of such Issuing
      Bank imposed by the jurisdictions (federal, state and local) in which such
      Issuing Bank's principal office is located),

            (ii) imposes, modifies or deems applicable any reserve, special
      deposit or similar requirement against credits or commitments to extend
      credit extended by, assets (funded or contingent) of, deposits with or for
      the account of, other acquisitions of funds by, any Issuing Bank,

            (iii) imposes, modifies or deems applicable any capital adequacy or
      similar requirement (A) against assets (funded or contingent) of, or
      credits or commitments to extend credit extended by, any Issuing Bank or
      (B) otherwise applicable to the obligations of any Issuing Bank under this
      Agreement, or

            (iv) imposes upon any Issuing Bank any other condition or expense
      with respect to this Agreement or the issuance of any Letter of Credit,

and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Issuing Bank or, in the case of clause (iii) hereof, any Person controlling an
Issuing Bank, with respect to this Agreement or the issuance of any Letter of
Credit (or, in the case of any capital adequacy or similar requirement, to have
the effect of reducing the rate of return on such Issuing Bank's or controlling
Person's capital, taking into consideration such Issuing Bank's or controlling
Person's policies with respect to capital adequacy so long as such policies are
reasonable in light of prevailing market practice at the time) by an amount
which such Issuing Bank deems to be material, such Issuing Bank may from time to
time notify the Account Parties of the amount determined in good faith (using
any averaging and attribution methods) by such Issuing Bank (which determination
shall be conclusive) to be necessary to compensate such Issuing Bank for such
increase, reduction or imposition. Such amount shall be due and payable by any
applicable Account Party to such Issuing Bank five Business Days after such
notice is given, together with an amount equal to interest on such amount from
the date two Business Days after the date demanded until such due date at the
Prime Rate. A certificate by such Issuing Bank as to the amount due and payable
under this Section 2.12 from time to time and the method of calculating such
amount shall be conclusive. Each Issuing Bank agrees that it will use good faith
efforts to notify the Account Parties of the occurrence of any event that would
give rise to a payment under this Section 2.12; provided, however that, so long
as such notice is given within a reasonable period after the occurrence of such
event, any failure of such Issuing Bank to give any such notice shall have no
effect on the Account Parties' obligations hereunder.

      2.13. Taxes.

      (a) Payments Net of Taxes. All payments made by the Account Parties under
this Agreement or any other Transaction Document shall be made free and clear
of, and without reduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Official Body, and all liabilities with respect
thereto, excluding

            (i) in the case of the Agent and each Issuing Bank, income or
      franchise taxes imposed on the Agent or such Issuing Bank by the
      jurisdiction under the laws of which the Agent or such Issuing Bank is
      organized or any political subdivision or taxing authority thereof or

                                       14
<PAGE>

      therein or as a result of a connection between such Issuing Bank and any
      jurisdiction other than a connection resulting solely from this Agreement
      and the transactions contemplated hereby, and

            (ii) in the case of each Issuing Bank, income or franchise taxes
      imposed by any jurisdiction in which such Issuing Bank's lending offices
      which issue Letters of Credit are located or any political subdivision or
      taxing authority thereof or therein

(all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"), unless an Account Party is
required to withhold or deduct Taxes. If any Taxes are required to be withheld
or deducted from any amounts payable to the Agent or any Issuing Bank under this
Agreement or any other Transaction Document, the applicable Account Party shall
pay the relevant amount of such Taxes and the amounts so payable to the Agent or
such Issuing Bank shall be increased to the extent necessary to yield to the
Agent or such Issuing Bank (after payment of all Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the other Transaction Documents. Whenever any Taxes are paid by an
Account Party with respect to payments made in connection with this Agreement or
any other Transaction Document, as promptly as possible thereafter, such Account
Party shall send to the Agent for its own account or for the account of such
Issuing Bank, as the case may be, a certified copy of an original official
receipt received by such Account Party showing payment thereof. If the Agent or
an Issuing Bank determines in its sole discretion in good faith that it has
received a refund in respect of any Taxes as to which it has been indemnified by
an Account Party, or with respect to which an Account Party has paid additional
amounts pursuant to this Section 2.13, the Agent or such Issuing Bank shall
promptly after the date of such receipt pay over the amount of such refund to
such Account Party (but only to the extent of indemnity payments made, or
additional amounts paid, by such Account Party under this Section 2.13 with
respect to Taxes giving rise to such refund and only to the extent that the
Agent or such Issuing Bank has determined that the amount of any such refund is
directly attributable to payments made under this Agreement), net of all
reasonable expenses of the Agent or such Issuing Bank (including additional
Taxes attributable to such refund, as determined by the Agent or such Issuing
Bank) and without interest (other than interest, if any, paid by the relevant
Official Body with respect to such refund). An Account Party receiving any such
payment from the Agent or an Issuing Bank shall, upon demand, pay to the Agent
or such Issuing Bank any amount paid over to such Account Party by the Agent or
such Issuing Bank (plus penalties, interest or other charges) in the event the
Agent or such Issuing Bank is required to repay any portion of such refund to
such Official Body. Nothing in this Section 2.13(a) shall entitle an Account
Party to have access to the records of the Agent or any Issuing Bank, including,
without limitation, tax returns.

      (b) Indemnity. Each Account Party hereby indemnifies the Agent and each of
the Issuing Banks for the full amount of all Taxes attributable to payments by
or on behalf of such Account Party hereunder or under any of the other
Transaction Documents, any Taxes paid by the Agent or such Issuing Bank, as the
case may be, any present or future claims, liabilities or losses with respect to
or resulting from any omission to pay or delay in paying any Taxes (including
any incremental Taxes, interest or penalties that may become payable by the
Agent or such Issuing Bank as a result of any failure to pay such Taxes, except
by reason of unreasonable delay by the Agent or such Issuing Bank in notifying
an Account Party or in making payment after payment was received from an Account
Party), whether or not such Taxes were correctly or legally asserted. Such
indemnification shall be made within 30 days from the date such Issuing Bank or
the Agent, as the case may be, makes written demand therefor.

      (c) Withholding and Backup Withholding. Each Issuing Bank that is
incorporated or organized under the laws of any jurisdiction other than the
United States or any State thereof agrees that, on or prior to the date the
first payment is due to be made to it hereunder or under any other Transaction
Document, it will furnish to the Account Parties and the Agent

                                       15
<PAGE>

            (i) two valid, duly completed copies of United States Internal
      Revenue Service Form 4224 or United States Internal Revenue Form 1001 or
      successor applicable form, as the case may be, certifying in each case
      that such Issuing Bank is entitled to receive payments under this
      Agreement and the other Transaction Documents without deduction or
      withholding of any United States federal income taxes and

            (ii) a valid, duly completed Internal Revenue Service Form W-8 or
      W-9 or successor applicable form, as the case may be, to establish an
      exemption from United States backup withholding tax.

Each Issuing Bank which so delivers to the Account Parties and the Agent a Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms, agrees to
deliver to the Account Parties and the Agent two further copies of the said Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or other manner
of certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from withholding tax, or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it, and such extensions or renewals thereof as may reasonably be
requested by the Account Parties and the Agent, certifying in the case of a Form
1001 or Form 4224 that such Issuing Bank is entitled to receive payments under
this Agreement or any other Transaction Document without deduction or
withholding of any United States federal income taxes, unless in any such cases
an event (including any changes in Law) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Issuing Bank from duly completing and
delivering any such letter or form with respect to it and such Issuing Bank
advises the Account Parties and the Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax, and in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax, in which case Section 2.13(a) and (b) shall apply
to all further payments.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES.

Each Credit Party represents and warrants that:

      3.01. Organization and Qualification. Such Credit Party and each of its
Subsidiaries is a corporation duly organized, validly existing and (unless the
concept of good standing is not known to the law of the relevant jurisdiction)
in good standing under the laws of their respective jurisdictions of
incorporation and has the power and authority to own its properties and assets,
and to carry on its business as presently conducted and is qualified to do
business in those jurisdictions in which its ownership of property or the nature
of its business activities is such that failure to receive or retain such
qualification would have a Material Adverse Effect. A list of such Credit
Party's Subsidiaries setting forth their respective jurisdictions of
incorporation is set forth in Schedule 3.01 hereto. Such Credit Party is not
subject to any Private Act, except, with respect to XL Insurance, the X.L.
Insurance Company, Ltd. Act, 1989, a copy of which has been provided to the
Agent.

      3.02. Corporate Power and Authorization. Such Credit Party and any
Subsidiary of such Credit Party which is also a Credit Party has corporate power
and authority to make and carry out this Agreement and any other Transaction
Document to which it is a party, to execute and deliver this Agreement and each
such Transaction Document, to perform its obligations hereunder and under any
such Transaction Documents and, in the case of each Credit Party which is an
Account

                                       16
<PAGE>

Party, to request the issuance of Letters of Credit as provided for herein. All
such action has been duly authorized by all necessary corporate proceedings on
the part of such Credit Party.

      3.03. Financial Information. Such Credit Party has furnished to Agent,
with sufficient copies for each Issuing Bank, copies of the audited consolidated
financial statements of such Credit Party and its consolidated Subsidiaries
including a consolidated and consolidating balance sheet and related statements
of income and retained earnings for the fiscal year ending December 31, 1998.
Such financial statements fairly present the financial position of such Credit
Party and its consolidated Subsidiaries as of the date of such reports and the
consolidated and consolidating results of their operations and cash flows for
the fiscal period then ended in conformity with GAAP or SAP, applied on a
consistent basis, and such consolidated financial statements have been examined
and reported upon by independent, certified public accountants.

      3.04. Litigation. Except as disclosed to the Issuing Banks in writing
prior to the Closing Date (including by disclosure in the financial statements
delivered to the Issuing Banks referred to in Section 3.03 hereof), there is no
litigation or governmental proceeding by or against such Credit Party or any of
its Subsidiaries pending or, to its knowledge, threatened, which could
reasonably be expected (in light of reserves, and total shareholders' equity of
such Credit Party and after taking into account the nature of such Credit
Party's business and activities) to have a Material Adverse Effect if adversely
determined.

      3.05. No Adverse Changes. Since December 31, 1998, there has been no
occurrence or event which has had a Material Adverse Effect.

      3.06. No Conflicting Laws or Agreements; Consents and Approvals. (a)
Neither the execution and delivery of this Agreement or any other Transaction
Document, the consummation of the transactions herein or therein contemplated
nor compliance with the terms and provisions hereof or thereof will conflict
with or result in a breach of any of the terms, conditions or provisions of the
articles of incorporation or by-laws of such Credit Party or of any applicable
Law or of any material agreement or instrument to which such Credit Party is a
party or by which it is bound or to which it is subject, or constitute a default
thereunder or result in the creation or imposition of any Lien, except Permitted
Liens, of any nature whatsoever upon any of the property of such Credit Party
pursuant to the terms of any such agreement or instrument.

      (b) No authorization, consent, approval, license, exemption or other
action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary or advisable in
connection with (i) execution and delivery of this Agreement or any other
Transaction Document, (ii) the consummation of the transactions herein or
therein contemplated, or (iii) the performance of or compliance with the terms
and conditions hereof or thereof.

      3.07. Execution and Binding Effect. This Agreement has been duly and
validly executed and delivered by such Credit Party. This Agreement and each
Transaction Document to which it is a party constitutes legal, valid and binding
obligations of such Credit Party enforceable in accordance with the terms
thereof except, as to the enforcement of remedies, for limitations imposed by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally (excluding Laws with
respect to fraudulent conveyance), (ii) Laws limiting the right of specific
performance or (iii) general principles of equity.

      3.08. Taxes. All tax returns required to be filed by such Credit Party
have been properly prepared, executed and filed. All taxes, assessments, fees
and other governmental charges upon such Credit Party or upon its properties,
income or sales which are due and payable have been paid. The reserves and
provisions for taxes, if any, on the books of such Credit Party are adequate for
all open years and for its current fiscal period as determined in accordance
with GAAP.

                                       17
<PAGE>

      3.09. Use of Proceeds. Such Credit Party will use any Letter of Credit
issued hereunder for its account solely to support the Account Parties'
reinsurance program with NAC Re Corporation in the ordinary course of business.
Such Credit Party will make no request for a Letter of Credit hereunder for the
purpose of directly or indirectly buying or carrying any "margin stock" as such
term is used in Regulation U of the Board of Governors of the Federal Reserve
System in violation of such regulation. Such Credit Party is not engaged in the
business of extending credit to others for the purposes of buying or carrying
any "margin stock."

      3.10. Permits, Licenses and Rights. Such Credit Party and each Subsidiary
of such Credit Party own or possess all the patents, trademarks, service marks,
trade names, copyrights, licenses, franchises, permits and rights with respect
to the foregoing necessary to own and operate their respective properties and to
carry on their respective businesses as presently conducted and presently
planned to be conducted without, to the best knowledge of such Credit Party,
conflict with the rights of others.

      3.11. Accurate and Complete Disclosure. All information provided by or on
behalf of any Credit Party to the Agent or any Issuing Bank pursuant to or in
connection with this Agreement or the other Transaction Documents and the
transactions contemplated hereby and thereby is true and accurate in all
material respects on the date such information is dated (or, if not dated, on
the date such information was received by the Agent or such Issuing Bank, as the
case may be) and such information, taken as a whole, which was provided on or
prior to the time this representation is made or remade, does not, to the best
knowledge of the Credit Parties, omit to state any material fact necessary to
make such information not misleading at such time in light of the circumstances
in which it was provided.

      3.12. Absence of Violations. Such Credit Party and each Affiliate of such
Credit Party is not in violation of any charter document, corporate minute or
resolution, any instrument or agreement, in each case binding on it or affecting
its property, or any Law, in a manner which could have a Materially Adverse
Effect.

      3.13. Environmental Matters. Such Credit Party and each of its
Subsidiaries is and has been in full compliance with all applicable
Environmental Laws. Such Credit Party and each of its Subsidiaries have all
approvals by Official Bodies charged with the enforcement of Environmental Laws
that are necessary or desirable for the ownership and operation of their
respective properties, facilities and businesses as presently owned and operated
and as presently proposed to be owned and operated.

      3.14. Not an Investment Company. Such Credit Party is not an Investment
Company required to be registered under the Investment Company Act of 1940.

      3.15. Year 2000 Compliance. XL Capital has (i) initiated a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by material suppliers, vendors and
customers) that could be adversely affected by the risk that computer
applications used by XL Capital or any of its Subsidiaries (or material
suppliers, vendors and customers other than those affecting customers that may
give rise to claims under insurance policies issued by XL Capital or any
Subsidiary of XL Capital) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999 (the "Year 2000 Problem") and (ii) developed a plan and
timetable for addressing the Year 2000 Problem on a timely basis. Based on the
foregoing, XL Capital believes that all computer applications of XL Capital and
its Subsidiaries that are material to its or any of its Subsidiaries' business
and operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
("Year 2000 Compliant"), except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.

                                       18
<PAGE>

                                   ARTICLE IV

                                   CONDITIONS

      4.01. Effectiveness. The respective obligations of the Issuing Banks to
issue Letters of Credit shall be subject to the following conditions:

      (a) Proceedings and Incumbency. There shall have been delivered to the
Agent with sufficient copies for each Issuing Bank a certificate with respect to
each Credit Party in form and substance satisfactory to the Agent dated the
Closing Date and signed on behalf of each Credit Party by the Secretary or an
Assistant Secretary of such Credit Party certifying as to: (i) true copies of
all corporate action taken by such Credit Party relative to this Agreement and
the other Transaction Documents applicable to it including but not limited to
that described in Section 3.02 hereof (with respect to the Guarantors, such
corporate action shall include board findings satisfactory to the Arranger's
Bermuda counsel) and (ii) the names, true signatures and incumbency of the
officer or officers of such Credit Party authorized to execute and deliver this
Agreement and the other Transaction Documents applicable to it. Each Issuing
Bank may conclusively rely on such certificates unless and until a later
certificate revising the prior certificate has been furnished to such Issuing
Bank.

      (b) Organizational Documents. There shall have been delivered to the Agent
with sufficient copies for each Issuing Bank (i) certified copies of the
articles of incorporation or memorandum of association and by-laws or other
equivalent organizational documents for each Credit Party and (ii) a certificate
of good standing for each Credit Party certified by the appropriate Official
Body of its place of organization.

      (c) Opinions of Counsel. There shall have been delivered to the Agent with
sufficient copies for each Issuing Bank written opinions addressed to the
Issuing Banks, dated the Closing Date, of Messrs. Cahill Gordon & Reindel,
Messrs. Conyers, Dill & Pearman, Hunter & Hunter and Paul S. Giordano, Esq.,
respectively, the Account Parties' and Guarantors' counsel, which together are
substantially to the effects set forth in Exhibit C, and opinions of counsel
qualified to practice in each jurisdiction, other than Bermuda and the United
States, under the laws of which an Account Party is organized substantially to
such effects to the extent that the laws of such jurisdiction are relevant.

      (d) Details, Proceedings and Documents. All legal details and proceedings
in connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory to each Issuing Bank, and each Issuing Bank shall have
received all such counterpart originals or certified or other copies of this
Agreement and the other the Transaction Documents and such other documents and
proceedings in connection with such transactions, in form and substance
satisfactory to it, as such Issuing Bank have reasonably requested.

      (e) Fees and Expenses. Each Account Party shall have paid all fees and
other compensation to be paid by it hereunder on or prior to the Closing Date.

      (f) Representations and Warranties. The representations and warranties
contained in Article III hereof shall be true on and as of the Closing Date with
the same effect as though made on and as of the Closing Date.

      (g) Letter of Credit Agreement. Each Continuing Letter of Credit Agreement
shall have been delivered to the Agent, with sufficient copies for each Issuing
Bank, duly executed by each Account Party.

                                       19
<PAGE>

      4.02. Issuance of Letters of Credit. The obligation of the Issuing Banks
to issue any Letters of Credit hereunder is subject to the accuracy as of the
date hereof of the representations and warranties herein contained, to the
performance by each Account Party of its obligations to be performed hereunder
on or before the date of such Letters of Credit and to the satisfaction of the
following further conditions:

      (a) Representations and Warranties; Events of Default and Potential
Defaults. The representations and warranties contained in Article III hereof
shall be true on and as of the date of each Letter of Credit issued hereunder
with the same effect as though made on and as of each such date, and on the date
of each Letter of Credit issued hereunder no Event of Default and no Potential
Default shall have occurred and be continuing or exist or shall occur or exist
after giving effect to the Letter of Credit to be issued on such date. Failure
of the Agent to receive notice from the applicable Account Party to the contrary
before any Letter of Credit is issued hereunder shall constitute a
representation and warranty that: (i) the representations and warranties
contained in Article III hereof are true and correct on and as of the date of
such Letter of Credit with the same effect as though made on and as of such date
and (ii) on the date of such Letter of Credit no Event of Default or Potential
Default has occurred and is continuing or exists or will occur or exist after
giving effect to such Letter of Credit.

      (b) Commitment. The fact that, immediately after the issuance of such
Letter of Credit, the Letter of Credit Undrawn Availability and the aggregate of
the Letter of Credit Unreimbursed Draws will not exceed the aggregate amount of
the Letter of Credit Committed Amounts.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

      Each Credit Party, as applicable, hereby covenants to the Agent and each
Issuing Bank as follows:

      5.01. Reporting and Information Requirements. Each Credit Party shall
deliver to the Agent with sufficient copies for each Issuing Bank:

      (a) Annual Reports. As soon as practicable and in any event within 100
days after the close of each fiscal year, audited consolidated statements of
income, retained earnings and cash flows of such Credit Party and its
consolidated Subsidiaries, for such fiscal year and a consolidated audited
balance sheet of such Credit Party and its consolidated Subsidiaries, as of the
close of such fiscal year, and notes to each, all in accordance with GAAP or, in
the case of Credit Parties which are Insurance Subsidiaries, SAP, setting forth
in comparative form the corresponding figures for the preceding fiscal year,
with such consolidated statements and balance sheets to be certified by
independent public accountants of recognized national standing in the United
States selected by such Credit Party and not unacceptable to the Required
Issuing Banks, and the certificate or report of such accountants to be free of
exceptions or qualifications not reasonably acceptable to the Required Issuing
Banks (it being understood that delivery of XL Capital's Report on Form 10-K
filed with the Securities and Exchange Commission shall satisfy the requirement
of this Section 5.01(a) to deliver the annual financial statements of XL Capital
so long as the financial information required to be in such report is
substantially the same as the financial information required by this Section
5.01(a)).

      (b) Quarterly Statements. Within sixty days after the end of the first,
second and third quarterly accounting periods in each fiscal year of XL Capital,
copies of the unaudited consolidated balance sheets of XL Capital and its
consolidated Subsidiaries as of the end of such accounting period and of the
consolidated income statements of XL Capital and its consolidated Subsidiaries
for the

                                       20
<PAGE>

elapsed portion of the fiscal year ended with the last day of such accounting
period, all in accordance with GAAP subject to year-end audit adjustments and
certified by the principal financial officer of XL Capital to have been prepared
in accordance with generally accepted accounting principles consistently applied
by XL Capital except as explained in such certificate (it being understood that
delivery of XL Capital's Report on Form 10-Q filed with the Securities and
Exchange Commission shall satisfy the requirement of this Section 5.01(b) to
deliver the quarterly financial statements of XL Capital so long as the
financial information required to be in such report is substantially the same as
the financial information required by this Section 5.01(b)).

      (c) Compliance Certificates. Within 100 days after the end of each fiscal
year of the Credit Parties and within sixty days after the end of each of the
first three quarters of each fiscal year, a certificate in the form of Exhibit D
hereto dated as of the end of such fiscal year or quarter, signed on behalf of
each Credit Party by a principal financial officer thereof, (i) stating that as
of the date thereof no Event of Default or Potential Default has occurred and is
continuing or exists, or if an Event of Default or Potential Default has
occurred and is continuing or exists, specifying in detail the nature and period
of existence thereof and any action with respect thereto taken or contemplated
to be taken by such Credit Party, (ii) stating in reasonable detail the
information and calculations necessary to establish compliance with the
provisions of Article VI hereof, and (iii) stating that the signer has reviewed
this Agreement and that such certificate is based on an examination made by or
under the supervision of the signer sufficient to assure that such certificate
is accurate.

      (d) Further Information. All such other information and in such form as
any Issuing Bank may reasonably request in writing.

      (e) Notice of Event of Default. Immediately upon becoming aware of any
Event of Default or Potential Default, written notice thereof, together with a
written statement of the president or a principal financial officer of the
applicable Credit Party setting forth the details thereof and any action with
respect thereto taken or contemplated to be taken by the Credit Parties.

      (f) Notice of Material Adverse Change. Promptly upon becoming aware
thereof, written notice of any event or occurrence constituting or which could
reasonably be expected to have a Material Adverse Effect.

      (g) Notice of Material Proceedings. Promptly upon becoming aware thereof,
written notice of the commencement, existence or threat of any proceeding or a
material change in any existing material proceeding by or before any Official
Body against or affecting such Credit Party which, if adversely decided, could
have a Material Adverse Effect.

      (h) Notice of Certain Material Changes. Promptly upon adoption thereof,
notice of each material change in any Credit Party's investment policy,
underwriting policy or other business policy.

      (i) Year 2000 Compliance. Promptly after any Credit Party's discovery or
determination thereof, notice (in reasonable detail) that any computer
application that is material to its or any of its Subsidiaries' business and
operations will not be Year 2000 Compliant (as defined in Section 3.15), except
to the extent that such failure could not reasonably be expected to have a
Material Adverse Effect.

      5.02. Preservation of Existence and Franchises. Each Credit Party shall,
and shall cause each of its Subsidiaries to, maintain its corporate existence,
rights and franchises in full force and effect in its jurisdiction of
incorporation, which jurisdiction shall continue to be, in the case of each
Credit Party, the jurisdiction under the laws of which such Credit Party is
organized as of the date hereof. Each Credit Party shall, and shall cause each
of its Subsidiaries to, qualify and remain qualified as a foreign corporation in
each jurisdiction in which failure to receive or retain such qualification would
have a Material Adverse Effect.

                                       21
<PAGE>

      5.03. Insurance. Each Credit Party shall, and shall cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers,
insurance with respect to its properties in such amounts as is customary in the
case of corporations engaged in the same or a similar business having similar
properties similarly situated.

      5.04. Maintenance of Properties. Each Credit Party shall, and shall cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition the properties now or hereafter owned, leased or
otherwise possessed by and used or useful in its business and shall make or
cause to be made all needful and proper repairs, renewals, replacements and
improvements thereto so that the business carried on in connection therewith may
be properly conducted at all times, provided, however, that the foregoing shall
not impose on such Credit Party or any Subsidiary of such Credit Party any
obligation in respect of any property leased by such Credit Party or such
Subsidiary in addition to such Credit Party's obligations under the applicable
document creating such Credit Party's or such Subsidiary's lease or tenancy.

      5.05. Payment of Taxes and Other Potential Charges and Priority Claims
Payment of Other Current Liabilities. Each Credit Party shall, and shall cause
each of its Subsidiaries to, pay or discharge:

      (a) on or prior to the date on which penalties attach thereto, all taxes,
assessments and other governmental charges or levies imposed upon it or any of
its properties or income;

      (b) on or prior to the date when due, all lawful claims of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons which, if
unpaid, might result in the creation of a Lien upon any such property; and

      (c) on or prior to the date when due, all other lawful claims which, if
unpaid, might result in the creation of a Lien upon any such property (other
than Liens not forbidden by Section 6.03 hereof) or which, if unpaid, might give
rise to a claim entitled to priority over general creditors of such Account
Party in any proceeding under the Bermuda Companies Law or Bermuda Insurance Law
or any similar Law applicable to any Credit Party, or any insolvency proceeding,
liquidation, receivership, rehabilitation, dissolution or winding-up involving
such Credit Party or such Subsidiary; provided that, unless and until
foreclosure, distraint, levy, sale or similar proceedings shall have been
commenced, such Credit Party need not pay or discharge any such tax, assessment,
charge, levy or claim so long as the validity thereof is contested in good faith
and by appropriate proceedings diligently conducted and so long as such reserves
or other appropriate provisions as may be required by GAAP and SAP shall have
been made therefor and so long as such failure to pay or discharge does not have
a Material Adverse Effect.

      5.06. Financial Accounting Practices. Such Credit Party shall, and shall
cause each of its Subsidiaries to, make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect its transactions and
dispositions of its assets and maintain a system of internal accounting controls
sufficient to provide reasonable assurances that transactions are recorded as
necessary to permit preparation of financial statements required under Section
5.01 hereof in conformity with GAAP and SAP, as applicable, and to maintain
accountability for assets.

      5.07. Compliance with Applicable Laws. Each Credit Party shall, and shall
cause each of its Subsidiaries to, comply with all applicable Laws (including
but not limited to the Bermuda Companies Law and Bermuda Insurance Laws) in all
respects; provided that such Credit Party or any Subsidiary of such Credit Party
shall not be deemed to be in violation of this Section 5.07 as a result of any
failure to comply with any such Law which would not (i) result in fines,
penalties, injunctive relief or other civil or criminal liabilities which, in
the aggregate, would have a Materially Adversely Effect or (ii) otherwise impair
the ability of such Credit Party to perform its obligations under this
Agreement.

                                       22
<PAGE>

      5.08. Use of Proceeds. Each Account Party shall use the Letters of Credit
issued hereunder solely to support the Account Parties' reinsurance program with
NAC Re Corporation in the ordinary course of business of such Account Party.

      5.09. Continuation Of and Change In Business. Each Credit Party and its
Subsidiaries shall continue to engage in substantially the same business and
activities it currently engages in on the date of this Agreement.

      5.10. Visitation. Each Credit Party shall permit such Persons as any
Issuing Bank may reasonably designate to visit and inspect any of the properties
of such Credit Party, to discuss its affairs with its financial management, and
provide such other information relating to the business and financial condition
of such Credit Party at such times as such Issuing Bank may reasonably request.
Each Credit Party hereby authorizes its financial management to discuss with any
Issuing Bank the affairs of such Credit Party.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

Each Credit Party covenants to the Agent and to each Issuing Bank as follows:

      6.01. Mergers and Acquisitions. (a) Such Credit Party shall not merge with
or into or consolidate with any other Person, or agree to do any of the
foregoing, except that if no Event of Default or Potential Event of Default
shall occur and be continuing or shall exist at the time of such merger or
consolidation or immediately thereafter and after giving effect thereto:

            (i) any Credit Party may merge with any other corporation, including
      a Subsidiary, if such Credit Party shall be the surviving corporation; and

            (ii) if the written consent of the Required Issuing Banks is
      obtained, any Credit Party may merge into or consolidate with any other
      corporation if the corporation into which such Credit Party is merged or
      which is formed by such consolidation shall expressly assume all
      obligations of such Credit Party under this Agreement.

      (b) Such Credit Party shall not acquire the stock or other equity
interests, or all or any substantial portion of the properties or assets of any
other Person, or agree to do any of the foregoing, unless such Person is engaged
primarily in the insurance business or the financial services business.

      6.02. Dispositions of Assets. Such Credit Party shall not, and shall not
permit any Subsidiary to, sell, convey, assign, lease, abandon or otherwise
transfer or dispose of, voluntarily or involuntarily (any of the foregoing being
referred to in this Section 6.02 as a "transaction" and any series of related
transactions constituting but a single transaction), any of its properties or
Assets, tangible or intangible (including but not limited to sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper or
general intangibles with or without recourse), except:

      (a) Transactions in the ordinary course of business involving current
assets or other assets classified on such Credit Party's balance sheet as
available for sale;

      (b) Sales, conveyances, assignments or other transfers or dispositions in
immediate exchange for cash or tangible assets, provided that any such sales,
conveyances or transfers shall not individually, or in the aggregate, exceed
$50,000,000 in any calendar year for all Credit Parties in the aggregate; or

                                       23
<PAGE>

      (c) Dispositions of equipment or other property which is obsolete or no
longer used or useful in the conduct of the business of such Credit Party or its
Subsidiaries.

      6.03. Liens. Such Credit Party shall not, and shall not permit any
Subsidiary to, at any time create, incur, assume or suffer to exist any Lien on
any of its property or assets, tangible or intangible, now owned or hereafter
acquired or agree or become liable to do so, except:

      (a) Liens existing on the date hereof (and extension, renewal and
replacement Liens upon the same property, provided the amount secured by each
Lien constituting such an extension, renewal or replacement Lien shall not
exceed the amount secured by the Lien theretofore existing) and listed on
Schedule 6.03(a) hereto;

      (b) Liens arising from taxes, assessments, charges, levies or claims
described in Section 5.05 hereof that are not yet due or that remain payable
without penalty or to the extent permitted to remain unpaid under the provision
of such Section 5.05;

      (c) Liens on property securing all or part of the purchase price thereof
to such Credit Party and Liens (whether or not assumed) existing on property at
the time of purchase thereof by such Credit Party (and extension, renewal and
replacement Liens upon the same property), provided --

            (i) each such Lien is confined solely to the property so purchased,
      improvements thereto and proceeds thereof, and

            (ii) the aggregate amount of the obligations secured by all such
      Liens on any particular property at any time purchased by such Credit
      Party, as applicable, shall not exceed 100% (if such obligations are not
      subject when created to United States income taxes) or 90% (in all other
      cases) of the lesser of the fair market value of such property at such
      time or the actual purchase price of such property;

      (d) Zoning restrictions, easements, minor restrictions on the use of real
property, minor irregularities in title thereto and other minor Liens that do
not in the aggregate materially detract from the value of a property or asset
to, or materially impair its use in the business of, such Credit Party;

      (e) Liens securing Indebtedness permitted by Section 6.08 hereof covering
assets whose market value is not materially greater than an amount equal to the
amount of the Indebtedness secured thereby, plus a commercially reasonable
margin; or

      (f) Liens on cash and securities of such Credit Party or its Subsidiaries
incurred as part of the management of its investment portfolio in accordance
with customary portfolio management practice and not in violation of such Credit
Parties' investment policy as in effect on the date of this Agreement.

      6.04. Transactions With Affiliates. Such Credit Party shall not, and shall
not permit any Subsidiary to, enter into or carry out any transaction with
(including, without limitation, purchase or lease property or services to, loan
or advance to or enter into, suffer to remain in existence or amend any
contract, agreement or arrangement with) any Affiliate of such Credit Party, or
directly or indirectly agree to do any of the foregoing, except transactions
among such Credit Party and its wholly-owned Subsidiaries and transactions with
Affiliates in good faith in the ordinary course of such Credit Party's business
consistent with past practice and on terms no less favorable to such Credit
Party or any Subsidiary than those that could have been obtained in a comparable
transaction on an arm's length basis from an unrelated Person.

      6.05. Business. Such Credit Party will not, and will not permit any
Subsidiary to, engage (directly or indirectly) in any businesses other than the
businesses substantially the same as those

                                       24
<PAGE>

in which such Credit Party and its Subsidiaries are engaged on the Closing Date
and any businesses reasonably related thereto or in the financial services
industry. Each Account Party which is an insurance company will not permit, at
any time, its net premiums earned from insurance or reinsurance operations to
comprise less than 50% of gross revenues of such Account Party (on a
consolidated basis exclusive of net gains and losses from investments and
investment income).

      6.06. Ratio of Total Funded Debt to Consolidated Tangible Net Worth. XL
Capital will not permit its ratio of (i) the sum of (x) Total Funded Debt plus
(y) the aggregate undrawn face amount of all letters of credit (as to which
reimbursement obligations are unsecured) issued for the account of, or as to
which reimbursement obligations are guaranteed by, XL Capital or any of its
Consolidated Subsidiaries to (ii) Consolidated Tangible Net Worth to be greater
than 0.35 at any time.

      6.07. Consolidated Tangible Net Worth. XL Capital will not permit its
Consolidated Tangible Net Worth to be less than $2,566,000,000.00 at any time.

      6.08. Indebtedness. Such Credit Party shall not, and shall not permit any
Subsidiary to, at any time create, incur, assume or suffer to exist any
Indebtedness, or agree, become or remain liable (contingent or otherwise) to do
any of the foregoing, except:

      (a) Indebtedness to the Issuing Banks pursuant to this Agreement and the
other Transaction Document;

      (b) Other Indebtedness, so long as upon the incurrence thereof no Event of
Default or Potential Default would occur or exist;

      (c) Accounts or claims payable and accrued and deferred compensation
(including options) incurred in the ordinary course of business by any Credit
Party or any Subsidiary of any Credit Party; and

      (d) Indebtedness incurred in transactions described in Section 6.03(f).

      6.09. Claims-Paying Ratings. Each of XL Insurance and XL Mid Ocean shall
maintain at all times a claims-paying rating of at least "A" from Standard &
Poor's Ratings Services and from A.M. Best Company.

      6.10. Private Act. Such Credit Party shall not become subject to a Private
Act except, in the case of XL Insurance, the X.L. Insurance Company, Ltd. Act,
1989.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

      7.01. Events of Default. An Event of Default shall mean the occurrence or
existence of one or more of the following events or conditions (for any reason,
whether voluntary, involuntary or effected or required by Law):

      (a) Any Account Party shall default in the payment when due of any
reimbursement obligation with respect to any Letter of Credit;

                                       25
<PAGE>

      (b) Any Account Party shall default in the payment when due of any Letter
of Credit Fee, Commitment Fee, or any other fee or amount payable hereunder
which default shall continue for a period of three days from the due date
thereof;

      (c) Any Credit Party shall default in the observance, performance or
fulfillment of any covenant contained in Article VI hereof;

      (d) Any Credit Party shall default in the observance, performance or
fulfillment of any other covenant, condition or provision hereof and such
default shall not be remedied for a period of twenty days after written notice
thereof to such Credit Party from the Agent;

      (e) Any Credit Party or any Subsidiary of any Credit Party shall default
(i) in any payment of principal of or interest on any other obligation for
borrowed money in principal amount of $10,000,000 or more beyond any period of
grace provided with respect thereto, or (ii) in the performance of any other
agreement, term or condition contained in any such agreement under which any
such obligation in principal amount of $10,000,000 or more is created, if the
effect of such default is to cause or permit the holder or holders of such
obligation (or trustee on behalf of such holder or holders) to cause such
obligation to become due prior to its stated maturity or to terminate its
commitment under such agreement;

      (f) One or more judgments for the payment of money shall have been entered
against any Credit Party which judgments exceed $50,000,000 in the aggregate and
such judgments shall remain undischarged or uncontested or appealed in good
faith for a period of thirty consecutive days;

      (g) Any representation or warranty herein made by any Credit Party, or any
certificate or financial statement furnished pursuant to the provisions hereof,
shall prove to have been false or misleading in any material respect as of the
time made (or deemed made) or furnished;

      (h) XL Insurance shall cease to own, beneficially and of record, directly
or indirectly, 100% of the outstanding voting shares of common stock of XL
Investments;

      (i) XL Capital shall cease to own, beneficially and of record, directly or
indirectly all of the outstanding voting shares of common stock of each other
Credit Party, except for a nominal number of shares owned by nominee
shareholders required by the applicable laws of the jurisdiction where such
Credit Party is incorporated;

      (j) A Change in Control shall occur;

      (k) The guarantee contained in Article X hereof shall terminate or cease,
in whole or material part, to be a legally valid and binding obligation of XL
Insurance, XL Capital or XL Mid Ocean or any Credit Party or any Person acting
for or on behalf of any of such parties contests such validity or binding nature
of such guarantee itself or the transactions contemplated by this Agreement, or
any other Person shall assert any of the foregoing;

      (l) A decree or order by a court having jurisdiction in the premises shall
have been entered adjudging any Credit Party a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of such Credit
Party under the Bermuda Companies Law, or any other similar applicable Law, and
such decree or order shall have continued undischarged or unstayed for a period
of sixty days; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of such Credit Party or a substantial part of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have remained in force undischarged and
unstayed for a period of sixty days; or

                                       26
<PAGE>

      (m) Any Credit Party shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under the Bermuda Companies Law, or the companies laws of the Cayman Islands,
British West Indies or any other similar applicable Law, or shall consent to the
filing of any such petition, or shall consent to the appointment of a receiver
or liquidator or examiner or trustee or assignee in bankruptcy or insolvency of
it or of a substantial part of its property, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or corporate action shall be taken by such Credit
Party in furtherance of any of the aforesaid purposes.

If an Event of Default shall occur then the Issuing Banks shall be under no
further obligation to issue Letters of Credit hereunder and the Agent may, and
upon written request of the Required Issuing Banks shall, exercise any or all
remedies available to it. Without limiting the generality of the foregoing, if
an Event of Default shall have occurred and be continuing, the Agent may, and
upon the request of the Required Issuing Banks shall, make demand upon the
applicable Account Party to, and forthwith upon such demand the applicable
Account Party will, pay to the Agent as cash collateral for the ratable benefit
of the Issuing Banks, in same day funds at the Agent's office designated in such
demand, an amount equal to the aggregate Letter of Credit Undrawn Availability
of all Letters of Credit issued for the account of such Account Party. If at any
time during the continuance of an Event of Default the Agent determines that
such funds are subject to any right or claim of any Person other than the Agent
and the Issuing Banks or that the total amount of such funds is less than the
aggregate Letter of Credit Undrawn Availability of all Letters of Credit issued
for the account of an Account Party, such Account Party will, forthwith upon
demand by the Agent, pay to the Agent as additional cash collateral for the
ratable benefit of the Issuing Banks an amount equal to the excess of (a) such
aggregate Letter of Credit Undrawn Availability over (b) the total amount of
funds, if any, that the Agent determines to be free and clear of any such right
or claim. Upon the drawing of any Letters of Credit, such funds shall be applied
to reimburse the Issuing Banks, ratably, to the extent permitted by applicable
law.

                                  ARTICLE VIII

                                    THE AGENT

      8.01. Appointment. (a) Each Issuing Bank hereby appoints Mellon Bank, N.A.
to act as Agent for such Issuing Bank under this Agreement and the other
Transaction Documents. Each Issuing Bank hereby irrevocably authorizes the Agent
to take such action on behalf of such Issuing Bank under the provisions of this
Agreement and the other Transaction Documents, and to exercise such powers and
to perform such duties, as are expressly delegated to or required of the Agent
by the terms hereof or thereof, together with such powers as are reasonably
incidental thereto. Mellon Bank, N.A. hereby agrees to act as Agent on behalf of
the Issuing Banks on the terms and conditions set forth in this Agreement and
the other Transaction Documents, subject to its right to resign as provided in
Section 8.10 hereof. Each Issuing Bank hereby irrevocably authorizes the Agent
to execute and deliver each of the Transaction Documents and to accept delivery
of such of the other Transaction Documents as may not require execution by the
Agent. Each Issuing Bank agrees that the rights and remedies granted to the
Agent under the Transaction Documents shall be exercised exclusively by the
Agent, and that no Issuing Bank shall have any right individually to exercise
any such right or remedy, except to the extent expressly provided herein or
therein.

      (b) The Arranger shall have no duties or obligations in such capacity
under this Agreement.

      8.02. General Nature of Agent's Duties. Notwithstanding anything to the
contrary elsewhere in this Agreement or in any other Transaction Document:

                                       27
<PAGE>

            (a) The Agent shall have no duties or responsibilities except those
      expressly set forth in this Agreement and the other Transaction Documents,
      and no implied duties or responsibilities on the part of the Agent shall
      be read into this Agreement or any Transaction Document or shall otherwise
      exist.

            (b) The duties and responsibilities of the Agent under this
      Agreement and the other Transaction Documents shall be mechanical and
      administrative in nature, and the Agent shall not have a fiduciary
      relationship in respect of any Issuing Bank.

            (c) The Agent is and shall be solely the agent of the Issuing Banks.
      The Agent does not assume, and shall not at any time be deemed to have,
      any relationship of agency or trust with or for, or any other duty or
      responsibility to, any other Person (except only for its relationship as
      agent for, and its express duties and responsibilities to, the Issuing
      Banks as provided in this Agreement and the other Transaction Documents).

            (d) The Agent shall be under no obligation to take any action
      hereunder or under any other Transaction Document if the Agent believes in
      good faith that taking such action may conflict with any Law or any
      provision of this Agreement or any other Transaction Document, or may
      require the Agent to qualify to do business in any jurisdiction where it
      is not then so qualified.

      8.03. Exercise of Powers. The Agent shall take any action of the type
specified in this Agreement or any other Transaction Document as being within
the Agent's rights, powers or discretion in accordance with directions from the
Required Issuing Banks (or, to the extent this Agreement or such Transaction
Document expressly requires the direction or consent of some other Person or set
of Persons, then instead in accordance with the directions of such other Person
or set of Persons). In the absence of such directions, the Agent shall have the
authority (but under no circumstances shall be obligated), in its sole
discretion, to take any such action, except to the extent this Agreement or such
Transaction Document expressly requires the direction or consent of the Required
Issuing Banks (or some other Person or set of Persons), in which case the Agent
shall not take such action absent such direction or consent. Any action or
inaction pursuant to such direction, discretion or consent shall be binding on
all the Issuing Banks. The Agent shall not have any liability to any Person as a
result of (x) the Agent acting or refraining from acting in accordance with the
directions of the Required Issuing Banks (or other applicable Person or set of
Persons), (y) the Agent refraining from acting in the absence of instructions to
act from the Required Issuing Banks (or other applicable Person or set of
Persons), whether or not the Agent has discretionary power to take such action,
or (z) the Agent taking discretionary action it is authorized to take under this
Section (subject, in the case of this clause (z), to the provisions of Section
8.04(a) hereof).

      8.04. General Exculpatory Provisions. Notwithstanding anything to the
contrary elsewhere in this Agreement or any other Transaction Document:

      (a) The Agent shall not be liable for any action taken or omitted to be
taken by it under or in connection with this Agreement or any other Transaction
Document, unless caused by its own gross negligence or willful misconduct.

      (b) The Agent shall not be responsible for (i) the execution, delivery,
effectiveness, enforceability, genuineness, validity or adequacy of this
Agreement or any other Transaction Document, (ii) any recital, representation,
warranty, document, certificate, report or statement in, provided for in, or
received under or in connection with, this Agreement or any other Transaction
Document, (iii) any failure of any Credit Party or Issuing Bank to perform any
of their respective obligations under this Agreement or any other Transaction
Document, or (iv) the existence, validity, enforceability, perfection,
recordation, priority, adequacy or value, now or hereafter, of any Lien or other
direct or indirect security afforded or purported to be afforded by any of the
Transaction Documents or otherwise from time to time.

                                       28
<PAGE>

      (c) The Agent shall not be under any obligation to ascertain, inquire or
give any notice relating to (i) the performance or observance of any of the
terms or conditions of this Agreement or any other Transaction Document on the
part of any Credit Party, (ii) the business, operations, condition (financial or
otherwise) or prospects of any Credit Party or any other Person, or (iii) except
to the extent set forth in Section 8.05(f) hereof, the existence of any Event of
Default or Potential Default.

      (d) The Agent shall not be under any obligation, either initially or on a
continuing basis, to provide any Issuing Bank with any notices, reports or
information of any nature, whether in its possession presently or hereafter,
except for such notices, reports and other information expressly required by
this Agreement or any other Transaction Document to be furnished by the Agent to
such Issuing Bank.

      8.05. Administration by the Agent.

      (a) The Agent may rely upon any notice or other communication of any
nature (written or oral, including but not limited to telephone conversations,
whether or not such notice or other communication is made in a manner permitted
or required by this Agreement or any Transaction Document) purportedly made by
or on behalf of the proper party or parties, and the Agent shall not have any
duty to verify the identity or authority of any Person giving such notice or
other communication.

      (b) The Agent may consult with legal counsel (including, without
limitation, in-house counsel for the Agent or in-house or other counsel for any
Credit Party), independent public accountants and any other experts selected by
it from time to time, and the Agent shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts.

      (c) The Agent may conclusively rely upon the truth of the statements and
the correctness of the opinions expressed in any certificates or opinions
furnished to the Agent in accordance with the requirements of this Agreement or
any other Transaction Document. Whenever the Agent shall deem it necessary or
desirable that a matter be proved or established with respect to any Credit
Party or Issuing Bank, such matter may be established by a certificate of such
Credit Party or Issuing Bank, as the case may be, and the Agent may conclusively
rely upon such certificate (unless other evidence with respect to such matter is
specifically prescribed in this Agreement or another Transaction Document).

      (d) The Agent may fail or refuse to take any action unless it shall be
indemnified to its satisfaction from time to time against any and all amounts,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature which may be imposed on,
incurred by or asserted against the Agent by reason of taking or continuing to
take any such action.

      (e) The Agent may perform any of its duties under this Agreement or any
other Transaction Document by or through agents or attorneys-in-fact. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in fact selected by it with reasonable care.

      (f) The Agent shall not be deemed to have any knowledge or notice of the
occurrence of any Event of Default or Potential Default unless the Agent has
received notice from an Issuing Bank or any Credit Party referring to this
Agreement, describing such Event of Default or Potential Default, and stating
that such notice is a "notice of default". If the Agent receives such a notice,
the Agent shall give prompt notice thereof to each Issuing Bank.

      8.06. Issuing Bank Not Relying on Agent or Issuing Banks. Each Issuing
Bank acknowledges as follows: (a) neither the Agent nor any other Issuing Bank
has made any representations or

                                       29
<PAGE>

warranties to it, and no act taken hereafter by the Agent or any other Issuing
Bank shall be deemed to constitute any representation or warranty by the Agent
or such other Issuing Bank to it; (b) it has, independently and without reliance
upon the Agent or any other Issuing Bank, and based upon such documents and
information as it has deemed appropriate, made its own credit and legal analysis
and decision to enter into this Agreement and the other Transaction Documents;
and (c) it will, independently and without reliance upon the Agent or any other
Issuing Bank, and based upon such documents and information as it shall deem
appropriate at the time, make its own decisions to take or not take action under
or in connection with this Agreement and the other Transaction Documents.

      8.07. Indemnification. Each Issuing Bank agrees to reimburse and indemnify
the Agent, in its capacity as Agent, and its directors, officers, employees and
agents (to the extent not reimbursed by a Credit Party and without limitation of
the obligations of the Credit Parties to do so), ratably in accordance with
their respective Letter of Credit Committed Amounts, from and against any and
all amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or
nature (including, without limitation, the reasonable fees and disbursements of
counsel for the Agent or such other Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Agent or such other Person shall be designated a party thereto) that may at
any time be imposed on, incurred by or asserted against the Agent or such other
Person as a result of, or arising out of, or in any way related to or by reason
of, this Agreement, any other Transaction Document, any transaction from time to
time contemplated hereby or thereby, or any transaction to which a Letter of
Credit directly or indirectly relates, provided that no Issuing Bank shall be
liable for any portion of such amounts, losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements to the extent resulting from the gross negligence or willful
misconduct of the Agent or such other Person, as finally determined by a court
of competent jurisdiction. Payments under this Section shall be due and payable
on demand, and to the extent that any Issuing Bank fails to pay any such amount
after a proper demand, such amount shall bear interest for each day from the
date of demand until paid (before and after judgment) at a rate per annum
(calculated on the basis of a year of 360 days and actual days elapsed) which
for each day shall be equal to 2% over the interest rate per annum announced by
the Federal Reserve Bank of New York or otherwise determined by the Agent to be
applicable for such day to overnight federal funds transactions arranged by
federal funds brokers on the previous trading day.

      8.08. Agent in its Individual Capacity. With respect to its commitments
hereunder and the Obligations owing to it, the Agent shall have the same rights
and powers under this Agreement and each other Transaction Document as any other
Issuing Bank and may exercise the same as though it were not the Agent, and the
terms "Issuing Banks" and like terms shall include the Agent in its individual
capacity as such. The Agent and its affiliates may, without liability to
account, make loans to, accept deposits from, acquire debt or equity interests
in, act as trustee under indentures of, act as agent under other credit
facilities for, and engage in any other business with, any Credit Party and any
stockholder, subsidiary or affiliate of any Credit Party, as though the Agent
were not the Agent hereunder.

      8.09. Successor Agent. The Agent may resign at any time by giving 10 days'
prior written notice thereof to the Issuing Banks and the Account Parties. The
Agent may be removed by the Required Issuing Banks at any time by giving 10
days' prior written notice thereof to the Agent, the other Issuing Banks and the
Account Parties. Upon any such resignation or removal, the Required Issuing
Banks shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed and consented to, and shall have accepted such
appointment, within 30 days after such notice of resignation or removal, then
the retiring Agent may, on behalf of the Issuing Banks, appoint a successor
Agent. Each successor Agent shall be a commercial bank or trust company
organized under the laws of the United States of America or any State thereof
and having a combined capital and surplus of at least $1,000,000,000. Upon the
acceptance by a successor Agent of its appointment as Agent hereunder, such
successor Agent shall thereupon succeed to and become vested with all the
properties, rights, powers, privileges and duties of the former Agent, without
further act, deed or

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<PAGE>

conveyance. Upon the effective date of resignation or removal of a retiring
Agent, such Agent shall be discharged from its duties under this Agreement and
the other Transaction Documents, but the provisions of this Agreement shall
inure to its benefit as to any actions taken or omitted by it while it was Agent
under this Agreement. If and so long as no successor Agent shall have been
appointed, then any notice or other communication required or permitted to be
given by the Agent shall be sufficiently given if given by the Required Issuing
Banks, all notices or other communications required or permitted to be given to
the Agent shall be given to each Issuing Bank, and all payments to be made to
the Agent shall be made directly to the Account Parties or Issuing Bank for
whose account such payment is made.

      8.10. Additional Agents. If the Agent shall from time to time deem it
necessary or advisable, for its own protection in the performance of its duties
hereunder or in the interest of the Issuing Banks, the Agent and the Account
Parties shall execute and deliver a supplemental agreement and all other
instruments and agreements necessary or advisable, in the opinion of the Agent,
to constitute another commercial bank or trust company, or one or more other
Persons approved by the Agent, to act as co-Agent or agent with such powers of
the Agent as may be provided in such supplemental agreement and to vest in such
bank, trust company or Person as such co-Agent or separate agent, as the case
may be, any properties, rights, powers, privileges and duties of the Agent under
this Agreement or any other Transaction Document.

      8.11. Calculations. The Agent shall not be liable for any calculation,
apportionment or distribution of payments made by it in good faith. If such
calculation, apportionment or distribution is subsequently determined to have
been made in error, the sole recourse of any Issuing Bank to whom payment was
due but not made shall be to recover from the other Issuing Banks any payment in
excess of the amount to which they are determined to be entitled or, if the
amount due was not paid by the appropriate Account Party, to recover such amount
from the appropriate Account Party.

      8.12. Documentation Agent. Fleet National Bank shall not, in the capacity
of Documentation Agent (as opposed to the capacity of Issuing Bank) have any
duties or rights hereunder.

                                   ARTICLE IX

                                  MISCELLANEOUS

      9.01. No Implied Waiver etc. No delay or failure of the Agent or any
Issuing Bank in exercising any right, power or privilege hereunder shall affect
such right, power or privilege; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or
privilege. The rights and remedies hereunder of the Agent and the Issuing Banks
are cumulative and not exclusive of any rights or remedies which, it or they
would otherwise have. Any amendment, waiver, permit, consent or approval of any
kind or character on the part of the Agent or an Issuing Bank of any breach or
default under this Agreement or any such waiver of any provision or condition of
this Agreement must be in writing and shall be effective only to the extent in
such writing specifically set forth.

      9.02. Set-Off. In case any one or more of the Events of Default described
in Article VII hereof shall occur, each Issuing Bank shall have the right, in
addition to all other rights and remedies available to it, to set-off against
the unpaid balance of its interests in any Letter of Credit Reimbursement
Obligations any debt owing by such Issuing Bank to the applicable Credit Party,
including without limitation any funds in any deposit account maintained by such
Credit Party with such

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<PAGE>

Issuing Bank, and such Issuing Bank shall have and there is hereby created in
favor of such Issuing Bank a security interest in all deposit accounts
maintained by such Credit Party with such Issuing Bank, subject to Liens
permitted under 6.03(f). Nothing in this Agreement shall be deemed any waiver or
prohibition of any right of banker's lien or set-off under applicable Law.

      9.03. Survival of Provisions. Each of the representations, warranties,
covenants and agreements of the Credit Parties contained herein or made in
writing in connection herewith shall survive the execution and delivery of this
Agreement, and the issuance of any Letter of Credit hereunder.

      9.04. Expenses and Fees; Indemnity.

      (a) Each Account Party agrees to pay or cause to be paid and to save the
Agent and (in the case of clause (iii) below) each of the Issuing Banks harmless
against liability for the payment of all reasonable out-of-pocket costs and
expenses (including but not limited to reasonable fees and expenses of counsel,
including local counsel, auditors, and all other professional, accounting,
evaluation and consulting costs) incurred by the Agent or such Issuing Bank from
time to time arising from or relating to (i) the negotiation, preparation,
execution, delivery, administration and performance of this Agreement and the
other Transaction Documents, (ii) any requested amendments, modifications,
supplements, waivers or consents (whether or not ultimately entered into or
granted) to this Agreement or any Transaction Document, and (iii) the
enforcement or preservation of rights under this Agreement or any Transaction
Document (including but not limited to any such costs or expenses arising from
or relating to (A) collection or enforcement of any other amount owing hereunder
or thereunder by the Agent or any Issuing Bank and (B) any litigation,
proceeding, dispute, work-out, restructuring or rescheduling related in any way
to this Agreement or the Transaction Documents. Notwithstanding the foregoing,
an Account Party shall not be required to pay costs and expenses of an Issuing
Bank (in its capacity as such) which were incurred by such Issuing Bank in
connection with any litigation, proceeding or other dispute relating solely to a
claim made against such Issuing Bank by one or more of the other Issuing Banks.
Each Account Party hereby agrees to pay all stamp, document, transfer,
recording, filing, registration, search, sales and excise fees and taxes and all
similar impositions now or hereafter determined by the Agent or any Issuing Bank
to be payable in connection with this Agreement or any other Transaction
Documents or any other documents, instruments or transactions pursuant to or in
connection herewith or therewith, and an Account Party agrees to save the Agent
and each Issuing Bank harmless from and against any and all present or future
claims, liabilities or losses with respect to or resulting from any omission to
pay or delay in paying any such fees.

      (b) Each Account Party hereby agrees to reimburse and indemnify the Agent
and each Issuing Bank (the "Indemnified Parties") from and against any and all
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of counsel for the
Indemnified Parties in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnified
Party shall be designated a party thereto) that may at any time be imposed on,
asserted against or incurred by such Indemnified Party as a result of, or
arising out of, or in any way related to or by reason of, this Agreement or any
other Transaction Document, any transaction from time to time contemplated
hereby or thereby, or any transaction to which any Letter of Credit directly or
indirectly relates (and without in any way limiting the generality of the
foregoing, including any violation or breach of any Law by any Credit Party or
any exercise by the Agent or any Issuing Bank of any of its rights or remedies
under this Agreement or any other Transaction Document; any breach of any
representation or warranty, covenant or agreement of any Credit Party); but
excluding any such losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements to the extent
resulting from the gross negligence or willful misconduct of such Indemnified
Party, as finally determined by a court of competent jurisdiction. If and to the
extent that the foregoing obligations of the Account Parties under this Section
9.04, or any other indemnification obligation of the Account Parties hereunder
or under any other Transaction Document, are unenforceable for any reason, the
Account Parties hereby agree to make the

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<PAGE>

maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable Law. Notwithstanding the foregoing, an Account
Party shall not be required to pay costs and expenses of an Issuing Bank (in its
capacity as such) which were incurred by such Issuing Bank in connection with
any litigation, proceeding or other dispute relating solely to a claim made
against such Issuing Bank by one or more of the other Issuing Banks.

      9.05. Severability; Inconsistent Provisions. In the event any one or more
of the provisions contained in this Agreement or in any other Transaction
Document should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions. In the event of any inconsistency between the terms of
this Agreement and the terms of any Letter of Credit Application or Continuing
Letter of Credit Agreement, the terms of this Agreement shall control.

      9.06. Holidays. Unless otherwise specified herein, whenever any payment or
action to be made or taken hereunder shall be stated to be due on a Saturday,
Sunday or public holiday under the laws of the Commonwealth of Pennsylvania or
Bermuda, such payment or action shall be made or taken on the next succeeding
Business Day and such extension of time shall in such case be included in
computing interest, if any, in connection with such payment or action.

      9.07. Notices, etc. Any notice or other communication in connection with
this Agreement shall be deemed to have been given or made when received by the
party to whom directed. All such notices and other communications shall be in
writing unless otherwise provided herein and shall be directed, if to an Issuing
Bank, at such Issuing Bank's address on the signature pages hereof, if to the
Agent at One Mellon Bank Center, Room 4401, Pittsburgh, Pennsylvania 15258,
Attention: Karla Maloof, fax no. (412) 234-8087, with a copy to Loan
Administration, Three Mellon Bank Center, Pittsburgh, PA 15259 fax no. (412)
209-6134; and if to any Credit Party, to XL Capital Ltd, Cumberland House, One
Victoria Street, Hamilton HM11 Bermuda, Attn:William Robbie, fax no. (441)
292-5226, or in accordance with the latest unrevoked written direction from any
party to the other parties hereto. For the purposes of both receiving
information from the Agent or any Issuing Bank or providing information to the
Agent or any Issuing Bank, XL Insurance shall act as the agent for each other
Credit Party.

      9.08. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR ANY
OTHER MATTER RELATED THERETO MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF
COMMONWEALTH OF PENNSYLVANIA OR IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF PENNSYLVANIA. EACH CREDIT PARTY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF
PENNSYLVANIA AND THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF
PENNSYLVANIA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION, SUBJECT TO ANY GENERAL RIGHT OF APPEAL. EACH CREDIT PARTY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, TO THE ADDRESS PROVIDED IN THIS AGREEMENT.

      9.09. WAIVER OF JURY TRIAL. TO THE EXTENT LITIGATION HEREUNDER IS BROUGHT
BEFORE A COURT IN THE UNITED STATES, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY. EACH PARTY
ACKNOWLEDGES AND AGREES THAT IT

                                       33
<PAGE>

HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISIONS OF EACH OTHER DOCUMENT RELATED HERETO TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND EACH ISSUING
BANK ENTERING INTO THIS AGREEMENT AND RELATED AGREEMENTS.

      9.10. Governing Law. This Agreement and any other documents delivered in
connection herewith and the rights and obligations of the parties hereto and
thereto shall for all purposes be governed by and construed and enforced in
accordance with the substantive law of the Commonwealth of Pennsylvania without
giving effect to conflict of laws principles.

      9.11 Validity and Enforceability. If any stamp tax, levy, duty or fee is
imposed or payable in respect to this Agreement or the transaction contemplated
hereby or is necessary or advisable to ensure the legality, validity or
enforceability of the documents in this transaction, the Account Parties shall
promptly pay such stamp tax, levy, duty or fee. No government approval or
consent is necessary for the execution, delivery and performance of the
transactions contemplated under this Agreement.

      9.12. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed and delivered, shall be an original, but all such
counterparts shall together constitute one (1) and the same instrument.

      9.13. Successors and Assigns; Participations; Assignments.

      (a) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Account Parties, the Issuing Banks,
the Agent, and their respective successors and assigns, except that no Credit
Party may assign or otherwise transfer any of its rights or duties under this
Agreement without the prior written consent of the Agent and all of the Issuing
Banks, and any purported assignment without such consent shall be void.

      (b) Participations. Any Issuing Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
sell participations to one or more commercial banks or other Persons (each a
"Participant") in a portion of its rights and obligations under this Agreement
and the other Transaction Documents; provided, that

            (i) any such participation sold to a Participant which is not an
      Issuing Bank, an affiliate of an Issuing Bank or a Federal Reserve Bank
      shall be made only with the consent (which in each case shall not be
      unreasonably withheld) of XL Capital and the Agent, unless an Event of
      Default has occurred and is continuing, in which case the consent of XL
      Capital shall not be required,

            (ii) any such Issuing Bank's obligations under this Agreement and
      the other Transaction Documents shall remain unchanged,

            (iii) such Issuing Bank shall remain solely responsible to the other
      parties hereto for the performance of such obligations,

            (iv) the parties hereto shall continue to deal solely and directly
      with such Issuing Bank in connection with such Issuing Bank's rights and
      obligations under this Agreement and each of the other Transaction
      Documents,

            (v) such Participant shall be bound by the provisions of Section
      9.18 hereof, and the Issuing Bank selling such participation shall obtain
      from such Participant a written confirmation of its agreement to be so
      bound,

                                       34
<PAGE>

            (vi) no Participant (unless such Participant is an affiliate of such
      Issuing Bank, or is itself a Issuing Bank) shall be entitled to require
      such Issuing Bank to take or refrain from taking action under this
      Agreement or under any other Transaction Document, except that such
      Issuing Bank may agree with such Participant that such Issuing Bank will
      not, without such Participant's consent, take action of the type described
      in subsections (a), (b), (c), (d) or (e) of Section 9.14 hereof, and

            (vii) a Participant shall have the right to vote regarding
      amendments to this Agreement only in connection with amendments which
      effect changes in the amount of Letter of Credit Commitments, Letter of
      Credit Committed Amounts, fees payable hereunder and the Expiration Date.

Each Account Party agrees that any such Participant shall be entitled to the
benefits of Sections 2.09 and 9.04 with respect to its participation in the
Commitments and the Letters of Credit outstanding from time to time; provided,
that no such Participant shall be entitled to receive any greater amount
pursuant to such Sections than the transferor Issuing Bank would have been
entitled to receive in respect of the amount of the participation transferred to
such Participant had no such transfer occurred.

      (c) Assignments. Any Issuing Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
assign all or a portion of its rights and obligations under this Agreement and
the other Transaction Documents (including, without limitation, all or any
portion of its Letter of Credit Commitments to any Issuing Bank, any affiliate
of an Issuing Bank or to one or more additional commercial banks or other
Persons (each a "Purchasing Bank"); provided, that

            (i) any such assignment to a Purchasing Bank which is not an Issuing
      Bank, an affiliate of an Issuing Bank or a Federal Reserve Bank shall be
      made only with the consent (which in each case shall not be unreasonably
      withheld) of XL Capital and the Agent, unless an Event of Default has
      occurred and is continuing or exists, in which case the consent of XL
      Capital shall not be required,

            (ii) if an Issuing Bank makes such an assignment of less than all of
      its then remaining rights and obligations under this Agreement and the
      other Transaction Documents, such assignment shall be in a minimum
      aggregate principal amount of $10,000,000 of such Issuing Bank's Letter of
      Credit Commitments and Letter of Credit Exposure then outstanding,

            (iii) each such assignment shall be of a constant, and not a
      varying, percentage of each Commitment of the transferor Issuing Bank and
      of all of the transferor Issuing Bank's rights and obligations under this
      Agreement and the other Transaction Documents, and

            (iv) each such assignment shall be made pursuant to a Transfer
      Supplement in substantially the form of Exhibit B to this Agreement, duly
      completed (a "Transfer Supplement").

            In order to effect any such assignment, the transferor Issuing Bank
      and the Purchasing Bank shall execute and deliver to the Agent a duly
      completed Transfer Supplement (including the consents required by clause
      (i) of the preceding sentence) with respect to such assignment, and a
      processing and recording fee of $2,500; and, upon receipt thereof, the
      Agent shall accept such Transfer Supplement; provided, however, that no
      such processing and recording fee shall be due if such assignment is to an
      affiliate of an Issuing Bank or a Federal Reserve Bank . Upon receipt of
      the Purchase Price Receipt Notice pursuant to such Transfer Supplement,
      the Agent shall record such acceptance in the Register. Upon such
      execution, delivery, acceptance and recording, from and after the

                                       35
<PAGE>

      close of business at the Agent's Office on the Transfer Effective Date
      specified in such Transfer Supplement.

            (x) the Purchasing Bank shall be a party hereto and, to the extent
      provided in such Transfer Supplement, shall have the rights and
      obligations of an Issuing Bank hereunder, and

            (y) the transferor Issuing Bank thereunder shall be released from
      its obligations under this Agreement to the extent so transferred (and, in
      the case of an Transfer Supplement covering all or the remaining portion
      of a transferor Issuing Bank's rights and obligations under this
      Agreement, such transferor Issuing Bank shall cease to be a party to this
      Agreement) from and after the Transfer Effective Date.

      (d) Register. The Agent shall maintain at its office a copy of each
Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Issuing Banks and the Letter of
Credit Commitment of, and the amount of the Letter of Credit Committed Amount
of, each Issuing Bank from time to time. The entries in the Register shall be
conclusive absent manifest error and the Account Parties, the Agent and the
Issuing Banks may treat each person whose name is recorded in the Register as an
Issuing Bank hereunder for all purposes of the Agreement. The Register shall be
available for inspection by any Account Party or any Issuing Bank at any
reasonable time and from time to time upon reasonable prior notice.

      (e) Financial and Other Information. Each Credit Party authorizes the
Agent and each Issuing Bank to disclose to any Participant or Purchasing Bank
(each, a "transferee") and any prospective transferee any and all financial and
other information in such Person's possession concerning the Credit Parties and
their affiliates which has been or may be delivered to such Person by or on
behalf of the Credit Parties in connection with this Agreement or any other
Transaction Document or such Person's credit evaluation of the Credit Parties
and their affiliates. At the request of any Issuing Bank, a Credit Party, at
such Credit Party's expense, shall provide to each prospective transferee the
conformed copies of documents referred to in Section 4 of the form of Transfer
Supplement.

      9.14. Amendments and Waivers. Neither this Agreement nor any Transaction
Document may be amended, modified or supplemented except in accordance with the
provisions of this Section. The Agent and the Credit Parties may from time to
time amend, modify or supplement the provisions of this Agreement or any other
Transaction Document for the purpose of amending, adding to, or waiving any
provisions or changing in any manner the rights and duties of any Credit Party,
the Agent or any Issuing Bank. Any such amendment, modification or supplement
made by the Credit Parties and the Agent in accordance with the provisions of
this Section shall be binding upon the Credit Parties, each Issuing Bank and the
Agent. The Agent shall enter into such amendments, modifications or supplements
from time to time as directed by the Required Issuing Banks, and only as so
directed, provided, that no such amendment, modification or supplement may be
made which will:

      (a) Increase the Letter of Credit Committed Amount of any Issuing Bank
over the amount thereof then in effect, or extend the Expiration Date, without
the written consent of each Issuing Bank affected thereby;

      (b) Reduce the amount of or postpone the date for payment of any
Commitment Fee or Letter of Credit Fee or reduce or postpone the date for
payment of any other fees, expenses, indemnities or amounts payable under any
Transaction Document, without the written consent of each Issuing Bank affected
thereby;

      (c) Change the definition of "Required Issuing Banks" or amend this
Section 9.14, without the written consent of all the Issuing Banks;

                                       36
<PAGE>

      (d) Amend or waive any of the provisions of Article VII hereof, or impose
additional duties upon the Agent or otherwise adversely affect the rights,
interests or obligations of the Agent, without the written consent of the Agent;
or

      (e) Amend or waive any of the provisions of Article X or release any
Guarantor from its obligations hereunder without the written consent of all the
Issuing Banks;

and provided further, that Transfer Supplements may be entered into in the
manner provided in Section 9.13 hereof. Any such amendment, modification or
supplement must be in writing and shall be effective only to the extent set
forth in such writing. Any Event of Default or Potential Default waived or
consented to in any such amendment, modification or supplement shall be deemed
to be cured and not continuing to the extent and for the period set forth in
such waiver or consent, but no such waiver or consent shall extend to any other
or subsequent Event of Default or Potential Default or impair any right
consequent thereto.

      9.15. Judgment Currency. In the event of a judgment or order being
rendered by any court or tribunal for the payment of any amounts owing to the
Issuing Banks, the Agent or any of them under this Agreement or any other
Transaction Document or for the payment of damages in respect of any breach of
this Agreement or any other Transaction Document or under or in respect of a
judgment or order of another court or tribunal for the payment of such amounts
or damages, such judgment or order being expressed in a currency (the "Judgment
Currency") other than Dollars the party against whom the judgment or order is
made shall indemnify and hold the Issuing Banks and the Agent harmless against
any deficiency in terms of Dollars in the amounts received by the Issuing Banks
or the Agent, as the case may be, arising or resulting from any variations as
between (i) the exchange rate at which Dollars are converted into the Judgment
Currency for the purposes of such judgment or order and (ii) the exchange rate
at which each Issuing Bank or the Agent, as the case may be, is able to purchase
Dollars with the amount of the Judgment Currency actually received by such
Issuing Bank or the Agent, as the case may be, on the date of such receipt. The
indemnity in this section shall constitute a separate and independent obligation
from the other obligations of the Account Parties hereunder and shall apply
irrespective of any indulgence granted by the Issuing Banks.

      9.16. Records. The amount of outstanding Letters of Credit, each Issuing
Bank's Letter of Credit Committed Amount and the accrued and unpaid Commitment
Fees shall at all times be ascertained from the records of the Agent, which
shall be conclusive absent manifest error.

      9.17 Confidentiality. Each of the Agent and the Issuing Banks agree to
keep confidential any information relating to the Credit Parties received by it
pursuant to or in connection with this Agreement which is (a) information which
the Agent and the Issuing Banks reasonably expect that the applicable Credit
Party would want to keep confidential or (b) information which is clearly marked
"CONFIDENTIAL"; provided, however, that this Section 9.17 shall not be construed
to prevent the Agent or any Issuing Bank from disclosing such information (i) to
any affiliate that shall agree in writing for the benefit of the Credit Parties
to be bound by this obligation of confidentiality, (ii) upon the order of any
court or administrative agency of competent jurisdiction, (iii) upon the request
or demand of any regulatory agency or authority having jurisdiction over the
Agent or such Issuing Bank which request or demand has the force of Law or is
made by a bank regulatory agency, (iv) that has been publicly disclosed, other
than from a breach of this provision by the Agent or any Issuing Bank, (v) that
has been obtained from any person that is neither a party to this Agreement nor
an affiliate of any such party, but only to the extent that such Issuing Bank
does not know or have reason to know that such disclosure violates a
confidentiality agreement between such person and the applicable Credit Party
(vi) in connection with the exercise of any right or remedy hereunder or under
any other Transaction Document, (vii) as expressly contemplated by this
Agreement or any other Transaction Document or (viii) to any prospective
purchaser of all or any part of the interest of any Issuing Bank which shall
agree in writing for the benefit of the Credit Parties to be bound by the
obligation of confidentiality in this Agreement or the other Transaction
Documents if such prospective

                                       37
<PAGE>

purchaser is a financial institution or has been consented to by the Account
Parties, which consent will not be withheld if such purchaser is not a
competitor of any Account Party or an affiliate of a competitor of any Account
Party.

      9.18. Sharing of Collections. The Issuing Banks hereby agree among
themselves that if any Issuing Bank shall receive (by voluntary payment,
realization upon security, set-off or from any other source) any amount on
account of any Obligation contemplated by this Agreement or the other
Transaction Documents to be made by an Account Party Pro Rata to all Issuing
Banks in greater proportion than any such amount received by any other Issuing
Bank, then the Issuing Bank receiving such proportionately greater payment shall
notify each other Issuing Bank and the Agent of such receipt, and equitable
adjustment will be made in the manner stated in this Section 9.18 so that, in
effect, all such excess amounts will be shared ratably among all of the Issuing
Banks. The Issuing Bank receiving such excess amount shall purchase (which it
shall be deemed to have done simultaneously upon the receipt of such excess
amount) for cash from the other Issuing Banks a participation in the applicable
Obligations owed to such other Issuing Banks in such amount as shall result in a
ratable sharing by all Issuing Banks of such excess amount (and to such extent
the receiving Issuing Bank shall be a Participant). If all or any portion of
such excess amount is thereafter recovered from the Issuing Bank making such
purchase, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, together with interest or other amounts, if any,
required by Law to be paid by the Issuing Bank making such purchase. The Account
Parties hereby consent to and confirm the foregoing arrangements. Each
Participant shall be bound by this Section 9.18 as fully as if it were an
Issuing Bank hereunder.

                                    ARTICLE X

                                    GUARANTEE

      10.01. The Guarantee. Each of the Guarantors hereby irrevocably,
unconditionally and absolutely guarantees to the Agent and the Issuing Banks,
and becomes surety for, the prompt payment of the Obligations of the Account
Parties (the "Guaranteed Obligations") in full when due (whether at stated
maturity, by acceleration, or otherwise) strictly in accordance with the terms
thereof. Each Guarantor hereby further agrees, as a primary obligor, that if any
of the Guaranteed Obligations are not paid in full when due (whether at stated
maturity, by acceleration, or otherwise and whether or not such payments would
not be permitted under any applicable bankruptcy or similar law), the Guarantor
will promptly pay the same, without any demand or notice whatsoever (except as
expressly provided herein), and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

Notwithstanding any provision to the contrary contained herein or in any other
of the Transaction Documents, to the extent the obligations of any Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable law, including the insolvency
laws, relating to fraudulent conveyances or transfers) then the obligations of
such Guarantor hereunder automatically shall be limited to the maximum amount
that is permissible under applicable law.

      10.02. Obligations Unconditional. The obligations of each Guarantor under
this Article are irrevocable, absolute and unconditional (to the fullest extent
permitted by applicable law), irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Transaction Documents, or any other
agreement or instrument referred to therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or

                                       38
<PAGE>

defense of a surety or guarantor, it being the intent of this Article that the
obligations of each Guarantor hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
any Account Party, for amounts paid under this Article X until such time as the
Issuing Banks have been paid in full, no Letter of Credit is outstanding, the
Letter of Credit Commitments under this Agreement have been terminated and no
Person or Official Body shall have any right to request any return or
reimbursement of funds from any Issuing Bank in connection with monies received
under the Transaction Documents. Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by applicable law,
the occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain irrevocable, absolute
and unconditional as described above:

            (i) at any time or from time to time, without notice to the
      Guarantors, the time for any performance of or compliance with any of the
      Guaranteed Obligations shall be extended, or such performance or
      compliance shall be waived;

            (ii) any of the acts mentioned in any of the provisions of any of
      the Transaction Documents, or any other agreement or instrument referred
      to in the Transaction Documents shall be done or omitted;

            (iii) the maturity of any of the Guaranteed Obligations shall be
      accelerated, or any of the Guaranteed Obligations shall be modified,
      supplemented or amended in any respect, or any right under any of the
      Transaction Documents, or any other agreement or instrument referred to in
      the Transaction Documents shall be waived or any other guarantee of any of
      the Guaranteed Obligations or any security therefor shall be released or
      exchanged in whole or in part or otherwise dealt with;

            (iv) any Lien granted to, or in favor of, the Agent or any Issuing
      Bank as security for any of the Guaranteed Obligations shall be void or
      voidable, or shall fail to attach or be perfected or the Agent or any
      Issuing Bank shall fail to realize on any collateral security; or

            (v) any of the Guaranteed Obligations shall be determined to be void
      or voidable (including, without limitation, for the benefit of any
      creditor of any Guarantor) or shall be subordinated to the claims of any
      Person (including, without limitation, any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever (except notices expressly required hereunder), and any requirement
that the Agents, the Issuing Banks or any of them exhaust any right, power or
remedy or proceed against any Person under any of the Transaction Documents, or
any other agreement or instrument referred to in the Transaction Documents, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations. This is a guarantee of payment and not merely of
collection.

      10.03. Reinstatement. The obligations of the Guarantors under this Article
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy,
receivership, or reorganization or otherwise, and each Guarantor agrees that it
will indemnify the Agent and the Issuing Banks on demand for all reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable fees
and expenses of counsel) incurred by the Agent or any Issuing Bank in connection
with such rescission or restoration, including any such reasonable costs and
expenses incurred in defending against any claim alleging that such payment
constituted

                                       39
<PAGE>

a preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency, receivership, reorganization or similar law.

      10.04. Remedies. Each Guarantor agrees that, to the fullest extent
permitted by applicable law, as between such Guarantor, on the one hand, and the
Agent and the Issuing Banks, on the other hand, the Guaranteed Obligations may
be declared to be forthwith due and payable as provided in Section 7.01 hereof
(and shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 7.01) for purposes of Section 10.01
hereof notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Guaranteed Obligations from becoming
automatically due and payable) as to any other Person and that, in the event of
such declaration (or Guaranteed Obligations being deemed to have become
automatically due and payable), the Guaranteed Obligations (whether or not due
and payable by any other Person) shall forthwith become due and payable by such
Guarantor for purposes of said Section 10.01.

      10.05. Continuing Guarantee. The guarantee in this Article is a continuing
guarantee, and shall apply to all of the Guaranteed Obligations whenever
arising.

      10.06. No Restrictions. Except for restrictions under the Transaction
Documents, no Guarantor shall be or become subject to any restriction of any
nature (whether arising by operation of Law, by agreement, by its articles of
incorporation, by-laws or other constituent documents of such Guarantor, or
otherwise) on the right of such Guarantor from time to time to (x) pay any
indebtedness, obligations or liabilities from time to time owed to any Account
Party, (y) make loans or advances to any Account Party, or (z) transfer any of
its properties or assets to any Account Party.

                                       40
<PAGE>

      IN WITNESS WHEREOF, the parties hereto, by their respective officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.

XL INSURANCE LTD, as an Account Party and a Guarantor

By: /s/ Christopher Coelho
    ------------------------------------
      (Signature)
Name: Christopher Coelho
      ----------------------------------
Title: Chief Financial Officer
       ---------------------------------

XL MID OCEAN REINSURANCE LTD, as an Account Party and a Guarantor

By: /s/ Henry C.V. Keeling
    ------------------------------------
      (Signature)
Name: Henry C.V. Keeling
      ----------------------------------
Title: President & CEO
       ---------------------------------

XL CAPITAL LTD, as a Guarantor

By: /s/ Brian M. O'Hara
    ------------------------------------
      (Signature)
Name: Brian M. O'Hara
      ----------------------------------
Title: President & Chief Executive Officer
       -----------------------------------

MELLON BANK, N.A., as an Issuing Bank, as Arranger and as Agent

By: /s/ Susan M. Whitewood
    ------------------------------------
      (Signature)
Name: Susan M. Whitewood
      ----------------------------------
Title: Vice President
       ---------------------------------

Notice Address:

Institutional Banking Department
One Mellon Bank Center, Room 4401
Pittsburgh, PA 15258
Attn: Karla Maloof

Telephone:  (412) 236-4147
Facsimile:   (412) 234-8087

with a copy to:
Manager, Letter of Credit Operations
Three Mellon Bank Center, 23rd Floor

                                       41
<PAGE>

Pittsburgh, PA 15259

Initial Letter of Credit Committed Amount:  $30,000,000

                                       42
<PAGE>

DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES,

as an Issuing Bank

By: /s/ John S. McGill     /s/ Clinton M. Johnson
    -----------------------------------------------
      (Signature)
Name: John S. McGill         Clinton M. Johnson
      ---------------------------------------------
Title: Director                Managing Director
       --------------------------------------------

Notice Address:

31 West 52nd Street
New York, NY  10019
Attn:  John McGill

Telephone:  (212) 469-8101
Facsimile:  (212) 469-8366

Initial Letter of Credit Committed Amount:  $30,000,000

FIRST UNION NATIONAL BANK, as an Issuing Bank

By: /s/ Gail M. Golightly
    ------------------------------------
      (Signature)
Name: Gail M. Golightly
      ----------------------------------
Title: Senior Vice President
       ---------------------------------

Notice Address:                                 Additional notice to:

301 South College Street                        International Trade Operations
1 First Union Center 10th Floor                 Attn:  Standby L/C Unit
Charlotte, NC  28288                            8739 Research Drive - URP4
Attn:  Butch Mayer                              Charlotte, NC 28262-0742

Telephone:  (704) 374-6628                      Telephone:  (704) 593-7892
Facsimile:  (704) 383-7611                      Facsimile:  (704) 593-7937

Initial Letter of Credit Committed Amount:  $30,000,000

                                       43
<PAGE>

FLEET NATIONAL BANK, as an Issuing Bank

By: /s/ Anson Harris
    ------------------------------------
      (Signature)
Name: Anson Harris
      ----------------------------------
Title: Vice President
       ---------------------------------

Notice Address:

Mail Stop CTMO 0250
777 Main Street
Hartford, CT  06115-2001
Attn:  Anson T. Harris

Telephone:  (860) 986-7518
Facsimile:  (860) 986-1264

Initial Letter of Credit Committed Amount:  $30,000,000

BANK ONE, NA (MAIN OFFICE CHICAGO), as an Issuing Bank

By: /s/ Gretchen Roetzer
    ------------------------------------
      (Signature)
Name: Gretchen Roetzer
      ----------------------------------
Title: Commercial Banking Officer
       ---------------------------------

Notice Address:

Insurance Division - Suite 0085
1 Bank One Plaza
Chicago, IL  60670-0085
Attn:  Gretchen Roetzer

Telephone:  (312) 732-8068
Facsimile:  (312) 732-4033

with a copy to:
153 West 51st Street
New York, NY  10019
Attn:  Sam Bridges

Telephone: (212) 373-1142
Facsimile:  (212) 373-1439

Initial Letter of Credit Committed Amount:  $30,000,000

                                       44

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