Document:

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                                                                   EXHIBIT 10.35
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                           ODYSSEY RE HOLDINGS CORP.

             $100,000,000 7.49% SENIOR NOTES DUE NOVEMBER 30, 2006

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                            NOTE PURCHASE AGREEMENT

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                         DATED AS OF NOVEMBER 15, 2001

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                               TABLE OF CONTENTS

                         (NOT A PART OF THE AGREEMENT)

<Table>
<Caption>
SECTION                                       HEADING                             PAGE
----------------    ------------------------------------------------------------  ----
<S>                 <C>                                                           <C>
Section 1.          Authorization of Notes......................................    1
Section 2.          Sale and Purchase of Notes..................................    1
Section 3.          Closing.....................................................    1
Section 4.          Conditions to Closing.......................................    1
  Section 4.1       Representations and Warranties..............................    1
  Section 4.2       Performance; No Default.....................................    1
  Section 4.3       Compliance Certificates.....................................    2
  Section 4.4       Opinions of Counsel.........................................    2
  Section 4.5       Purchase Permitted by Applicable Law, Etc...................    2
  Section 4.6       Related Transactions........................................    2
  Section 4.7       Payment of Special Counsel Fees.............................    2
  Section 4.8       Private Placement Number....................................    2
  Section 4.9       Changes in Corporate Structure..............................    2
  Section 4.10      Funding Instructions........................................    3
  Section 4.11      Proceedings and Documents...................................    3
Section 5.          Representations and Warranties of the Company...............    3
  Section 5.1       Organization; Power and Authority...........................    3
  Section 5.2       Authorization, Etc..........................................    3
  Section 5.3       Disclosure..................................................    3
  Section 5.4       Organization and Ownership of Shares of Subsidiaries;           4
                    Affiliates..................................................
  Section 5.5       Financial Statements........................................    4
  Section 5.6       Compliance with Laws, Other Instruments, Etc................    4
  Section 5.7       Governmental Authorizations, Etc............................    4
  Section 5.8       Litigation; Observance of Agreements, Statutes and Orders...    4
  Section 5.9       Taxes.......................................................    5
  Section 5.10      Title to Property; Leases...................................    5
  Section 5.11      Licenses, Permits, Etc......................................    5
  Section 5.12      Compliance with ERISA.......................................    5
  Section 5.13      Private Offering by the Company.............................    6
  Section 5.14      Use of Proceeds; Margin Regulations.........................    6
  Section 5.15      Existing Indebtedness; Future Liens.........................    6
  Section 5.16      Foreign Assets Control Regulations, Etc.....................    7
  Section 5.17      Status under Certain Statutes...............................    7
  Section 5.18      Environmental Matters.......................................    7
  Section 5.19      Notes Rank Pari Passu.......................................    7
</Table>

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<Table>
<Caption>
SECTION                                       HEADING                             PAGE
----------------    ------------------------------------------------------------  ----
<S>                 <C>                                                           <C>
Section 6.          Representations of the Purchasers...........................    7
  Section 6.1       Purchase for Investment.....................................    7
  Section 6.2       Source of Funds.............................................    8
Section 7.          Information as to Company...................................    8
  Section 7.1       Financial and Business Information..........................    8
  Section 7.2       Officer's Certificate.......................................   10
  Section 7.3       Inspection..................................................   10
Section 8.          Prepayment of the Notes.....................................   11
  Section 8.1       Required Prepayments........................................   11
  Section 8.2       Optional Prepayments with Make-Whole Amount.................   11
  Section 8.3       Prepayment of Notes upon Change in Control..................   11
  Section 8.4       Allocation of Partial Prepayments...........................   13
  Section 8.5       Maturity; Surrender, Etc....................................   13
  Section 8.6       Purchase of Notes...........................................   13
  Section 8.7       Make-Whole Amount...........................................   13
Section 9.          Affirmative Covenants.......................................   14
  Section 9.1       Compliance with Law.........................................   14
  Section 9.2       Insurance...................................................   14
  Section 9.3       Maintenance of Properties...................................   14
  Section 9.4       Payment of Taxes and Claims.................................   15
  Section 9.5       Existence, Etc..............................................   15
Section 10.         Negative Covenants..........................................   15
  Section 10.1      Limitation on Debt..........................................   15
  Section 10.2      Limitation on Priority Debt.................................   15
  Section 10.3      Consolidated Net Worth......................................   15
  Section 10.4      Limitations or Liens........................................   15
  Section 10.5      Merger, Consolidation, Etc..................................   17
  Section 10.6      Sale of Assets, Etc.........................................   17
  Section 10.7      Disposal of Ownership of a Subsidiary.......................   18
  Section 10.8      Investments in Fairfax......................................   18
  Section 10.9      Nature of Business..........................................   18
  Section 10.10     Transactions with Affiliates................................   18
Section 11.         Events of Default...........................................   19
</Table>

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<Table>
<Caption>
SECTION                                       HEADING                             PAGE
----------------    ------------------------------------------------------------  ----
<S>                 <C>                                                           <C>
Section 12.         Remedies on Default, Etc....................................   20
  Section 12.1      Acceleration................................................   20
  Section 12.2      Other Remedies..............................................   21
  Section 12.3      Rescission..................................................   21
  Section 12.4      No Waivers or Election of Remedies, Expenses, Etc...........   21
Section 13.         Registration; Exchange; Substitution of Notes...............   21
  Section 13.1      Registration of Notes.......................................   21
  Section 13.2      Transfer and Exchange of Notes..............................   21
  Section 13.3      Replacement of Notes........................................   22
Section 14.         Payments on Notes...........................................   22
  Section 14.1      Place of Payment............................................   22
  Section 14.2      Home Office Payment.........................................   22
Section 15.         Expenses, Etc...............................................   23
  Section 15.1      Transaction Expenses........................................   23
  Section 15.2      Survival....................................................   23
Section 16.         Survival of Representations and Warranties; Entire             23
                    Agreement...................................................
Section 17.         Amendment and Waiver........................................   23
  Section 17.1      Requirements................................................   23
  Section 17.2      Solicitation of Holders of Notes............................   23
  Section 17.3      Binding Effect, Etc.........................................   24
  Section 17.4      Notes Held by Company, Etc..................................   24
Section 18.         Notices.....................................................   24
Section 19.         Reproduction of Documents...................................   24
Section 20.         Confidential Information....................................   25
Section 21.         Substitution of Purchaser...................................   25
Section 22.         Miscellaneous...............................................   26
  Section 22.1      Successors and Assigns......................................   26
  Section 22.2      Payments Due on Non-Business Days...........................   26
  Section 22.3      Severability................................................   26
  Section 22.4      Construction................................................   26
  Section 22.5..    Counterparts................................................   26
  Section 22.6..    Governing Law...............................................   26
Signature.......................................................................   27
</Table>

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<PAGE>

ATTACHMENTS TO THE NOTE PURCHASE AGREEMENT:

<Table>
<S>              <C>
Schedule A       Information Relating to Purchasers
Schedule B       Defined Terms
Schedule 4.9     Changes in Corporate Structure
Schedule 5.3     Disclosure Materials
Schedule 5.4     Subsidiaries of the Company and Ownership of Subsidiary
                 Stock
Schedule 5.5     Financial Statements
Schedule 5.8     Certain Litigation
Schedule 5.11    Patents, Etc.
Schedule 5.14    Use of Proceeds
Schedule 5.15    Existing Debt; Future Liens
Exhibit 1        Form of 7.49% Senior Note due November 30, 2006
Exhibit          Form of Opinion of Counsel for the Company
  4.4(a)
Exhibit          Form of Opinion of Donald L. Smith, Esq., General Counsel to
  4.4(b)         the Company
Exhibit          Form of Opinion of Special Counsel for the Travelers
  4.4(c)         Purchasers
</Table>

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<PAGE>

                           ODYSSEY RE HOLDINGS CORP.
                            140 Broadway, 39th Floor
                            New York, New York 10005
                    7.49% Senior Notes due November 30, 2006

                                                   Dated as of November 15, 2001

To the Purchasers listed in
  the attached Schedule A:

Ladies and Gentlemen:

     Odyssey Re Holdings Corp., a Delaware corporation (the "Company"), agrees
with the purchasers listed in the attached Schedule A (the "Purchasers") as
follows:

SECTION 1. AUTHORIZATION OF NOTES.

     The Company will authorize the issue and sale of $100,000,000 aggregate
principal amount of its 7.49% Senior Notes due November 30, 2006 (the "Notes,"
such term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement). The Notes shall be substantially in the form set
out in Exhibit 1, with such changes therefrom, if any, as may be approved by the
Purchasers and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

SECTION 2. SALE AND PURCHASE OF NOTES.

     Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser's name in Schedule A at the purchase price of
100% of the principal amount thereof. Each Purchaser's obligations hereunder are
several and not joint and no Purchaser shall have any obligation or liability to
any Person for the performance or nonperformance by any other Purchaser
hereunder.

SECTION 3. CLOSING.

     The sale and purchase of the Notes to be purchased by the Purchasers shall
occur at the offices of Chapman and Cutler, 111 West Monroe Street, Chicago,
Illinois 60603, at 10:00 a.m., Chicago time, at a closing (the "Closing") on
December 4, 2001 or on such other Business Day thereafter on or prior to
December 7, 2001 as may be agreed upon by the Company and the Purchasers. At the
Closing, the Company will deliver to each Purchaser the Notes to be purchased by
such Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as such Purchaser may request) dated the date
of the Closing and registered in such Purchaser's name (or in the name of its
nominee), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company. If at
the Closing the Company shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in Section
4 shall not have been fulfilled to any Purchaser's satisfaction, such Purchaser
shall, at its election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.

SECTION 4. CONDITIONS TO CLOSING.

     Each Purchaser's obligation to purchase and pay for the Notes to be sold to
such Purchaser at the Closing is subject to the fulfillment to such Purchaser's
satisfaction, prior to or at the Closing, of the following conditions:

          Section 4.1.  Representations and Warranties.  The representations and
     warranties of the Company in this Agreement shall be correct when made and
     at the time of the Closing.

          Section 4.2.  Performance; No Default.  The Company shall have
     performed and complied with all agreements and conditions contained in this
     Agreement required to be performed or complied with by it
<PAGE>

     prior to or at the Closing, and after giving effect to the issue and sale
     of the Notes (and the application of the proceeds thereof as contemplated
     by Schedule 5.14), no Default or Event of Default shall have occurred and
     be continuing. Neither the Company nor any Subsidiary shall have entered
     into any transaction since the date of the Memorandum that would have been
     prohibited by Section 10 had such Section applied since such date.

          Section 4.3. Compliance Certificates.

             (a) Officer's Certificate.  The Company shall have delivered to
        such Purchaser an Officer's Certificate, dated the date of the Closing,
        certifying that the conditions specified in Sections 4.1, 4.2 and 4.9
        have been fulfilled.

             (b) Secretary's Certificate.  The Company shall have delivered to
        such Purchaser a certificate certifying as to the resolutions attached
        thereto and other corporate proceedings relating to the authorization,
        execution and delivery of the Notes and this Agreement.

          Section 4.4. Opinions of Counsel.  Such Purchaser shall have received
     opinions in form and substance satisfactory to such Purchaser, dated the
     date of the Closing (a) from Shearman & Sterling, counsel for the Company,
     covering the matters set forth in Exhibit 4.4(a) and covering such other
     matters incident to the transactions contemplated hereby as such Purchaser
     or special counsel to the Travelers Purchasers may reasonably request (and
     the Company hereby instructs its counsel to deliver such opinion to such
     Purchaser), (b) from Donald L. Smith, Esq., General Counsel to the Company,
     covering the matters set forth in Exhibit 4.4(b) and covering such other
     matters incident to the transactions contemplated hereby as such Purchaser
     or special counsel to the Travelers Purchasers may reasonably request and
     (c) in the case of Zenith Insurance Company and the Travelers Purchasers,
     from Chapman and Cutler, special counsel to the Travelers Purchasers, in
     connection with such transactions, substantially in the form set forth in
     Exhibit 4.4(c) and covering such other matters incident to such
     transactions as such Travelers Purchaser may reasonably request.

          Section 4.5. Purchase Permitted by Applicable Law, Etc.  On the date
     of the Closing, such Purchaser's purchase of Notes shall (a) be permitted
     by the laws and regulations of each jurisdiction to which such Purchaser is
     subject, without recourse to provisions (such as Section 1405(a)(8) of the
     New York Insurance Law) permitting limited investments by insurance
     companies without restriction as to the character of the particular
     investment, (b) not violate any applicable law or regulation (including,
     without limitation, Regulation T, U or X of the Board of Governors of the
     Federal Reserve System) and (c) not subject such Purchaser to any tax,
     penalty or liability under or pursuant to any applicable law or regulation.
     If requested by such Purchaser, such Purchaser shall have received an
     Officer's Certificate certifying as to such matters of fact as such
     Purchaser may reasonably specify to enable it to determine whether such
     purchase is so permitted.

          Section 4.6. Related Transactions.  The Company shall have consummated
     the sale of the entire principal amount of the Notes scheduled to be sold
     on the date of the Closing pursuant to this Agreement.

          Section 4.7. Payment of Special Counsel Fees.  Without limiting the
     provisions of Section 15.1, the Company shall have paid on or before the
     Closing the fees, charges and disbursements of special counsel to the
     Travelers Purchasers and original drafting counsel referred to in Section
     4.4 to the extent reflected in a statement of such counsel rendered to the
     Company no later than 12:00 noon Chicago time one Business Day prior to the
     Closing.

          Section 4.8. Private Placement Number.  A Private Placement number
     issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
     Securities Valuation Office of the National Association of Insurance
     Commissioners) shall have been obtained for the Notes.

          Section 4.9. Changes in Corporate Structure.  Except as specified in
     Schedule 4.9, the Company shall not have changed its jurisdiction of
     incorporation or been a party to any merger or consolidation and shall not
     have succeeded to all or any substantial part of the liabilities of any
     other entity, at any time following the date of the most recent financial
     statements referred to in Schedule 5.5.

                                        2
<PAGE>

          Section 4.10. Funding Instructions.  At least three Business Days
     prior to the date of the Closing, such Purchaser shall have received
     written instructions executed by an authorized financial officer of the
     Company directing the manner of the payment of funds and setting forth (a)
     the name of the transferee bank, (b) such transferee bank's ABA number, (c)
     the account name and number into which the purchase price for the Notes is
     to be deposited and (d) the name and telephone number of the account
     representative responsible for verifying receipt of such funds.

          Section 4.11. Proceedings and Documents.  All corporate and other
     proceedings in connection with the transactions contemplated by this
     Agreement and all documents and instruments incident to such transactions
     shall be satisfactory to such Purchaser and special counsel to the
     Travelers Purchasers, and such Purchaser and special counsel to the
     Travelers Purchasers shall have received all such counterpart originals or
     certified or other copies of such documents as such Purchaser or special
     counsel to the Travelers Purchasers may reasonably request.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     The Company represents and warrants to each Purchaser that:

          Section 5.1. Organization; Power and Authority.  The Company is a
     corporation duly organized, validly existing and in good standing under the
     laws of its jurisdiction of incorporation, and is duly qualified as a
     foreign corporation and is in good standing in each jurisdiction in which
     such qualification is required by law, other than those jurisdictions as to
     which the failure to be so qualified or in good standing could not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect. The Company has the corporate power and authority to own or
     hold under lease the properties it purports to own or hold under lease, to
     transact the business it transacts and proposes to transact, to execute and
     deliver this Agreement and the Notes and to perform the provisions hereof
     and thereof.

          Section 5.2. Authorization, Etc.  This Agreement and the Notes have
     been duly authorized by all necessary corporate action on the part of the
     Company, and this Agreement constitutes, and upon execution and delivery
     thereof each Note will constitute, a legal, valid and binding obligation of
     the Company enforceable against the Company in accordance with its terms,
     except as such enforceability may be limited by (a) applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     enforcement of creditors' rights generally and (b) general principles of
     equity (regardless of whether such enforceability is considered in a
     proceeding in equity or at law).

          Section 5.3. Disclosure.  The Company, through its lead agent, Banc of
     America Securities LLC, has delivered to each Purchaser a copy of a Private
     Placement Memorandum, dated October 2001 and various enclosures related
     thereto (collectively, the "Memorandum"), relating to the transactions
     contemplated hereby. The Memorandum fairly describes, in all material
     respects, the general nature of the business and principal properties of
     the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this
     Agreement, the Memorandum, the documents, certificates or other writings
     delivered to the Purchasers by or on behalf of the Company in connection
     with the transactions contemplated hereby and the financial statements
     listed in Schedule 5.5, taken as a whole, do not contain any untrue
     statement of a material fact or omit to state any material fact necessary
     to make the statements therein not misleading in light of the circumstances
     under which they were made. Except as disclosed in the Memorandum or as
     expressly described in Schedule 5.3, or in one of the documents,
     certificates or other writings identified therein, or in the financial
     statements listed in Schedule 5.5, since December 31, 2000, there has been
     no change in the financial condition, operations, business, properties or
     prospects of the Company or any Subsidiary except changes that,
     individually or in the aggregate, could not reasonably be expected to have
     a Material Adverse Effect. There is no fact known to the Company that could
     reasonably be expected to have a Material Adverse Effect that has not been
     set forth herein or in the Memorandum or in the other documents,
     certificates and other writings delivered to the Purchasers by or on behalf
     of the Company specifically for use in connection with the transactions
     contemplated hereby.

                                        3
<PAGE>

          Section 5.4. Organization and Ownership of Shares of Subsidiaries;
     Affiliates.

             (a) Schedule 5.4 contains (except as noted therein) complete and
        correct lists (1) of the Company's Subsidiaries, showing, as to each
        Subsidiary, the correct name thereof, the jurisdiction of its
        organization, and the percentage of shares of each class of its capital
        stock or similar equity interests outstanding owned by the Company and
        each other Subsidiary, (2) of the Company's Affiliates, other than
        Subsidiaries, and (3) of the Company's directors and senior officers.

             (b) All of the outstanding shares of capital stock or similar
        equity interests of each Subsidiary shown in Schedule 5.4 as being owned
        by the Company and its Subsidiaries have been validly issued, are fully
        paid and nonassessable and are owned by the Company or another
        Subsidiary free and clear of any Lien (except as otherwise disclosed in
        Schedule 5.4).

             (c) Each Subsidiary identified in Schedule 5.4 is a corporation or
        other legal entity duly organized, validly existing and in good standing
        under the laws of its jurisdiction of organization, and is duly
        qualified as a foreign corporation or other legal entity and is in good
        standing in each jurisdiction in which such qualification is required by
        law, other than those jurisdictions as to which the failure to be so
        qualified or in good standing could not, individually or in the
        aggregate, reasonably be expected to have a Material Adverse Effect.
        Each such Subsidiary has the corporate or other power and authority to
        own or hold under lease the properties it purports to own or hold under
        lease and to transact the business it transacts and proposes to
        transact.

             (d) No Subsidiary is a party to, or otherwise subject to any legal
        restriction or any agreement (other than this Agreement, the agreements
        listed on Schedule 5.4 and customary limitations imposed by corporate
        law and insurance regulatory statutes) restricting the ability of such
        Subsidiary to pay dividends out of profits or make any other similar
        distributions of profits to the Company or any of its Subsidiaries that
        owns outstanding shares of capital stock or similar equity interests of
        such Subsidiary.

          Section 5.5. Financial Statements.  The Company has delivered to each
     Purchaser copies of the financial statements of the Company and its
     Subsidiaries listed on Schedule 5.5. All of said financial statements
     (including in each case the related schedules and notes) fairly present, in
     all material respects, the consolidated financial position of the Company
     and its Subsidiaries as of the respective dates specified in such Schedule
     and the consolidated results of their operations and cash flows for the
     respective periods so specified and have been prepared in accordance with
     GAAP consistently applied throughout the periods involved except as set
     forth in the notes thereto (subject, in the case of any interim financial
     statements, to normal year-end adjustments).

          Section 5.6. Compliance with Laws, Other Instruments, Etc.  The
     execution, delivery and performance by the Company of this Agreement and
     the Notes will not (a) contravene, result in any breach of, or constitute a
     default under, or result in the creation of any Lien in respect of any
     property of the Company or any Subsidiary under, any indenture, mortgage,
     deed of trust, loan, purchase or credit agreement, lease, corporate charter
     or by-laws, or any other agreement or instrument to which the Company or
     any Subsidiary is bound or by which the Company or any Subsidiary or any of
     their respective properties may be bound or affected, (b) conflict with or
     result in a breach of any of the terms, conditions or provisions of any
     order, judgment, decree, or ruling of any court, arbitrator or Governmental
     Authority applicable to the Company or any Subsidiary or (c) violate any
     provision of any statute or other rule or regulation of any Governmental
     Authority applicable to the Company or any Subsidiary.

          Section 5.7. Governmental Authorizations, Etc.  No consent, approval
     or authorization of, or registration, filing or declaration with, any
     Governmental Authority is required in connection with the execution,
     delivery or performance by the Company of this Agreement or the Notes.

          Section 5.8. Litigation; Observance of Agreements, Statutes and
     Orders.

             (a) Except as disclosed in Schedule 5.8, there are no actions,
        suits or proceedings pending or, to the knowledge of the Company,
        threatened against or affecting the Company or any Subsidiary or any
        property of the Company or any Subsidiary in any court or before any
        arbitrator of any kind or

                                        4
<PAGE>

        before or by any Governmental Authority that, individually or in the
        aggregate, could reasonably be expected to have a Material Adverse
        Effect.

             (b) Neither the Company nor any Subsidiary is in default under any
        term of any agreement or instrument to which it is a party or by which
        it is bound, or any order, judgment, decree or ruling of any court,
        arbitrator or Governmental Authority or is in violation of any
        applicable law, ordinance, rule or regulation (including, without
        limitation, Environmental Laws) of any Governmental Authority, which
        default or violation, individually or in the aggregate, could reasonably
        be expected to have a Material Adverse Effect.

          Section 5.9. Taxes.  The Company and its Subsidiaries have filed all
     tax returns that are required to have been filed in any jurisdiction, and
     have paid all taxes shown to be due and payable on such returns and all
     other taxes and assessments levied upon them or their properties, assets,
     income or franchises, to the extent such taxes and assessments have become
     due and payable and before they have become delinquent, except for any
     taxes and assessments (a) the amount of which is not, individually or in
     the aggregate, Material or (b) the amount, applicability or validity of
     which is currently being contested in good faith by appropriate proceedings
     and with respect to which the Company or a Subsidiary, as the case may be,
     has established adequate reserves in accordance with GAAP. The Company
     knows of no basis for any other tax or assessment that could reasonably be
     expected to have a Material Adverse Effect. The charges, accruals and
     reserves on the books of the Company and its Subsidiaries in respect of
     Federal, state or other taxes for all fiscal periods are adequate. The
     Federal income tax liabilities of the Company and its Subsidiaries have
     been determined by the Internal Revenue Service and paid for all fiscal
     years up to and including the fiscal year ended December 31, 1997.

          Section 5.10. Title to Property; Leases.  The Company and its
     Subsidiaries have good and sufficient title to their respective properties
     that, individually or in the aggregate, are Material, including all such
     properties reflected in the most recent audited balance sheet referred to
     in Section 5.5 or purported to have been acquired by the Company or any
     Subsidiary after said date (except as sold or otherwise disposed of in the
     ordinary course of business), in each case free and clear of Liens
     prohibited by this Agreement. All leases that, individually or in the
     aggregate, are Material are valid and subsisting and are in full force and
     effect in all material respects.

          Section 5.11. Licenses, Permits, Etc.  Except as disclosed in Schedule
     5.11.

             (a) the Company and its Subsidiaries own, possess or are licensed
        to use all licenses, permits, franchises, authorizations, patents,
        copyrights, service marks, trademarks, trade names and domain names, or
        rights thereto, that, individually or in the aggregate, are Material,
        without known material conflict with the rights of others;

             (b) to the best knowledge of the Company, no product of the Company
        infringes in any material respect any license, permit, franchise,
        authorization, patent, copyright, service mark, trademark, trade name,
        domain name or other right owned by any other Person; and

             (c) to the best knowledge of the Company, there is no Material
        violation by any Person of any right of the Company or any of its
        Subsidiaries with respect to any patent, copyright, service mark,
        trademark, trade name, domain name or other right owned or used by the
        Company or any of its Subsidiaries.

          Section 5.12. Compliance with ERISA.

             (a) The Company and each ERISA Affiliate have operated and
        administered each employee benefit plan (as defined in Section 3(3) of
        ERISA) in compliance with all applicable laws except for such instances
        of noncompliance as have not resulted in and could not reasonably be
        expected to result in a Material Adverse Effect. Neither the Company nor
        any ERISA Affiliate has incurred any liability pursuant to Title I or IV
        of ERISA or the penalty or excise tax provisions of the Code relating to
        employee benefit plans (as defined in Section 3(3) of ERISA), and no
        event, transaction or condition has occurred or exists that could
        reasonably be expected to result in the incurrence of any such liability
        by the Company or any ERISA Affiliate, or in the imposition of any Lien
        on any of the rights, properties or assets of the Company or any ERISA
        Affiliate, in either case pursuant to
                                        5
<PAGE>

        Title I or IV of ERISA or to such penalty or excise tax provisions or to
        Section 401(a)(29) or 412 of the Code, other than such liabilities or
        Liens as could not, individually or in the aggregate, reasonably be
        expected to result in a Material Adverse Effect.

             (b) The present value of the aggregate benefit liabilities under
        each of the Plans (other than Multiemployer Plans), determined as of the
        end of such Plan's most recently ended plan year on the basis of the
        actuarial assumptions specified for funding purposes in such Plan's most
        recent actuarial valuation report, did not exceed the aggregate current
        value of the assets of such Plan allocable to such benefit liabilities
        by more than $1,000,000 in the aggregate for all Plans.

             The term "benefit liabilities" has the meaning specified in Section
        4001 of ERISA and the terms "current value" and "present value" have the
        meanings specified in Section 3 of ERISA.

             (c) The Company and its ERISA Affiliates have not incurred
        withdrawal liabilities (and are not subject to contingent withdrawal
        liabilities) under Section 4201 or 4204 of ERISA in respect of
        Multiemployer Plans that could, individually or in the aggregate,
        reasonably be expected to result in a Material Adverse Effect.

             (d) The expected post-retirement benefit obligation (determined as
        of the last day of the Company's most recently ended fiscal year in
        accordance with Financial Accounting Standards Board Statement No. 106,
        without regard to liabilities attributable to continuation coverage
        mandated by Section 4980B of the Code) of the Company and its
        Subsidiaries is not Material.

             (e) The execution and delivery of this Agreement and the issuance
        and sale of the Notes hereunder will not involve any transaction that is
        subject to the prohibitions of Section 406(a) of ERISA or in connection
        with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D)
        of the Code. The representation by the Company in the first sentence of
        this Section 5.12(e) is made in reliance upon and subject to the
        accuracy of each Purchaser's representation in Section 6.2 as to the
        sources of the funds used to pay the purchase price of the Notes to be
        purchased by such Purchaser, and is made only as of the date each
        Purchaser's representation in Section 6.2 is made.

          Section 5.13. Private Offering by the Company.  Neither the Company
     nor anyone acting on its behalf has offered the Notes or any similar
     securities for sale to, or solicited any offer to buy any of the same from,
     or otherwise approached or negotiated in respect thereof with, any Person
     other than the Purchasers and not more than seventy-five (75) other
     Institutional Investors of the type described in clause (c) of the
     definition thereof, each of which has been offered the Notes at a private
     sale for investment. Neither the Company nor anyone acting on its behalf
     has taken, or will take, any action that would subject the issuance or sale
     of the Notes to the registration requirements of Section 5 of the
     Securities Act.

          Section 5.14. Use of Proceeds; Margin Regulations.  The Company will
     apply the proceeds of the sale of the Notes as set forth in Schedule 5.14.
     No part of the proceeds from the sale of the Notes hereunder will be used,
     directly or indirectly, for the purpose of buying or carrying any margin
     stock within the meaning of Regulation U of the Board of Governors of the
     Federal Reserve System (12 CFR 221), or for the purpose of buying or
     carrying or trading in any securities under such circumstances as to
     involve the Company in a violation of Regulation X of said Board (12 CFR
     224) or to involve any broker or dealer in a violation of Regulation T of
     said Board (12 CFR 220). Margin stock does not constitute more than 0% of
     the value of the consolidated assets of the Company and its Subsidiaries
     and the Company does not have any present intention that margin stock will
     constitute more than 0% of the value of such assets. As used in this
     Section, the terms "margin stock" and "purpose of buying or carrying" shall
     have the meanings assigned to them in said Regulation U.

          Section 5.15. Existing Indebtedness; Future Liens.

             (a) Except as described therein, Schedule 5.15 sets forth a
        complete and correct list of all outstanding Debt of the Company and its
        Subsidiaries as of September 30, 2001, since which date there has been
        no Material change in the amounts, interest rates, sinking funds,
        installment payments or maturities of the Debt of the Company or its
        Subsidiaries. Neither the Company nor
                                        6
<PAGE>

        any Subsidiary is in default and no waiver of default is currently in
        effect, in the payment of any principal or interest on any Debt of the
        Company or such Subsidiary and no event or condition exists with respect
        to any Debt of the Company or any Subsidiary that would permit (or that
        with notice or the lapse of time, or both, would permit) one or more
        Persons to cause such Debt to (b) Except as disclosed in Schedule 5.15,
        neither the Company nor any Subsidiary has agreed or consented to cause
        or permit in the future (upon the happening of a contingency or
        otherwise) any of its property, whether now owned or hereafter acquired,
        to be subject to a Lien not permitted by Section 10.4.

          Section 5.16. Foreign Assets Control Regulations, Etc.  Neither the
     sale of the Notes by the Company hereunder nor its use of the proceeds
     thereof will violate the Anti-Terrorism Order, the Trading with the Enemy
     Act, as amended, or any of the foreign assets control regulations of the
     United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
     amended) or any enabling legislation or executive order relating thereto.

          Section 5.17. Status under Certain Statutes.  Neither the Company nor
     any Subsidiary is required to be registered under the Investment Company
     Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as
     amended, the ICC Termination Act of 1995, as amended, or the Federal Power
     Act, as amended.

          Section 5.18. Environmental Matters.  Neither the Company nor any
     Subsidiary has knowledge of any claim or has received any notice of any
     claim, and no proceeding has been instituted raising any claim against the
     Company or any of its Subsidiaries or any of their respective real
     properties now or formerly owned, leased or operated by any of them or
     other assets, alleging any damage to the environment or violation of any
     Environmental Laws, except, in each case, such as could not reasonably be
     expected to result in a Material Adverse Effect. Except as otherwise
     disclosed to the Purchasers in writing:

             (a) neither the Company nor any Subsidiary has knowledge of any
        facts which would give rise to any claim, public or private, of
        violation of Environmental Laws or damage to the environment emanating
        from, occurring on or in any way related to real properties now or
        formerly owned, leased or operated by any of them or to other assets or
        their use, except, in each case, such as could not reasonably be
        expected to result in a Material Adverse Effect;

             (b) neither the Company nor any of its Subsidiaries has stored any
        Hazardous Materials on real properties now or formerly owned, leased or
        operated by any of them or has disposed of any Hazardous Materials in a
        manner contrary to any Environmental Laws in each case in any manner
        that could reasonably be expected to result in a Material Adverse
        Effect; and (c) all buildings on all real properties now owned, leased
        or operated by the Company or any of its Subsidiaries are in compliance
        with applicable Environmental Laws, except where failure to comply could
        not reasonably be expected to result in a Material Adverse Effect.

          Section 5.19. Notes Rank Pari Passu.  The obligations of the Company
     under this Agreement and the Notes rank at least pari passu in right of
     payment with all other Senior Debt (actual or contingent) of the Company,
     including, without limitation, all Senior Debt of the Company described in
     Schedule 5.15.

SECTION 6. REPRESENTATIONS OF THE PURCHASERS.

          Section 6.1. Purchase for Investment.  Each Purchaser represents that
     it is an Institutional Accredited Investor. Each Purchaser further
     represents that it is purchasing the Notes for its own account or for one
     or more separate accounts maintained by such Purchaser or for the account
     of one or more pension or trust funds and not with a view to the
     distribution thereof, provided that the disposition of such Purchaser's or
     such pension or trust fund's property shall at all times be within such
     Purchaser's or such pension or trust fund's control. Each Purchaser
     understands that the Notes have not been registered under the Securities
     Act or securities laws of any other applicable jurisdiction and may be
     resold only if registered pursuant to the provisions of the Securities Act
     or if an exemption from registration is available, except under
     circumstances where neither such registration nor such an exemption is
     required by law, and that the Company is not required to register the
     Notes.

                                        7
<PAGE>

          Section 6.2. Source of Funds.  Each Purchaser represents that at least
     one of the following statements is an accurate representation as to each
     source of funds (a "Source") to be used by such Purchaser to pay the
     purchase price of the Notes to be purchased by such Purchaser hereunder:

             (a) the Source is an "insurance company general account" within the
        meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
        95-60 (issued July 12, 1995) and there is no employee benefit plan,
        treating as a single plan all plans maintained by the same employer or
        employee organization, with respect to which the amount of the general
        account reserves and liabilities for all contracts held by or on behalf
        of such plan, exceeds 10% of the total reserves and liabilities of such
        general account (exclusive of separate account liabilities) plus
        surplus, as set forth in the NAIC Annual Statement filed with such
        Purchaser's state of domicile; or

             (b) the Source is either (1) an insurance company pooled separate
        account, within the meaning of PTE 90-1 (issued January 29, 1990), or
        (2) a bank collective investment fund, within the meaning of the PTE
        91-38 (issued July 12, 1991) and, except as such Purchaser has disclosed
        to the Company in writing pursuant to this paragraph (b) prior to the
        date of the Closing, no employee benefit plan or group of plans
        maintained by the same employer or employee organization beneficially
        owns more than 10% of all assets allocated to such pooled separate
        account or collective investment fund; or

             (c) the Source constitutes assets of an "investment fund" (within
        the meaning of Part V of the QPAM Exemption) managed by a "qualified
        professional asset manager" or "QPAM" (within the meaning of Part V of
        the QPAM Exemption), no employee benefit plan's assets that are included
        in such investment fund, when combined with the assets of all other
        employee benefit plans established or maintained by the same employer or
        by an affiliate (within the meaning of Section V(c)(1) of the QPAM
        Exemption) of such employer or by the same employee organization and
        managed by such QPAM, exceed 20% of the total client assets managed by
        such QPAM, the applicable conditions of Part I of the QPAM Exemption are
        satisfied, neither the QPAM nor a Person controlling or controlled by
        the QPAM (applying the definition of "control" in Section V(e) of the
        QPAM Exemption) owns a 5% or more interest in the Company and (1) the
        identity of such QPAM and (2) the names of all employee benefit plans
        whose assets are included in such investment fund have been disclosed to
        the Company in writing pursuant to this paragraph (c); or

             (d) the Source is a governmental plan; or

             (e) the Source is one or more employee benefit plans, or a separate
        account or trust fund comprised of one or more employee benefit plans,
        each of which has been identified to the Company in writing pursuant to
        this paragraph (e) prior to the date of the Closing; or

             (f) the Source does not include assets of any employee benefit
        plan, other than a plan exempt from the coverage of ERISA.

          As used in this Section 6.2, the terms "employee benefit plan,"
     "governmental plan," "party in interest" and "separate account" shall have
     the respective meanings assigned to such terms in Section 3 of ERISA, and
     the term "employee benefit plan" shall also include a "plan" as defined in
     Section 4975(e)(i) of the Code.

SECTION 7. INFORMATION AS TO COMPANY.

          Section 7.1. Financial and Business Information.  The Company shall
     deliver to each holder of Notes that is an Institutional Investor:

             (a) Quarterly Statements.  Within 60 days after the end of each
        quarterly fiscal period in each fiscal year of the Company (other than
        the last quarterly fiscal period of each such fiscal year), duplicate
        copies of:

                (1) a consolidated balance sheet of the Company and its
           Subsidiaries as at the end of such quarter, and

                                        8
<PAGE>

                (2) consolidated statements of operations and comprehensive
           income, changes in stockholders' equity and cash flows of the Company
           and its Subsidiaries for such quarter and (in the case of the second
           and third quarters) for the portion of the fiscal year ending with
           such quarter, setting forth in each case in comparative form the
           figures for the corresponding periods in the previous fiscal year,
           all in reasonable detail, prepared in accordance with GAAP applicable
           to quarterly financial statements generally, and certified by a
           Senior Financial Officer as fairly presenting, in all material
           respects, the financial position of the companies being reported on
           and their results of operations and cash flows, subject to changes
           resulting from year-end adjustments, provided that delivery within
           the time period specified above of copies of the Company's Quarterly
           Report on Form 10-Q prepared in compliance with the requirements
           therefor and filed with the Securities and Exchange Commission shall
           be deemed to satisfy the requirements of this Section 7.1(a);

             (b) Annual Statements.  Within 105 days after the end of each
        fiscal year of the Company, duplicate copies of,

                (1) a consolidated balance sheet of the Company and its
           Subsidiaries, as at the end of such year, and

                (2) consolidated statements of operations and comprehensive
           income, changes in stockholders' equity and cash flows of the Company
           and its Subsidiaries, for such year,

           setting forth in each case in comparative form the figures for the
           previous fiscal year, all in reasonable detail, prepared in
           accordance with GAAP, and accompanied by an opinion thereon of
           independent certified public accountants of recognized national
           standing, which opinion shall state that such financial statements
           present fairly, in all material respects, the consolidated financial
           position of the companies being reported upon and their results of
           operations and cash flows and have been prepared in conformity with
           GAAP, and that the examination of such accountants in connection with
           such financial statements has been made in accordance with generally
           accepted auditing standards, and that such audit provides a
           reasonable basis for such opinion in the circumstances, provided that
           the delivery within the time period specified above of the Company's
           Annual Report on Form 10-K for such fiscal year (together with the
           Company's annual report to stockholders, if any, prepared pursuant to
           Rule 14a-3 under the Exchange Act) prepared in accordance with the
           requirements therefor and filed with the Securities and Exchange
           Commission shall be deemed to satisfy the requirements of this
           Section 7.1(b);

             (c) SEC and Other Reports.  Promptly upon their becoming available,
        one copy of (1) each financial statement, report, notice or proxy
        statement sent by the Company or any Subsidiary to public securities
        holders generally and (2) each regular or periodic report, each
        registration statement that has become effective (without exhibits
        except as expressly requested by such holder), and each final prospectus
        and all amendments thereto filed by the Company or any Subsidiary with
        the Securities and Exchange Commission and of all press releases and
        other statements made available generally by the Company or any
        Subsidiary to the public concerning developments that are Material;

             (d) Notice of Default or Event of Default.  Promptly, and in any
        event within five Business Days after a Responsible Officer becoming
        aware of the existence of any Default or Event of Default or that any
        Person has given any notice or taken any action with respect to a
        claimed default hereunder or that any Person has given any notice or
        taken any action with respect to a claimed default of the type referred
        to in Section 11(f), a written notice specifying the nature and period
        of existence thereof and what action the Company is taking or proposes
        to take with respect thereto;

             (e) ERISA Matters.  Promptly, and in any event within five Business
        Days after a Responsible Officer becoming aware of any of the following,
        a written notice setting forth the nature thereof and the action, if
        any, that the Company or an ERISA Affiliate proposes to take with
        respect thereto:

                                        9
<PAGE>

                (1) with respect to any Plan, any reportable event, as defined
           in Section 4043(c) of ERISA, for which notice thereof has not been
           waived pursuant to the applicable regulations if such reportable
           event could reasonably be expected to have a Material Adverse Effect,
           it being agreed that an event required to be reported pursuant to
           Department of Labor Regulation Section 4043.25, 4043.26 or 4043.33
           shall, in any event, be subject to the notice requirement of this
           Section 7.1(e)(1); or

                (2) the taking by the PBGC of steps to institute, or the
           threatening by the PBGC of the institution of, proceedings under
           Section 4042 of ERISA for the termination of, or the appointment of a
           trustee to administer, any Plan, or the receipt by the Company or any
           ERISA Affiliate of a notice from a Multiemployer Plan that such
           action has been taken by the PBGC with respect to such Multiemployer
           Plan; or

                (3) any event, transaction or condition that could result in the
           incurrence of any liability by the Company or any ERISA Affiliate
           pursuant to Title I or IV of ERISA or the penalty or excise tax
           provisions of the Code relating to employee benefit plans, or in the
           imposition of any Lien on any of the rights, properties or assets of
           the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
           or such penalty or excise tax provisions, if such liability or Lien,
           taken together with any other such liabilities or Liens then
           existing, could reasonably be expected to have a Material Adverse
           Effect;

             (f) Notices from Governmental Authority.  Promptly, and in any
        event within 30 days of receipt thereof, copies of any notice to the
        Company or any Subsidiary from any Federal or state Governmental
        Authority relating to any order, ruling, statute or other law or
        regulation that could reasonably be expected to have a Material Adverse
        Effect; and

             (g) Requested Information.  With reasonable promptness, such other
        data and information relating to the business, operations, affairs,
        financial condition, assets or properties of the Company or any of its
        Subsidiaries or relating to the ability of the Company to perform its
        obligations hereunder and under the Notes as from time to time may be
        reasonably requested by any such holder of Notes.

          Section 7.2. Officer's Certificate.  Each set of financial statements
     delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
     hereof shall be accompanied by a certificate of a Senior Financial Officer
     setting forth:

             (a) Covenant Compliance.  The information (including detailed
        calculations) required in order to establish whether the Company was in
        compliance with the requirements of Section 10.1 through Section 10.8
        hereof, inclusive, during the quarterly or annual period covered by the
        statements then being furnished (including with respect to each such
        Section, where applicable, the calculations of the maximum or minimum
        amount, ratio or percentage, as the case may be, permissible under the
        terms of such Section, and the calculation of the amount, ratio or
        percentage then in existence); and

             (b) Event of Default.  Statement that such officer has reviewed the
        relevant terms hereof and has made, or caused to be made, under his or
        her supervision, a review of the transactions and conditions of the
        Company and its Subsidiaries from the beginning of the quarterly or
        annual period covered by the statements then being furnished to the date
        of the certificate and that such review shall not have disclosed the
        existence during such period of any condition or event that constitutes
        a Default or an Event of Default or, if any such condition or event
        existed or exists (including, without limitation, any such event or
        condition resulting from the failure of the Company or any Subsidiary to
        comply with any Environmental Law), specifying the nature and period of
        existence thereof and what action the Company shall have taken or
        proposes to take with respect thereto.

          Section 7.3. Inspection.  The Company shall permit the representatives
     of each holder of Notes that is an Institutional Investor:

             (a) No Default.  If no Default or Event of Default then exists, at
        the expense of such holder and upon reasonable prior notice to the
        Company, to visit the principal executive office of the
                                        10
<PAGE>

        Company, to discuss the affairs, finances and accounts of the Company
        and its Subsidiaries with the Company's officers, and (with the consent
        of the Company, which consent will not be unreasonably withheld) to
        visit the other offices and properties of the Company and each
        Subsidiary, all at such reasonable times and as often as may be
        reasonably requested in writing; and

             (b) Default.  If a Default or Event of Default then exists, at the
        expense of the Company to visit and inspect any of the offices or
        properties of the Company or any Subsidiary, to examine all their
        respective books of account, records, reports and other papers, to make
        copies and extracts therefrom, and to discuss their respective affairs,
        finances and accounts with their respective officers and independent
        public accountants (and by this provision the Company authorizes said
        accountants to discuss the affairs, finances and accounts of the Company
        and its Subsidiaries), all at such times and as often as may be
        requested.

SECTION 8. PREPAYMENT OF THE NOTES.

          Section 8.1. Required Prepayments.

             (a) The Notes shall not be subject to any required prepayment prior
        to the final maturity thereof.

             (b) On the maturity date of the Notes, the Company will pay the
        then outstanding principal amount of Notes together with interest
        accrued thereon.

          Section 8.2. Optional Prepayments with Make-Whole Amount.  The Company
     may, at its option, upon notice as provided below, prepay at any time all,
     or from time to time any part of, the Notes, in an amount not less than
     $1,000,000 of the aggregate principal amount of the Notes then outstanding
     in the case of a partial prepayment, at 100% of the principal amount so
     prepaid, plus the Make-Whole Amount, if any, determined for the prepayment
     date with respect to such principal amount. The Company will give each
     holder of Notes written notice of each optional prepayment under this
     Section 8.2 not less than 30 days and not more than 60 days prior to the
     date fixed for such prepayment. Each such notice shall specify such date,
     the aggregate principal amount of the Notes to be prepaid on such date, the
     principal amount of each Note held by such holder to be prepaid (determined
     in accordance with Section 8.4), and the interest to be paid on the
     prepayment date with respect to such principal amount being prepaid, and
     shall be accompanied by a certificate of a Senior Financial Officer as to
     the estimated Make-Whole Amount due in connection with such prepayment
     (calculated as if the date of such notice were the date of the prepayment),
     setting forth the details of such computation. Two Business Days prior to
     such prepayment, the Company shall deliver to each holder of Notes a
     certificate of a Senior Financial Officer specifying the calculation of
     such Make-Whole Amount as of the specified prepayment date.

          Section 8.3. Prepayment of Notes upon Change in Control.

             (a) Notice of Change in Control.  The Company will, within 15
        Business Days after any Responsible Officer has knowledge of the
        occurrence of any Change in Control or Control Event, give written
        notice of such Change in Control or Control Event to each holder of
        Notes unless notice in respect of such Change in Control (or Change in
        Control contemplated by such Control Event) shall have been given
        pursuant to paragraph (b) of this Section 8.3. If a Change in Control
        has occurred, such notice shall contain and constitute an offer to
        prepay Notes as described in paragraph (c) of this Section 8.3 and shall
        be accompanied by the certificate described in paragraph (g) of this
        Section 8.3.

             (b) Condition to Company Action.  The Company will not take any
        action that consummates or finalizes a Change in Control unless (1) at
        least 30 days prior to such action it shall have given to each holder of
        Notes written notice containing and constituting an offer to prepay
        Notes as described in paragraph (c) of this Section 8.3, accompanied by
        the certificate described in paragraph (g) of this Section 8.3, and (2)
        contemporaneously with such action, it prepays all Notes required to be
        prepaid in accordance with this Section 8.3.

             (c) Offer to Prepay Notes.  The offer to prepay Notes contemplated
        by paragraphs (a) and (b) of this Section 8.3 shall be an offer to
        prepay, in accordance with and subject to this

                                        11
<PAGE>

        Section 8.3, all, but not less than all, the Notes held by each holder
        (in this case only, "holder" in respect of any Note registered in the
        name of a nominee for a disclosed beneficial owner shall mean such
        beneficial owner) on a date specified in such offer (the "Proposed
        Prepayment Date"). If such Proposed Prepayment Date is in connection
        with an offer contemplated by paragraph (a) of this Section 8.3, such
        date shall be not less than 30 days and not more than 60 days after the
        date of such offer (if the Proposed Prepayment Date shall not be
        specified in such offer, the Proposed Prepayment Date shall be the
        thirtieth day after the date of such offer). If such Proposed Prepayment
        Date is in connection with an offer contemplated by paragraph (b) of
        this Section 8.3, such date shall be the proposed date of the Change in
        Control.

             (d) Acceptance/Rejection.  A holder of Notes may accept or reject
        the offer to prepay Notes made pursuant to this Section 8.3 by causing a
        notice of such acceptance or rejection to be delivered to the Company
        within 15 Business Days after receipt of the notice specified in
        paragraph (a) or paragraph (b) above; provided that if such Proposed
        Prepayment Date shall be deferred pursuant to paragraph (f) of this
        Section 8.3 for more than 10 Business Days, then any acceptance of an
        offer may be rescinded by a holder by written notice delivered to the
        Company not less than three days prior to any deferred prepayment date.
        A failure by a holder of Notes to respond to an offer to prepay made
        pursuant to this Section 8.3 shall be deemed to constitute a rejection
        of such offer by such holder.

             (e) Prepayment.  Prepayment of the Notes to be prepaid pursuant to
        this Section 8.3 shall be at 100% of the principal amount of such Notes,
        together with interest on such Notes accrued to the date of prepayment
        but without any premium. The prepayment shall be made on the Proposed
        Prepayment Date except as provided in paragraph (f) of this Section 8.3.

             (f) Deferral Pending Change in Control.  The obligation of the
        Company to prepay Notes pursuant to the offers required by paragraph (b)
        and accepted in accordance with paragraph (d) of this Section 8.3 is
        subject to the occurrence of the Change in Control in respect of which
        such offers and acceptances shall have been made. In the event that such
        Change in Control does not occur on the Proposed Prepayment Date in
        respect thereof, the prepayment shall be deferred until, and shall be
        made on the date on which, such Change in Controls occurs. The Company
        shall keep each holder of Notes reasonably and timely informed of (1)
        any such deferral of the date of prepayment, (2) the date on which such
        Change in Control and the prepayment are expected to occur and (3) any
        determination by the Company that efforts to effect such Change in
        Control have ceased or been abandoned (in which case the offers and
        acceptances made pursuant to this Section 8.3 in respect of such Change
        in Control shall be deemed rescinded).

             (g) Officer's Certificate.  Each offer to prepay the Notes pursuant
        to this Section 8.3 shall be accompanied by a certificate, executed by a
        Senior Financial Officer of the Company and dated the date of such
        offer, specifying: (1) the Proposed Prepayment Date; (2) that such offer
        is made pursuant to this Section 8.3; (3) the principal amount of each
        Note offered to be prepaid; (4) the interest that would be due on each
        Note offered to be prepaid, accrued to the Proposed Prepayment Date; (5)
        that the conditions of this Section 8.3 have been fulfilled; and (6) in
        reasonable detail, the nature and date or proposed date of the Change in
        Control.

             (h) Change in Control Defined.  "Change in Control" shall be deemed
        to have occurred if any Person or Persons acting in concert (other than
        Fairfax), together with Affiliates thereof, shall in the aggregate,
        directly or indirectly, control or own (beneficially or otherwise) more
        than 50% of the issued and outstanding common stock of the Company.

             (i) Control Event Defined.  "Control Event" shall mean:

                (1) the execution by the Company or any of its Subsidiaries or
           Affiliates of any agreement or letter of intent with respect to any
           proposed transaction or event or series of transactions or events
           which, individually or in the aggregate, may reasonably be expected
           to result in a Change in Control,

                                        12
<PAGE>

                (2) the execution of any written agreement which, when fully
           performed by the parties thereto, would result in a Change in
           Control, or

                (3) the making of any written offer by any person (as such term
           is used in Section 13(d) and Section 14(d)(2) of the Exchange Act as
           in effect on the date of the Closing) or related persons constituting
           a group (as such term is used in Section 13(d) and Section 14(d)(2)
           of the Exchange Act as in effect on the date of the Closing) to the
           holders of the common stock of the Company, which offer, if accepted
           by the requisite number of holders, would result in a Change in
           Control.

          Section 8.4. Allocation of Partial Prepayments.  In the case of each
     partial prepayment of the Notes pursuant to Section 8.2, the principal
     amount of the Notes to be prepaid shall be allocated among all of the Notes
     at the time outstanding in proportion, as nearly as practicable, to the
     respective unpaid principal amounts thereof not theretofore called for
     prepayment.

          Section 8.5. Maturity; Surrender, Etc.  In the case of each prepayment
     of Notes pursuant to this Section 8, the principal amount of each Note to
     be prepaid shall mature and become due and payable on the date fixed for
     such prepayment, together with interest on such principal amount accrued to
     such date and the applicable Make-Whole Amount, if any. From and after such
     date, unless the Company shall fail to pay such principal amount when so
     due and payable, together with the interest and Make-Whole Amount, if any,
     as aforesaid, interest on such principal amount shall cease to accrue. Any
     Note paid or prepaid in full shall be surrendered to the Company and
     cancelled and shall not be reissued, and no Note shall be issued in lieu of
     any prepaid principal amount of any Note.

          Section 8.6. Purchase of Notes.  The Company will not, and will not
     permit any Subsidiary to, purchase, redeem, prepay or otherwise acquire,
     directly or indirectly, any of the outstanding Notes except upon the
     payment or prepayment of the Notes in accordance with the terms of this
     Agreement and the Notes. The Company will promptly cancel all Notes
     acquired by it or any Subsidiary pursuant to any payment, prepayment or
     purchase of Notes pursuant to any provision of this Agreement and no Notes
     may be issued in substitution or exchange for any such Notes.

          Section 8.7. Make-Whole Amount.  The term "Make-Whole Amount" means,
     with respect to any Note, an amount equal to the excess, if any, of the
     Discounted Value of the Remaining Scheduled Payments with respect to the
     Called Principal of such Note over the amount of such Called Principal,
     provided that the Make-Whole Amount may in no event be less than zero. For
     the purposes of determining the Make-Whole Amount, the following terms have
     the following meanings:

             "Called Principal" shall mean, with respect to any Note, the
        principal of such Note that is to be prepaid pursuant to Section 8.2 or
        has become or is declared to be immediately due and payable pursuant to
        Section 12.1, as the context requires.

             "Discounted Value" shall mean, with respect to the Called Principal
        of any Note, the amount obtained by discounting all Remaining Scheduled
        Payments with respect to such Called Principal from their respective
        scheduled due dates to the Settlement Date with respect to such Called
        Principal, in accordance with accepted financial practice and at a
        discount factor (applied on the same periodic basis as that on which
        interest on the Notes is payable) equal to the Reinvestment Yield with
        respect to such Called Principal.

             "Reinvestment Yield" shall mean, with respect to the Called
        Principal of any Note, 0.50% over the yield to maturity implied by (a)
        the yields reported, as of 10:00 a.m. (New York, New York time) on the
        second Business Day preceding the Settlement Date with respect to such
        Called Principal, on the display designated as "Page PX1" on the
        Bloomberg Financial Services Screen (or such other display as may
        replace Page PX1 on the Bloomberg Financial Services Screen) for
        actively traded U.S. Treasury securities having a maturity equal to the
        Remaining Average Life of such Called Principal as of such Settlement
        Date, or (b) if such yields are not reported as of such time or the
        yields reported as of such time are not ascertainable, the Treasury
        Constant Maturity Series Yields reported, for the latest day for which
        such yields have been so reported as of the second Business Day
        preceding the Settlement Date with respect to such Called

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        Principal, in Federal Reserve Statistical Release H.15 (519) (or any
        comparable successor publication) for actively traded U.S. Treasury
        securities having a constant maturity equal to the Remaining Average
        Life of such Called Principal as of such Settlement Date. Such implied
        yield will be determined, if necessary, by (1) converting U.S. Treasury
        bill quotations to bond-equivalent yields in accordance with accepted
        financial practice and (2) interpolating linearly between (i) the
        actively traded U.S. Treasury security with the maturity closest to and
        greater than the Remaining Average Life and (ii) the actively traded
        U.S. Treasury security with the maturity closest to and less than the
        Remaining Average Life.

             "Remaining Average Life" shall mean, with respect to any Called
        Principal, the number of years (calculated to the nearest one-twelfth
        year) obtained by dividing (a) such Called Principal into (b) the sum of
        the products obtained by multiplying (1) the principal component of each
        Remaining Scheduled Payment with respect to such Called Principal by (2)
        the number of years (calculated to the nearest one-twelfth year) that
        will elapse between the Settlement Date with respect to such Called
        Principal and the scheduled due date of such Remaining Scheduled
        Payment.

             "Remaining Scheduled Payments" shall mean, with respect to the
        Called Principal of any Note, all payments of such Called Principal and
        interest thereon that would be due after the Settlement Date with
        respect to such Called Principal if no payment of such Called Principal
        were made prior to its scheduled due date, provided that if such
        Settlement Date is not a date on which interest payments are due to be
        made under the terms of the Notes, then the amount of the next
        succeeding scheduled interest payment will be reduced by the amount of
        interest accrued to such Settlement Date and required to be paid on such
        Settlement Date pursuant to Section 8.2 or 12.1.

             "Settlement Date" shall mean, with respect to the Called Principal
        of any Note, the date on which such Called Principal is to be prepaid
        pursuant to Section 8.2 or has become or is declared to be immediately
        due and payable pursuant to Section 12.1, as the context requires.

SECTION 9. AFFIRMATIVE COVENANTS.

     The Company covenants that so long as any of the Notes are outstanding:

          Section 9.1. Compliance with Law.  The Company will, and will cause
     each of its Subsidiaries to, comply with all laws, ordinances or
     governmental rules or regulations to which each of them is subject,
     including, without limitation, Environmental Laws, and will obtain and
     maintain in effect all licenses, certificates, permits, franchises and
     other governmental authorizations necessary to the ownership of their
     respective properties or to the conduct of their respective businesses, in
     each case to the extent necessary to ensure that non-compliance with such
     laws, ordinances or governmental rules or regulations or failures to obtain
     or maintain in effect such licenses, certificates, permits, franchises and
     other governmental authorizations could not, individually or in the
     aggregate, reasonably be expected to have a Material Adverse Effect.

          Section 9.2. Insurance.  The Company will, and will cause each of its
     Subsidiaries to, maintain, with insurers reasonably determined by the
     Company in good faith to be financially sound and reputable, insurance with
     respect to their respective properties and businesses against such
     casualties and contingencies, of such types, on such terms and in such
     amounts (including deductibles, co-insurance and self-insurance, if
     adequate reserves are maintained with respect thereto) as is customary in
     the case of entities of established reputations engaged in the same or a
     similar business and similarly situated.

          Section 9.3. Maintenance of Properties.  The Company will, and will
     cause each of its Subsidiaries to, maintain and keep, or cause to be
     maintained and kept, their respective properties in good repair, working
     order and condition (other than ordinary wear and tear), so that the
     business carried on in connection therewith may be properly conducted at
     all times, provided that this Section shall not prevent the Company or any
     Subsidiary from discontinuing the operation and the maintenance of any of
     its properties if such discontinuance is desirable in the conduct of its
     business and the Company has concluded that such discontinuance could not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect.

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<PAGE>

          Section 9.4. Payment of Taxes and Claims.  The Company will, and will
     cause each of its Subsidiaries to, file all tax returns required to be
     filed in any jurisdiction and to pay and discharge all taxes shown to be
     due and payable on such returns and all other taxes, assessments,
     governmental charges, or levies imposed on them or any of their properties,
     assets, income or franchises, to the extent such taxes and assessments have
     become due and payable and before they have become delinquent and all
     claims for which sums have become due and payable that have or might become
     a Lien on properties or assets of the Company or any Subsidiary, provided
     that neither the Company nor any Subsidiary need pay any such tax or
     assessment or claims if (a) the amount, applicability or validity thereof
     is contested by the Company or such Subsidiary on a timely basis in good
     faith and in appropriate proceedings, and the Company or such Subsidiary
     has established adequate reserves therefor in accordance with GAAP on the
     books of the Company or such Subsidiary or (b) the nonpayment of all such
     taxes and assessments in the aggregate could not reasonably be expected to
     have a Material Adverse Effect.

          Section 9.5. Corporate Existence, Etc.  The Company will at all times
     preserve and keep in full force and effect its corporate existence. Subject
     to Sections 10.5, 10.6 and 10.7, the Company will at all times preserve and
     keep in full force and effect the corporate existence of each of its
     Subsidiaries (unless merged into the Company or a Subsidiary) and all
     rights and franchises of the Company and its Subsidiaries unless, in the
     good faith judgment of the Company, the termination of or failure to
     preserve and keep in full force and effect such corporate existence, right
     or franchise could not, individually or in the aggregate, have a Material
     Adverse Effect.

SECTION 10. NEGATIVE COVENANTS.

     The Company covenants that so long as any of the Notes are outstanding:

          Section 10.1. Limitation on Debt.

             (a) The Company will not, at any time, permit Consolidated Debt to
        exceed 40% of Consolidated Total Capitalization.

             (b) The Company will not, at any time, permit Consolidated Short
        Term Debt to exceed 20% of Consolidated Total Capitalization.

          Section 10.2. Limitation on Priority Debt.  The Company will not, and
     will not permit any Subsidiary to, create, assume or incur or in any manner
     be or become liable in respect of any Priority Debt, unless at the time of
     issuance thereof and after giving effect thereto and to the application of
     the proceeds thereof, Priority Debt shall not exceed 10% of Consolidated
     Total Capitalization.

          Section 10.3. Consolidated Net Worth.  The Company will not, at any
     time, permit Consolidated Net Worth to be less than the sum of (a)
     $720,000,000, plus (b) an aggregate amount equal to 35% of its Consolidated
     Net Income (but, in each case, only if a positive number) for each
     completed fiscal year beginning with the fiscal year ending on December 31,
     2001.

          Section 10.4. Limitation on Liens.  The Company will not, and will not
     permit any of its Subsidiaries to, directly or indirectly create, incur,
     assume or permit to exist (upon the happening of a contingency or
     otherwise) any Lien on or with respect to any property or asset (including,
     without limitation, any document or instrument in respect of goods or
     accounts receivable) of the Company or any such Subsidiary, whether now
     owned or held or hereafter acquired, or any income or profits therefrom, or
     assign or otherwise convey any right to receive income or profits, except:

             (a) Liens for taxes, assessments or other governmental charges or
        levies which are not yet due and payable or the payment of which is not
        at the time required by Section 9.4;

             (b) statutory Liens of landlords, undetermined or inchoate Liens
        and other Liens imposed by law such as Liens of carriers, warehousemen,
        mechanics, materialmen and other similar Liens, in each case, incurred
        in the ordinary course of business for sums not yet due and payable or
        the payment of which is not at the time required by Section 9.4;

             (c) Liens (other than any Lien imposed by ERISA) incurred or
        deposits made in the ordinary course of business (1) in connection with
        workers' compensation, unemployment insurance, other

                                        15
<PAGE>

        types of social security or retirement benefits and insurance regulatory
        requirements, (2) to secure (or to obtain letters of credit that secure)
        the performance of tenders, statutory obligations, surety bonds, appeal
        bonds, bids, leases (other than Capital Leases), performance bonds,
        purchase, construction or sales contracts and other similar obligations
        or (3) to secure payments of claims under polices of reinsurance
        underwritten by any Subsidiary or letters of credit or reinsurance
        trusts established to secure such Subsidiaries obligations to make such
        payments, in each case, not incurred or made in connection with the
        borrowing of money, the obtaining of advances or credit or the payment
        of the deferred purchase price of property;

             (d) any attachment or judgment Lien, unless the judgment it secures
        shall not, within 60 days after the entry thereof, have been discharged
        or execution thereof stayed pending appeal, or shall not have been
        discharged within 60 days after the expiration of any such stay;

             (e) Liens on property or assets of a Subsidiary securing Debt owing
        to the Company or to any of its Wholly-Owned Subsidiaries;

             (f) Liens existing on the date of the Closing and described in
        Schedule 5.15;

             (g) leases or subleases granted to others, easements,
        rights-of-way, restrictions and other similar charges or encumbrances or
        minor survey exceptions, in each case incidental to, and not interfering
        with, the ordinary conduct of the business of the Company or any of its
        Subsidiaries, provided that such Liens do not, in the aggregate,
        materially detract from the value of such property;

             (h) any Lien created to secure all or any part of the purchase
        price, or to secure Debt incurred or assumed to pay all or any part of
        the purchase price or cost of construction, of property (or any
        improvement thereon) acquired or constructed by the Company or a
        Subsidiary after the date of the Closing, provided that

                (1) any such Lien shall extend solely to the item or items of
           such property (or improvement thereon) so acquired or constructed
           and, if required by the terms of the instrument originally creating
           such Lien, other property (or improvement thereon) which is an
           improvement to or is acquired for specific use in connection with
           such acquired or constructed property (or improvement thereon) or
           which is real property being improved by such acquired or constructed
           property (or improvement thereon),

                (2) the principal amount of the Debt secured by any such Lien
           shall at no time exceed an amount equal to the lesser of (i) the cost
           to the Company or such Subsidiary of the property (or improvement
           thereon) so acquired or constructed and (ii) the Fair Market Value
           (as determined in good faith by one or more officers of the Company
           to whom authority to enter into the related transaction has been
           delegated to by the board of directors of the Company) of such
           property (or improvement thereon) at the time of such acquisition or
           construction,

                (3) any such Lien shall be created contemporaneously with, or
           within 180 days after, the acquisition or construction of such
           property, and

                (4) the aggregate principal amount of all Debt secured by such
           Liens shall be permitted by the limitation set forth in Section 10.1;

             (i) any Lien existing on property of a Person immediately prior to
        its being consolidated with or merged into the Company or a Subsidiary
        or its becoming a Subsidiary, or any Lien existing on any property
        acquired by the Company or any Subsidiary at the time such property is
        so acquired (whether or not the Debt secured thereby shall have been
        assumed), provided that (1) no such Lien shall have been created or
        assumed in contemplation of such consolidation or merger or such
        Person's becoming a Subsidiary or such acquisition of property, (2) each
        such Lien shall extend solely to the item or items of property so
        acquired and, if required by the terms of the instrument originally
        creating such Lien, other property which is an improvement to or is
        acquired for specific use in connection with such acquired property and
        (3) the aggregate amount of all Debt secured by such Liens shall be
        permitted by the limitation set forth in Section 10.1;

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<PAGE>

             (j) any Lien renewing, extending or refunding any Lien permitted by
        paragraphs (f), (h) or (i) of this Section 10.4, provided that (1) the
        principal amount of Debt secured by such Lien immediately prior to such
        extension, renewal or refunding is not increased or the maturity thereof
        reduced, (2) such Lien is not extended to any other property and (3)
        immediately after such extension, renewal or refunding no Default or
        Event of Default would exist; and

             (k) other Liens not otherwise permitted by paragraphs (a) through
        (j), inclusive, of this Section 10.4, provided that the Priority Debt
        secured thereby shall be permitted by the limitation set forth in
        Section 10.2 at the time that the Lien securing such Priority Debt is
        created.

          Any Person that becomes a Subsidiary after the date of the Closing
     shall, for all purposes of this Section 10.4, be deemed to have created or
     incurred, at the time it becomes a Subsidiary, all outstanding Liens of
     such Person immediately after it becomes a Subsidiary, and any Person
     extending, renewing or refunding any Debt secured by any Lien shall be
     deemed to have incurred such Lien at the time of such extension, renewal or
     refunding.

          Section 10.5. Merger, Consolidation, Etc.  The Company will not, and
     will not permit any of its Subsidiaries to, consolidate with or merge with
     any other Person or convey, transfer or lease substantially all of its
     assets in a single transaction or series of transactions to any Person
     (except that a Subsidiary of the Company may (x) consolidate with or merge
     with, or convey, transfer or lease substantially all of its assets in a
     single transaction or series of transactions to, the Company or a
     Wholly-Owned Subsidiary of the Company and (y) convey, transfer or lease
     all of its assets in compliance with the provisions of Section 10.6 or
     10.7), provided that the foregoing restriction does not apply to the
     consolidation or merger of the Company with, or the conveyance, transfer or
     lease of substantially all of the assets of the Company in a single
     transaction or series of transactions to, any Person so long as:

             (a) the successor formed by such consolidation or the survivor of
        such merger or the Person that acquires by conveyance, transfer or lease
        substantially all of the assets of the Company as an entirety, as the
        case may be (the "Successor Corporation"), shall be a solvent
        corporation organized and existing under the laws of the United States
        or any State thereof (including the District of Columbia),

             (b) if the Company is not the Successor Corporation, (1) the
        Successor Corporation shall have executed and delivered to each holder
        of the Notes its assumption of the due and punctual performance and
        observance of each covenant and condition of this Agreement and the
        Notes (pursuant to such agreements and instruments as shall be
        reasonably satisfactory to the Required Holders) and (2) the Successor
        Corporation shall have caused to be delivered to each holder of any
        Notes an opinion of nationally recognized independent counsel, or other
        independent counsel reasonably satisfactory to the Required Holders, to
        the effect that all agreements or instruments effecting such assumption
        are enforceable in accordance with their terms and comply with the terms
        hereof;

             (c) immediately after giving effect to such transaction, no Default
        or Event of Default would exist.

          No such conveyance, transfer or lease of substantially all of the
     assets of the Company shall have the effect of releasing the Company or any
     Successor Corporation from its liability under this Agreement or the Notes.

          Section 10.6. Sale of Assets, Etc.  Except as permitted under Section
     10.5 and Section 10.7, the Company will not, and will not permit any of its
     Subsidiaries to, make any Asset Disposition unless:

             (a) in the good faith opinion of the Company, the Asset Disposition
        is in exchange for consideration having a Fair Market Value at least
        equal to that of the property exchanged and is in the best interest of
        the Company or such Subsidiary;

             (b) immediately after giving effect to the Asset Disposition, no
        Default or Event of Default would exist; and

                                        17
<PAGE>

             (c) immediately after giving effect to the Asset Disposition, the
        Disposition Value of all property that was the subject of any Asset
        Disposition occurring in the then current fiscal year of the Company
        would not exceed 10% of Consolidated Total Assets as of the end of the
        then most recently ended fiscal year of the Company.

          If the Net Proceeds Amount for any Transfer is applied to (1) a Debt
     Prepayment Application, (2) a Property Reinvestment Application or (3) to
     make payment of claims under policies of reinsurance underwritten by any
     Subsidiary, in each case within 180 days after such Transfer, then such
     Transfer, only for the purpose of determining compliance with subsection
     (c) of this Section 10.6 as of a date on or after the Net Proceeds Amount
     is so applied, shall be deemed not to be an Asset Disposition.

          Section 10.7. Disposal of Ownership of a Subsidiary.  The Company will
     not, and will not permit any of its Subsidiaries to, sell or otherwise
     dispose of any shares of Subsidiary Stock, nor will the Company permit any
     such Subsidiary to issue, sell or otherwise dispose of any shares of its
     own Subsidiary Stock, provided that the foregoing restrictions do not apply
     to:

             (a) the issue of directors' qualifying shares by any such
        Subsidiary;

             (b) any such Transfer of Subsidiary Stock constituting a Transfer
        described in clause (a) of the definition of "Asset Disposition"; and

             (c) the Transfer of the Subsidiary Stock of a Subsidiary of the
        Company owned by the Company and its other Subsidiaries, provided such
        Transfer satisfies the requirements of Section 10.6 hereof.

          Section 10.8. Investments in Fairfax.  The Company will not, and will
     not permit any of the Subsidiaries to, make or authorize any Investments in
     Fairfax or any Affiliate of Fairfax (other than the Company or any
     Subsidiary of the Company), unless immediately after giving effect to such
     action, (a) the aggregate value of all then outstanding Investments of the
     Company and its Subsidiaries in Fairfax made or authorized on or after the
     date of the Closing (valued immediately after such action) would not exceed
     $25,000,000, (b) the aggregate value of all then outstanding Investments of
     the Company and its Subsidiaries in any such Affiliate of Fairfax made or
     authorized on or after the date of the Closing (valued immediately after
     such action) would not exceed $25,000,000, provided that for purposes of
     this clause (b), the purchase by Odyssey Reinsurance Corporation of
     1,000,000 shares of Zenith National Insurance Corp. for an amount not
     exceeding $25,000,000 pursuant to the stock purchase agreement dated as of
     November 21, 2001 between Odyssey Reinsurance Corporation and Zenith
     National Insurance Corp. shall be deemed to have been made and authorized
     prior to the date of the Closing and (c) no Default or Event of Default
     would exist.

          Each Person which becomes a Subsidiary of the Company after the date
     of the Closing will be deemed to have made, on the date such Person becomes
     a Subsidiary of the Company, all Investments of such Person in Fairfax and
     any Affiliates of Fairfax in existence on such date. The Company and each
     Subsidiary will be deemed to have made, on the date any Person becomes an
     Affiliate of Fairfax after the date of the Closing, all Investments of the
     Company or such Subsidiary in such Person in existence on such date.
     Investments in any Person that ceases to be a Subsidiary of the Company
     after the date of the Closing (but remains an Affiliate of Fairfax and in
     which the Company or another Subsidiary continues to maintain an
     Investment) will be deemed to have been made on the date on which such
     Person ceases to be a Subsidiary of the Company.

          Section 10.9. Nature of Business.  The Company will not, and will not
     permit any of its Subsidiaries to, engage in any business if, as a result,
     the general nature of the business in which the Company and its
     Subsidiaries, taken as a whole, would then be engaged would be
     substantially changed from the general nature of the business in which the
     Company and its Subsidiaries, taken as a whole, are engaged on the date of
     the Closing as described in the Memorandum.

          Section 10.10. Transactions with Affiliates.  The Company will not,
     and will not permit any Subsidiary to, enter into directly or indirectly
     any Material transaction or Material group of related transactions
     (including, without limitation, the purchase, lease, sale or exchange of
     properties of any kind or the rendering of any service) with any Affiliate
     (other than the Company or another Subsidiary),
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<PAGE>

     except in the ordinary course and pursuant to the reasonable requirements
     of the Company's or such Subsidiary's business and upon fair and reasonable
     terms no less favorable to the Company or such Subsidiary than would be
     obtainable in a comparable arm's-length transaction with a Person not an
     Affiliate. Notwithstanding the foregoing but subject to the other terms of
     this Agreement, (a) the Company or any Subsidiary may enter into any
     transaction with an Affiliate that is expressly provided for by the
     Investment Management Agreements and the Investment Administration
     Agreements and (b) the Company may, at any time, prepay the Fairfax Debt so
     long as immediately prior to such prepayment and after giving effect
     thereto, no Default or Event of Default shall exist.

SECTION 11. EVENTS OF DEFAULT.

     An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

          (a) the Company defaults in the payment of any principal or Make-Whole
     Amount, if any, on any Note when the same becomes due and payable, whether
     at maturity or at a date fixed for prepayment or by declaration or
     otherwise; or

          (b) the Company defaults in the payment of any interest on any Note
     for more than five Business Days after the same becomes due and payable; or

          (c) the Company defaults in the performance of or compliance with any
     term contained in Sections 10.1 through 10.8, inclusive, and such default
     is not remedied within five Business Days after the occurrence of such
     default; or

          (d) the Company defaults in the performance of or compliance with any
     term contained herein (other than those referred to in paragraphs (a), (b)
     and (c) of this Section 11) and such default is not remedied within 30 days
     after the earlier of (1) a Responsible Officer obtaining actual knowledge
     of such default and (2) the Company receiving written notice of such
     default from any holder of a Note (any such written notice to be identified
     as a "notice of default" and to refer specifically to this paragraph (d) of
     Section 11); or

          (e) any representation or warranty made in writing by or on behalf of
     the Company or by any officer of the Company in this Agreement or in any
     writing furnished in connection with the transactions contemplated hereby
     proves to have been false or incorrect in any material respect on the date
     as of which made; or

          (f) (1) the Company or any Subsidiary is in default (as principal or
     as guarantor or other surety) in the payment of any principal of or premium
     or make-whole amount or interest on any Debt that is outstanding in an
     aggregate principal amount at least equal to 5% of Consolidated Net Worth
     beyond any period of grace provided with respect thereto, or (2) the
     Company or any Subsidiary is in default in the performance of or compliance
     with any term of any evidence of any Debt in an aggregate outstanding
     principal amount at least equal to 5% of Consolidated Net Worth or of any
     mortgage, indenture or other agreement relating thereto or any other
     condition exists, and as a consequence of such default or condition such
     Debt has become, or has been declared (or one or more Persons are entitled
     to declare such Debt to be), due and payable before its stated maturity or
     before its regularly scheduled dates of payment or (3) as a consequence of
     the occurrence or continuation of any event or condition (other than the
     passage of time or the right of the holder of Debt to convert such Debt
     into equity interests), (i) the Company or any Subsidiary has become
     obligated to purchase or repay Debt before its regular maturity or before
     its regularly scheduled dates of payment in an aggregate outstanding
     principal amount at least equal to 5% of Consolidated Net Worth or (ii) one
     or more Persons have the right to require the Company or any Subsidiary so
     to purchase or repay such Debt; or

          (g) the Company or any Significant Subsidiary (1) is generally not
     paying, or admits in writing its inability to pay, its debts as they become
     due, (2) files, or consents by answer or otherwise to the filing against it
     of, a petition for relief or reorganization or arrangement or any other
     petition in bankruptcy, for liquidation or to take advantage of any
     bankruptcy, insolvency, reorganization, moratorium or other similar law of
     any jurisdiction, (3) makes an assignment for the benefit of its creditors,
     (4) consents to

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<PAGE>

     the appointment of a custodian, receiver, trustee or other officer with
     similar powers with respect to it or with respect to any substantial part
     of its property, (5) is adjudicated as insolvent or to be liquidated or (6)
     takes corporate action for the purpose of any of the foregoing; or

          (h) a court or governmental authority of competent jurisdiction enters
     an order appointing, without consent by the Company or any of its
     Significant Subsidiaries, a custodian, receiver, trustee or other officer
     with similar powers with respect to it or with respect to any substantial
     part of its property, or constituting an order for relief or approving a
     petition for relief or reorganization or any other petition in bankruptcy
     or for liquidation or to take advantage of any bankruptcy or insolvency law
     of any jurisdiction, or ordering the dissolution, winding-up or liquidation
     of the Company or any of its Significant Subsidiaries, or any such petition
     shall be filed against the Company or any of its Significant Subsidiaries
     and such petition shall not be dismissed within 60 days; or

          (i) a final judgment or judgments for the payment of money aggregating
     in excess of 5% of Consolidated Net Worth are rendered against one or more
     of the Company and its Subsidiaries and which judgments are not, within 60
     days after entry thereof, bonded, discharged or stayed pending appeal, or
     are not discharged within 60 days after the expiration of such stay; or

          (j) if (1) any Plan shall fail to satisfy the minimum funding
     standards of ERISA or the Code for any plan year or part thereof or a
     waiver of such standards or extension of any amortization period is sought
     or granted under Section 412 of the Code, (2) a notice of intent to
     terminate any Plan shall have been filed with the PBGC or the PBGC shall
     have instituted proceedings under ERISA Section 4042 to terminate or
     appoint a trustee to administer any Plan or the PBGC shall have notified
     the Company or any ERISA Affiliate that a Plan will become a subject of any
     such proceedings, (3) the aggregate "amount of unfunded benefit
     liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under all
     Plans, determined in accordance with Title IV of ERISA, shall exceed 5% of
     Consolidated Net Worth, (4) the Company or any ERISA Affiliate shall have
     incurred or is reasonably expected to incur any liability pursuant to Title
     I or IV of ERISA or the penalty or excise tax provisions of the Code
     relating to employee benefit plans, (5) the Company or any ERISA Affiliate
     withdraws from any Multiemployer Plan or (6) the Company or any ERISA
     Affiliate establishes or amends any employee welfare benefit plan that
     provides post-employment welfare benefits (other than COBRA) in a manner
     that would increase the liability of the Company or any ERISA Affiliate
     thereunder; and any such event or events described in clauses (1) through
     (6) above, either individually or together with any other such event or
     events, could reasonably be expected to have a Material Adverse Effect.

          As used in Section 11(j), the terms "employee benefit plan" and
     "employee welfare benefit plan" shall have the respective meanings assigned
     to such terms in Section 3 of ERISA.

SECTION 12. REMEDIES ON DEFAULT, ETC.

          Section 12.1. Acceleration.

             (a) If an Event of Default with respect to the Company described in
        paragraph (g) or (h) of Section 11 (other than an Event of Default
        described in clause (1) of paragraph (g) or described in clause (6) of
        paragraph (g) by virtue of the fact that such clause encompasses clause
        (1) of paragraph (g)) has occurred, all the Notes then outstanding shall
        automatically become immediately due and payable.

             (b) If any other Event of Default has occurred and is continuing,
        the Required Holders may at any time at their option, by notice or
        notices to the Company, declare all the Notes then outstanding to be
        immediately due and payable.

             (c) If any Event of Default described in paragraph (a) or (b) of
        Section 11 has occurred and is continuing, any holder or holders of
        Notes at the time outstanding affected by such Event of Default may at
        any time, at its or their option, by notice or notices to the Company,
        declare all the Notes held by it or them to be immediately due and
        payable.

             Upon any Note's becoming due and payable under this Section 12.1,
        whether automatically or by declaration, such Note will forthwith mature
        and the entire unpaid principal amount of such

                                        20
<PAGE>

        Note, plus (1) all accrued and unpaid interest thereon and (2) the
        Make-Whole Amount, if any, determined in respect of such principal
        amount (to the full extent permitted by applicable law), shall all be
        immediately due and payable, in each and every case without presentment,
        demand, protest or further notice, all of which are hereby waived. The
        Company acknowledges, and the parties hereto agree, that each holder of
        a Note has the right to maintain its investment in the Notes free from
        repayment by the Company (except as herein specifically provided for),
        and that the provision for payment of a Make-Whole Amount by the Company
        in the event that the Notes are prepaid or are accelerated as a result
        of an Event of Default, is intended to provide compensation for the
        deprivation of such right under such circumstances.

          Section 12.2. Other Remedies.  If any Default or Event of Default has
     occurred and is continuing, and irrespective of whether any Notes have
     become or have been declared immediately due and payable under Section
     12.1, the holder of any Note at the time outstanding may proceed to protect
     and enforce the rights of such holder by an action at law, suit in equity
     or other appropriate proceeding, whether for the specific performance of
     any agreement contained herein or in any Note, or for an injunction against
     a violation of any of the terms hereof or thereof, or in aid of the
     exercise of any power granted hereby or thereby or by law or otherwise.

          Section 12.3. Rescission.  At any time after any Notes have been
     declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
     Required Holders, by written notice to the Company, may rescind and annul
     any such declaration and its consequences if (a) the Company has paid all
     overdue interest on the Notes, all principal of and Make-Whole Amount, if
     any, on any Notes that are due and payable and are unpaid other than by
     reason of such declaration, and all interest on such overdue principal and
     Make-Whole Amount, if any, and (to the extent permitted by applicable law)
     any overdue interest in respect of the Notes, at the Default Rate, (b) all
     Events of Default and Defaults, other than non-payment of amounts that have
     become due solely by reason of such declaration, have been cured or have
     been waived pursuant to Section 17 and (c) no judgment or decree has been
     entered for the payment of any monies due pursuant hereto or to the Notes.
     No rescission and annulment under this Section 12.3 will extend to or
     affect any subsequent Event of Default or Default or impair any right
     consequent thereon.

          Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.  No
     course of dealing and no delay on the part of any holder of any Note in
     exercising any right, power or remedy shall operate as a waiver thereof or
     otherwise prejudice such holder's rights, powers or remedies. No right,
     power or remedy conferred by this Agreement or by any Note upon any holder
     thereof shall be exclusive of any other right, power or remedy referred to
     herein or therein or now or hereafter available at law, in equity, by
     statute or otherwise. Without limiting the obligations of the Company under
     Section 15, the Company will pay to the holder of each Note on demand such
     further amount as shall be sufficient to cover all costs and expenses of
     such holder incurred in any enforcement or collection under this Section
     12, including, without limitation, reasonable attorneys' fees, expenses and
     disbursements.

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

          Section 13.1. Registration of Notes.  The Company shall keep at its
     principal executive office a register for the registration and registration
     of transfers of Notes. The name and address of each holder of one or more
     Notes, each transfer thereof and the name and address of each transferee of
     one or more Notes shall be registered in such register. Prior to due
     presentment for registration of transfer, the Person in whose name any Note
     shall be registered shall be deemed and treated as the owner and holder
     thereof for all purposes hereof, and the Company shall not be affected by
     any notice or knowledge to the contrary. The Company shall give to any
     holder of a Note that is an Institutional Investor promptly upon request
     therefor, a complete and correct copy of the names and addresses of all
     registered holders of Notes.

          Section 13.2. Transfer and Exchange of Notes.  Upon surrender of any
     Note at the principal executive office of the Company for registration of
     transfer or exchange (and in the case of a surrender for registration of
     transfer, duly endorsed or accompanied by a written instrument of transfer
     duly executed by the registered holder of such Note or its attorney duly
     authorized in writing and accompanied by the

                                        21
<PAGE>

     address for notices of each transferee of such Note or part thereof), the
     Company shall execute and deliver, at the Company's expense (except as
     provided below), one or more new Notes (as requested by the holder thereof)
     in exchange therefor, in an aggregate principal amount equal to the unpaid
     principal amount of the surrendered Note. Each such new Note shall be
     payable to such Person as such holder may request and shall be
     substantially in the form of Exhibit 1. Each such new Note shall be dated
     and bear interest from the date to which interest shall have been paid on
     the surrendered Note or dated the date of the surrendered Note if no
     interest shall have been paid thereon. The Company may require payment of a
     sum sufficient to cover any stamp tax or governmental charge imposed in
     respect of any such transfer of Notes. Notes shall not be transferred in
     denominations of less than $100,000, provided that if necessary to enable
     the registration of transfer by a holder of its entire holding of Notes,
     one Note may be in a denomination of less than $100,000. Any transferee, by
     its acceptance of a Note registered in its name (or the name of its
     nominee), shall be deemed to have made the representation set forth in
     Section 6.2.

          Section 13.3. Replacement of Notes.  Upon receipt by the Company of
     evidence reasonably satisfactory to it of the ownership of and the loss,
     theft, destruction or mutilation of any Note (which evidence shall be, in
     the case of an Institutional Investor, notice from such Institutional
     Investor of such ownership and such loss, theft, destruction or
     mutilation), and

             (a) in the case of loss, theft or destruction, of indemnity
        reasonably satisfactory to it (provided that if the holder of such Note
        is, or is a nominee for, a Purchaser or another holder of a Note with a
        minimum net worth of at least $50,000,000, such Person's own unsecured
        agreement of indemnity shall be deemed to be satisfactory), or

             (b) in the case of mutilation, upon surrender and cancellation
        thereof,

        the Company at its own expense shall execute and deliver, in lieu
        thereof, a new Note, dated and bearing interest from the date to which
        interest shall have been paid on such lost, stolen, destroyed or
        mutilated Note or dated the date of such lost, stolen, destroyed or
        mutilated Note if no interest shall have been paid thereon.

SECTION 14. PAYMENTS ON NOTES.

          Section 14.1. Place of Payment.  Subject to Section 14.2, payments of
     principal, Make-Whole Amount, if any, and interest becoming due and payable
     on the Notes shall be made in New York, New York at the principal office of
     the Company in such jurisdiction. The Company may at any time, by notice to
     each holder of a Note, change the place of payment of the Notes so long as
     such place of payment shall be either the principal office of the Company
     in such jurisdiction or the principal office of a bank or trust company in
     such jurisdiction.

          Section 14.2. Home Office Payment.  So long as any Purchaser or its
     nominee shall be the holder of any Note, and notwithstanding anything
     contained in Section 14.1 or in such Note to the contrary, the Company will
     pay all sums becoming due on such Note for principal, Make-Whole Amount, if
     any, and interest by the method and at the address specified for such
     purpose below such Purchaser's name in Schedule A, or by such other method
     or at such other address as such Purchaser shall have from time to time
     specified to the Company in writing for such purpose, without the
     presentation or surrender of such Note or the making of any notation
     thereon, except that upon written request of the Company made concurrently
     with or reasonably promptly after payment or prepayment in full of any
     Note, such Purchaser shall surrender such Note for cancellation, reasonably
     promptly after any such request, to the Company at its principal executive
     office or at the place of payment most recently designated by the Company
     pursuant to Section 14.1. Prior to any sale or other disposition of any
     Note held by any Purchaser or it's nominee such Purchaser will, at its
     election, either endorse thereon the amount of principal paid thereon and
     the last date to which interest has been paid thereon or surrender such
     Note to the Company in exchange for a new Note or Notes pursuant to Section
     13.2. The Company will afford the benefits of this Section 14.2 to any
     Institutional Investor that is the direct or indirect transferee of any
     Note purchased by any Purchaser under this Agreement and that has made the
     same agreement relating to such Note as such Purchaser has made in this
     Section 14.2.

                                        22
<PAGE>

SECTION 15. EXPENSES, ETC.

          Section 15.1. Transaction Expenses.  Whether or not the transactions
     contemplated hereby are consummated, the Company will pay (a) reasonable
     attorneys' fees of Schiff Hardin & Waite, original drafting counsel, and
     (b) all costs and expenses (including reasonable attorneys' fees of a
     special counsel and, if reasonably required, local or other counsel)
     incurred by the Purchasers or any other holder of a Note in connection with
     such transactions and in connection with any amendments, waivers or
     consents under or in respect of this Agreement or the Notes (whether or not
     such amendment, waiver or consent becomes effective), including, without
     limitation: (i) the costs and expenses incurred in enforcing or defending
     (or determining whether or how to enforce or defend) any rights under this
     Agreement or the Notes or in responding to any subpoena or other legal
     process or informal investigative demand issued in connection with this
     Agreement or the Notes, or by reason of being a holder of any Note, and
     (ii) the costs and expenses, including reasonable financial advisors' fees,
     incurred in connection with the insolvency or bankruptcy of the Company or
     any Subsidiary or in connection with any work-out or restructuring of the
     transactions contemplated hereby and by the Notes. The Company will pay,
     and will save the Purchasers and each other holder of a Note harmless from,
     all claims in respect of any fees, costs or expenses, if any, of brokers
     and finders (other than, with respect to any Purchaser or other holder of
     the Notes, those retained by such Purchaser or other holder).

          Section 15.2. Survival.  The obligations of the Company under this
     Section 15 will survive the payment or transfer of any Note, the
     enforcement, amendment or waiver of any provision of this Agreement or the
     Notes, and the termination of this Agreement.

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

          All representations and warranties contained herein shall survive the
     execution and delivery of this Agreement and the Notes, the purchase or
     transfer by any Purchaser of any Note or portion thereof or interest
     therein and the payment of any Note, and may be relied upon by any
     subsequent holder of a Note, regardless of any investigation made at any
     time by or on behalf of any Purchaser or any other holder of a Note. All
     statements contained in any certificate or other instrument delivered by or
     on behalf of the Company pursuant to this Agreement shall be deemed
     representations and warranties of the Company under this Agreement. Subject
     to the preceding sentence, this Agreement and the Notes embody the entire
     agreement and understanding between the Purchasers and the Company and
     supersede all prior agreements and understandings relating to the subject
     matter hereof.

SECTION 17. AMENDMENT AND WAIVER.

          Section 17.1. Requirements.  This Agreement and the Notes may be
     amended, and the observance of any term hereof or of the Notes may be
     waived (either retroactively or prospectively), with (and only with) the
     written consent of the Company and the Required Holders, except that (a) no
     amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or
     21 hereof, or any defined term (as it is used therein), will be effective
     as to any holder unless consented to by such holder in writing, and (b) no
     such amendment or waiver may, without the written consent of the holder of
     each Note at the time outstanding affected thereby, (1) subject to the
     provisions of Section 12 relating to acceleration or rescission, change the
     amount or time of any prepayment or payment of principal of, or reduce the
     rate or change the time of payment or method of computation of interest or
     of the Make-Whole Amount on, the Notes, (2) change the percentage of the
     principal amount of the Notes the holders of which are required to consent
     to any such amendment or waiver or (3) amend any of Sections 8, 11(a),
     11(b), 12, 17 or 20.

          Section 17.2. Solicitation of Holders of Notes.

             (a) Solicitation.  The Company will provide each holder of the
        Notes (irrespective of the amount of Notes then owned by it) with
        sufficient information, sufficiently far in advance of the date a
        decision is required, to enable such holder to make an informed and
        considered decision with respect to any proposed amendment, waiver or
        consent in respect of any of the provisions hereof or of the Notes. The
        Company will deliver executed or true and correct copies of each
        amendment, waiver or consent effected pursuant to the provisions of this
        Section 17 to each holder of outstanding Notes

                                        23
<PAGE>

        promptly following the date on which it is executed and delivered by, or
        receives the consent or approval of, the requisite holders of Notes.

             (b) Payment.  The Company will not directly or indirectly pay or
        cause to be paid any remuneration, whether by way of supplemental or
        additional interest, fee or otherwise, or grant any security, to any
        holder of Notes as consideration for or as an inducement to the entering
        into by any holder of Notes or any waiver or amendment of any of the
        terms and provisions hereof unless such remuneration is concurrently
        paid, or security is concurrently granted, on the same terms, ratably to
        each holder of Notes then outstanding even if such holder did not
        consent to such waiver or amendment.

          Section 17.3. Binding Effect, Etc.  Any amendment or waiver consented
     to as provided in this Section 17 applies equally to all holders of Notes
     and is binding upon them and upon each future holder of any Note and upon
     the Company without regard to whether such Note has been marked to indicate
     such amendment or waiver. No such amendment or waiver will extend to or
     affect any obligation, covenant, agreement, Default or Event of Default not
     expressly amended or waived or impair any right consequent thereon. No
     course of dealing between the Company and the holder of any Note nor any
     delay in exercising any rights hereunder or under any Note shall operate as
     a waiver of any rights of any holder of such Note. As used herein, the term
     "this Agreement" and references thereto shall mean this Agreement as it may
     from time to time be amended or supplemented.

          Section 17.4. Notes Held by Company, Etc.  Solely for the purpose of
     determining whether the holders of the requisite percentage of the
     aggregate principal amount of Notes then outstanding approved or consented
     to any amendment, waiver or consent to be given under this Agreement or the
     Notes, or have directed the taking of any action provided herein or in the
     Notes to be taken upon the direction of the holders of a specified
     percentage of the aggregate principal amount of Notes then outstanding,
     Notes directly or indirectly owned by the Company or any of its Affiliates,
     including, without limitation, Fairfax Inc. and Zenith Insurance Company,
     shall be deemed not to be outstanding.

SECTION 18. NOTICES.

     All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid) or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

          (1) if to any Purchaser or its nominee, to such Purchaser or its
     nominee at the address specified for such communications in Schedule A, or
     at such other address as such Purchaser or its nominee shall have specified
     to the Company in writing,

          (2) if to any other holder of any Note, to such holder at such address
     as such other holder shall have specified to the Company in writing, or

          (3) if to the Company, to the Company at its address set forth at the
     beginning hereof to the attention of Donald L. Smith, or at such other
     address as the Company shall have specified to the holder of each Note in
     writing.

     Notices under this Section 18 will be deemed given only when actually
received.

SECTION 19. REPRODUCTION OF DOCUMENTS.

     This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Purchasers at the Closing (except the
Notes themselves) and (c) financial statements, certificates and other
information previously or hereafter furnished to any holder of the Notes, may be
reproduced by such holders by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such holders may
destroy any original document so reproduced. The Company agrees and stipulates
that, to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction

                                        24
<PAGE>

was made by any holder of the Notes in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

SECTION 20. CONFIDENTIAL INFORMATION.

     For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser's behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section
7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (1) its directors, trustees,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such Purchaser's Notes), (2) such Purchaser's financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (3)
any other holder of any Note, (4) any Institutional Investor to which such
Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (5) any Person from which such Purchaser offers to purchase any security of
the Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (6)
any Federal or state regulatory authority having jurisdiction over such
Purchaser, (7) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Purchaser's investment portfolio or (8) any
other Person to which such delivery or disclosure may be necessary or
appropriate (i) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (ii) in response to any subpoena or other legal
process, (iii) in connection with any litigation to which such Purchaser is a
party or (iv) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser's Notes and this Agreement. Each holder
of a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement. On reasonable request by the Company in connection
with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other
than a holder that is a party to this Agreement or its nominee), such holder
will enter into an agreement with the Company embodying the provisions of this
Section 20.

SECTION 21. SUBSTITUTION OF PURCHASER.

     Each Purchaser shall have the right to substitute any one of its Affiliates
as the purchaser of the Notes that such Purchaser has agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both such Purchaser and such Affiliate, shall contain such Affiliate's agreement
to be bound by this Agreement and shall contain a confirmation by such Affiliate
of the accuracy with respect to it of the representations set forth in Section
6. Upon receipt of such notice, wherever the word "Purchaser" is used in this
Agreement (other than in this Section 21), such word shall be deemed to refer to
such Affiliate in lieu of such Purchaser. In the event that such Affiliate is so
substituted as a purchaser hereunder and such Affiliate thereafter transfers to
such Purchaser all of the Notes then held by such Affiliate, upon receipt by the
Company of notice of such transfer, wherever the word "Purchaser" is used in
this Agreement (other than in
                                        25
<PAGE>

this Section 21), such word shall no longer be deemed to refer to such
Affiliate, but shall refer to such Purchaser, and such Purchaser shall have all
the rights of an original holder of the Notes under this Agreement.

SECTION 22. MISCELLANEOUS.

          Section 22.1. Successors and Assigns.  All covenants and other
     agreements contained in this Agreement by or on behalf of any of the
     parties hereto bind and inure to the benefit of their respective successors
     and assigns (including, without limitation, any subsequent holder of a
     Note) whether so expressed or not.

          Section 22.2. Payments Due on Non-Business Days.  Anything in this
     Agreement or the Notes to the contrary notwithstanding, any payment of
     principal of or Make-Whole Amount, if any, or interest on any Note that is
     due on a date other than a Business Day shall be made on the next
     succeeding Business Day without including the additional days elapsed in
     the computation of the interest payable on such next succeeding Business
     Day.

          Section 22.3. Severability.  Any provision of this Agreement that is
     prohibited or unenforceable in any jurisdiction shall, as to such
     jurisdiction, be ineffective to the extent of such prohibition or
     unenforceability without invalidating the remaining provisions hereof, and
     any such prohibition or unenforceability in any jurisdiction shall (to the
     full extent permitted by law) not invalidate or render unenforceable such
     provision in any other jurisdiction.

          Section 22.4. Construction.

             (a) Each covenant contained herein shall be construed (absent
        express provision to the contrary) as being independent of each other
        covenant contained herein, so that compliance with any one covenant
        shall not (absent such an express contrary provision) be deemed to
        excuse compliance with any other covenant. Where any provision herein
        refers to action to be taken by any Person, or which such Person is
        prohibited from taking, such provision shall be applicable whether such
        action is taken directly or indirectly by such Person.

             (b) Where the character or amount of any asset or liability or item
        of income or expense is required to be determined or any consolidation
        or other accounting computation is required to be made by the Company
        for the purposes of this Agreement, the same shall be done by the
        Company in accordance with GAAP, to the extent applicable, except where
        such principles are inconsistent with the requirements of this
        Agreement.

          Section 22.5. Counterparts.  This Agreement may be executed in any
     number of counterparts, each of which shall be an original but all of which
     together shall constitute one instrument. Each counterpart may consist of a
     number of copies hereof, each signed by less than all, but together signed
     by all, of the parties hereto.

          Section 22.6. Governing Law.  This Agreement shall be construed and
     enforced in accordance with, and the rights of the parties shall be
     governed by, the law of the State of New York excluding choice-of-law
     principles of the law of such State that would require the application of
     the laws of a jurisdiction other than such State.

                                   * * * * *

                                        26
<PAGE>

     The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set forth.

<Table>
<S>                                            <C> <C>
                                               Very truly yours,
                                               Odyssey Re Holdings Corp.

                                               By  /s/  DONALD L. SMITH
                                                   -------------------------------------------
                                                   Donald L. Smith
                                                   Its SVP
</Table>

<Table>
<S> <C>                                         <C>
The foregoing is hereby agreed to as of the date thereof.

The Travelers Insurance Company

By  /s/  MATTHEW J. MCINERNY
    -------------------------------------------
    Its Assistant Investment Officer

First Trenton Indemnity Company

By  /s/  MATTHEW J. MCINERNY
    -------------------------------------------
    Its Assistant Investment Officer

Premier Insurance Company of Massachusetts

By  /s/  MATTHEW J. MCINERNY
    -------------------------------------------
    Its Assistant Investment Officer

First Floridian Auto and Home Insurance Company

By  /s/  MATTHEW J. MCINERNY
    -------------------------------------------
    Its Assistant Investment Officer

Zenith Insurance Company

By  /s/  STANLEY R. ZAX
    -------------------------------------------
    Its Chairman and President

Fairfax Inc.

By  /s/  BRAD MARTIN
    -------------------------------------------
    Its Vice President
</Table>

                                        27
<PAGE>

                       INFORMATION RELATING TO PURCHASERS

                                                             Principal Amount of
                                                           Notes to Be Purchased
                                                                     $19,000,000

Name and Address of Purchaser

THE TRAVELERS INSURANCE COMPANY
c/o Citigroup Investments Inc.
242 Trumbull Street
P.O. Box 150449
Hartford, CT 06115-0449
Attention: Cashier's Division

Payments

     All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Odyssey Re Holdings Corp., 7.49% Senior Notes due November 30, 2006, PPN 67612W
A* 9, principal, premium or interest") to:

                Chase Manhattan Bank, N.A.
                New York, NY
                ABA Number 021-000-021
                REF: Travelers Private Placement Account
                Account No.: 910-2-587434

     Notices

     All notices and communications to be addressed as first provided above.

     Name of Nominee in which Notes are to be issued: TRAL & CO

     Taxpayer I.D. Number: 06-0566090 (a Connecticut corporation)

                                   Schedule A
                          (to Note Purchase Agreement)
<PAGE>

                                                             Principal Amount of
                                                           Notes to Be Purchased
                                                                     $16,000,000

Name and Address of Purchaser

THE TRAVELERS INSURANCE COMPANY
(as to Separate Account STFMG)
c/o Citigroup Investments Inc.
242 Trumbull Street
P.O. Box 150449
Hartford, CT 06115-0449
Attention: Cashier's Division

Payments

     All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Odyssey Re Holdings Corp., 7.49% Senior Notes due November 30, 2006, PPN 67612W
A* 9, principal, premium or interest") to:

                All payments by wire transfer to:
                Chase Manhattan Bank, N.A.
                New York, NY
                ABA Number 021-000-021
                Account No.: 910-2-720464

     Notices

     All notices and communications to be addressed as first provided above.

     Name of Nominee in which Notes are to be issued: The Travelers Insurance
                                                      Company
                                                       Separate Account SMGA

     Taxpayer I.D. Number: 06-0566090 (a Connecticut corporation)

                                       A-1
<PAGE>

                                                             Principal Amount of
                                                           Notes to Be Purchased
                                                                      $3,000,000

Name and Address of Purchaser

FIRST TRENTON INDEMNITY COMPANY
c/o Citigroup Investments Inc.
242 Trumbull Street
P.O. Box 150449
Hartford, CT 06115-0449

Payments

     All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Odyssey Re Holdings Corp., 7.49% Senior Notes due November 30, 2006, PPN 67612W
A* 9, principal, premium or interest") to:

                Chase Manhattan Bank, N.A.
                New York, NY
                ABA Number 021-000-021
                Account No.: 910-2-739365

     Notices

     All notices and communications to be addressed as first provided above.

     Name of Nominee in which Notes are to be issued: First Trenton Indemnity
Company

     Taxpayer I.D. Number: 13-6062916

                                       A-2
<PAGE>

                                                             Principal Amount of
                                                           Notes to Be Purchased
                                                                      $1,000,000

Name and Address of Purchaser

PREMIER INSURANCE COMPANY OF MASSACHUSETTS
c/o Citigroup Investments Inc.
242 Trumbull Street
P.O. Box 150449
Hartford, CT 06115-0449
Attention: Cashier's Division

Payments

     All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Odyssey Re Holdings Corp., 7.49% Senior Notes due November 30, 2006, PPN 67612W
A* 9, principal, premium or interest") to:

                Chase Manhattan Bank, N.A.
                New York, NY
                ABA Number 021-000-021
                Account No.: 910-2-739365

     Notices

     All notices and communications to be addressed as first provided above.

     Name of Nominee in which Notes are to be issued: Premier Insurance Company
of Massachusetts

     Taxpayer I.D. Number: 04-3175569

                                       A-3
<PAGE>

                                                             Principal Amount of
                                                           Notes to Be Purchased
                                                                      $1,000,000

Name and Address of Purchaser

FIRST FLORIDIAN AUTO AND HOME INSURANCE COMPANY
c/o Citigroup Investments Inc.
242 Trumbull Street
P.O. Box 150449
Hartford, CT 06115-0449
Attention: Cashier's Division

Payments

     All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Odyssey Re Holdings Corp., 7.49% Senior Notes due November 30, 2006, PPN 67612W
A* 9, principal, premium or interest") to:

                Chase Manhattan Bank, N.A.
                New York, NY
                ABA Number 021-000-021
                Account No.: 910-2-739365

     Notices

     All notices and communications to be addressed as first provided above.

     Name of Nominee in which Notes are to be issued: First Floridian Auto and
Home Insurance Company

     Taxpayer I.D. Number: 59-3372141

                                       A-4
<PAGE>

                                                             Principal Amount of
                                                           Notes to Be Purchased
                                                                     $25,000,000

Name and Address of Purchaser

ZENITH INSURANCE COMPANY
21255 Califa St.
Woodland Hills, CA 91367
Attention: Stanley R. Zax, Chairman & President
Facsimile: 818/713-0177

Payments

     All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Odyssey Re Holdings Corp., 7.49% Senior Notes due November 30, 2006, PPN 67612W
A* 9, principal, premium or interest") to:

                Zenith Insurance Company
                Account Number 001-327372
                City National Bank
                400 North Roxbury Dr., Third Floor
                Beverly Hills, CA 90210
                ABA# 122016066

     Notices

     All notices and communications to be addressed as first provided above,
except notices with respect to payment and written confirmation of each such
payment, to be addressed:

                Zenith Insurance Company
                Investment Accounting
                21255 Califa St.
                Woodland Hills, CA 91367
                Attn: Visenta McGhee
                Telephone: 818/676-3928
                Facsimile: 818/703-0091

     Name of Nominee in which Notes are to be issued: Zenith Insurance Company

     Taxpayer I.D. Number: 95-1651549

                                       A-5
<PAGE>

                                                             Principal Amount of
                                                           Notes to Be Purchased
                                                                     $35,000,000

Name and Address of Purchaser

FAIRFAX INC.
140 Broadway, 39th Floor
New York, New York 10005
Attention: President
Facsimile: (212) 267-8293

Payments

     All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Odyssey Re Holdings Corp., 7.49% Senior Notes due November 30, 2006, PPN 67612W
A* 9, principal, premium or interest") to:

<Table>
                   <S>            <C>
                   Bank:          Harris Trust and Savings Bank
                                  111 West Monroe PO Box 755
                                  Chicago, Illinois 60690
                   ABA#:          071-000-288
                   A/C Name:      Fairfax Inc
                   A/C Number:    387-3940
                   Contact:       Vicki Hitz (312-461-1517) at the Harris Bank
</Table>

     Notices

     All notices and communications to be addressed as first provided above.

     Name of Nominee in which Notes are to be issued: Fairfax Inc.

     Taxpayer I.D. Number: 83-0306126

                                       A-6
<PAGE>

                                 DEFINED TERMS

     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:

     "Affiliate" shall mean at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of such
first Person or any other Person of which such first Person beneficially owns or
holds, in the aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company.

     "Anti-Terrorism Order" shall mean Executive Order No. 13,224 66 Fed Reg.
49,079 (2001) issued by the President of the United States of America (Executive
Order Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism).

     "Asset Disposition" shall mean any Transfer except:

          (a) any

             (1) Transfer from a Subsidiary to the Company or a Wholly-Owned
        Subsidiary; and

             (2) Transfer from the Company to a Wholly-Owned Subsidiary;

        so long as immediately before and immediately after the consummation of
        any such Transfer and after giving effect thereto, no Default or Event
        of Default shall exist; and

          (b) any Transfer made in the ordinary course of business and involving
     only property that is either (1) inventory held for sale or (2) equipment,
     fixtures, supplies or materials no longer required in the operation of the
     business of the Company or any of its Subsidiaries or that is obsolete or
     (3) securities in the investment portfolios of the Company or its
     Subsidiaries.

     "Business Day" shall mean (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York,
New York are required or authorized to be closed, and (b) for the purposes of
any other provision of this Agreement, any day other than a Saturday, a Sunday
or a day on which commercial banks in Hartford, Connecticut or New York, New
York are required or authorized to be closed.

                                   Schedule B
                          (to Note Purchase Agreement)
<PAGE>

     "Capital Lease" shall mean a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

     "Change in Control" is defined in Section 8.3(h).

     "Closing" is defined in Section 3.

     "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.

     "Company" shall mean Odyssey Re Holdings Corp., a Delaware corporation and
any Successor Corporation.

     "Confidential Information" is defined in Section 20.

     "Consolidated Debt" shall mean, as of any date of determination, the total
of all Debt of the Company and its Subsidiaries outstanding on such date, after
eliminating all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP.

     "Consolidated Net Income" shall mean, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries for such period (taken as a
cumulative whole), as determined in accordance with GAAP, after eliminating all
offsetting debits and credits between the Company and its Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its Subsidiaries in
accordance with GAAP.

     For purposes of determining "Consolidated Net Income," there shall be
excluded from any calculation thereof the amount of any unrealized gains and
losses of the Company and its Subsidiaries arising from the Company's compliance
with Financial Accounting Standards Board Statement No. 115.

     "Consolidated Net Worth" shall mean, as of any date of determination
thereof,

          (a) the sum of (1) the par value (or value stated on the books of the
     corporation) of the capital stock (but excluding treasury stock and capital
     stock subscribed and unissued) of the Company and its Subsidiaries plus (2)
     the amount of the paid-in capital and retained earnings of the Company and
     its Subsidiaries, in each case as such amounts would be shown on a
     consolidated balance sheet of the Company and its Subsidiaries as of such
     time prepared in accordance with GAAP, minus

          (b) to the extent included in clause (a), all amounts properly
     attributable to minority interests, if any, in the stock and surplus of
     Subsidiaries.

     For purposes of determining "Consolidated Net Worth," there shall be
excluded from any calculation thereof the amount of any unrealized gains and
losses included in the retained earnings of the Company and its Subsidiaries
arising from the Company's compliance with Financial Accounting Standards Board
Statement No. 115.

     "Consolidated Short Term Debt" shall mean, as of any date of determination,
the total of all Short-Term Debt of the Company and its Subsidiaries outstanding
on such date, after eliminating all offsetting debits and credits between the
Company and its Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the
Company and its Subsidiaries in accordance with GAAP.

     "Consolidated Total Assets" shall mean, as of any date of determination,
the total assets of the Company and its Subsidiaries that would be shown as
assets on a consolidated balance sheet of the Company and its Subsidiaries as of
such time prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus of
Subsidiaries.

     "Consolidated Total Capitalization" shall mean, as of any date of
determination thereof, the sum of (a) Consolidated Net Worth and (b)
Consolidated Debt.

     "Control Event" is defined in Section 8.3(i).
                                       B-1
<PAGE>

     "Debt" shall mean, with respect to any Person, without duplication,

          (a) its liabilities for borrowed money and its redemption obligations
     in respect of mandatorily redeemable Preferred Stock;

          (b) its liabilities for the deferred purchase price of property
     acquired by such Person (excluding accounts payable arising in the ordinary
     course of business but including all liabilities created or arising under
     any conditional sale or other title retention agreement with respect to any
     such property);

          (c) all liabilities appearing on its balance sheet in accordance with
     GAAP in respect of Capital Leases;

          (d) all liabilities for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such liabilities); and

          (e) any Guaranty of such Person with respect to liabilities of a type
     described in any of clauses (a) through (d) hereof.

     Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.

     "Debt Prepayment Application" shall mean, with respect to any Transfer of
property, the application by the Company or its Subsidiaries of cash in an
amount equal to the Net Proceeds Amount with respect to such Transfer to pay
Senior Debt of the Company or any Subsidiary (other than Senior Debt owing to
the Company, any of its Subsidiaries or any Affiliate and Senior Debt in respect
of any revolving credit or similar credit facility providing the Company or any
of its Subsidiaries with the right to obtain loans or other extensions of credit
from time to time, except to the extent that in connection with such payment of
Senior Debt the availability of credit under such credit facility is permanently
reduced by an amount not less than the amount of such proceeds applied to the
payment of such Senior Debt).

     "Default" shall mean an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.

     "Default Rate" shall mean that rate of interest that is the greater of (1)
2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (2) 2% over the rate of interest publicly announced by
Bank of America in New York, New York as its "reference" rate.

     "Disposition Value" shall mean with respect to any property

          (a) in the case of property that does not constitute Subsidiary Stock,
     the book value thereof, valued at the time of such disposition in good
     faith by the Company, and

          (b) in the case of property that constitutes Subsidiary Stock, an
     amount equal to that percentage of book value of the assets of the
     Subsidiary that issued such stock as is equal to the percentage that the
     book value of such Subsidiary Stock represents of the book value of all of
     the outstanding capital stock of such Subsidiary (assuming, in making such
     calculations, that all securities convertible into such capital stock are
     so converted and giving full effect to all transactions that would occur or
     be required in connection with such conversion) determined at the time of
     the disposition thereof, in good faith by the Company.

     "Environmental Laws" shall mean any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

                                       B-2
<PAGE>

     "ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under Section 414 of the Code.

     "Event of Default" is defined in Section 11.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Fair Market Value" shall mean, as of any date of determination thereof and
with respect to any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an informed and willing
buyer and an informed and willing seller (neither being under a compulsion to
buy or sell).

     "Fairfax" shall mean Fairfax Financial Holdings Limited, a Canadian
corporation, and any Person that succeeds to all, or substantially all, of the
assets and business of Fairfax Financial Holdings Limited.

     "Fairfax Debt" shall mean that certain $200,000,000 Floating Rate Term Note
dated June 19, 2001 issued by the Company and held by Fairfax Inc.

     "GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.

     "Governmental Authority" shall mean

          (a) the government of

             (1) the United States of America or any State or other political
        subdivision thereof, or

             (2) any jurisdiction in which the Company or any Subsidiary
        conducts all or any part of its business, or which asserts jurisdiction
        over any properties of the Company or any Subsidiary, or

          (b) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

     "Guaranty" shall mean, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including, without limitation, obligations incurred
through an agreement, contingent or otherwise, by such Person:

          (a) to purchase such Debt or obligation or any property constituting
     security therefor;

          (b) to advance or supply funds (1) for the purchase or payment of such
     Debt or obligation, or (2) to maintain any working capital or other balance
     sheet condition or any income statement condition of any other Person or
     otherwise to advance or make available funds for the purchase or payment of
     such Debt or obligation;

          (c) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such Debt or obligation
     of the ability of any other Person to make payment of the Debt or
     obligation; or

          (d) otherwise to assure the owner of such Debt or obligation against
     loss in respect thereof.

     In any computation of the Debt or other liabilities of the obligor under
any Guaranty, the Debt or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

     "Hazardous Material" shall mean any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required by, or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized by, any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).

                                       B-3
<PAGE>

     "holder" shall mean, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.

     "Institutional Accredited Investor" shall mean an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

     "Institutional Investor" shall mean (a) any original purchaser of a Note,
(b) any holder of a Note holding more than $2,000,000 in aggregate principal
amount of the Notes then outstanding and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.

     "Investment" shall mean any investment, made in cash or by delivery of
property, by the Company or any of its Subsidiaries (a) in any Person, whether
by acquisition of shares, Debt or other obligation or security, or by loan,
Guaranty, advance, capital contribution or otherwise or (b) in any property;
provided, however, that "Investments" shall not include obligations of the
Company or any of its Subsidiaries under reinsurance contracts entered into in
the ordinary course of business with Affiliates of Fairfax.

     "Investment Administration Agreements" shall mean those separate and
several Investment Administration Agreements dated as of April 13, 1999, May 11,
2001 and May 11, 2001, between Fairfax and TIG Reinsurance Company, Odyssey
Reinsurance Corporation and Hudson Insurance Company, respectively, in each
case, as in effect on the date of the Closing.

     "Investment Management Agreements" shall mean those separate and several
Investment Management Agreements dated as of April 13, 1999, May 11, 2001 and
May 11, 2001, between Hamblin Watsa Investment Counsel, Ltd. and TIG Reinsurance
Company, Odyssey Reinsurance Corporation and Hudson Insurance Company,
respectively, in each case, as in effect on the date of the Closing.

     "Lien" shall mean, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).

     "Make-Whole Amount" is defined in Section 8.7.

     "Material" shall mean material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Subsidiaries, taken as a whole.

     "Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries, taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Notes or (c) the
validity or enforceability of this Agreement or the Notes.

     "Memorandum" is defined in Section 5.3.

     "Multiemployer Plan" shall mean any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).

     "Net Proceeds Amount" shall mean, with respect to any Transfer of any
Property by any Person, an amount equal to the difference of

          (a) the aggregate amount of the consideration (valued at the Fair
     Market Value of such consideration at the time of the consummation of such
     Transfer) received by such Person in respect of such Transfer, minus

          (b) all ordinary and reasonable out-of-pocket costs and expenses
     actually incurred by such Person in connection with such Transfer.

     "Notes" is defined in Section 1.

                                       B-4
<PAGE>

     "Officer's Certificate" shall mean a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.

     "PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

     "Person" shall mean an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

     "Plan" shall mean an "employee benefit plan" subject to Title IV of ERISA
or Section 412 of the Code that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
could reasonably be expected to have any liability.

     "Preferred Stock" shall mean any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.

     "Priority Debt" shall mean, without duplication, the sum of (a) all Debt of
the Company secured by Liens, other than Liens permitted by paragraphs (a)
through (j), inclusive, of Section 10.4 and (b) all Debt of Subsidiaries
(excluding (1) Debt owing to the Company or a Wholly-Owned Subsidiary and (2)
Debt of any Person that is outstanding on the date such Person becomes a
Subsidiary as long as such Debt is not incurred in contemplation of such Person
becoming a Subsidiary).

     "Property Reinvestment Application" shall mean, with respect to any
Transfer of property, the application of an amount equal to the Net Proceeds
Amount with respect to such Transfer to the acquisition by the Company or any
Subsidiary of operating assets of the Company or any Subsidiary to be used in
the principal business of such Person.

     "property" or "properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.

     "Proposed Prepayment Date" is defined in Section 8.3(c).

     "PTE" is defined in Section 6.2(a).

     "Purchasers" is defined in the Preamble.

     "QPAM Exemption" shall mean Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.

     "Required Holders" shall mean, at any time, the holders of more than 50% in
aggregate principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates, including, without
limitation, Fairfax Inc. and Zenith Insurance Company).

     "Responsible Officer" shall mean any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.

     "Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.

     "Senior Debt" shall mean any Debt of the Company of any Subsidiary that is
not in any manner subordinated in right of payment to the Notes or any other
Debt of such Person.

     "Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.

     "Short Term Debt" shall mean, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures on demand or on or prior to November 30, 2006. For
purposes of determining "Short Term Debt," there shall be included that portion
of

                                       B-5
<PAGE>

any Debt, not otherwise constituting Short Term Debt, that matures on or prior
to November 30, 2006 (whether by sinking fund or other required prepayment).

     "Significant Subsidiary" shall mean, at any time, any Subsidiary (a) the
assets of which exceed 5% of Consolidated Total Assets or (b) the revenues of
which account for more than 5% of the consolidated total revenues of the Company
and its Subsidiaries determined in accordance with GAAP.

     "Source" is defined in Section 6.2.

     "Subsidiary" shall mean, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.

     "Subsidiary Stock" shall mean, with respect to any Person, the stock (or
any options or warrants to purchase stock or other securities exchangeable for
or convertible into stock) of any Subsidiary of such Person.

     "Successor Corporation" is defined in Section 10.5(a).

     "Transfer" shall mean, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Subsidiary Stock. For purposes of determining the
application of the Net Proceeds Amount in respect of any Transfer, the Company
may designate any Transfer as one or more separate Transfers each yielding a
separate Net Proceeds Amount. In any such case, (a) the Disposition Value of any
property subject to each such separate Transfer and (b) the amount of
Consolidated Total Assets attributable to any property subject to each such
separate Transfer shall be determined by ratably allocating the aggregate
Disposition Value of, and the aggregate Consolidated Total Assets attributable
to, all property subject to all such separate Transfers to each such separate
Transfer on a proportionate basis.

     "Travelers Purchasers" shall mean the Purchasers, other than Zenith
Insurance Company and Fairfax Inc.

     "Wholly-Owned Subsidiary" shall mean any Subsidiary 100% of all of the
equity interests (except directors' qualifying shares) and voting interests of
which are owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries.

                                       B-6
<PAGE>

                          CHANGES IN CORPORATE STATUS

                                     None.

                                  Schedule 4.9
                          (to Note Purchase Agreement)
<PAGE>

                              DISCLOSURE MATERIALS

                                     None.

                                  Schedule 5.3
                          (to Note Purchase Agreement)
<PAGE>

                                  SCHEDULE 5.4

SUBSIDIARIES AND AFFILIATES OF THE COMPANY

     Please see attached chart.  Subsidiaries are marked with an "S".

     Fairfax Financial Holdings Limited ("Fairfax") owns approximately 40.8% of
the outstanding common shares of The Hub Group Limited ("Hub"). A subsidiary of
Fairfax has recently entered into an agreement to purchase additional shares of
common stock of Zenith National Insurance Corp. ("Zenith"). Following the
completion of the transaction, Fairfax will indirectly own approximately 42.1%
of the outstanding shares of common stock of Zenith. Fairfax disclaims that it
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of Hub or Zenith.

                               [GRAPHIC OMITTED]

DIRECTORS AND SENIOR OFFICERS

<Table>
<Caption>
NAME                                    POSITION
----                                    --------
<S>                                     <C>

V. PREM WATSA........................   Chairman of the Board of Directors

JAMES F. DOWD........................   Vice Chairman of the Board of Directors

ANDREW A. BARNARD....................   President, Chief Executive Officer and Director

MICHAEL G. WACEK.....................   Executive Vice President

CHARLES D. TROIANO...................   Executive Vice President and Chief Financial Officer

ANTHONY J. NARCISO, JR...............   Senior Vice President and Controller

DONALD L. SMITH......................   Senior Vice President, General Counsel and Corporate
                                        Secretary

WINSLOW W. BENNETT...................   Director

ANTHONY F. GRIFFITHS.................   Director

ROBBERT HARTOG.......................   Director

PAUL B. INGREY.......................   Director

COURTNEY SMITH.......................   Director
</Table>

                                  Schedule 5.4
                          (to Note Purchase Agreement)
<PAGE>

                                  SCHEDULE 5.5

FINANCIAL STATEMENTS

     The following financial statements are included in the Company's Form 10-Q
for the six months ended June 30, 2001 or the Company's common stock prospectus
dated June 13, 2001 each attached to the confidential private placement
memorandum dated October 2001 delivered to each Purchaser.

ODYSSEY RE HOLDINGS CORP.

     Consolidated financial statements as of June 30, 2001 (unaudited) and
December 31, 2000 (audited) and for periods ended June 30, 2001 and 2000

     Unaudited pro forma combined consolidated financial statements as of March
31, 2001 and for periods ended March 31, 2001 and December 31, 2000

ODYSSEY AMERICA REINSURANCE CORPORATION

     Consolidated financial statements as of December 31, 1999 and 2000 and for
the years ended December 31, 1998, 1999 and 2000

     Unaudited consolidated financial statements as of March 31, 2001 and for
the three months ended March 31, 2000 and 2001

TIG REINSURANCE COMPANY

     Consolidated financial statements as of December 31, 1998 and for the year
ended December 31, 1998

     Unaudited consolidated financial statements as of April 13, 1999 and for
the period ended April 13, 1999

                                  Schedule 5.5
                          (to Note Purchase Agreement)
<PAGE>

                               CERTAIN LITIGATION
                                     None.
                                  Schedule 5.8
                          (to Note Purchase Agreement)
<PAGE>

                                 PATENTS, ETC.
                                     None.
                                 Schedule 5.11
                          (to Note Purchase Agreement)
<PAGE>

                                USE OF PROCEEDS

         The proceeds from the sale of the Notes will be used to repay
        existing Debt of the Company and for general corporate purposes.

                                 Schedule 5.14
                          (to Note Purchase Agreement)
<PAGE>

                                 SCHEDULE 5.15

EXISTING DEBT; FUTURE LIENS

     Odyssey Re Holdings Corp.

     $200,000,000 of three-year term notes issued to subsidiaries of Fairfax
Financial Holdings Limited.

                                 Schedule 5.15
                          (to Note Purchase Agreement)
<PAGE>

                                  FORM OF NOTE

                           ODYSSEY RE HOLDINGS CORP.

                    7.49% SENIOR NOTE DUE NOVEMBER 30, 2006

No. R-                                                           Date
$                                                                 PPN 67612W A*9

     For Value Received, the undersigned, Odyssey Re Holdings Corp. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to           , or registered
assigns, the principal sum of           Dollars (or so much thereof as shall not
have been prepaid) on November 30, 2006, with interest (computed on the basis of
a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the
rate of 7.49% per annum from the date hereof, payable semiannually, on the last
day of May and November in each year, commencing with the May 31 or November 30
next succeeding the date hereof, until the principal hereof shall have become
due and payable and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreement referred to below), payable semiannually as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (1) 9.49% or (2) 2% over the rate of
interest publicly announced by Bank of America from time to time in New York,
New York as its "reference" rate.

     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company in New York, New York or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreement referred to below.

     This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to that certain Note Purchase Agreement dated as of November 15,
2001 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6 of the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

                                       E-1
<PAGE>

     This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York
excluding choice of law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

                                          ODYSSEY RE HOLDINGS CORP
                                          By
                                          --------------------------------------

                                            Its
                                            ------------------------------------

                                   Exhibit 1
                          (to Note Purchase Agreement)
                                       E-2
<PAGE>

                           FORM OF OPINION OF COUNSEL
                                FOR THE COMPANY

(416) 360-8484

                                December 4, 2001

To: The Purchasers listed on
    Schedule A to the Note Purchase Agreement
    (as defined below)

                           ODYSSEY RE HOLDINGS CORP.
                          7.49% SENIOR NOTES DUE 2006

Ladies and Gentlemen:

     We are acting as counsel to Odyssey Re Holdings Corp., a Delaware
corporation (the "Company"), in connection with the purchase, subject to the
terms and conditions set forth in the note purchase agreement dated as of
November 15, 2001 (the "Note Purchase Agreement") among the Company and each of
the purchasers listed on Schedule A thereto (the "Purchasers"), by the
Purchasers of U.S.$100,000,000 aggregate principal amount of the Company's 7.49%
Senior Notes due November 30, 2006 (the "Notes"). This opinion is being
delivered to you in accordance with Section 4.4(a) of the Note Purchase
Agreement. All capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Note Purchase Agreement.

     In such capacity, we have examined (a) a signed copy of the Note Purchase
Agreement; (b) copies of the signed Notes; and (c) a copy of the Private
Placement Memorandum dated October 2001.

     We have also examined the originals, or copies identified to our
satisfaction, of such corporate records of the Company, certificates of public
officials, officers of the Company and other persons and such other documents,
agreements and instruments, as we have deemed necessary as a basis for the
opinions hereinafter expressed. In our examinations, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the originals of all documents submitted to
us as copies.

                                 Exhibit 4.4(a)
                          (to Note Purchase Agreement)
<PAGE>

     Our opinions expressed below are limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware and the federal laws
of the United States, and we do not express any opinion herein concerning any
other law.

     Based upon the foregoing, and having regard for such legal considerations
as we deem relevant, we are of the opinion that:

          (i) The Note Purchase Agreement has been duly authorized, executed and
     delivered by the Company and constitutes a valid and binding obligation of
     the Company, enforceable against the Company in accordance with its terms.

          (ii) The Notes have been duly authorized, executed and delivered by
     the Company and constitute valid and binding obligations of the Company,
     enforceable against the Company in accordance with their terms.

          (iii) Based upon our review of New York State and United States
     federal statutes, rules and regulations which in our experience are
     normally applicable to transactions of the type provided for in the Note
     Purchase Agreement (the "Requirements of Law"), but without having made any
     special investigation concerning any other requirements of law, no consent,
     approval, authorization, order, registration or qualification of or with
     any United States federal or New York State court or governmental agency or
     body is required in connection with the execution and delivery by the
     Company of, and the performance by the Company of its obligations under,
     the Note Purchase Agreement and the Notes.

          (iv) Assuming the accuracy of the representations of the Company and
     of the Purchasers in the Note Purchase Agreement and of Banc of America
     Securities LLC in its agent's certificate dated the date hereof, no
     registration of the offer and sale of Notes to the Purchasers under the
     Securities Act of 1933, as amended, and no qualification of a trust
     indenture in respect of the Notes under the Trust Indenture Act of 1939, as
     amended, is required in connection with the offer, sale and delivery of the
     Notes under the circumstances contemplated by the Note Purchase Agreement.

          (v) The execution and delivery by the Company of, and the performance
     by the Company of its obligations under, the Note Purchase Agreement and
     the Notes will not contravene or violate any order, judgment or decree of
     any United States federal or New York State court or governmental agency or
     body having jurisdiction over the Company or any of its Subsidiaries or
     violate the provisions of any United States federal or New York State
     statute, rule or regulation applicable to the Company or any of its
     Subsidiaries. This opinion is based on our review of the Requirements of
     Law and those orders, judgments and decrees specifically identified to us
     by the Company as being those to which it or its Subsidiaries are subject,
     but without our having made any special investigation concerning any other
     requirements of law.

          (vi) The issuance of the Notes and the use of proceeds thereof as
     contemplated by the Note Purchase Agreement will not result in any
     violation of Regulations T, U or X of the Board of Governors of the Federal
     Reserve System (12 C.F.R., Chapter II, as amended).

          (vii) The Company is not required to be registered as an "investment
     company" under the Investment Company Act of 1940, as amended.

     The opinions set forth in sub paragraphs (i) and (ii) above are subject to
the qualification that enforcement is (x) subject to the effect of any
applicable bankruptcy, insolvency (including, without limitation, all laws
relating to preferences or fraudulent transfers), reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and to
possible judicial action giving effect to governmental actions or foreign laws
affecting creditors' rights and (y) subject to the effect of general principles
of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether enforcement
is considered in a proceeding in equity or at law).

     These opinions are intended solely for your benefit and are not to be made
available to, or relied upon by, any other person or entity (other than
permitted transferees of the Notes) without our prior written consent, provided
that you may make this opinion available to (i) your independent auditors and
attorneys, (ii) any
                                    E-4.4(a)-2
<PAGE>

state or federal authority or independent insurance board or body having
regulatory jurisdiction over you, (iii) any person pursuant to order or legal
process of any court or governmental agency, (iv) any person in connection with
any legal action to which you are a party arising out of or in respect of the
Note Purchase Agreement or the Notes, and (v) any proposed purchasers or
subsequent holders of the Notes.

                                          Very truly yours,

                                    E-4.4(a)-3
<PAGE>

                     FORM OF OPINION OF THE GENERAL COUNSEL
                                 TO THE COMPANY

                                December 4, 2001

To: The Purchasers listed on
    Schedule A to the Note Purchase Agreement
    (as defined below)

                           ODYSSEY RE HOLDINGS CORP.
                          7.49% SENIOR NOTES DUE 2006

Ladies and Gentlemen:

     I, Donald L. Smith, Senior Vice President, General Counsel and Corporate
Secretary for Odyssey Re Holdings Corp., a Delaware corporation (the "Company"),
licensed to practice law in the State of New York, have agreed to provide an
in-house legal opinion in connection with the purchase, subject to the terms and
conditions set forth in the note purchase agreement dated as of November 15,
2001 (the "Note Purchase Agreement") between the Company and each of the
purchasers listed on Schedule A thereto (the "Purchasers"), by the Purchasers of
U.S.$100,000,000 principal amount of the Company's 7.49% Senior Notes due
November 30, 2006 (the "Notes"). This opinion is being delivered to you in
accordance with Section 4.4(b) of the Note Purchase Agreement. All capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in the Note Purchase Agreement.

     In such capacity I have examined (a) a signed copy of the Note Purchase
Agreement; (b) copies of the signed Notes; and (c) a copy of the Private
Placement Memorandum dated October 2001.

     I have also examined the originals, or copies identified to my
satisfaction, of such corporate records of the Company and its subsidiaries,
certificates of public officials, officers of the Company and other persons, and
such other documents, agreements and instruments, as I have deemed necessary as
a basis for the opinions hereinafter expressed. In my examination, I have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to me as originals and the conformity with the originals of all
documents submitted to me as copies.

     The opinions set forth below are limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware and the federal laws
of the United States, and I do not express any opinion herein concerning any
other laws.

Based upon the foregoing, I am of the opinion that

                                 Exhibit 4.4(b)
                          (to Note Purchase Agreement)
<PAGE>

          (i) The Company is a corporation duly incorporated and validly
     existing in good standing under the laws of the State of Delaware and has
     the corporate power and authority under such laws to enter into and perform
     its obligations under the Note Purchase Agreement and the Notes and has the
     corporate power and authority to conduct the activities in which it is now
     engaged and is duly licensed or qualified and is in good standing as a
     foreign corporation in each jurisdiction in which the character of the
     properties owned or leased by it or the nature of the business transacted
     by it makes such licensing or qualification necessary other than those
     jurisdictions as to which the failure to be so licensed, qualified or in
     good standing could not, individually or in the aggregate, reasonably be
     expected to have a Material Adverse Effect.

          (ii) Each Subsidiary is a corporation or other legal entity duly
     organized, validly existing and in good standing under the laws of its
     jurisdiction of organization and is duly licensed or qualified and is in
     good standing as a foreign corporation or other legal entity in each
     jurisdiction in which the character of the properties owned or leased by it
     or the nature of the business transacted by it makes such licensing or
     qualification necessary other than those jurisdictions as to which the
     failure to be so licensed, qualified or in good standing could not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect and all of the issued and outstanding shares of capital
     stock or other equity interests of each such Subsidiary have been duly
     issued, are fully paid and non-assessable and are owned by the Company, by
     one or more Subsidiaries, or by the Company and one or more Subsidiaries.

          (iii) The execution and delivery by the Company of, and the
     performance by the Company of its obligations under, the Note Purchase
     Agreement and issuance and sale of the Notes will not conflict with or
     result in any breach of any of the provisions of or constitute a default
     under or result in the creation or imposition of any Lien upon any of the
     property of the Company pursuant to the provisions of the Amended and
     Restated Certificate of Incorporation or By-laws of the Company or any
     agreement or other instrument known to me to which the Company is a party
     or by which the Company may be bound.

     This opinion letter speaks only as of the date hereof. I do not assume, and
I expressly disclaim, any responsibility to advise any of you of any change of
law or fact that may occur after the date of this opinion letter even though
such change may affect the legal analysis, a legal conclusion or any other
matter set forth in or relating to the opinion letter.

     These opinions are intended solely for your benefit and are not to be made
available to, or relied upon by, any other person or entity (other than
permitted transferees of the Notes) without my prior written consent, provided
that you may make this opinion available to (i) your independent auditors and
attorneys, (ii) any state or federal authority or independent insurance board or
body having regulatory jurisdiction over you, (iii) any person pursuant to order
or legal process of any court or governmental agency, (iv) any person in
connection with any legal action to which you are a party arising out of or in
respect of the Note Purchase Agreement or the Notes, and (v) any proposed
purchasers or subsequent holders of the Notes.

                                          Very truly yours,

                                    E-4.4(b)-2
<PAGE>

                       FORM OF OPINION OF SPECIAL COUNSEL
                          TO THE TRAVELERS PURCHASERS

     The closing opinion of Chapman and Cutler, special counsel to the Travelers
Purchasers, called for by Section 4.4(c) of the Note Purchase Agreement, shall
be dated the date of the Closing and addressed to Zenith Insurance Company and
each Travelers Purchaser, shall be satisfactory in form and substance to each
Travelers Purchaser and shall be to the effect that:

          1. The Company is a corporation, validly existing and in good standing
     under the laws of the State of Delaware and has the corporate power and the
     corporate authority to execute and deliver the Note Purchase Agreement and
     to issue the Notes.

          2. The Note Purchase Agreement has been duly authorized by all
     necessary corporate action on the part of the Company, has been duly
     executed and delivered by the Company and constitutes the legal, valid and
     binding contract of the Company enforceable in accordance with its terms,
     subject to bankruptcy, insolvency, fraudulent conveyance and similar laws
     affecting creditors' rights generally, and general principles of equity
     (regardless of whether the application of such principles is considered in
     a proceeding in equity or at law).

          3. The Notes have been duly authorized by all necessary corporate
     action on the part of the Company, and the Notes being delivered on the
     date hereof have been duly executed and delivered by the Company and
     constitute the legal, valid and binding obligations of the Company
     enforceable in accordance with their terms, subject to bankruptcy,
     insolvency, fraudulent conveyance and similar laws affecting creditors'
     rights generally, and general principles of equity (regardless of whether
     the application of such principles is considered in a proceeding in equity
     or at law).

          4. The issuance, sale and delivery of the Notes under the
     circumstances contemplated by the Note Purchase Agreement do not, under
     existing law, require the registration of the Notes under the Securities
     Act or the qualification of an indenture under the Trust Indenture Act of
     1939, as amended.

     The opinion of Chapman and Cutler shall also state that the opinions of
Shearman and Sterling and Donald L. Smith, Esq. are satisfactory in scope and
form to Chapman and Cutler and that, in their opinion, Zenith Insurance Company
and each Travelers Purchaser is justified in relying thereon.

     In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler
may rely, as to matters referred to in paragraph 1, solely upon an examination
of the Certificate of Incorporation certified by, and a certificate of good
standing of the Company from, the Secretary of State of the State of Delaware,
the By-laws of the Company and the general business corporation law of the State
of Delaware. The opinion of Chapman and Cutler is limited to the laws of the
State of New York, the general business corporation law of the State of Delaware
and the Federal laws of the United States.

     With respect to matters of fact upon which such opinion is based, Chapman
and Cutler may rely on appropriate certificates of public officials and officers
of the Company and upon representations of the Company and the Purchasers
delivered in connection with the issuance and sale of the Notes.

                                    E-4.4(b)-3<PAGE>

                                                                   EXHIBIT 10.36

                                U.S. $50,000,000

                     AMENDED AND RESTATED CREDIT AGREEMENT

                          DATED AS OF JANUARY 31, 2002

                                     AMONG

                           ODYSSEY RE HOLDINGS CORP.,

                             BANK OF AMERICA, N.A.,
                            AS ADMINISTRATIVE AGENT,

                             JP MORGAN CHASE BANK,
                            AS DOCUMENTATION AGENT,

                                      AND

                 THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

                        BANC OF AMERICA SECURITIES LLC,
                  AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER
<PAGE>

                              AMENDED AND RESTATED
                                CREDIT AGREEMENT

     This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of January
31, 2002, among OdysseyRe Holdings Corp. (the "Borrower"), the several financial
institutions from time to time party to this Agreement (collectively, the
"Lenders"; individually, a "Lender"), JP Morgan Chase Bank, as documentation
agent, and Bank of America, N.A. as administrative agent for the Lenders.

     WHEREAS, the Borrower has entered into a Credit Agreement (the "Existing
Credit Agreement") dated as of December 31, 2001 with the Lenders; and

     WHEREAS, the parties to the Existing Credit Agreement wish to extend the
term of the Existing Credit Agreement and to make certain other amendments
thereto;

     NOW, THEREFORE, the Existing Credit Agreement is hereby amended and
restated to state in its entirety as follows:

     NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:

                                      1.1
                                  DEFINITIONS

          (a) Certain Defined Terms.  The following terms have the following
     meanings:

             "Administrative Agent" means Bank of America in its capacity as
        administrative agent for the Lenders hereunder, and any successor
        administrative agent arising under Section 9.9.

             "Administrative Agent-Related Persons" means Bank of America and
        any successor administrative agent arising under Section 9.9, together
        with their respective Affiliates (including, in the case of Bank of
        America, the Lead Arranger), and the officers, directors, employees,
        agents and attorneys-in-fact of such Persons and Affiliates.

             "Administrative Agent's Payment Office" means the address for
        payments set forth on Schedule 10.2 or such other address as the
        Administrative Agent may from time to time specify.

             "Affiliate" means, as to any Person, any other Person which,
        directly or indirectly, is in control of, is controlled by, or is under
        common control with, such Person. A Person shall be deemed to control
        another Person if the controlling Person possesses, directly or
        indirectly, the power to direct or cause the direction of the management
        and policies of the other Person, whether through the ownership of
        voting securities, membership interests, by contract, or otherwise.

             "Agreement" means this Credit Agreement.

             "Annual Statement" means, with respect to any Insurance Subsidiary
        for any fiscal year, the annual financial statements of such Insurance
        Subsidiary as required to be filed with the Insurance Regulatory
        Authority of its jurisdiction of domicile and in accordance with the
        laws of such jurisdiction, together with all exhibits, schedules,
        certificates and actuarial opinions required to be filed or delivered
        therewith, prepared in accordance with Statutory Accounting Practices.
        References to amounts on particular exhibits, schedules, lines, pages
        and columns of such Annual Statements are based on the formats
        promulgated by the NAIC for 2000 Annual Statements for the applicable
        Insurance Subsidiary. If such format is changed in future years so that
        different information is contained in such items or they no longer
        exist, it is understood that the reference is to information consistent
        with that recorded in the referenced item in the 2000 Annual Statement
        of the Insurance Subsidiary.

             "Applicable Margin" means 2.50%.
<PAGE>

             "Appraisal" means a real estate appraisal conducted in accordance
        with the Uniform Standards of Professional Appraisal Practice (as
        promulgated by the Appraisal Standards Board of the Appraisal
        Foundation) and all Requirements of Law applicable to the Lenders, and
        applicable internal policies of the Administrative Agent, undertaken by
        an independent appraisal firm satisfactory to the Administrative Agent
        and the Required Lenders, and providing an assessment of fair market
        value of a parcel or property, and taking into account any and all
        Estimated Remediation Costs.

             "Assignee" has the meaning specified in subsection 10.9(a).

             "Attorney Costs" means and includes all fees and disbursements of
        any law firm or other external counsel, the allocated cost of internal
        legal services and all disbursements of internal counsel.

             "Bank of America" means Bank of America, N. A.

             "Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978
        (11 U.S.C. sec.101, et seq.).

             "BAS" means Banc of America Securities LLC.

             "Base Rate" means a fluctuating rate per annum equal to the higher
        of: (a) the Federal Funds Rate plus 1/2 of 1%; and (b) the rate of
        interest in effect for such day as publicly announced from time to time
        by Bank of America as its "prime rate". Such rate is a rate set by Bank
        of America based upon various factors including Bank of America's costs
        and desired return, general economic conditions and other factors, and
        is used as a reference point for pricing some loans, which may be priced
        at, above, or below such announced rate. Any change in such rate
        announced by Bank of America shall take effect at the opening of
        business on the day specified in the public announcement of such change.

             "Base Rate Loan" means a Loan that bears interest based on the Base
        Rate.

             "Benefit Arrangement" means any employee benefit plan within the
        meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer
        Plan and which is maintained or otherwise contributed to by any member
        of the ERISA Group.

             "Borrower Reinsurance Agreement" means any arrangement whereby any
        Insurance Subsidiary, as reinsurer, agrees to indemnify any other
        insurance or reinsurance company against all or a portion of the
        insurance risks underwritten by such insurance or reinsurance company
        under any insurance or reinsurance policy.

             "Borrowing" means a borrowing hereunder consisting of Loans of the
        same Type made to the Borrower on the same day by the Lenders under
        Article II, and, other than in the case of Base Rate Loans, having the
        same Interest Period.

             "Business Day" means any day other than a Saturday, Sunday or other
        day on which commercial banks in the state where the Administrative
        Agent's Office is located are authorized or required by law to close
        and, if the applicable Business Day relates to any Offshore Rate Loan,
        means such a day on which dealings in deposits are carried on in the
        applicable offshore dollar interbank market.

             "Capital Adequacy Regulation" means any guideline, request or
        directive of any central bank or other Governmental Authority, or any
        other law, rule or regulation, whether or not having the force of law,
        in each case, regarding capital adequacy of any bank or of any
        corporation controlling a bank.

             "Capital Expenditures" means, for any period, the sum of

                (a) the aggregate amount of all expenditures of the Borrower and
           its Subsidiaries for fixed or capital assets made during such period
           which, in accordance with GAAP, would be classified as capital
           expenditures; and
                                        2
<PAGE>

                (b) the aggregate amount of all Capitalized Lease Liabilities
           incurred during such period.

             "Capitalization Ratio" means, as of the last day of any fiscal
        quarter, the ratio of (i) Consolidated Indebtedness as of such date to
        (ii) the sum of Consolidated Indebtedness and Consolidated Tangible Net
        Worth, each as of such date.

             "Capitalized Lease Liabilities" means all monetary obligations of
        the Borrower or any of its Subsidiaries under any leasing or similar
        arrangement which, in accordance with GAAP, would be classified as
        capitalized leases, and, for purposes of this Agreement and each other
        Loan Document, the amount of such obligations shall be the capitalized
        amount thereof, determined in accordance with GAAP, and the stated
        maturity thereof shall be the date of the last payment of rent or any
        other amount due under such lease prior to the first date upon which
        such lease may be terminated by the lessee without payment of a penalty.

             "Cash Equivalents" means (i) securities issued or unconditionally
        guaranteed by the United States of America or any agency or
        instrumentality thereof, backed by the full faith and credit of the
        United States of America and maturing within one hundred eighty (180)
        days from the date of acquisition, (ii) commercial paper issued by any
        Person organized under the laws of the United States of America,
        maturing within one hundred eighty (180) days from the date of
        acquisition and, at the time of acquisition, having a rating of at least
        A-1 or the equivalent thereof by S&P and at least P-1 or the equivalent
        thereof by Moody's, (iii) time deposits, certificates of deposit and
        banker's acceptances maturing within one hundred eighty (180) days from
        the date of issuance and issued by a bank or trust company organized
        under the laws of the United States of America or any state thereof that
        has combined capital and surplus of at least $500,000,000 and that has
        (or is a subsidiary of a bank holding company that has) a long-term
        unsecured debt rating of at least A or the equivalent thereof by S&P or
        at least A-2 or the equivalent thereof by Moody's, (iv) repurchase
        obligations of a bank or trust company described in clause (iii) above
        and having a term not exceeding seven (7) days with respect to
        underlying securities of the types described in clause (i) above entered
        into with any bank or trust company meeting the qualifications specified
        in clause (iii) above, and (v) repurchase obligations of brokers,
        dealers and other parties with a long-term unsecured debt rating of at
        least A or the equivalent thereof by S&P or at least A-2 or the
        equivalent by Moody's of the types of securities described in clause (i)
        above and having a term not exceeding seven (7) days.

             "CERCLA" has the meaning specified in the definition of
        "Environmental Laws."

             "Change of Control" shall occur at any time any of the following
        shall occur: (i) the Guarantor shall not own, directly or indirectly, a
        majority of the voting stock of the Borrower or (ii) Prem Watsa shall
        not own, directly or indirectly, at least 40% of the votes attaching to
        the voting stock of the Guarantor.

             "Closing Date" means the date on which all conditions precedent set
        forth in Section 4.1 are satisfied or waived by all Lenders (or, in the
        case of subsection 4.7, waived by the Person entitled to receive such
        payment).

             "CMOs" means any security or certificate representing any interest
        or participation in a pool of Mortgage Backed Securities (it being
        understood that Mortgage Backed Securities themselves are not CMOs).

             "Code" means the Internal Revenue Code of 1986, and regulations
        promulgated thereunder.

             "Combined Statutory Surplus" means, as to all Insurance
        Subsidiaries domiciled in the United States on a combined basis as of
        any date, the sum (without duplication) of the total amounts shown on
        line 27, column 1, page 3 of the Annual Statement of such Insurance
        Subsidiary.

             "Compliance Certificate" means a certificate substantially in the
        form of Exhibit B.

                                        3
<PAGE>

             "Consolidated Indebtedness" means, as of the last day of any fiscal
        quarter, the aggregate (without duplication) of all Indebtedness of the
        Borrower and its Subsidiaries as of such date, determined on a
        consolidated basis in accordance with GAAP.

             "Consolidated Net Income" means, for any period, all amounts which,
        in conformity with GAAP consistently applied, would be included under
        net income on a consolidated income statement of the Borrower and each
        of its Subsidiaries for such period.

             "Consolidated Net Worth" means, at any time, the net worth of the
        Borrower and its Subsidiaries at such time, determined on a consolidated
        basis in accordance with GAAP but excluding any preferred stock or other
        class of equity securities that, by its stated terms (or by the terms of
        any class of equity securities issuable upon conversion thereof or in
        exchange therefor), or upon the occurrence of any event, matures or is
        mandatorily redeemable, or is redeemable at the option of the holders
        thereof, in whole or in part and excluding the effect of Statement of
        Financial Accounting Standards No. 115 issued by the Financial
        Accounting Standards Board.

             "Consolidated Tangible Net Worth" means as to the Borrower and its
        Subsidiaries, Consolidated Net Worth minus intangible assets minus
        capitalized expenses.

             "Contingent Obligation" means, as to any Person (without
        duplication), any direct or indirect liability of that Person, whether
        or not contingent, with or without recourse, (a) with respect to any
        Indebtedness, lease, dividend, letter of credit (excluding any Letter of
        Credit under the Letter of Credit Agreement or letter of credit
        supporting reinsurance liabilities to the extent of reserves established
        under GAAP) or other obligation (the "primary obligations") of another
        Person (the "primary obligor"), including (i) to purchase, repurchase or
        otherwise acquire such primary obligations or any security therefor,
        (ii) to advance or provide funds for the payment or discharge of any
        such primary obligation, or to maintain working capital or equity
        capital of the primary obligor or otherwise to maintain the net worth or
        solvency or any balance sheet item, level of income or financial
        condition of the primary obligor, (iii) to purchase property, securities
        or services primarily for the purpose of assuring the owner of any such
        primary obligation of the ability of the primary obligor to make payment
        of such primary obligation, or (iv) otherwise to assure or hold harmless
        the holder of any such primary obligation against loss in respect
        thereof (each, a "Guaranty Obligation"); (b) with respect to any Surety
        Instrument issued for the account of that Person or as to which that
        Person is otherwise liable for reimbursement of drawings or payments;
        (c) to purchase any materials, supplies or other property from, or to
        obtain the services of, another Person if the relevant contract or other
        related document or obligation requires that payment for such materials,
        supplies or other property, or for such services, shall be made
        regardless of whether delivery of such materials, supplies or other
        property is ever made or tendered, or such services are ever performed
        or tendered, or (d) in respect of any Swap Contract; provided, however,
        that obligations of each of the Insurance Subsidiaries under Insurance
        Agreements or Borrower Reinsurance Agreements which are entered into in
        the ordinary course of business (including security posted by each of
        the Insurance Subsidiaries in the ordinary course of its business to
        secure obligations thereunder) shall not be deemed to be Contingent
        Obligations of such Insurance Subsidiary or the Borrower for the
        purposes of this Agreement. The amount of any Person's obligation under
        any Contingent Obligations shall (subject to any limitation set forth
        therein) be deemed to be the lesser of (i) the outstanding principal
        amount (or maximum permitted principal amount, if larger) of the
        Indebtedness, obligation or other liability guaranteed or supported
        thereby or (ii) the maximum stated amount so guaranteed or supported.

             "Contractual Obligation" means, as to any Person, any provision of
        any security issued by such Person or of any agreement, undertaking,
        contract, indenture, mortgage, deed of trust or other instrument,
        document or agreement to which such Person is a party or by which it or
        any of its property is bound.

                                        4
<PAGE>

             "Conversion/Continuation Date" means any date on which, under
        Section 2.3, the Borrower (a) converts Loans of one Type to another
        Type, or (b) continues as Loans of the same Type, but with a new
        Interest Period, Loans having Interest Periods expiring on such date.

             "Covenant Compliance Worksheet" means a fully completed worksheet
        in the form of Attachment A to Exhibit C.

             "Default" means any event or circumstance which, with the giving of
        notice, the lapse of time, or both, would (if not cured or otherwise
        remedied during such time) constitute an Event of Default.

             "Disposition" means (i) the sale, lease, conveyance or other
        disposition of property, and (ii) the sale or transfer by the Borrower
        or any Subsidiary of the Borrower of any equity securities issued by any
        Subsidiary of the Borrower and held by such transferor Person, other
        than the sale of assets in the ordinary course of business.

             "Dollars", "dollars" and "$" each mean lawful money of the United
        States.

             "Eligible Assignee" means (a) a commercial bank organized under the
        laws of the United States, or any state thereof, and having a combined
        capital and surplus of at least $100,000,000; (b) a commercial bank
        organized under the laws of any other country which is a member of the
        Organization for Economic Cooperation and Development (the "OECD"), or a
        political subdivision of any such country, and having a combined capital
        and surplus of at least $100,000,000, provided that such bank is acting
        through a branch or agency located in the United States; (c) a Person
        that is primarily engaged in the business of commercial banking and that
        is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which
        a Lender is a Subsidiary, or (iii) a Person of which a Lender is a
        Subsidiary; and (d) any other Person the Borrower or the Administrative
        Agent shall agree to permit to be an Eligible Assignee.

             "Environmental Claims" means all claims (other than claims in the
        ordinary course of business under Insurance Agreements or Reinsurance
        Agreements written or assumed by any Insurance Subsidiary), however
        asserted, by any Governmental Authority or other Person alleging
        potential liability or responsibility for violation of any Environmental
        Law, or for release or injury to the environment or threat to public
        health, personal injury (including sickness, disease or death), property
        damage, natural resources damage, or otherwise alleging liability or
        responsibility for damages (punitive or otherwise), cleanup, removal,
        remedial or response costs, restitution, civil or criminal penalties,
        injunctive relief, or other type of relief, resulting from or based upon
        the presence, placement, discharge, emission or release (including
        intentional and unintentional, negligent and non-negligent, sudden or
        non-sudden, accidental or non-accidental, placement, spills, leaks,
        discharges, emissions or releases) of any Hazardous Materials at, in, or
        from property, whether or not owned by the Borrower.

             "Environmental Laws" means all federal, state or local laws,
        statutes, common law duties, rules, regulations, ordinances and codes,
        together with all administrative orders, directed duties, requests,
        licenses, authorizations and permits of, and agreements with, any
        Governmental Authorities, in each case relating to environmental, health
        and safety matters, including the Comprehensive Environmental Response,
        Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act,
        the Federal Water Pollution Control Act of 1972, the Solid Waste
        Disposal Act, the Federal Resource Conservation and Recovery Act, the
        Toxic Substances Control Act, the Emergency Planning and Community
        Right-to-Know Act.

             "ERISA" means the Employee Retirement Income Security Act of 1974,
        and regulations promulgated thereunder.

             "ERISA Affiliate" means any trade or business (whether or not
        incorporated) under common control with the Borrower within the meaning
        of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
        Code for purposes of provisions relating to Section 412 of the Code).

                                        5
<PAGE>

             "ERISA Event" means (a) a Reportable Event with respect to a
        Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate
        from a Pension Plan subject to Section 4063 of ERISA during a plan year
        in which it was a substantial employer (as defined in Section 4001(a)(2)
        of ERISA) or a cessation of operations which is treated as such a
        withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
        withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
        Plan or notification that a Multiemployer Plan is in reorganization; (d)
        the filing of a notice of intent to terminate, the treatment of a Plan
        amendment as a termination under Section 4041 or 4041A of ERISA, or the
        commencement of proceedings by the PBGC to terminate a Pension Plan or
        Multiemployer Plan; (e) an event or condition which might reasonably be
        expected to constitute grounds under Section 4042 of ERISA for the
        termination of, or the appointment of a trustee to administer, any
        Pension Plan or Multiemployer Plan; or (f) the imposition of any
        liability under Title IV of ERISA, other than PBGC premiums due but not
        delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
        Affiliate.

             "ERISA Group" means the Borrower and all members of a controlled
        group of corporations and all trades or businesses (whether or not
        incorporated) under common control which, together with the Borrower,
        are treated as a single employer under Section 414 of the Internal
        Revenue Code.

             "Estimated Remediation Costs" means all costs associated with
        performing work to remediate contamination of real property or
        groundwater, including engineering and other professional fees and
        expenses, costs to remove, transport and dispose of contaminated soil,
        costs to "cap" or otherwise contain contaminated soil, and costs to pump
        and treat water and monitor water quality.

             "Eurodollar Reserve Percentage" has the meaning specified in the
        definition of "Offshore Rate".

             "Event of Default" means any of the events or circumstances
        specified in Section 8.1.

             "Event of Loss" means, with respect to any property, any of the
        following: (a) any loss, destruction or damage of such property; (b) any
        pending or threatened institution of any proceedings for the
        condemnation or seizure of such property or for the exercise of any
        right of eminent domain; or (c) any actual condemnation, seizure or
        taking, by exercise of the power of eminent domain or otherwise, of such
        property, or confiscation of such property or the requisition of the use
        of such property.

             "Exchange Act" means the Securities Exchange Act of 1934, and
        regulations promulgated thereunder.

             "Existing Credit Agreement" has the meaning specified in the
        recitals.

             "FDIC" means the Federal Deposit Insurance Corporation, and any
        Governmental Authority succeeding to any of its principal functions.

             "Federal Funds Rate" means, for any day, the rate per annum
        (rounded upwards to the nearest 1/100 of 1%) equal to the weighted
        average of the rates on overnight Federal funds transactions with
        members of the Federal Reserve System arranged by Federal funds brokers
        on such day, as published by the Federal Reserve Bank on the Business
        Day next succeeding such day; provided that (a) if such day is not a
        Business Day, the Federal Funds Rate for such day shall be such rate on
        such transactions on the next preceding Business Day as so published on
        the next succeeding Business Day, and (b) if no such rate is so
        published on such next succeeding Business Day, the Federal Funds Rate
        for such day shall be the average rate charged to Bank of America on
        such day on such transactions as determined by Administrative Agent.

             "Fitch" means Fitch, Inc., its successors and assigns.

             "FRB" means the Board of Governors of the Federal Reserve System,
        and any Governmental Authority succeeding to any of its principal
        functions.

                                        6
<PAGE>

             "GAAP" means generally accepted accounting principles set forth in
        the opinions and pronouncements of the Accounting Principles Board and
        the American Institute of Certified Public Accountants and statements
        and pronouncements of the Financial Accounting Standards Board or such
        other principles as may be approved by a significant segment of the
        accounting profession, that are applicable to the circumstances as of
        the date of determination, consistently applied. If at any time any
        change in GAAP would affect the computation of any financial ratio or
        requirement set forth in any Loan Document, and either Borrower or the
        Required Lenders shall so request, the Administrative Agent, Lenders and
        Borrower shall negotiate in good faith to amend such ratio or
        requirement to preserve the original intent thereof in light of such
        change in GAAP (subject to the approval of the Required Lenders),
        provided that, until so amended, (a) such ratio or requirement shall
        continue to be computed in accordance with GAAP prior to such change
        therein and (b) Borrower shall provide to the Administrative Agent, and
        the Lenders financial statements and other documents required under this
        Agreement or as reasonably requested hereunder setting forth a
        reconciliation between calculations of such ratio or requirement made
        before and after giving effect to such change in GAAP.

             "Governmental Authority" means any nation or government, any state
        or other political subdivision thereof, any central bank (or similar
        monetary or regulatory authority) thereof, any entity exercising
        executive, legislative, judicial, regulatory or administrative functions
        of or pertaining to government, and any corporation or other entity
        owned or controlled, through stock or capital ownership or otherwise, by
        any of the foregoing.

             "Granting Lender" has the meaning specified in Section 10.9(f).

             "Guarantor" means Fairfax Financial Holdings Limited, a Canada
        corporation.

             "Guarantor Consent" means a consent of the Guarantor in
        substantially the form of Exhibit E.

             "Guaranty" means the guaranty of the Guarantor dated December 31,
        2001.

             "Guaranty Obligation" has the meaning specified in the definition
        of "Contingent Obligation."

             "Hazardous Materials" means any substances or materials (a) that
        are defined as hazardous wastes, hazardous substances, pollutants,
        contaminants or toxic substances under any Environmental Law, (b) that
        are defined by any Environmental Law as toxic, explosive, corrosive,
        ignitable, infectious, radioactive, mutagenic or otherwise hazardous,
        (c) the presence of which require investigation or response under any
        Environmental Law, (d) that constitute a nuisance, trespass or health or
        safety hazard to Persons or neighboring properties, (e) that consist of
        underground or aboveground storage tanks, whether empty, filled or
        partially filled with any substance or (f) that contain asbestos,
        polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
        hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear
        fuel, natural gas or synthetic gas.

             "Historical Statutory Statements" has the meaning specified in
        Section 5.11(b).

             "Indebtedness" of any Person means, without duplication, (a) all
        indebtedness for borrowed money or in respect of loans or advances; (b)
        all obligations issued, undertaken or assumed as the deferred purchase
        price of property or services (other than trade payables entered into in
        the ordinary course of business on ordinary terms); (c) all
        reimbursement or payment obligations (contingent or otherwise) with
        respect to Surety Instruments; (d) all obligations evidenced by notes,
        bonds, debentures or similar instruments, including obligations so
        evidenced incurred in connection with the acquisition of property,
        assets or businesses; (e) all indebtedness created or arising under any
        conditional sale or other title retention agreement, or incurred as
        financing, in either case with respect to property acquired by the
        Person (even though the rights and remedies of the seller or bank under
        such agreement in the event of default are limited to repossession or
        sale of such property); (i) all obligations with respect to capital
        leases or Synthetic Lease Obligations; (j) all Obligations with respect
        to Swap Contracts; (h) all Obligations with respect to (x) any loans
        made to any executives of the Borrower or any its Subsidiaries that are
        guaranteed by the Borrower and (y) any

                                        7
<PAGE>

        repurchase obligations including contingent obligations in respect of
        shares; (i) all accrued earn-out obligations of such Person; (j) all
        indebtedness referred to in clauses (a) through (i) above secured by (or
        for which the holder of such Indebtedness has an existing right,
        contingent or otherwise, to be secured by) any Lien upon or in property
        (including accounts and contracts rights) owned by such Person, even
        though such Person has not assumed or become liable for the payment of
        such Indebtedness; and (k) all Contingent Obligations in respect of
        indebtedness or obligations of others of the kinds referred to in
        clauses (a) through (i) above; provided that Indebtedness shall not
        include obligations under any Borrower Reinsurance Agreement or
        Insurance Agreement or letters of credit supporting such obligations to
        the extent of reserves established under GAAP.

             "Indemnified Liabilities" has the meaning specified in Section
        10.5.

             "Indemnified Person" has the meaning specified in Section 10.5.

             "Insolvency Proceeding" means, with respect to any Person, (a) any
        case, action or proceeding with respect to such Person before any court
        or other Governmental Authority relating to bankruptcy, reorganization,
        insolvency, liquidation, receivership, dissolution, winding-up or relief
        of debtors, or (b) any general assignment for the benefit of creditors,
        composition, marshalling of assets for creditors, or other, similar
        arrangement in respect of its creditors generally or any substantial
        portion of its creditors; undertaken under U.S. Federal, state or
        foreign law, including the Bankruptcy Code.

             "Insurance Agreement" means all contracts of insurance issued by
        any Insurance Subsidiary.

             "Insurance Regulatory Authority" means, with respect to any
        Insurance Subsidiary, the insurance department or similar Governmental
        Authority charged with regulating insurance companies or insurance
        holding companies, in its jurisdiction of domicile and, to the extent
        that it has regulatory authority over such Insurance Subsidiary, in each
        other jurisdiction in which such Insurance Subsidiary conducts business
        or is licensed to conduct business.

             "Insurance Subsidiary" means any Subsidiary of the Borrower the
        ability of which to pay dividends is regulated by an Insurance
        Regulatory Authority or that is otherwise required to be regulated
        thereby in accordance with the applicable Requirements of Law of its
        jurisdiction of domicile, and shall mean and include, without
        limitation, each of Odyssey Reinsurance Corporation and Odyssey America
        Reinsurance Corporation.

             "Interest Payment Date" means, as to an Offshore Rate Loan, the
        last day of each Interest Period applicable to such Loan and, as to any
        Base Rate Loan, the last Business Day of each calendar quarter and each
        date such Loan is converted into another Type of Loan, provided,
        however, that if any Interest Period for an Offshore Rate Loan exceeds
        three months, the date that falls three months after the beginning of
        such Interest Period and after each Interest Payment Date thereafter is
        also an Interest Payment Date.

             "Interest Period" means, as to any Offshore Rate Loan, the period
        commencing on the borrowing date of such Loan or on the
        Conversion/Continuation Date on which the Loan is converted into or
        continued as an Offshore Rate Loan, and ending on the date one, two,
        three or six months thereafter as selected by the Borrower in its Notice
        of Borrowing or Notice of Conversion/ Continuation;

        provided that:

                (i) if any Interest Period would otherwise end on a day that is
           not a Business Day, that Interest Period shall be extended to the
           following Business Day unless, in the case of an Offshore Rate Loan,
           the result of such extension would be to carry such Interest Period
           into another calendar month, in which event such Interest Period
           shall end on the preceding Business Day;

                                        8
<PAGE>

                (ii) any Interest Period pertaining to an Offshore Rate Loan
           that begins on the last Business Day of a calendar month (or on a day
           for which there is no numerically corresponding day in the calendar
           month at the end of such Interest Period) shall end on the last
           Business Day of the calendar month at the end of such Interest
           Period; and

                (iii) unless the Administrative Agent otherwise consents, there
           may not be more than four Interest Periods in effect at any time.

             "Invested Assets" means, with respect to any Person, the amount, on
        a consolidated basis, of such Person's investments, cash and cash
        equivalents as reflected on its most recent balance sheet.

             "Investment Grade Securities" means non-equity securities (other
        than those issued by an Affiliate of the Borrower and other than CMOs
        and REMICS) that are rated "BBB-" (or the equivalent thereof) or higher
        by S&P, "Baa3" (or the equivalent thereof) or higher by Moody's, or
        "BBB-" (or the equivalent thereof) or higher by Fitch or if not rated by
        S&P, Moody's or Fitch, are rated "NAIC 2" (or the equivalent thereof) or
        better by the NAIC.

             "Investments" has the meaning specified in Section 7.4.

             "IRS" means the Internal Revenue Service, and any Governmental
        Authority succeeding to any of its principal functions under the Code.

             "Joint Venture" means a partnership, limited liability company,
        joint venture or other legal arrangement (whether created by contract or
        conducted through a separate legal entity) now or hereafter formed by
        the Borrower or any of its Subsidiaries with another Person in order to
        conduct a common venture or enterprise with such Person.

             "Lead Arranger" means BAS in its capacity as sole lead arranger and
        sole book manager.

             "Lender" means each lender from time to time party hereto.

             "Lending Office" means, as to any Lender, the office or offices of
        such Lender specified as its "Lending Office" or "Domestic Lending
        Office" or "Offshore Lending Office", as the case may be, on Schedule
        10.2, or such other office or offices as the Lender may from time to
        time notify the Borrower and the Administrative Agent.

             "Letter of Credit Agreement" means the Standby Letter of Credit
        Application and Agreement dated December 5, 1996 with Morgan Guaranty
        Trust Company in respect of Lloyd's of London, as amended.

             "Licenses" has the meaning specified in Section 5.4.

             "Lien" means any mortgage, pledge, hypothecation, assignment,
        deposit arrangement (in the nature of compensating balances, cash
        collateral accounts or security interests), encumbrance, lien (statutory
        or other), charge, or preference, priority or other security interest or
        preferential arrangement of any kind or nature whatsoever (including any
        conditional sale or other title retention agreement, any financing lease
        having substantially the same economic effect as any of the foregoing,
        and the filing of any financing statement under the Uniform Commercial
        Code or comparable Laws of any jurisdiction), including the interest of
        a purchaser of accounts receivable.

             "Loan" means an extension of credit by a Lender to the Borrower
        under Article II, and may be a Base Rate Loan or an Offshore Rate Loan
        (each, a "Type" of Loan).

             "Loan Documents" means this Agreement, any Notes, and all other
        documents delivered to the Administrative Agent or any Lender in
        connection with the transactions contemplated by this Agreement.

             "Margin Stock" has the meaning given to such term in Regulation U.

             "Material Adverse Effect" means (a) a material adverse change in,
        or a material adverse effect upon, the operations, business, properties,
        condition (financial or otherwise) or prospects of the
                                        9
<PAGE>

        Borrower and its Subsidiaries taken as a whole; (b) a material
        impairment of the ability of the Borrower or any Subsidiary to perform
        under any Loan Document and to avoid any Event of Default; or (c) a
        material adverse effect upon (i) the legality, validity, binding effect
        or enforceability against the Borrower or any Subsidiary of any Loan
        Document or (ii) the perfection or priority of any Lien granted under
        any of the Collateral Documents.

             "Moody's" means Moody's Investors Service, Inc., its successors and
        assigns.

             "Mortgage Backed Securities" means investment securities
        representing any undivided interest or participation in or which are
        secured by, a pool of loans secured by mortgages or deeds of trust.

             "Multiemployer Plan" means an employee pension benefit plan within
        the meaning of Section 4001(a)(3) of ERISA to which any member of the
        ERISA Group is then making or accruing an obligation to make
        contributions or has within the preceding five (5) plan years made
        contributions, including for these purposes, any Person which ceased to
        be a member of the ERISA Group during such five (5) year period.

             "NAIC" means the National Association of Insurance Commissioners
        and any successor thereto.

             "Net Proceeds" means, as to any Disposition by a Person, proceeds
        in cash, checks or other cash equivalent financial instruments as and
        when received by such Person, net of: (a) the direct costs relating to
        such Disposition excluding amounts payable to such Person or any
        Affiliate of such Person, (b) sale, use or other transaction taxes paid
        or payable by such Person as a direct result thereof, and (c) amounts
        required to be applied to repay principal, interest and prepayment
        premiums and penalties on Indebtedness secured by a Lien on the asset
        which is the subject of such Disposition. "Net Proceeds" means, as to
        any issuance of debt or equity, proceeds of such issuance net of the
        direct costs relating to such issuance excluding amounts payable to such
        Person or any Affiliate of such Person. "Net Proceeds" shall also
        include proceeds paid on account of any Event of Loss, net of (i) all
        money actually applied to repair or reconstruct the damaged property or
        property affected by the condemnation or taking, (ii) all of the costs
        and expenses reasonably incurred in connection with the collection of
        such proceeds, award or other payments, and (iii) any amounts retained
        by or paid to parties having superior rights to such proceeds, awards or
        other payments.

             "Note" means a promissory note executed by the Borrower in favor of
        a Lender pursuant to subsection 2.2(b), in substantially the form of
        Exhibit D.

             "Notice of Conversion/Continuation" means a notice in substantially
        the form of Exhibit A.

             "Obligations" means all advances, debts, liabilities, obligations,
        covenants and duties arising under any Loan Document owing by the
        Borrower to any Lender, the Administrative Agent, or any Indemnified
        Person, whether direct or indirect (including those acquired by
        assignment), absolute or contingent, due or to become due, now existing
        or hereafter arising.

             "Offshore Rate" means for any Interest Period with respect to any
        Offshore Rate Loan, a rate per annum determined by the Administrative
        Agent pursuant to the following formula:

<Table>
        <S>              <C>
                                        LIBOR
                         ------------------------------------
        Offshore Rate =       1.00 -- Eurodollar Reserve
                                      Percentage
</Table>

           Where,

             "LIBOR" means, for such Interest Period,

                (a) the rate per annum (carried out to the fifth decimal place)
           equal to the rate determined by the Administrative Agent to be the
           offered rate that appears on Page 3750 of the Telerate Screen for
           deposits in Dollars (for delivery on the first day of such Interest
           Period) with a term equivalent to such Interest Period, determined as
           of approximately 11:00 a.m. (London time) two Business Days prior to
           the first day of such Interest Period, or

                                        10
<PAGE>

                (b) in the event the rate referenced in the preceding subsection
           (a) does not appear on such page or service or such page or service
           shall cease to be available, the rate per annum (carried out to the
           fifth decimal place) equal to the rate determined by the
           Administrative Agent to be the offered rate on such other page or
           other service that displays an average British Bankers Association
           Interest Settlement Rate for deposits in Dollars (for delivery on the
           first day of such Interest Period) with a term equivalent to such
           Interest Period, determined as of approximately 11:00 a.m. (London
           time) two Business days prior to the first day of such Interest
           Period, or

                (c) in the event the rates referenced in the preceding
           subsections (a) and (b) are not available, the rate per annum
           determined by the Administrative Agent as the rate of interest at
           which Dollar deposits (for delivery on the first day of such Interest
           Period) in same day funds in the approximate amount of the applicable
           Offshore Rate Loan and with a term equivalent to such Interest Period
           would be offered by its London Branch to major banks in the offshore
           Dollar market at their request at approximately 11:00 a.m. (London
           time) two Business Days prior to the first day of such Interest
           Period.

             "Eurodollar Reserve Percentage" means, for any day during any
        Interest Period, the reserve percentage (expressed as a decimal, rounded
        upward to the next 1/100th of 1%) in effect on such day, whether or not
        applicable to any Lender, under regulations issued from time to time by
        the Board of Governors of the Federal Reserve System for determining the
        maximum reserve requirement (including any emergency, supplemental or
        other marginal reserve requirement) with respect to Eurocurrency funding
        (currently referred to as "Eurocurrency liabilities"). The Offshore Rate
        for each outstanding Offshore Rate Loan shall be adjusted automatically
        as of the effective date of any change in the Eurodollar Reserve
        Percentage.

          The determination of the Eurodollar Reserve Percentage and LIBOR by
     the Administrative Agent shall be conclusive in the absence of manifest
     error.

             "Offshore Rate Loan" means a Loan that bears interest based on the
        Offshore Rate.

             "Organization Documents" means, for any corporation, the
        certificate or articles of incorporation, the bylaws, any certificate of
        determination or instrument relating to the rights of preferred
        shareholders of such corporation, any shareholder rights agreement, and
        all applicable resolutions of the board of directors (or any committee
        thereof) of such corporation.

             "Other Taxes" means any present or future stamp, court or
        documentary taxes or any other excise or property taxes, charges or
        similar levies which arise from any payment made hereunder or from the
        execution, delivery, performance, enforcement or registration of, or
        otherwise with respect to, this Agreement or any other Loan Documents.

             "Participant" has the meaning specified in subsection 10.9(d).

             "PBGC" means the Pension Benefit Guaranty Corporation, or any
        Governmental Authority succeeding to any of its principal functions
        under ERISA.

             "Pension Plan" means a pension plan (as defined in Section 3(2) of
        ERISA) subject to Title IV of ERISA which the Borrower sponsors,
        maintains, or to which it makes, is making, or is obligated to make
        contributions, or in the case of a multiple employer plan (as described
        in Section 4064(a) of ERISA) has made contributions at any time during
        the immediately preceding five (5) plan years.

             "Permitted Liens" has the meaning specified in Section 7.3.

             "Person" means an individual, partnership, corporation, limited
        liability company, business trust, joint stock company, trust,
        unincorporated association, joint venture or Governmental Authority.

                                        11
<PAGE>

             "Plan" means an employee benefit plan (as defined in Section 3(3)
        of ERISA) which the Borrower sponsors or maintains or to which the
        Borrower makes, is making, or is obligated to make contributions and
        includes any Pension Plan.

             "Pro Rata Share" means, as to any Lender at any time, the
        percentage equivalent (expressed as a decimal, rounded to the ninth
        decimal place) at such time of the outstanding Loans payable to such
        Lender divided by the aggregate outstanding Loans of all Lenders.

             "Quarterly Statement" means, with respect to any Insurance
        Subsidiary for any fiscal quarter, the quarterly financial statements of
        such Insurance Subsidiary as required to be filed with the Insurance
        Regulatory Authority of its jurisdiction of domicile, together with all
        exhibits, schedules, certificates and actuarial opinions required to be
        filed or delivered therewith.

             "Reinsurance Agreement" means any agreement, contract, treaty,
        certificate of other arrangement whereby any Insurance Subsidiary agrees
        to transfer, cede or retrocede to another insurer or reinsurer all or
        part of the liability assumed or assets held by such Insurance
        Subsidiary under a policy or policies of insurance issued by such
        Insurance Subsidiary.

             "Reportable Event" means any of the events set forth in Section
        4043(b) of ERISA or the regulations thereunder, other than any such
        event for which the 30-day notice requirement under ERISA has been
        waived in regulations issued by the PBGC.

             "Required Lenders" means, at any time Lenders then holding at least
        51% of the then aggregate unpaid principal amount of the Loans.

             "Requirement of Law" means, as to any Person, any law (statutory or
        common), treaty, rule or regulation or determination of an arbitrator or
        of a Governmental Authority, in each case applicable to or binding upon
        the Person or any of its property or to which the Person or any of its
        property is subject.

             "Responsible Officer" means the chief executive officer or the
        president of the Borrower, or any other officer having substantially the
        same authority and responsibility; or, with respect to compliance with
        financial covenants, the chief financial officer or the treasurer of the
        Borrower, or any other officer having substantially the same authority
        and responsibility.

             "SEC" means the Securities and Exchange Commission, or any
        Governmental Authority succeeding to any of its principal functions.

             "Solvent" means, as to any Person at any time, that (a) the fair
        value of the property of such Person is greater than the amount of such
        Person's liabilities (including disputed, contingent and unliquidated
        liabilities) as such value is established and liabilities evaluated for
        purposes of Section 101(31) of the Bankruptcy Code and, in the
        alternative, for purposes of the New York Uniform Fraudulent Transfer
        Act; (b) the present fair saleable value of the property of such Person
        is not less than the amount that will be required to pay the probable
        liability of such Person on its debts as they become absolute and
        matured; (c) such Person is able to realize upon its property and pay
        its debts and other liabilities (including disputed, contingent and
        unliquidated liabilities) as they mature in the normal course of
        business; (d) such Person does not intend to, and does not believe that
        it will, incur debts or liabilities beyond such Person's ability to pay
        as such debts and liabilities mature; and (e) such Person is not engaged
        in business or a transaction, and is not about to engage in business or
        a transaction, for which such Person's property would constitute
        unreasonably small capital.

             "S&P" means Standard & Poor's Rating Group.

             "SPC" has the meaning specified in Section 10.9(f).

             "Statutory Accounting Practices" means, with respect to any
        Insurance Subsidiary, the statutory accounting practices prescribed or
        permitted by the relevant Insurance Regulatory

                                        12
<PAGE>

        Authority of its state of domicile, consistently applied and maintained
        and in conformity with those used in the preparation of the most recent
        Historical Statutory Statements.

             "Subsidiary" means a corporation, partnership, joint venture,
        limited liability company or other business entity of which a majority
        of the shares of securities or other interest having ordinary voting
        power for the election of directors or other governing body (other than
        securities or interests having such power only by reason of the
        happening of a contingency) are at the time beneficially owned, or the
        management of which is otherwise controlled, directly, or indirectly
        through one or more intermediaries, or both, by Borrower.

             "Surety Instruments" means all letters of credit (including standby
        and commercial), banker's acceptances, bank guaranties, shipside bonds,
        surety bonds and similar instruments.

             "Surplus Relief Reinsurance Agreement" means any agreement or other
        arrangement whereby any Insurance Subsidiary cedes business under a
        reinsurance agreement that would not be considered a transaction that
        indemnifies an insurer against loss or liability relating to insurance
        risk, as determined in accordance with Statement of Financial Accounting
        Standards No. 113 ("FAS 113") issued by the Financial Accounting
        Standards Board.

             "Swap Contract" means any agreement, whether or not in writing,
        relating to any transaction that is a rate swap, basis swap, forward
        rate transaction, commodity swap, commodity option, equity or equity
        index swap or option, bond, note or bill option, interest rate option,
        forward foreign exchange transaction, cap, collar or floor transaction,
        currency swap, cross-currency rate swap, swaption, currency option or
        any other, similar transaction (including any option to enter into any
        of the foregoing) or any combination of the foregoing, and, unless the
        context otherwise clearly requires, any master agreement relating to or
        governing any or all of the foregoing.

             "Swap Termination Value" means, in respect of any one or more Swap
        Contracts, after taking into account the effect of any legally
        enforceable netting agreement relating to such Swap Contracts, (a) for
        any date on or after the date such Swap Contracts have been closed out
        and termination value(s) determined in accordance therewith, such
        termination value(s), and (b) for any date prior to the date referenced
        in clause (a) the amount(s) determined as the mark-to-market value(s)
        for such Swap Contracts, as determined by the Borrower based upon one or
        more mid- market or other readily available quotations provided by any
        recognized dealer in such Swap Contracts (which may include any Lender.)

             "Synthetic Lease Obligations" means all monetary obligations of a
        Person under (a) a so-called synthetic, off-balance sheet or tax
        retention lease, or (b) an agreement for the use or possession of
        property creating obligations which do not appear on the balance sheet
        of such Person but which, upon the insolvency or bankruptcy of such
        Person, would be characterized as the Indebtedness of such Person
        (without regard to accounting treatment).

             "Taxes" means any and all present or future taxes, levies,
        assessments, imposts, duties, deductions, fees, withholdings or similar
        charges, and all liabilities with respect thereto, excluding, in the
        case of each Lender and the Administrative Agent, respectively, taxes
        imposed on or measured by its net income by the jurisdiction (or any
        political subdivision thereof) under the laws of which such Lender or
        the Administrative Agent, as the case may be, is organized or maintains
        a lending office.

             "Termination Date" shall mean January 31, 2005.

             "Type" has the meaning specified in the definition of "Loan."

             "UCC" means the Uniform Commercial Code as in effect in the State
        of New York.

             "Unfunded Pension Liability" means the excess of a Plan's benefit
        liabilities under Section 4001(a)(16) of ERISA, over the current value
        of that Plan's assets, determined in accordance

                                        13
<PAGE>

        with the assumptions used for funding the Pension Plan pursuant to
        Section 412 of the Code for the applicable plan year.

             "United States" and "U.S." each means the United States of America.

             "Wholly Owned Subsidiary" means any corporation in which (other
        than directors' qualifying shares required by law) 100% of the capital
        stock of each class having ordinary voting power, and 100% of the
        capital stock of every other class, in each case, at the time as of
        which any determination is being made, is owned, beneficially and of
        record, by the Borrower, or by one or more of the other Wholly-Owned
        Subsidiaries, or both.

          (b) Other Interpretive Provisions.  The meanings of defined terms are
     equally applicable to the singular and plural forms of the defined terms.

             (ii) The words "hereof," "herein," "hereunder" and similar words
        refer to this Agreement as a whole and not to any particular provision
        of this Agreement; and subsection, Section, Schedule and Exhibit
        references are to this Agreement unless otherwise specified.

             (iii) The term "documents" includes any and all instruments,
        documents, agreements, certificates, indentures, notices and other
        writings, however evidenced.

          (B) The term "including" is not limiting and means "including without
     limitation."

          (C) In the computation of periods of time from a specified date to a
     later specified date, the word "from" means "from and including"; the words
     "to" and "until" each mean "to but excluding", and the word "through" means
     "to and including."

          (D) The term "property" includes any kind of property or asset, real,
     personal or mixed, tangible or intangible.

             (iv) Unless otherwise expressly provided herein, (i) references to
        agreements (including this Agreement) and other contractual instruments
        shall be deemed to include all subsequent amendments and other
        modifications thereto, but only to the extent such amendments and other
        modifications are not prohibited by the terms of any Loan Document, and
        (ii) references to any statute or regulation are to be construed as
        including all statutory and regulatory provisions consolidating,
        amending, replacing, supplementing or interpreting the statute or
        regulation.

             (v) The captions and headings of this Agreement are for convenience
        of reference only and shall not affect the interpretation of this
        Agreement.

             (vi) This Agreement and other Loan Documents may use several
        different limitations, tests or measurements to regulate the same or
        similar matters. All such limitations, tests and measurements are
        cumulative and shall each be performed in accordance with their terms.
        Unless otherwise expressly provided, any reference to any action of the
        Administrative Agent or the Lenders by way of consent, approval or
        waiver shall be deemed modified by the phrase "in its/their sole
        discretion."

             (vii) This Agreement and the other Loan Documents are the result of
        negotiations among and have been reviewed by counsel to the
        Administrative Agent, the Borrower and the other parties, and are the
        products of all parties. Accordingly, they shall not be construed
        against the Lenders or the Administrative Agent merely because of the
        Administrative Agent's or Lenders' involvement in their preparation.

          (c) Accounting Principles.  Unless the context otherwise clearly
     requires, all accounting terms not expressly defined herein shall be
     construed, and all financial computations required under this Agreement
     shall be made, in accordance with GAAP, consistently applied.

             (ii) References herein to "fiscal year" and "fiscal quarter" refer
        to such fiscal periods of the Borrower.

                                        14
<PAGE>

                                      1.2
                                  THE CREDITS

          (a) Terms of Loans.  Each Lender has made a Loan in the principal
     amount set forth in Schedule 2.1 under the Existing Credit Agreement. Such
     Loans shall continue to remain outstanding under the terms and conditions
     of this Agreement. Any amount of such Loans repaid may not be reborrowed.

             (ii) Subject to the terms and conditions of this Agreement, the
        Type of Loan shall be at the sole option of the Borrower.

          (b) Loan Accounts.  The Loans made by each Lender shall be evidenced
     by one or more loan accounts or records maintained by such Lender in the
     ordinary course of business. The loan accounts or records maintained by the
     Administrative Agent and each Lender shall be conclusive absent manifest
     error/rebuttable presumptive evidence of the amount of the Loans made by
     the Lenders to the Borrower and the interest and payments thereon. Any
     failure so to record or any error in doing so shall not, however, limit or
     otherwise affect the obligation of the Borrower hereunder to pay any amount
     owing with respect to the Loans.

             (ii) Upon the request of any Lender made through the Administrative
        Agent, the Loans made by such Lender may be evidenced by one or more
        Notes, instead of or in addition to loan accounts. Each such Lender
        shall set forth on the schedules annexed to its Note(s) the date, amount
        and maturity of each Loan made by it and the amount of each payment of
        principal made by the Borrower with respect thereto. Each such Lender is
        irrevocably authorized by the Borrower to endorse its Note(s) and each
        Lender's record shall be conclusive absent manifest error; provided,
        however, that the failure of a Lender to make, or an error in making, a
        notation thereon with respect to any Loan shall not limit or otherwise
        affect the obligations of the Borrower hereunder or under any such Note
        to such Lender. Each Note issued to a Lender shall (i) be executed by
        the Borrower, (ii) be payable to the order of such Lender, (iii) be
        dated as of the Closing Date, (iv) be in a stated principal amount equal
        to such Lender's Loans, (v) bear interest in accordance with the
        provisions of Section 2.7, and (vi) be entitled to all of the benefits
        of this Agreement and the other Loan Documents and subject to the
        provisions hereof and thereof.

          (c) Conversion and Continuation Elections.  The Borrower may, upon
     irrevocable written notice to the Administrative Agent in accordance with
     subsection 2.3(b):

          (A) elect, as of any Business Day, in the case of Base Rate Loans, or
     as of the last day of the applicable Interest Period, in the case of
     Offshore Rate Loans, to convert any such Loans (or any part thereof in an
     amount not less than $5,000,000, or that is in an integral multiple of
     $1,000,000 in excess thereof) into Loans of any other Type; or

          (B) elect, as of the last day of the applicable Interest Period, to
     continue any Loans having Interest Periods expiring on such day (or any
     part thereof in an amount not less than $5,000,000, or that is in an
     integral multiple of $1,000,000 in excess thereof);

     provided, that if at any time the aggregate amount of Offshore Rate Loans
     in respect of any Borrowing is reduced, by payment, prepayment, or
     conversion of part thereof to be less than $5,000,000, Offshore Rate Loans
     shall automatically convert into Base Rate Loans, and on and after such
     date the right of the Borrower to continue such Loans as, and convert such
     Loans into, Offshore Rate Loans shall terminate.

             (ii) The Borrower shall deliver a Notice of Conversion/
        Continuation to be received by the Administrative Agent not later than
        9:00 a.m. (Chicago time) at least (i) three Business Days in advance of
        the Conversion/ Continuation Date, if the Loans are to be converted into
        or continued as

                                        15
<PAGE>

        Offshore Rate Loans and (ii) on the Conversion/Continuation Date, if the
        Loans are to be converted into Base Rate Loans, specifying:

                (1) the proposed Conversion/Continuation Date;

                (2) the aggregate amount of Loans to be converted or continued;

                (3) the Type of Loans resulting from the proposed conversion or
           continuation; and

                (4) other than in the case of conversions into Base Rate Loans,
           the duration of the requested Interest Period.

             (iii) If upon the expiration of any Interest Period for Offshore
        Rate Loans, the Borrower has failed to select timely a new Interest
        Period to be applicable to such Offshore Rate Loans, as the case may be,
        or if any Default or Event of Default then exists, the Borrower shall be
        deemed to have elected to convert such Offshore Rate Loans into Base
        Rate Loans effective as of the expiration date of such Interest Period.

             (iv) The Administrative Agent will promptly notify each Lender of
        its receipt of a Notice of Conversion/ Continuation, or, if no timely
        notice is provided by the Borrower, the Administrative Agent will
        promptly notify each Lender of the details of any automatic conversion.
        All conversions and continuations shall be made ratably according to the
        respective outstanding principal amounts of the Loans with respect to
        which the notice was given held by each Lender.

             (v) Unless the Required Lenders otherwise consent, during the
        existence of a Default or Event of Default, the Borrower may not elect
        to have a Loan converted into or continued as an Offshore Rate Loan.

             (vi) After giving effect to any conversion or continuation of
        Loans, unless the Administrative Agent shall otherwise consent, there
        may not be more than two different Interest Periods in effect.

          (d) Optional Prepayments.  Subject to Section 3.4, the Borrower may,
     at any time or from time to time, upon not less than three Business Days'
     irrevocable notice to the Administrative Agent, ratably prepay Loans in
     whole or in part, in minimum amounts of $5,000,000 or any multiple of
     $1,000,000 in excess thereof. Such notice of prepayment shall specify the
     date and amount of such prepayment and the Type(s) of Loans to be prepaid.
     The Administrative Agent will promptly notify each Lender of its receipt of
     any such notice, and of such Lender's Pro Rata Share of such prepayment. If
     such notice is given by the Borrower, the Borrower shall make such
     prepayment and the payment amount specified in such notice shall be due and
     payable on the date specified therein, together with accrued interest to
     each such date on the amount prepaid and any amounts required pursuant to
     Section 3.4.

          (e) Mandatory Prepayments of Loans; Maturity.

             (i) If the Borrower or any Subsidiary shall at any time or from
        time to time make or agree to make a Disposition, then (i) the Borrower
        shall promptly notify the Administrative Agent of such proposed
        Disposition (including the amount of the estimated Net Proceeds to be
        received by the Borrower or such Subsidiary in respect thereof) and (ii)
        promptly upon, and in no event later than three Business Days after,
        receipt by the Borrower or the Subsidiary of one hundred percent (100%)
        of the Net Proceeds of any Disposition other than Dispositions, the Net
        Proceeds of which are less than $10,000,000 in the aggregate, the
        Borrower shall prepay Loans in an aggregate amount equal to the lesser
        of the amount of the Loans outstanding or the amount of such Net
        Proceeds.

             (ii) If the Borrower or any of its Subsidiaries shall issue debt or
        equity, other than debt permitted under Section 7.2, the Borrower or
        such Subsidiary shall promptly notify the Administrative Agent of the
        estimated Net Proceeds of such issuance to be received by the Borrower
        or such Subsidiary in respect thereof. Promptly upon, and in no event
        later than three Business Days after receipt by the Borrower or such
        Subsidiary of Net Proceeds of such issuance, the Borrower or such
        Subsidiary shall prepay the Loans in an aggregate amount equal to the
        lesser amount of the amount of the Loans outstanding or such Net
        Proceeds.
                                        16
<PAGE>

             (iii) Any payments pursuant to this Section 2.5 shall be applied
        first to any Base Rate Loans then outstanding and then to Offshore Rate
        Loans with the shortest Interest Periods remaining. The Borrower shall
        pay, together with each payment under this Section 2.5, accrued interest
        on the amount prepaid and any amounts required pursuant to Section 3.4.

             (iv) All Loans shall be due and payable on the Termination Date.

          (f) Use of Proceeds.  The Borrower has only used the proceeds of the
     Loans to make a payment on the intercompany note owed to the Guarantor.

          (g) Interest.  Each Loan shall bear interest on the outstanding
     principal amount thereof from the applicable borrowing date at a rate per
     annum equal to the Offshore Rate plus the Applicable Margin or the Base
     Rate, as the case may be (and subject to the Borrower's right to convert to
     other Types of Loans under Section 2.3).

             (ii) Interest on each Loan shall be paid in arrears on each
        Interest Payment Date. Interest shall also be paid on the date of any
        prepayment of Loans under Section 2.5 for the portion of the Loans so
        prepaid and upon payment (including prepayment) in full thereof and,
        during the existence of any Event of Default, interest shall be paid on
        demand of the Administrative Agent at the request or with the consent of
        the Required Lenders.

             (iii) Notwithstanding subsection (a) of this Section, while any
        Event of Default exists or after acceleration, the Borrower shall pay
        interest (after as well as before entry of judgment thereon to the
        extent permitted by law) on the principal amount of all outstanding
        Loans at a rate per annum which is determined by adding 2% per annum to
        the interest rate then in effect for such Loans; provided, however,
        that, on and after the expiration of any Interest Period applicable to
        any Offshore Rate Loan outstanding on the date of occurrence of such
        Event of Default or acceleration, the principal amount of such Loan
        shall, during the continuation of such Event of Default or after
        acceleration, bear interest at a rate per annum equal to the Base Rate
        plus 2%.

             (iv) Anything herein to the contrary notwithstanding, the
        obligations of the Borrower to any Lender hereunder shall be subject to
        the limitation that payments of interest shall not be required for any
        period for which interest is computed hereunder, to the extent (but only
        to the extent) that contracting for or receiving such payment by such
        Lender would be contrary to the provisions of any law applicable to such
        Lender limiting the highest rate of interest that may be lawfully
        contracted for, charged or received by such Lender, and in such event
        the Borrower shall pay such Lender interest at the highest rate
        permitted by applicable law.

          (h) Computation of Interest.  All computations of interest for Base
     Rate Loans when the Base Rate is determined by Bank of America's "prime
     rate" shall be made on the basis of a year of 365 or 366 days, as the case
     may be, and actual days (including the first day, but excluding the last
     day) elapsed. All other computations of interest shall be made on the basis
     of a 360-day year and actual days (including the first day, but excluding
     the last day) elapsed (which results in more interest being paid than if
     computed on the basis of a 365-day year). Interest and fees shall accrue
     during each period during which interest or such fees are computed from the
     first day thereof to the last day thereof.

             (ii) Each determination of an interest rate by the Administrative
        Agent shall be conclusive and binding on the Borrower and the Lenders in
        the absence of manifest error.

          (i) Payments by the Borrower.  All payments to be made by the Borrower
     shall be made without set-off, recoupment or counterclaim. Except as
     otherwise expressly provided herein, all payments by the Borrower shall be
     made to the Administrative Agent for the account of the Lenders at the
     Administrative Agent's Payment Office, and shall be made in dollars and in
     immediately available funds, no later than 11:00 a.m. (Chicago time) on the
     date specified herein. The Administrative Agent will promptly distribute to
     each Lender its Pro Rata Share (or other applicable share as expressly
     provided herein) of such payment in like funds as received. Any payment
     received by the Administrative Agent later than

                                        17
<PAGE>

     11:00 a.m. (Chicago time) shall be deemed to have been received on the
     following Business Day and any applicable interest or fee shall continue to
     accrue.

             (ii) Subject to the provisions set forth in the definition of
        "Interest Period" herein, whenever any payment is due on a day other
        than a Business Day, such payment shall be made on the following
        Business Day, and such extension of time shall in such case be included
        in the computation of interest or fees, as the case may be.

             (iii) Unless the Administrative Agent receives notice from the
        Borrower prior to the date on which any payment is due to the Lenders
        that the Borrower will not make such payment in full as and when
        required, the Administrative Agent may assume that the Borrower has made
        such payment in full to the Administrative Agent on such date in
        immediately available funds and the Administrative Agent may (but shall
        not be so required), in reliance upon such assumption, distribute to
        each Lender on such due date an amount equal to the amount then due such
        Lender. If and to the extent the Borrower has not made such payment in
        full to the Administrative Agent, each Lender shall repay to the
        Administrative Agent on demand such amount distributed to such Lender,
        together with interest thereon at the Federal Funds Rate for each day
        from the date such amount is distributed to such Lender until the date
        repaid.

          (j) Sharing of Payments, Etc.  If, other than as expressly provided
     elsewhere herein, any Lender shall obtain on account of the Loans made by
     it any payment (whether voluntary, involuntary, through the exercise of any
     right of set-off, or otherwise) in excess of its ratable share (or other
     share contemplated hereunder), such Lender shall immediately (a) notify the
     Administrative Agent of such fact, and (b) purchase from the other Lenders
     such participations in the Loans made by them as shall be necessary to
     cause such purchasing Lender to share the excess payment pro rata with each
     of them; provided, however, that if all or any portion of such excess
     payment is thereafter recovered from the purchasing Lender, such purchase
     shall to that extent be rescinded and each other Lender shall repay to the
     purchasing Lender the purchase price paid therefor, together with an amount
     equal to such paying Lender's ratable share (according to the proportion of
     (i) the amount of such paying Lender's required repayment to (ii) the total
     amount so recovered from the purchasing Lender) of any interest or other
     amount paid or payable by the purchasing Lender in respect of the total
     amount so recovered. The Borrower agrees that any Lender so purchasing a
     participation from another Lender may, to the fullest extent permitted by
     law, exercise all its rights of payment (including the right of set-off,
     but subject to Section 10.11) with respect to such participation as fully
     as if such Lender were the direct creditor of the Borrower in the amount of
     such participation. The Administrative Agent will keep records (which shall
     be conclusive and binding in the absence of manifest error) of
     participations purchased under this Section and will in each case notify
     the Lenders following any such purchases or repayments.

                                      1.3
                     TAXES, YIELD PROTECTION AND ILLEGALITY

          (a) Taxes.  Except as otherwise required by law, any and all payments
     by the Borrower to each Lender or the Administrative Agent under this
     Agreement and any other Loan Document shall be made free and clear of, and
     without deduction or withholding for, any Taxes. In addition, the Borrower
     shall pay all Other Taxes.

             (ii) If the Borrower shall be required by law to deduct or withhold
        any Taxes or Other Taxes from or in respect of any sum payable hereunder
        to any Lender or the Administrative Agent, then:

                (A) the sum payable shall be increased as necessary so that,
           after making all required deductions and withholdings (including
           deductions and withholdings applicable to additional sums payable
           under this Section), such Lender or the Administrative Agent, as the
           case may be, receives an amount equal to the sum it would have
           received and retained had no such deductions or withholdings been
           made;

                (B) the Borrower shall make such deductions and withholdings;
           and
                                        18
<PAGE>

                (C) the Borrower shall pay the full amount deducted or withheld
           to the relevant taxing authority or other authority in accordance
           with applicable law.

             (iii) The Borrower agrees to indemnify and hold harmless each
        Lender and the Administrative Agent for the full amount of (i) Taxes and
        (ii) Other Taxes in the amount that the respective Lender in good faith
        specifies as paid and necessary to preserve the after-tax yield the
        Lender would have received if such Taxes or Other Taxes had not been
        imposed, and any liability (including penalties, interest, additions to
        tax and expenses) arising therefrom or with respect thereto, whether or
        not such Taxes or Other Taxes were correctly or legally asserted.
        Payment under this indemnification shall be made within 30 days after
        the date the Lender or the Administrative Agent makes written demand
        therefor. Any refund or credit of Taxes or Other Taxes to a Lender or
        the Administrative Agent, including as a result of being incorrectly or
        illegally asserted, shall be remitted by the Lender or the
        Administrative Agent to the Borrower, and the Lender and the
        Administrative Agent agree that they will reasonably cooperate with the
        Borrower to pursue any claim that such Tax or Other Tax was incorrectly
        or illegally asserted.

             (iv) Within 30 days after the date of any payment by the Borrower
        of Taxes or Other Taxes, the Borrower shall furnish to each Lender or
        the Administrative Agent the original or a certified copy of a receipt
        evidencing payment thereof, or other evidence of payment reasonably
        satisfactory to such Lender or the Administrative Agent.

             (v) If the Borrower is required to pay any amount to any Lender or
        the Administrative Agent pursuant to subsection (b) or (c) of this
        Section, then such Lender shall use reasonable efforts (consistent with
        legal and regulatory restrictions) to change the jurisdiction of its
        Lending Office so as to eliminate any such additional payment by the
        Borrower which may thereafter accrue, if such change in the reasonable
        judgment of such Lender is not otherwise materially disadvantageous to
        such Lender.

             (vi) Notwithstanding the foregoing subsections 3.2(a) through (e),
        the Borrower shall not be required to pay any additional amounts to any
        Lender in respect of United States withholding tax pursuant to such
        subsections if (i) the obligation to pay such additional amounts would
        not have arisen but for a failure by such Lender to comply with the
        requirements of Section 9.10 or (ii) such Lender shall not have
        furnished the Administrative Agent and the Borrower with such forms
        listed in Section 9.10 and shall have not taken such other steps as
        reasonably may be available to it under applicable tax laws any and
        applicable tax treaty or convention to obtain an exemption from, or
        reduction (to the lowest applicable rate) of, such United States
        withholding tax.

          (b) Illegality.  If any Lender reasonably determines in good faith
     that the introduction of any Requirement of Law, or any change in any
     Requirement of Law, or in the interpretation or administration of any
     Requirement of Law, has made it unlawful, or that any central bank or other
     Governmental Authority has asserted that it is unlawful, for any Lender or
     its applicable Lending Office to make Offshore Rate Loans, then, on notice
     thereof by the Lender to the Borrower through the Administrative Agent, any
     obligation of that Lender to make Offshore Rate Loans shall be suspended
     until the Lender notifies the Administrative Agent and the Borrower that
     the circumstances giving rise to such determination no longer exist.

             (ii) If a Lender reasonably determines in good faith that it is
        unlawful to maintain any Offshore Rate Loan, the Borrower shall, upon
        its receipt of notice of such fact and demand from such Lender (with a
        copy to the Administrative Agent), prepay in full such Offshore Rate
        Loans of that Lender then outstanding, together with interest accrued
        thereon and amounts required under Section 3.4, either on the last day
        of the Interest Period thereof, if the Lender may lawfully continue to
        maintain such Offshore Rate Loans to such day, or immediately, if the
        Lender may not lawfully continue to maintain such Offshore Rate Loan. If
        the Borrower is required to so prepay any Offshore Rate Loan, then
        concurrently with such prepayment, the Borrower shall borrow from the
        affected Lender and the affected Lender shall make available to the
        Borrower, in the amount of such repayment, a Base Rate Loan.
                                        19
<PAGE>

          (c) Increased Costs and Reduction of Return.  If any Lender determines
     that, due to either (i) the introduction of or any change (other than any
     change by way of imposition of or increase in reserve requirements included
     in the calculation of the Offshore Rate) in or in the interpretation of any
     law or regulation or (ii) the compliance by that Lender with any guideline
     or request from any central bank or other Governmental Authority (whether
     or not having the force of law), there shall be any increase in the cost to
     such Lender of agreeing to make or making, funding or maintaining any
     Offshore Rate Loans, then the Borrower shall be liable for, and shall from
     time to time, within 15 days of written demand (with a copy of such demand
     to be sent to the Administrative Agent), pay to the Administrative Agent
     for the account of such Lender, additional amounts as are sufficient to
     compensate such Lender for such increased costs.

             (ii) If any Lender shall have determined that (i) the introduction
        of any Capital Adequacy Regulation, (ii) any change in any Capital
        Adequacy Regulation, (iii) any change in the interpretation or
        administration of any Capital Adequacy Regulation by any central bank or
        other Governmental Authority charged with the interpretation or
        administration thereof, or (iv) compliance by the Lender (or its Lending
        Office) or any corporation controlling the Lender with any Capital
        Adequacy Regulation, affects or would affect the amount of capital
        required or expected to be maintained by the Lender or any corporation
        controlling the Lender and (taking into consideration such Lender's or
        such corporation's policies with respect to capital adequacy and such
        Lender's desired return on capital) determines that the amount of such
        capital is increased as a consequence of its loans, credits or
        obligations under this Agreement, then, upon demand of such Lender to
        the Borrower through the Administrative Agent, the Borrower shall pay to
        the Lender, from time to time as specified by the Lender, additional
        amounts sufficient to compensate the Lender for such increase.

          (d) Funding Losses.  The Borrower shall reimburse each Lender and hold
     each Lender harmless from any loss or expense which the Lender may sustain
     or incur as a consequence of:

             (i) the failure of the Borrower to make on a timely basis any
        payment of principal of any Offshore Rate Loan;

             (ii) the failure of the Borrower to borrow, continue or convert a
        Loan after the Borrower has given (or is deemed to have given) a Notice
        of Borrowing or a Notice of Conversion/ Continuation;

             (iii) the failure of the Borrower to make any prepayment in
        accordance with any notice delivered under Section 2.5;

             (iv) the prepayment (including pursuant to Section 2.5) or other
        payment (including after acceleration thereof) of an Offshore Rate Loan
        on a day that is not the last day of the relevant Interest Period; or

             (v) the automatic conversion under Section 2.3 of any Offshore Rate
        Loan to a Base Rate Loan on a day that is not the last day of the
        relevant Interest Period; including any such loss or expense arising
        from the liquidation or reemployment of funds obtained by it to maintain
        its Offshore Rate Loans or from fees payable to terminate the deposits
        from which such funds were obtained. For purposes of calculating amounts
        payable by the Borrower to the Lenders under this Section and under
        subsection 3.3(a), each Offshore Rate Loan made by a Lender (and each
        related reserve, special deposit or similar requirement) shall be
        conclusively deemed to have been funded at LIBOR in determining the
        Offshore Rate for such Offshore Rate Loan by a matching deposit or other
        borrowing in the interbank eurodollar market for a comparable amount and
        for a comparable period, whether or not such Offshore Rate Loan is in
        fact so funded.

          (e) Inability to Determine Rates.  If the Administrative Agent
     determines that for any reason adequate and reasonable means do not exist
     for determining the Offshore Rate for any requested Interest Period with
     respect to a proposed Offshore Rate Loan, or that the Offshore Rate
     applicable pursuant to subsection 2.7(a) for any requested Interest Period
     with respect to a proposed Offshore Rate Loan does not adequately and
     fairly reflect the cost to the Lenders of funding such Loan, the
     Administrative Agent
                                        20
<PAGE>

     will promptly so notify the Borrower and each Lender. Thereafter, the
     obligation of the Lenders to make or maintain Offshore Rate Loans, as the
     case may be, hereunder shall be suspended until the Administrative Agent
     revokes such notice in writing. Upon receipt of such notice, the Borrower
     may revoke any Notice of Borrowing or Notice of Conversion/Continuation
     then submitted by it. If the Borrower does not revoke such Notice, the
     Lenders shall make, convert or continue the Loans, as proposed by the
     Borrower, in the amount specified in the applicable notice submitted by the
     Borrower, but such Loans shall be made, converted or continued as Base Rate
     Loans instead of Offshore Rate Loans, as the case may be.

          (f) Certificates of Lenders.  Any Lender claiming reimbursement or
     compensation under this Article III shall deliver to the Borrower (with a
     copy to the Administrative Agent) a certificate setting forth in reasonable
     detail the amount payable to the Lender hereunder and such certificate
     shall be conclusive and binding on the Borrower in the absence of manifest
     error.

          (g) Substitution of Lenders.  Upon the receipt by the Borrower from
     any Lender (an "Affected Lender") of a claim for compensation under Section
     3.3, the Borrower may: (i) request the Affected Lender to use its best
     efforts to obtain a replacement lender or financial institution
     satisfactory to the Borrower and to the Administrative Agent (a
     "Replacement Lender") to acquire and assume all or a ratable part of all of
     such Affected Lender's Loans; (ii) request one more of the other Lenders to
     acquire and assume all or part of such Affected Lender's Loans; or (iii)
     designate a Replacement Lender. Any such designation of a Replacement
     Lender under clause (i) or (iii) shall be subject to the prior written
     consent of the Administrative Agent (which consent shall not be
     unreasonably withheld).

          (h) Survival.  The agreements and obligations of the Borrower in this
     Article III shall survive the payment of all other Obligations.

                                      1.4
                              CONDITIONS PRECEDENT

     The effectiveness of the amendment and restatement of the Existing Credit
Agreement shall be subject to the receipt of the following documents in form and
substance satisfactory to the Administrative Agent and each Lender, and in
sufficient copies for each Lender:

          (a) Credit Agreement, Guaranty and Notes.  This Agreement, the
     Guarantor Consent (and, if requested, the Notes) executed by each party
     thereto;

          (b) Resolutions; Incumbency.  Copies of the resolutions of the board
     of directors of the Borrower and each Subsidiary that may become party to a
     Loan Document authorizing the transactions contemplated hereby, certified
     as of the Closing Date by the Secretary or an Assistant Secretary of such
     Person; and

             (ii) A certificate of the Secretary or Assistant Secretary of the
        Borrower, and each Subsidiary that may become party to a Loan Document
        certifying the names and true signatures of the officers of the Borrower
        or such Subsidiary authorized to execute, deliver and perform, as
        applicable, this Agreement, and all other Loan Documents to be delivered
        by it hereunder;

          (c) Organization Documents.  The articles or certificate of
     incorporation and the bylaws of the Borrower as in effect on the Closing
     Date, certified by the Secretary or Assistant Secretary of the Borrower or
     such Subsidiary as of the Closing Date;

          (d) Opinion.  Opinion(s) of Counsel to the Borrower in form
     satisfactory to the Administrative Agent;

          (e) Payment of Fees.  Evidence of payment by the Borrower of all
     accrued and unpaid fees, costs and expenses to the extent then due and
     payable on the Closing Date, together with Attorney Costs of Bank of
     America to the extent invoiced prior to or on the Closing Date, plus such
     additional amounts of Attorney Costs as shall constitute Bank of America's
     reasonable estimate of Attorney Costs incurred or to

                                        21
<PAGE>

     be incurred by it through the closing proceedings (provided that such
     estimate shall not thereafter preclude final settling of accounts between
     the Borrower and Bank of America); including any such costs, fees and
     expenses arising under or referenced in Section 10.4;

          (f) Certificate.  A certificate signed by a Responsible Officer, dated
     as of the Closing Date, stating that:

          (A) the representations and warranties contained in Article V are true
     and correct in all material respects on and as of such date, as though made
     on and as of such date;

          (B) no Default or Event of Default exists;

          (C) there has occurred since March 31, 2001 no event or circumstance
     that has resulted or could reasonably be expected to result in a Material
     Adverse Effect; and

          (D) no actions, suits, investigations or proceedings are pending or to
     such individual's knowledge threatened in any court or before any
     arbitrator or governmental authority that if adversely determined would
     have a Material Adverse Effect, and

          (g) Other Documents.  Such other approvals, opinions, documents or
     materials as the Administrative Agent or any Lender may reasonably request.

                                      1.5
                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Administrative Agent and each
Lender that:

          (a) Corporate Existence and Power.  Each of the Borrower and its
     Subsidiaries:

             (i) is a corporation duly organized, validly existing and in good
        standing under the laws of the jurisdiction of its incorporation, (b)
        has the full corporate power and authority to execute, deliver and
        perform the Loan Documents to which it is or will be a party, to own and
        hold its property and to engage in its business as presently conducted,
        and (c) is duly qualified to do business as a foreign corporation and is
        in good standing in each jurisdiction where the nature of its business
        or the ownership of its properties requires it to be so qualified except
        where the failure to be so qualified would not have a Material Adverse
        Effect.

          (b) Corporate Authorization.

             The Borrower has taken all necessary corporate action to execute,
        deliver and perform each of the Loan Documents to which it is or will be
        a party, and has, or on the Closing Date (or any later date of execution
        and delivery) will have, validly executed and delivered each of the Loan
        Documents to which it is or will be a party. This Agreement constitutes,
        and each of the other Loan Documents upon execution and delivery by the
        Borrower will constitute, assuming the due execution of the other
        parties hereto, the legal, valid and binding obligation of the Borrower
        enforceable against it in accordance with its terms, except as Borrower,
        enforceability may be limited by bankruptcy, insolvency, reorganization,
        moratorium or other similar laws affecting creditors' rights generally
        or by general equitable principles.

          (c) No Violation.

             The execution, delivery and performance by the Borrower of this
        Agreement and each of the other Loan Documents, and compliance by it
        with the terms hereof and thereof, do not and will not (a) contravene
        any Requirement of Law applicable to the Borrower, (b) conflict with,
        result in a breach of or constitute (with notice, lapse of time or both)
        a default under any material indenture, agreement or other instrument to
        which it is a party, by which it or any of its properties is bound or to
        which it is subject, (c) contravene the terms of the Borrower's
        Organizational Documents or (d) result in or require the creation or
        imposition of any Lien upon any of its properties or assets except to
        the extent provided in the Loan Documents. No Subsidiary is subject to
        any restriction or
                                        22
<PAGE>

        encumbrance on its ability to make dividend payments or other
        distributions in respect of its capital stock, to make loans or advances
        to the Borrower or any other Subsidiary, or to transfer any of its
        assets or properties to the Borrower or any other Subsidiary, in each
        case other than such restrictions or encumbrances existing under or by
        reason of the Loan Documents or applicable Requirements of Law.

          (d) Third Party Consent.

             (i) No consent, approval, authorization or other action by, notice
        to, or registration or filing with, any Governmental Authority or other
        Person is or will be required as a condition to or otherwise in
        connection with the due execution, delivery and performance by the
        Borrower of this Agreement or any of the other Loan Documents or the
        legality, validity or enforceability hereof or thereof.

             (ii) Each of the Borrower and its Subsidiaries has, and is in good
        standing with respect to, all governmental approvals, licenses, permits
        and authorizations necessary to conduct its business as presently
        conducted and to own or lease and operate its properties except where
        the failure to do so would not have a Material Adverse Effect.

             (iii) Schedule 5.4 lists with respect to each Insurance Subsidiary,
        as of the Closing Date, all of the jurisdictions in which such Insurance
        Subsidiary holds licenses (including, without limitation, licenses or
        certificates of authority from relevant Insurance Regulatory
        Authorities), permits or authorizations to transact insurance and
        reinsurance business (collectively, the "Licenses"), and indicates the
        line or lines of insurance in which each such Insurance Subsidiary is
        permitted to be engaged with respect to each License therein listed. To
        the knowledge of the Borrower, (a) no such License is the subject of a
        proceeding for suspension, revocation or limitation or any similar
        proceedings, (b) there is no sustainable basis for such a suspension,
        revocation or limitation, and (c) no such suspension, revocation or
        limitation is threatened by any relevant Insurance Regulatory Authority.
        No Insurance Subsidiary transacts as of the Closing Date any insurance
        business, directly or indirectly, in any jurisdiction other than those
        listed on Schedule 5.4, where such business requires any license, permit
        or other authorization of an Insurance Regulatory Authority of such
        jurisdiction.

          (e) Litigation.

             There are no actions, investigations, suits or proceedings pending
        or, to the knowledge of the Borrower, threatened, at law, in equity or
        in arbitration, before any court, other Governmental Authority or other
        Person, (i) against or affecting the Borrower, any of its Subsidiaries
        or any of their respective properties that would, if adversely
        determined, be reasonably likely to have a Material Adverse Effect or
        (ii) with respect to this Agreement or any of the other Loan Documents.

          (f) Taxes.

             Each of the Borrower and its Subsidiaries has timely filed all
        federal and all material state and local tax returns and reports
        required to be filed by it and has paid all taxes, assessments, fees and
        other charges levied upon it or upon its properties that are shown
        thereon as due and payable, other than those that are being contested in
        good faith and by proper proceedings and for which adequate reserves
        have been established in accordance with GAAP. Such returns accurately
        reflect in all material respects all liability for taxes of the Borrower
        and its Subsidiaries for the periods covered thereby. Except as set
        forth on Schedule 5.6, there is no ongoing audit or examination or, to
        the knowledge of the Borrower, other investigation by any Governmental
        Authority of the tax liability of the Borrower or any of its
        Subsidiaries; and there is no unresolved claim by any Governmental
        Authority concerning the tax liability of the Borrower or any of its
        Subsidiaries for any period for which tax returns have been or were
        required to have been filed, other than claims for which adequate
        reserves have been established in accordance with GAAP.

                                        23
<PAGE>

          (g) Subsidiaries.

             Schedule 5.7 sets forth a list, as of the Closing Date, of all of
        the Subsidiaries of the Borrower and, as to each such Subsidiary, the
        percentage ownership (direct and indirect) of the Borrower in each class
        of its capital stock and each direct owner thereof.

          (h) Full Disclosure.

             All factual information heretofore or contemporaneously furnished
        to the Administrative Agent or any Lender in writing by or on behalf of
        the Borrower or any of its Subsidiaries for purposes of or in connection
        with this Agreement and the transactions contemplated hereby is, and all
        other such factual information hereafter furnished to the Administrative
        Agent or any Lender in writing by or on behalf of the Borrower or any of
        its Subsidiaries will be, true and accurate in all material respects on
        the date as of which such information is dated or certified (or, if such
        information has been amended or supplemented, on the date as of which
        any such amendment or supplement is dated or certified) and not made
        incomplete by omitting to state a material fact necessary to make the
        statements contained therein, in light of the circumstances under which
        such information was provided, not misleading.

          (i) Margin Regulations.

             Neither the Borrower nor any of its Subsidiaries is engaged
        principally, or as one of its important activities, in the business of
        extending credit for the purpose of purchasing or carrying Margin Stock.
        None of the Loans made to the Borrower will be used, directly or
        indirectly, to purchase or carry any Margin Stock, to extend credit for
        such purpose or for any other purpose that would violate or be
        inconsistent with Regulations T, U or X or any provision of the Exchange
        Act and less than twenty five percent (25%) of the assets subject to
        Section 7.1 and 7.3 consists of Margin Stock.

          (j) No Material Adverse Effect.

             Since March 31, 2001, no event, condition or state of facts has
        existed that could reasonably be expected to result in a Material
        Adverse Effect.

          (k) Financial Matters.

             (i) The Borrower has heretofore furnished to the Administrative
        Agent copies of the pro forma consolidated balance sheet of the Borrower
        and its Subsidiaries as of December 31, 2000 and the unaudited
        consolidated balance sheets of the Borrower and its subsidiaries as of
        March 31, 2001 and September 30, 2001 and the related statements of
        income, stockholders' equity and cash flows for the fiscal periods then
        ended, together with, in the case of the December 31, 2000 statements,
        the opinion of PricewaterhouseCoopers. Such financial statements have
        been prepared in accordance with GAAP and present fairly the financial
        condition of the Borrower and its Subsidiaries on a consolidated basis
        as of the respective dates thereof and the consolidated results of
        operations of the Borrower and its Subsidiaries for the respective
        periods then ended. Except as fully reflected in the most recent
        financial statements referred to above and the notes thereto, there are
        no material liabilities or obligations as of the respective date of
        those financial statements with respect to the Borrower or any of its
        Subsidiaries of any nature whatsoever (whether absolute, contingent or
        otherwise and whether or not due).

             (ii) The Borrower has heretofore furnished to the Administrative
        Agent copies of the Annual Statements of each of the Insurance
        Subsidiaries as of December 31, 1998, 1999 and 2000, and for the fiscal
        years then ended and the Quarterly Statement of each of the Insurance
        Subsidiaries as of September 30, 2001, each as filed with the relevant
        Insurance Regulatory Authority (collectively, the "Historical Statutory
        Statements"). The Historical Statutory Statements (including, without
        limitation, the provisions made therein for investments and the
        valuation thereof, reserves, policy and contract claims and statutory
        liabilities) have been prepared in accordance with Statutory Accounting
        Practices, were in compliance with applicable Requirements of Law when
        filed and present fairly the financial condition of the respective
        Insurance Subsidiaries covered thereby as of the respective
                                        24
<PAGE>

        dates thereof and the results of operations, changes in capital and
        surplus and cash flow of the respective Insurance Subsidiaries covered
        thereby for the respective periods then ended. Except for liabilities
        and obligations disclosed or provided for in the Historical Statutory
        Statements (including, without limitation, reserves, policy and contract
        claims and statutory liabilities), no Insurance Subsidiary had, as of
        the date of its respective Historical Statutory Statements, any material
        liabilities or obligations of any nature whatsoever (whether absolute,
        contingent or otherwise and whether or not due) that, in accordance with
        Statutory Accounting Practices, would have been required to have been
        disclosed or provided for in such Historical Statutory Statements. All
        books of account of each Insurance Subsidiary fully and fairly disclose
        all of its material transactions, properties, assets, investments,
        liabilities and obligations, are in its possession and are true, correct
        and complete in all material respects.

             (iii) Each of the Borrower and its Subsidiaries, after giving
        effect to the consummation of the transactions contemplated hereby, (i)
        will have capital sufficient to carry on its businesses as conducted and
        as proposed to be conducted, (ii) will have assets with a fair saleable
        value, determined on a going concern basis, (y) not less than the amount
        required to pay the probable liability on its existing debts as they
        become absolute and matured and (z) greater than the total amount of its
        liabilities (including identified contingent liabilities, valued at the
        amount that can reasonably be expected to become absolute and matured),
        and (iii) will not intend to, and will not believe that it will, incur
        debts or liabilities beyond its ability to pay such debts and
        liabilities as they mature.

          (l) Ownership of Properties.

             Each of the Borrower and its Subsidiaries (a) has good and
        marketable title to all real property owned by it, (b) holds interests
        as lessee under valid leases in full force and effect with respect to
        all material leased real and personal property used in connection with
        its business, and (c) has good title to all of its other properties and
        assets reflected in the most recent financial statements referred to in
        Section 5.11(a) (except as sold or otherwise disposed of since the date
        thereof in the ordinary course of business), in each case under (a), (b)
        and (c) above free and clear of all Liens other than Permitted Liens.

          (m) ERISA.

             Each member of the ERISA Group has fulfilled its obligations under
        the minimum funding standards of ERISA and the Internal Revenue Code
        with respect to each Plan and is in compliance in all material respects
        with the presently applicable provisions of ERISA and the Internal
        Revenue Code with respect to each Plan. No member of the ERISA Group has
        (a) sought a waiver of the minimum funding standard under Section 412 of
        the Internal Revenue Code in respect of any Plan, (b) failed to make any
        contribution or payment to any Plan or Multiemployer Plan or in respect
        of any Benefit Arrangement, or made any amendment to any Plan or Benefit
        Arrangement, which has resulted or could result in the imposition of a
        Lien or the posting of a bond or other security under ERISA or the
        Internal Revenue Code or (c) incurred any liability under Title IV of
        ERISA other than a liability to the PBGC for premiums under Section 4007
        of ERISA.

          (n) Environmental Matters.

             (i) Except as set forth in Schedule 5.14(a), no Hazardous Materials
        are or, to the knowledge of the Borrower, have been generated, released,
        treated or disposed of by the Borrower or any of its Subsidiaries or, to
        the knowledge of the Borrower, by any other Person or otherwise, in, on
        or under any portion of any real property owned by the Borrower or any
        of its Subsidiaries, except in material compliance with all applicable
        Environmental Laws, and, to the knowledge of the Borrower, no portion of
        any such real property has been contaminated by any Hazardous Materials.
        For purposes of this Section 5.14, "contaminated" means the presence of
        Hazardous Materials that require or required within five years prior to
        the date of this Agreement, as the case may be, remediation under any
        Environmental Law.

                                        25
<PAGE>

             (ii) Except as set forth on Schedule 5.14(b), to the knowledge of
        the Borrower, (i) no portion of any real property owned by the Borrower
        or any of its Subsidiaries has been used as or for a mine, a landfill, a
        dump or other disposal facility, a gasoline service station, or (other
        than for petroleum substances stored in the ordinary course of business)
        a petroleum products storage facility, (ii) no portion of such real
        property or any other real property at any time owned by the Borrower or
        any of its Subsidiaries has, pursuant to any Environmental Law, been
        placed on the "National Priorities List" or "CERCLIS List" (or any
        similar federal, state or local list) of sites subject to possible
        environmental problems, and (iii) there are not and have never been any
        underground storage tanks situated on any real property owned by the
        Borrower or any of its Subsidiaries.

             (iii) All activities and operations of the Borrower and its
        Subsidiaries are in compliance with the requirements of all applicable
        Environmental Laws, except to the extent the failure so to comply,
        individually or in the aggregate, would not be reasonably likely to have
        a Material Adverse Effect. Other than claims in the ordinary course of
        business pursuant to insurance or reinsurance policies written or
        assumed by an Insurance Subsidiary, neither the Borrower nor any of its
        Subsidiaries is involved in any suit, action or proceeding, or has
        received any notice, complaint or other request for information from any
        Governmental Authority or other Person, with respect to any actual or
        alleged Environmental Claims that, if adversely determined, would be
        reasonably likely, individually or in the aggregate, to have a Material
        Adverse Effect; and, to the knowledge of the Borrower, there are no
        threatened actions, suits, proceedings or investigations with respect to
        any such Environmental Claims, nor any basis therefor.

          (o) Compliance with Laws.

             Each of the Borrower and its Subsidiaries has timely filed all
        material reports, documents and other materials required to be filed by
        it under all applicable Requirements of Law with any Governmental
        Authority, has retained all material records and documents required to
        be retained by it under all applicable Requirements of Law, and is
        otherwise in compliance with all applicable Requirements of Law in
        respect of the conduct of its business and the ownership and operation
        of its properties, except for such Requirements of Law the failure to
        comply with which, individually or in the aggregate, would not be
        reasonably likely to have a Material Adverse Effect.

          (p) Regulated Industries.

             Neither the Borrower nor any of its Subsidiaries is (i) an
        "investment company," a company "controlled" by an "investment company,"
        or an "investment advisor," within the meaning of the Investment Company
        Act of 1940, as amended, or (ii) a "holding company," a "subsidiary
        company" of a "holding company," or an "affiliate" of a "holding
        company" or of a "subsidiary company" of a "holding company," within the
        meaning of the Public Utility Holding Company Act of 1935, as amended.

          (q) Insurance.

             The assets, properties and business of the Borrower and its
        Subsidiaries are insured against such hazards and liabilities (other
        than normal life insurance risk), under such coverages and in such
        amounts, as are customarily maintained by prudent companies similarly
        situated and under policies issued by insurers of recognized
        responsibility. No notice of any pending or threatened cancellation or
        material premium increase has been received by the Borrower or any of
        its Subsidiaries with respect to any such insurance policies, and the
        Borrower and each of its Subsidiaries are in substantial compliance with
        all conditions contained therein.

          (r) Certain Contracts.

             Schedule 5.18 lists, as of the Closing Date, each material
        contract, agreement or commitment, written or oral, other than
        Reinsurance Agreements and Insurance Agreements, to which the Borrower
        or any of its Subsidiaries is a party, by which any of them or their
        respective properties is bound or to which any of them is subject (other
        than insurance policies written in the ordinary

                                        26
<PAGE>

        course of business) and that (i) relates to employment or labor matters,
        (ii) involves aggregate consideration payable to or by any party thereto
        of $1,000,000 or more or (iii) is otherwise material to the business,
        condition (financial or otherwise), operations, performance or
        properties of the Borrower or any of its Subsidiaries, and also
        indicates the parties, subject matter thereof. As of the Closing Date,
        each such contract is in full force and effect, and neither the Borrower
        nor any of its Subsidiaries or, to the knowledge of the Borrower, any
        other party thereto, is in breach of or in default under any such
        contract. As of the Closing Date, none of such other parties has
        notified the Borrower that it has any presently exercisable right to
        terminate any such contract nor will any such other party have any right
        to terminate any such contract on account of the execution, delivery and
        performance of the Loan Documents.

          (s) Reinsurance Agreements.

             (i) Except as set forth on Schedule F to the Annual Statements for
        the Insurance Subsidiaries for the fiscal year ending December 31, 2000
        as updated by Schedule F to the September 30, 2001 financial statements,
        there are no material liabilities outstanding as of the Closing Date
        under any Reinsurance Agreement. Each Reinsurance Agreement is in full
        force and effect; none of the Insurance Subsidiaries or, to the
        knowledge of the Borrower, any other party thereto, is in breach of or
        default under any such contract; and the Borrower has no reason to
        believe that the financial condition of any other party to any such
        contract is impaired such that a default thereunder by such party could
        reasonably be anticipated. Each Reinsurance Agreement is qualified under
        all applicable Requirements of Law to receive the statutory credit
        assigned to such Reinsurance Agreement in the relevant annual Statement
        or Quarterly Statement at the time prepared. Except as set forth on
        Schedule 5.19 each Person to whom any of the Insurance Subsidiaries has
        ceded any material liability pursuant to any Reinsurance Agreement on
        the Closing Date either: (i) has a rating of "A-" or better by A.M. Best
        & Company or S&P or (ii) has provided collateral in favor of the
        applicable Insurance Subsidiary of the type and in an amount described
        in Schedule 5.19.

             (ii) Except as set forth on Schedule 5.19, there are no Reinsurance
        Agreements or Insurance Agreements between the Borrower or any of its
        Subsidiaries and Affiliates (other than the Borrower and its
        Subsidiaries.)

             (iii) As of the Closing Date, no Insurance Subsidiary has any
        reinsured obligations under any Surplus Relief Reinsurance Agreement.

                                      1.6
                             AFFIRMATIVE COVENANTS

     So long as any Loan or other Obligation shall remain unpaid or unsatisfied,
unless the Required Lenders waive compliance in writing:

          (a) GAAP Financial Statements.

             The Borrower will deliver to each Lender:

                (i) As soon as available and in any event within sixty (60) days
           after the end of each of the first three fiscal quarters of each
           fiscal year, beginning with the first fiscal quarter ending March 31,
           2002, unaudited consolidated balance sheets of the Borrower and its
           Subsidiaries as of the end of such fiscal quarter and unaudited
           consolidated statements of income, comprehensive income and cash
           flows for the Borrower and its Subsidiaries for the fiscal quarter
           then ended and for that portion of the fiscal year then ended, in
           each case setting forth comparative consolidated figures as of the
           end of and for the corresponding period in the preceding fiscal year,
           all prepared in accordance with GAAP (subject to the absence of notes
           required by GAAP and subject to normal year-end audit adjustments)
           applied on a basis consistent with that of the preceding quarter or
           containing disclosure of the effect on the financial condition or

                                        27
<PAGE>

           results of operations of any change in the application of accounting
           principles and practices during such quarter; and

                (ii) As soon as available and in any event within ninety (90)
           days after the end of each fiscal year, beginning with the fiscal
           year ended December 31, 2001, (i) an audited consolidated balance
           sheet of the Borrower and its Subsidiaries as of the end of such
           fiscal year and audited consolidated statements of income,
           comprehensive income, stockholders' equity and cash flows for the
           Borrower and its Subsidiaries for the fiscal year then ended,
           including the applicable notes, in each case setting forth
           comparative figures as of the end of and for the preceding fiscal
           year, certified by the independent certified public accounting firm
           regularly retained by the Borrower or another independent certified
           public accounting firm of recognized national standing reasonably
           acceptable to the Required Lenders, together with a report thereon by
           such accountants that is not qualified as to going concern or scope
           of audit and to the effect that such financial statements present
           fairly the consolidated financial condition and results of operations
           of the Borrower and its Subsidiaries as of the dates and for the
           periods indicated in accordance with GAAP, and (ii) unaudited
           consolidating statements of income and cash flows for the Borrower
           and its Subsidiaries for the fiscal year then ended, in reasonable
           detail, all prepared in accordance with GAAP applied on a consistent
           basis with that of the preceding fiscal year or containing disclosure
           of the effect on the financial condition or results of operations of
           any change in the application of accounting principles and practices
           during such fiscal year.

          (b) Statutory Financial Statements.

             The Borrower will deliver to each Lender:

                (i) As soon as available and in any event within sixty (60) days
           after the end of each of the first three fiscal quarters of each
           fiscal year, beginning with the first fiscal quarter ending March 31,
           2002, a Quarterly Statement of each Insurance Subsidiary as of the
           end of such fiscal quarter and for that portion of the fiscal year
           then ended, in the form filed with the relevant Insurance Regulatory
           Authority, prepared in accordance with Statutory Accounting
           Practices; and

                (ii) As soon as available and in any event within sixty-five
           (65) days after the end of each fiscal year, beginning with the
           fiscal year ended December 31, 2001, an Annual Statement of each
           Insurance Subsidiary as of the end of such fiscal year and for the
           fiscal year then ended, in the form filed with the relevant Insurance
           Regulatory Authority, prepared in accordance with Statutory
           Accounting Practices.

          (c) Other Business and Financial Information.

             The Borrower will deliver to each Lender:

                (i) Concurrently with each delivery of the financial statements
           described in Sections 6.1 and 6.2, a Compliance Certificate in the
           form of Exhibit C with respect to the period covered by the financial
           statements then being delivered, executed by the chief financial
           officer of the Borrower (or a vice president of the Borrower having
           significant responsibility for financial matters), together, in the
           case of the financial statements described in Section 6.1, with a
           Covenant Compliance Worksheet reflecting the computation of the
           financial covenants set forth in Sections 6.12(a), (b) and (c) as of
           the last day of the period covered by such financial statements;

                (ii) Promptly upon filing with the relevant Insurance Regulatory
           Authority and in any event within ninety (90) days after the end of
           each fiscal year, beginning with the fiscal year ended December 31,
           2001, a copy of each Insurance Subsidiary's "Statement of Actuarial
           Opinion" (or equivalent information should the relevant Insurance
           Regulatory Authority not require such a statement) as to the adequacy
           of such Insurance Subsidiary's loss reserves for such fiscal year,
           together with a copy of its management discussion and analysis in
           connection

                                        28
<PAGE>

           therewith, each in the format prescribed by the applicable insurance
           laws of such Insurance Subsidiary's jurisdiction of domicile;

                (iii) Promptly upon the sending or filing thereof, copies of any
           "internal control" letter filed by or on behalf of the Borrower or
           any of its Subsidiaries with any Insurance Regulatory Authority;

                (iv) Promptly upon the sending, filing or receipt thereof,
           copies of (i) all financial statements, reports, notices and proxy
           statements that the Borrower or any of its Subsidiaries shall send or
           make available generally to its shareholders, (ii) all regular,
           periodic and special reports, registration statements and
           prospectuses that the Borrower or any of its Subsidiaries shall
           render to or file with the Securities and Exchange Commission, the
           National Association of Securities Dealers, Inc. or any national
           securities exchange, (iii) all significant reports on examination or
           similar significant reports, financial examinations reports or market
           conduct examination reports by the NAIC or any Insurance Regulatory
           Authority or other Governmental Authority with respect to any
           Insurance Subsidiary's insurance business, and (iv) all significant
           filings made under applicable state insurance holding company acts by
           the Borrower or any of its Subsidiaries, including, without
           limitation, filings seeking approval of transactions with Affiliates;

                (v) Promptly upon (and in any event within three (3) Business
           Days after) an officer of the Borrower obtaining knowledge thereof,
           written notice of any of the following:

          (A) the occurrence of any Default or Event of Default, together with a
     written statement of the chief executive officer or chief financial officer
     of the Borrower specifying the nature of such Default or Event of Default,
     the period of existence thereof and the action that the Borrower has taken
     and proposes to take with respect thereto;

          (B) the commencement or threat of commencement of any litigation or
     proceeding (or any material development in any litigation or other
     proceeding previously reported pursuant to Section 5.5 or Section
     6.3(e)(ii)) affecting the Borrower or any Subsidiary (i) in which the
     amount of damages claimed is $5,000,000 (or its equivalent in another
     currency or currencies) or more, (ii) in which injunctive or similar relief
     is sought and which, if adversely determined, would reasonably be expected
     to have a Material Adverse Effect, or (iii) in which the relief sought is
     an injunction or other stay of the performance of this Agreement or any
     Loan Document;

          (C) the receipt by the Borrower or any of its Subsidiaries from any
     Insurance Regulatory Authority or other Governmental Authority of (A) any
     notice asserting any failure by the Borrower or any of its Subsidiaries to
     be in compliance with applicable Requirements of Law or that threatens the
     taking of any action against the Borrower or such Subsidiary or sets forth
     circumstances that, if taken or adversely determined, would be reasonably
     likely to have a Material Adverse Effect, or (B) any notice of any actual
     or threatened suspension, limitation or revocation of, failure to renew, or
     imposition of any restraining order, escrow or impoundment of funds in
     connection with, any license, permit, accreditation or authorization of the
     Borrower or any of its Subsidiaries, where such action would be reasonably
     likely to have a Material Adverse Effect;

          (D) the occurrence of any of the following, together with a reasonably
     detailed description thereof and copies of any filings, communications,
     reports or other information relating thereto made available to the
     Borrower or any of its Subsidiaries: (A) the assertion or threat of
     assertion, of any Environmental Claim against or affecting the Borrower,
     any of its Subsidiaries or any of their respective real property, leased or
     owned; (B) the receipt by the Borrower or any of its Subsidiaries of notice
     of any alleged violation of or noncompliance with any Environmental Laws by
     the Borrower or any of its Subsidiaries; (C) the taking of any remedial
     action by the Borrower, any of its Subsidiaries or any other Person in
     response to the actual or alleged generation, storage, release, disposal or
     discharge of any Hazardous Materials on, to, upon or from any real property
     leased or owned by the Borrower or any of its Subsidiaries or (D) the
     existence of any environmental or similar condition on any real property
     adjoining

                                        29
<PAGE>

     or in the vicinity of the property of the Borrower or any Subsidiary that
     could reasonably be anticipated to cause such property or any part thereof
     to be subject to any restrictions on the ownership, occupancy,
     transferability or use of such property under any Environmental Laws; but
     in each case under clauses (A), (B), (C) and (D) above, only to the extent
     the same would be reasonably likely to have a Material Adverse Effect;

          (E) the occurrence of any other litigation or proceeding affecting the
     Borrower or any of its Subsidiaries which the Borrower would be required to
     report to the SEC pursuant to the Exchange Act;

          (F) the occurrence of any actual changes in any insurance statute or
     regulation governing the investment or dividend practices of any Insurance
     Subsidiary that would be reasonably likely to have a Material Adverse
     Effect;

          (G) if and when any member of the ERISA Group (A) knows that the plan
     administrator of any Plan has given or is required to give notice of any
     such reportable event, a copy of the notice of such reportable event given
     or required to be given to the PBGC; (B) receives notice of complete or
     partial withdrawal liability under Title IV of ERISA or notice that any
     Multiemployer Plan is in reorganization, is insolvent or has been
     terminated, a copy of such notice; (C) receives notice from the PBGC under
     Title IV of ERISA of an intent to terminate, impose liability (other than
     for premiums under Section 4007 of ERISA) in respect of, or appoint a
     trustee to administer, any Plan, a copy of such notice; (D) applies for a
     waiver of the minimum funding standard under Section 412 of the Internal
     Revenue Code, a copy of such application; (E) gives notice of withdrawal
     from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; (F)
     fails to make any payment or contribution to any Plan or Multiemployer Plan
     or in respect of any Benefit Arrangement or makes any amendment to any Plan
     or Benefit Arrangement which has resulted or could result in the imposition
     of a Lien or the posting of a bond or other security, a certificate of the
     chief financial officer or the chief accounting officer of the Borrower
     setting forth details as to such occurrence and action, if any, which the
     Borrower or applicable member of the ERISA Group is required or proposes to
     take; or (G) receives any notice from a Governmental Authority with respect
     to (i) an ERISA Event, (ii) a material increase in the Unfunded Pension
     Liability of any Pension Plan, (iii) the adoption of, or the commencement
     of contributions to, any Plan subject to Section 412 of the Code by any
     member of the ERISA Group, or (iv) the adoption of any amendment to a Plan
     subject to Section 412 of the Code, if such amendment results in a material
     increase in contributions or Unfunded Pension Liability.

          (H) of (x) any breach or non-performance of, or any default under, any
     Contractual Obligation of the Borrower or any of its Subsidiaries which
     could result in a Material Adverse Effect; and (y) any dispute, litigation,
     investigation, proceeding or suspension which may exist at any time between
     the Borrower or any of its Subsidiaries and any Governmental Authority; and

          (I) any other matter or event that has, or would have a Material
     Adverse Effect together with a written statement of the chief executive
     officer or chief financial officer of the Borrower setting forth the name
     and period of existence thereof and the action that the Borrower has taken
     and proposes to take with respect thereto;

                (vi) Promptly, notice of (i) the occurrence of any material
           amendment or modification to any Reinsurance Agreement (whether
           entered into before or after the Closing Date), including any such
           agreements that are in a runoff mode on the Closing Date, which
           amendment or modification would be reasonably likely to have a
           Material Adverse Effect, or (ii) the receipt by the Borrower or any
           of its Subsidiaries of any written notice of any denial of coverage,
           litigation, claim or arbitration arising out of any Reinsurance
           Agreement to which it is a party which would be reasonably likely to
           have a Material Adverse Effect; \

                (vii) As promptly as reasonably possible, such other information
           about the business, condition (financial or otherwise), operations or
           properties of the Borrower or any of its Subsidiaries (including,
           without limitation, financial, actuarial and other information with

                                        30
<PAGE>

           respect to Reinsurance Agreements) as the Administrative Agent or any
           Lender may from time to time reasonably request;

                (viii) Upon the request of the Administrative Agent at the
           direction of the Required Lenders (which absent a showing of good
           cause shall not be more often than one time during any twelve-month
           period), at the Borrower's expense, deliver to each Lender within
           sixty (60) days of such request an actuarial review of the
           liabilities and other items of each Insurance Subsidiary prepared by
           an actuary or a firm of actuaries reasonably acceptable to the
           Administrative Agent, such actuarial review to be in form and
           substance reasonably acceptable to the Required Lenders; and

                (ix) As promptly as possible, any material change in accounting
           policies or financial reporting practices by the Borrower or any of
           its consolidated Subsidiaries;

          (d) Corporate Existence; Franchises; Maintenance of Properties.

             The Borrower will, and will cause each of its Subsidiaries to,
        maintain and preserve in full force and effect its corporate existence,
        except as expressly permitted otherwise by Section 7.1. The Borrower
        will, and will cause each of its Subsidiaries to, (a) obtain, maintain
        and preserve in full force and effect all other rights, franchises,
        licenses, permits, certifications, approvals and authorizations required
        by Governmental Authorities and necessary to the ownership, occupation
        or use of its properties or the conduct of its business, except to the
        extent the failure to do so would not be reasonably likely to have a
        Material Adverse Effect, and (b) keep all material properties in good
        working order and condition (normal wear and tear excepted) and from
        time to time make all necessary repairs to and renewals and replacements
        of such properties, except to the extent that any of such properties are
        obsolete or are being replaced.

          (e) Compliance with Laws.

             The Borrower will, and will cause each of its Subsidiaries to,
        comply in all respects with all Requirements of Law applicable in
        respect of the conduct of its business and the ownership and operation
        of its properties, except to the extent the failure so to comply would
        not be reasonably likely to have a Material Adverse Effect.

          (f) Payment of Obligations.

             The Borrower will, and will cause each of its Subsidiaries to, (a)
        pay all liabilities and obligations as and when due (subject to any
        applicable subordination provisions), except to the extent failure to do
        so would not be reasonably likely to have a Material Adverse Effect, and
        (b) pay and discharge all taxes, assessments and governmental charges or
        levies imposed upon it, upon its income or profits or upon any of its
        properties, prior to the date on which penalties would attach thereto,
        and all lawful claims that, if unpaid, might become a Lien upon any of
        the properties of the Borrower or any of its Subsidiaries; provided,
        however, that neither the Borrower nor any of its Subsidiaries shall be
        required to pay any such tax, assessment, charge, levy or claim that is
        being contested in good faith and by proper proceedings and as to which
        the Borrower or such Subsidiary is maintaining adequate reserves with
        respect thereto in accordance with GAAP.

          (g) Insurance.

             The Borrower will, and will cause each of its Subsidiaries to,
        maintain with financially sound and reputable insurance companies
        insurance with respect to its assets, properties and business, against
        such hazards and liabilities (other than normal life insurance risk), of
        such types and in such amounts, as is customarily maintained by
        companies in the same or similar businesses similarly situated.

          (h) Maintenance of Books and Records; Inspection.

             The Borrower will, and will cause each of its Subsidiaries to, (i)
        maintain adequate books, accounts and records, in which full, true and
        correct entries shall be made of all financial
                                        31
<PAGE>

        transactions in relation to its business and properties, and prepare all
        financial statements required under this Agreement, in each case in
        accordance with GAAP or Statutory Accounting Practices, as applicable,
        and in compliance with the requirements of any Governmental Authority
        having jurisdiction over it, and (ii) permit employees or agents of the
        Administrative Agent or any Lender, at the Administrative Agent's or
        Lender's expense (except as provided in Section 10.4), to inspect its
        properties and examine or audit its books, records, working papers and
        accounts and make copies and memoranda of them, and to discuss its
        affairs, finances and accounts with its officers and employees and, with
        the prior consent of the Borrower (such consent not to be unreasonably
        withheld), the independent public accountants of the Borrower and its
        Subsidiaries (and by this provision the Borrower authorizes such
        accountants to discuss the finances of the Borrower and its
        Subsidiaries), all at such times and from time to time, upon reasonable
        notice and during business hours, as may be reasonably requested.

          (i) Dividends.

             The Borrower will take all action necessary to cause its
        Subsidiaries to make such dividends, distributions or other payments to
        the Borrower as shall be necessary for the Borrower to make payments of
        the Obligations. In the event the approval of any Governmental Authority
        or other Person is required in order for any such Subsidiary to make any
        such dividends, distributions or other payments to the Borrower, or for
        the Borrower to make any such principal or interest payments, the
        Borrower will forthwith exercise its best efforts and take all actions
        permitted by law and necessary to obtain such approval.

          (j) Ownership of Insurance Subsidiaries.

             The Borrower will cause each of its Insurance Subsidiaries to
        remain at all times a Wholly Owned Subsidiary of the Borrower, except as
        expressly permitted otherwise by Section 7.1.

          (k) Financial Covenants.

                (i) Capitalization Ratio.  The Borrower will not permit the
           Capitalization Ratio to be greater than 0.30 to 1.0 at any time.

                (ii) Statutory Surplus.  The Borrower will at all times cause
           the Combined Statutory Surplus of the Insurance Subsidiaries
           domiciled in the United States to be not less than (i) $700,000,000
           plus (ii) 50% of Consolidated Net Income (if positive) for each
           fiscal quarter ending on or after December 31, 2001 plus (iii) 50% of
           equity issued by the Borrower and its Subsidiaries after the date
           hereof.

                (iii) Risk-Based Capital.  The Borrower will not permit "total
           adjusted capital" (within the meaning of the Risk-Based Capital for
           Insurers Model Act as promulgated by the NAIC as of the date hereof
           (the "Model Act")) of each of Odyssey Reinsurance Corporation and
           Odyssey America Reinsurance Corporation to be less than one hundred
           fifty percent (150%), as of the last day of any fiscal quarter,
           beginning with the fiscal quarter ending December 31, 2001, of the
           applicable "Company Action Level RBC" (within the meaning of the
           Model Act).

                (iv) Earned Surplus.  The Borrower will not permit the Earned
           Surplus, as defined under Statutory Accounting Practices, of Odyssey
           America Reinsurance Corporation to be less than $200,000,000 at any
           time.

                                        32
<PAGE>

                                      1.7
                               NEGATIVE COVENANTS

     So long as any Lender shall have any Loan or other Obligation shall remain
unpaid or unsatisfied, unless the Required Lenders waive compliance in writing:

          (a) Merger; Consolidation; Disposition of Assets.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, liquidate, wind up or dissolve, enter into any
        consolidation, merger or other combination, or sell, assign, lease,
        convey, transfer, assumption reinsure or otherwise dispose of (whether
        in one or a series of transactions) all or any substantial portion of
        its assets, business or properties outside of the ordinary course of its
        business, or agree to do any of the foregoing; provided, however, that
        any Subsidiary may merge or consolidate with, or sell or otherwise
        dispose of assets to, another Subsidiary or the Borrower so long as (y)
        the surviving or transferee corporation is the Borrower or a Wholly
        Owned Subsidiary and (z) immediately after giving effect thereto, no
        Default or Event of Default would exist.

             Notwithstanding the foregoing, the Borrower will not, and will not
        permit or cause any of its Subsidiaries to sell, or otherwise dispose
        of, any capital stock of any Subsidiary.

          (b) Indebtedness.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, directly or indirectly, create, incur, assume or suffer
        to exist, any Indebtedness other than:

                (i) Accrued expenses, current trade or other accounts payable
           and other current liabilities arising in the ordinary course of
           business and not incurred through the borrowing of money, provided
           that the same shall be paid when due except to the extent being
           contested in good faith and by appropriate proceedings;

                (ii) Indebtedness of any Wholly Owned Subsidiary of the Borrower
           to the Borrower or to another Wholly Owned Subsidiary and of the
           Borrower to any Wholly Owned Subsidiary;

                (iii) Indebtedness due under the Loan Documents;

                (iv) Indebtedness to Fairfax Inc. in amounts not in excess of
           $50,000,000, which such Indebtedness shall not have any principal
           payments due, or be subject to redemption prior to the Termination
           Date and no prepayments or redemption thereon shall be made pursuant
           to the Termination Date;

                (v) Indebtedness in an amount of up to $100,000,000 issued
           pursuant to a private placement dated December 2001; and

                (vi) Other Indebtedness in an amount not in excess of
           $10,000,000 at any time outstanding.

          (c) Liens.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, directly or indirectly, make, create, incur, assume or
        suffer to exist, or enter into or suffer to exist any agreement or
        restriction that prohibits or conditions the creation, incurrence or
        assumption of, any Lien upon or with respect to any part of its property
        or assets, whether now owned or hereafter acquired, or agree to do any
        of the foregoing, other than the following (collectively, "Permitted
        Liens"):

                (i) Liens (y) in existence on the Closing Date and set forth on
           Schedule 7.3 and (z) arising out of the refinancing, extension,
           renewal or refunding of any Indebtedness secured by any such Lien,
           provided that such Indebtedness is not increased and is not secured
           by any additional assets;

                (ii) Liens imposed by law, such as Liens of carriers,
           warehousemen, mechanics, materialmen and landlords, and other similar
           Liens incurred in the ordinary course of business for sums
                                        33
<PAGE>

           not constituting borrowed money that are not overdue for a period of
           more than thirty (30) days or that are being contested in good faith
           by appropriate proceedings and for which adequate reserves have been
           established in accordance with GAAP;

                (iii) Liens (other than any lien imposed by ERISA, the creation
           or incurrence of which would result in an Event of Default under
           Section 8.1(h)) incurred in the ordinary course of business in
           connection with worker's compensation, unemployment insurance or
           other forms of governmental insurance or benefits, or to secure the
           performance of letters of credit, bids, tenders, statutory
           obligations, surety and appeal bonds, leases, government contracts
           and other similar obligations (other than obligations for borrowed
           money) entered into in the ordinary course of business;

                (iv) Liens for taxes, assessments or other governmental charges
           or statutory obligations, that are not delinquent or remain payable
           without any penalty or that are being contested in good faith by
           appropriate proceedings and for which adequate reserves have been
           established in accordance with GAAP;

                (v) Liens in connection with pledges and deposits made pursuant
           to statutory and regulatory requirements of Insurance Regulatory
           Authorities by an Insurance Subsidiary in the ordinary course of its
           business, for the purpose of securing regulatory capital or
           satisfying other financial responsibility requirements;

                (vi) with respect to any real property occupied by the Borrower
           or any of its Subsidiaries, all easements, rights of way, licenses
           and similar encumbrances on title that do not materially impair the
           use of such property for its intended purposes; and

                (vii) Liens (other than Liens specified in clauses (a) through
           (f) above) securing obligations in the aggregate principal amount not
           exceeding, at any time $5,000,000.

             Without limiting the foregoing, the Borrower will not, and will not
        permit or cause any of its Subsidiaries to, directly or indirectly,
        make, create, incur, assume or suffer to exist, or enter into any Lien
        upon the capital stock of any Subsidiary of the Borrower.

          (d) Investments; Acquisitions.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, directly or indirectly, purchase, own, invest in or
        otherwise acquire any capital stock, evidence of indebtedness or other
        obligation or security or any interest whatsoever in any other Person,
        or make or permit to exist any loans, advances or extensions of credit
        to, or any investment in cash or by delivery of property in, any other
        Person, or purchase or otherwise acquire (whether in one or a series of
        related transactions) any portion of the assets, business or properties
        of another Person, or create or acquire any Subsidiary, or become a
        partner or joint venturer in any partnership or joint venture
        (collectively, "Investments"), or make a commitment or otherwise agree
        to do any of the foregoing, if, immediately after any such Investment,
        the amount of the cash, Cash Equivalents and Investment Grade Securities
        owned by the Borrower and its Subsidiaries, on a consolidated basis,
        would be less than eighty percent (80%) of the total Invested Assets of
        the Borrower and its Subsidiaries determined as of the end of the most
        recent fiscal quarter; provided that neither the Borrower nor any of its
        Subsidiaries will make or permit any Investment in the Guarantor or any
        of its Subsidiaries and Affiliates, other than in the Borrower and its
        Subsidiaries.

          (e) Restricted Payments.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, directly or indirectly, declare or make any dividend
        payment, or make any other distribution of cash, property or assets, in
        respect of any of its capital stock or any warrants, rights or options
        (other than employee stock options) to acquire its capital stock, or
        purchase, redeem, retire or otherwise acquire for value

                                        34
<PAGE>

        any shares of its capital stock or any warrants, rights or options to
        acquire its capital stock, or set aside funds for any of the foregoing,
        except that:

          (A) each Wholly Owned Subsidiary may declare and make dividend
     payments or other distributions to the Borrower or another Wholly Owned
     Subsidiary to the extent permitted under applicable Requirements of Law
     and, as to the Insurance Subsidiaries, by each relevant Insurance
     Regulatory Authority, and

          (B) dividends, payments, distributions, acquisitions, purchases,
     retirements or redemptions not in excess of $12,500,000 in any fiscal year
     may be made; and

          (C) in addition to the amounts permitted under clause (ii), dividends,
     payments, distributions, acquisitions, purchases, retirements or
     redemptions may be made in any fiscal quarter in an amount not greater than
     50% of (A) Consolidated Net Income for such fiscal quarter minus (B)
     $15,000,000, so long as such amounts paid in reliance to this clause (iii)
     in any fiscal year shall not exceed $12,500,000.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, make (or give any notice in respect of) any voluntary
        or optional payment or prepayment on any Indebtedness or, directly or
        indirectly, make any redemption (including pursuant to any change of
        control provision), retirement, defeasance or other acquisition for
        value of any Indebtedness, or make any deposit or otherwise set aside
        funds for any of the foregoing purposes.

          (f) Transactions with Affiliates.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, enter into any transaction with any officer, director,
        stockholder or other Affiliate of the Borrower or any Subsidiary, except
        in the ordinary course of its business and upon fair and reasonable
        terms that are no less favorable to it than would obtain in a comparable
        arm's length transaction with a Person other than an Affiliate of the
        Borrower or such Subsidiary; provided, however, that nothing contained
        in this Section shall prohibit:

                (i) transactions described on Schedule 7.6 or otherwise
           expressly permitted hereunder; and

                (ii) the payment by the Borrower of reasonable and customary
           fees to members of its board of directors.

          (g) Certain Amendments.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, (a) amend, modify or waive, or permit the amendment,
        modification or waiver of, any provision of any agreement or instrument
        evidencing or governing any Indebtedness or (b) amend or modify its
        articles or certificate of incorporation or bylaws, in each case under
        clauses (a) and (b) other than any amendments or modifications that
        could not reasonably be expected to affect the Lenders adversely.

          (h) Lines of Business.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, engage to any substantial degree in any business other
        than the lines of property and casualty insurance or reinsurance
        business and other businesses engaged in by the Borrower and its
        Subsidiaries on the date hereof or a business reasonably related
        thereto.

          (i) Limitations on Certain Restrictions.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, directly or indirectly, create or otherwise cause or
        suffer to exist or become effective any restriction or encumbrance on
        (a) the ability of the Borrower and its Subsidiaries to perform and
        comply with their respective obligations under the Loan Documents, (b)
        the ability of the Borrower or any Subsidiary to grant, assume or permit
        to exist any Lien upon any of its assets or properties as
                                        35
<PAGE>

        security, directly or indirectly, for the Obligations, other than the
        restrictions, set forth in the Loan Documents, or (c) the ability of any
        Subsidiary to make payments or other distributions in respect of its
        capital to the Borrower or any other Subsidiary, or make transfers to
        the Borrower or any other Subsidiary, in each case, other than as
        existing under or by reason of the Loan Documents or applicable
        Requirements of Law.

          (j) Fiscal Year.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, change the ending date of its fiscal year to a date
        other than December 31.

          (k) Accounting Changes.

             The Borrower will not, and will not permit or cause any of its
        Subsidiaries to, make or permit any material change in its accounting
        policies or financial reporting practices, except as may be required by
        GAAP or Statutory Accounting Practices, as applicable, and any change to
        an accounting principle that can be demonstrated by the Borrower to be
        "preferable" in accordance with Statements on Auditing Standards No. 58
        as promulgated by the Auditing Standards Board.

          (l) Reinsurance Agreements.

             The Borrower will not, and will not permit or cause any of its
        Insurance Subsidiaries to be or become a party to any reinsurance
        agreements with any reinsurer not rated "A-" or better by A.M. Best &
        Company or S&P except (a) as listed on Schedule 7.12 (and only in
        amounts presently existing as listed on such Schedule) with a lower
        rating so listed on the date hereof, but not less than such listed
        rating and (b) additional amounts of up to 10% of ceded premiums in any
        fiscal year.

          (m) Capital Expenditures.  The Borrower will not, and will not permit
     any of its Subsidiaries to, make or commit Capital Expenditures in any
     fiscal year in excess of $10,000,000 in the aggregate.

          (n) Pari Passu.  The Borrower will not, and will not permit any
     Subsidiary to, make, create, assume, or suffer to exist any Lien to secure
     any Indebtedness, or Contingent Obligations to support any Indebtedness,
     except as specifically permitted under Section 7.3, unless the Obligations
     shall be secured and supported on a pari passu basis in form satisfactory
     to the Required Lenders.

                                      1.8
                               EVENTS OF DEFAULT

          (a) Event of Default.  Any of the following shall constitute an "Event
     of Default":

             (i) Non-Payment.  The Borrower fails to make, (i) when and as
        required to be made herein, payments of any amount of principal of any
        Loan, or (ii) within three days after the same becomes due, payment of
        any interest, fee or any other amount payable hereunder or under any
        other Loan Document; or

             (ii) Representation or Warranty.  Any representation or warranty by
        the Borrower or the Guarantor or any Subsidiary of the Borrower made or
        deemed made herein, in any other Loan Document, or which is contained in
        any certificate, document or financial or other statement by the
        Borrower, the Guarantor, any Subsidiary of the Borrower, or any
        Responsible Officer, furnished at any time under this Agreement, or in
        or under any other Loan Document is incorrect in any material respect on
        or as of the date made or deemed made; or

             (iii) Specific Defaults.  The Borrower fails to perform or observe
        any term, covenant or agreement contained in any of Sections 6.3,
        6.4(a), 6.11 or in Article VII; or

             (iv) Other Defaults.  The Guarantor, the Borrower or any of the
        Subsidiaries of the Borrower fails to observe, perform or comply with
        any condition, covenant or agreement contained in this Agreement or any
        of the other Loan Documents and such failure shall continue unremedied
        for any grace period specifically applicable thereto or, if no such
        grace period is applicable, for a period after
                                        36
<PAGE>

        the Borrower acquires knowledge thereof of (a) five (5) days with
        respect to covenants set forth in Sections 6.1 or 6.2 or (b) thirty (30)
        days with respect to any other condition, covenant or agreement; or

             (v) Cross-Default.  The Guarantor, the Borrower or any of the
        Subsidiaries of Borrower shall (a) fail to pay when due (whether by
        scheduled maturity, acceleration or otherwise and after giving effect to
        any applicable grace period) any principal of or interest on any
        Indebtedness (other than the Indebtedness incurred pursuant to this
        Agreement) having an aggregate principal amount of at least $5,000,000;
        or (b) fail to observe, perform or comply with any condition, covenant
        or agreement contained in any agreement or instrument evidencing or
        relating to any such Indebtedness, or any other event shall occur or
        condition exist in respect thereof, and the effect of such failure,
        event or condition is to cause, or permit the holder or holders of such
        Indebtedness (or a trustee or agent on its or their behalf) to cause
        (with the giving of no lapse of time, or both), such Indebtedness to
        become due, or to be prepaid, redeemed, purchased or defeased, prior to
        its stated maturity; or

             (vi) Insolvency; Voluntary Proceeding.  The Guarantor, the Borrower
        or any of the Subsidiaries of the Borrower shall (a) file a voluntary
        petition or commence a voluntary case seeking liquidation, winding-up,
        reorganization, dissolution, arrangement, readjustment of debts or any
        other relief under the Bankruptcy Code or under any other applicable
        bankruptcy, insolvency or similar law now or hereafter in effect, (b)
        consent to the institution of, or fail to controvert in a timely and
        appropriate manner, any petition or case of the type described in
        subsection (a) above, (c) apply for or consent to the appointment of or
        taking possession by a custodian, trustee, receiver or similar official
        for or of itself or all or a substantial part of its properties or
        assets, (d) fail generally, or admit in writing its inability, to pay
        its debts generally as they become due, (e) make a general assignment
        for the benefit of creditors or (f) take any corporate action to
        authorize or approve any of the foregoing; or

             (vii) Involuntary Proceedings.  (i) Any involuntary petition or
        case shall be filed or commenced against the Guarantor, the Borrower or
        any of the Subsidiaries of the Borrower seeking liquidation, winding-up,
        reorganization, dissolution, arrangement, readjustment of debts, the
        appointment of a custodian, trustee, receiver or similar official for it
        or all or a substantial part of its properties or any other relief under
        the Bankruptcy Code or under any other applicable bankruptcy, insolvency
        or similar law now or hereafter in effect, and such petition or case
        shall continue undismissed and unstayed for a period of sixty (60) days;
        or an order, judgment or decree approving or ordering any of the
        foregoing shall be entered in any such proceeding and (ii) any Insurance
        Regulatory Authority or other Governmental Authority having jurisdiction
        shall issue any order of conservation, supervision, rehabilitation or
        liquidation or any other order of similar effect in respect of any
        Insurance Subsidiary, and such action, individually or in the aggregate,
        would be reasonably likely to have a Material Adverse Effect; or

             (viii) ERISA.  Any member of the ERISA Group shall fail to pay when
        due an amount or amounts aggregating in excess of $5,000,000 which it
        shall have become liable to pay under Title IV of ERISA; or notice of
        intent to terminate a Plan shall be filed under Title IV of ERISA by any
        member of the ERISA Group, any plan administrator or any combination of
        the foregoing; or the PBGC shall institute proceedings under Title IV of
        ERISA to terminate, to impose liability (other than for premiums under
        Section 4007 of ERISA) in respect of, or to cause a Trustee to be
        appointed to administer any Plan; or a condition shall exist by reason
        of which the PBGC would be entitled to obtain a decree adjudicating that
        any Plan must be terminated; or there shall occur a complete or partial
        withdrawal from, or a default, within the meaning of Section 4219(c)(5)
        of ERISA, with respect to, one or more Multiemployer Plans which could
        cause one or more members of the ERISA Group to incur a current payment
        obligation in excess of $5,000,000; or

             (ix) Monetary Judgments.  Any one or more money judgments, writs or
        warrants of attachment, executions or similar processes involving an
        aggregate amount (exclusive of amounts fully

                                        37
<PAGE>

        bonded or covered by insurance as to which the surety or insurer, as the
        case may be, has acknowledged its liability in writing) in excess of
        $5,000,000 (other than a liability of an Insurance Subsidiary under an
        insurance contract written in the ordinary course of business) shall be
        entered or filed against the Guarantor, the Borrower or any of the
        Subsidiaries of the Borrower or any of their respective properties, and
        the same shall not be dismissed, stayed or discharged for a period of
        thirty (30) days; or

             (x) Non-Monetary Judgments.  Any non-monetary judgment, order or
        decree is entered against the Guarantor, the Borrower or any Subsidiary
        of the Borrower which does or would reasonably be expected to have a
        Material Adverse Effect, and there will be any period of 10 consecutive
        days during which a stay of enforcement of such judgment or order, by
        reason of a pending appeal or otherwise, shall not be in effect; or

             (xi) Change of Control.  There occurs any Change of Control; or

     Loss of Licenses.  Any one or more licenses, permits, accreditations or
authorizations of the Borrower of any of its Subsidiaries shall be suspended,
limited or terminated or shall not be renewed, or any other action shall be
taken, by any Governmental Authority in response to any alleged failure by the
Borrower or any of its Subsidiaries to be in compliance with applicable
Requirements of Law, and such action, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect; or

          (b) Remedies.  If any Event of Default occurs, the Administrative
     Agent shall, at the request of, or may, with the consent of, the Required
     Lenders,

             (i) by notice of any Event of Default under this Agreement, declare
        the unpaid principal amount of all outstanding Loans, all interest
        accrued and unpaid thereon, and all other amounts owing or payable
        hereunder or under any other Loan Document to be immediately due and
        payable, except as provided above, without presentment, demand, protest
        or other notice of any kind, all of which are hereby expressly waived by
        the Borrower provided that no such notice shall be required in respect
        of an Event of Default under subsections (f) or (g) of Section 8.1; and

             (ii) exercise on behalf of itself and the Lenders all rights and
        remedies available to it and the Lenders under the Loan Documents or
        applicable law; provided, however, that upon the occurrence of any event
        specified in subsection (f) or (g) of Section 8.1 (in the case of clause
        (i) of subsection (g) upon the expiration of the 60-day period mentioned
        therein), the obligation of each Lender to make Loans shall
        automatically terminate and the unpaid principal amount of all
        outstanding Loans and all interest and other amounts as aforesaid shall
        automatically become due and payable without further act of the
        Administrative Agent or any Lender.

          (c) Rights Not Exclusive.  The rights provided for in this Agreement
     and the other Loan Documents are cumulative and are not exclusive of any
     other rights, powers, privileges or remedies provided by law or in equity,
     or under any other instrument, document or agreement now existing or
     hereafter arising.

                                      1.9
                                   THE AGENT

     (a) Appointment and Authorization; "Administrative Agent."  Each Lender
hereby irrevocably (subject to Section 9.9) appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any

                                        38
<PAGE>

other Loan Document or otherwise exist against the Administrative Agent. Without
limiting the generality of the foregoing sentence, the use of the term
"administrative agent" in this Agreement with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.

     (b) Delegation of Duties.  The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

     (c) Liability of Administrative Agent.  None of the Administrative
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of the Lenders for any recital, statement, representation or warranty made by
the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of or title to any
Collateral, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Administrative Agent-Related Person shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any of the Borrower's Subsidiaries or Affiliates.

     (d) Reliance by Administrative Agent.  The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of the Lenders.

          (ii) For purposes of determining compliance with the conditions
     specified in Article IV, each Lender that has executed this Agreement shall
     be deemed to have consented to, approved or accepted or to be satisfied
     with, each document or other matter either sent by the Administrative Agent
     to such Lender for consent, approval, acceptance or satisfaction, or
     required thereunder to be consented to or approved by or acceptable or
     satisfactory to the Lender.

     (e) Notice of Default.  The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required

                                        39
<PAGE>

Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such request, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.

     (f) Credit Decision.  Each Lender acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Lender. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon any Administrative Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries, the value of and title to any Collateral, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Administrative Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any of the Administrative Agent-Related Persons.

     (g) Indemnification of Administrative Agent.  Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Administrative Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the obligation
of the Borrower to do so), pro rata, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to the Administrative Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Administrative Agent.

     (h) Administrative Agent in Individual Capacity.  Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower and its Subsidiaries and Affiliates as though Bank of America were not
the Administrative Agent hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of
America or its Affiliates may receive information regarding the Borrower or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrower or such Subsidiary) and acknowledge that
the Administrative Agent shall be under no obligation to provide such
information to them. With respect to its Loans, Bank of America shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Administrative Agent, and the terms "Lender"
and "Lenders" include Bank of America in its individual capacity.

     (i) Successor Administrative Agent.  The Administrative Agent may, and at
the request of the Required Lenders shall, resign as Administrative Agent upon
30 days' notice to the Lenders. If the Administrative
                                        40
<PAGE>

Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
the Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor
administrative agent as provided for above.

     (j) Withholding Tax.  Each Lender, and each holder of a participation
interest herein, that is a "foreign corporation, partnership or trust" within
the meaning of the Code shall deliver to Administrative Agent, prior to receipt
of any payment subject to withholding (or after accepting an assignment or
receiving a participation interest herein), two duly signed completed copies of
either Form W-8BEN or any successor thereto (relating to such Person and
entitling it to a complete exemption from withholding on all payments to be made
to such Person by Borrower pursuant to this Agreement) or Form W-8ECI or any
successor thereto (relating to all payments to be made to such Person by
Borrower pursuant to this Agreement) of the United States Internal Revenue
Service or such other evidence satisfactory to Borrower and Administrative Agent
that no withholding under the federal income tax laws is required with respect
to such Person. Thereafter and from time to time, each such Person shall (a)
promptly submit to Administrative Agent such additional duly completed and
signed copies of one of such forms (or such successor forms as shall be adopted
from time to time by the relevant United States taxing authorities) as may then
be available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and Administrative Agent of any
available exemption from, United States withholding taxes in respect of all
payments to be made to such Person by Borrower pursuant to this Agreement, and
(b) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office, if any) to avoid any
requirement of applicable laws that Borrower make any deduction or withholding
for taxes from amounts payable to such Person. If such Persons fails to deliver
the above forms or other documentation, then Administrative Agent may withhold
from any interest payment to such Person an amount equivalent to the applicable
withholding tax imposed by Sections 1441 and 1442 of the Code, without
reduction. If any Governmental Authority asserts that Administrative Agent did
not properly withhold any tax or other amount from payments made in respect of
such Person, such Person shall indemnify Administrative Agent therefor,
including all penalties and interest and costs and expenses (including Attorney
Costs) of Administrative Agent. The obligation of Persons under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of Administrative Agent.

     (k) Syndication Agent; Documentation Agent.  None of the Lenders identified
on the facing page or signature pages of this Agreement as a "syndication agent
" or "documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified as a "syndication agent " or "documentation agent" shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

                                        41
<PAGE>

                                      1.10
                                 MISCELLANEOUS

     (a) Amendments and Waivers.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by the Administrative Agent at
the written request of the Required Lenders) and the Borrower and acknowledged
by the Administrative Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Lenders and the Borrower and
acknowledged by the Administrative Agent, do any of the following:

          (i) postpone or delay any date fixed by this Agreement or any other
     Loan Document for any payment of principal, interest, fees or other amounts
     due to the Lenders (or any of them) hereunder or under any other Loan
     Document;

          (ii) reduce the principal of, or the rate of interest specified herein
     on any Loan, or (subject to clause (ii) below) any fees or other amounts
     payable hereunder or under any other Loan Document;

          (iii) release the Guaranty;

          (iv) change the percentage of the aggregate unpaid principal amount of
     the Loans which is required for the Lenders or any of them to take any
     action hereunder; or

          (v) amend this Section, or Section 2.10, or any provision herein
     providing for consent or other action by all Lenders.

     (b) Notices.  All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Borrower by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on Schedule 10.2, and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on Schedule 10.2; or, as directed to the Borrower or the Administrative
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Administrative Agent.

          (ii) All such notices, requests and communications shall, when
     transmitted by overnight delivery, or faxed, be effective when delivered
     for overnight (next-day) delivery, or transmitted in legible form by
     facsimile machine, respectively, or if mailed, upon the third Business Day
     after the date deposited into the U.S. mail, or if delivered, upon
     delivery; except that notices pursuant to Article II or IX to the
     Administrative Agent shall not be effective until actually received by the
     Administrative Agent.

          (iii) Any agreement of the Administrative Agent and the Lenders herein
     to receive certain notices by telephone or facsimile is solely for the
     convenience and at the request of the Borrower. The Administrative Agent
     and the Lenders shall be entitled to rely on the authority of any Person
     purporting to be a Person authorized by the Borrower to give such notice
     and the Administrative Agent and the Lenders shall not have any liability
     to the Borrower or other Person on account of any action taken or not taken
     by the Administrative Agent or the Lenders in reliance upon such telephonic
     or facsimile notice. The obligation of the Borrower to repay the Loans
     shall not be affected in any way or to any extent by any failure by the
     Administrative Agent and the Lenders to receive written confirmation of any
     telephonic or facsimile notice or the receipt by the Administrative Agent
     and the Lenders of a confirmation which is at variance with the terms
     understood by the Administrative Agent and the Lenders to be contained in
     the telephonic or facsimile notice.

     (c) No Waiver; Cumulative Remedies.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder, shall operate as a

                                        42
<PAGE>

waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.

     (d) Costs and Expenses. The Borrower shall:

          (i) whether or not the transactions contemplated hereby are
     consummated, pay or reimburse Bank of America (including in its capacity as
     Administrative Agent) and each Lender within five Business Days after
     presentation of a statement or invoice (subject to subsection 4.7) for all
     reasonable costs and expenses incurred by Bank of America (including in its
     capacity as Administrative Agent) and each Lender in connection with the
     development, preparation, delivery, administration and execution of, and
     any amendment, supplement, waiver or modification to (in each case, whether
     or not consummated), this Agreement, any Loan Document and any other
     documents prepared in connection herewith or therewith, and the
     consummation of the transactions contemplated hereby and thereby, including
     reasonable Attorney Costs incurred by Bank of America (including in its
     capacity as Administrative Agent) and any Lender with respect thereto; and

          (ii) pay or reimburse the Administrative Agent, the Lead Arranger and
     each Lender within five Business Days after presentation of a statement or
     invoice (subject to subsection 4.7) for all costs and expenses (including
     reasonable Attorney Costs) incurred by them in connection with the
     enforcement, attempted enforcement, or preservation of any rights or
     remedies under this Agreement or any other Loan Document during the
     existence of an Event of Default or after acceleration of the Loans
     (including in connection with any "workout" or restructuring regarding the
     Loans, and including in any Insolvency Proceeding or appellate proceeding);
     and

          (iii) pay or reimburse Bank of America (including in its capacity as
     Administrative Agent) within five Business Days after presentation of a
     statement or invoice (subject to subsection 4.7) for all appraisal
     (including the non-duplicative allocated cost of internal appraisal
     services), audit, environmental inspection and review (including the
     non-duplicative allocated cost of such internal services), search and
     filing costs, fees and expenses, incurred or sustained by Bank of America
     (including in its capacity as Administrative Agent) in connection with the
     matters referred to under subsections (a) and (b) of this Section.

     (e) Borrower Indemnification.  Whether or not the transactions contemplated
hereby are consummated, the Borrower shall indemnify, defend and hold the
Administrative Agent-Related Persons, and each Lender and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Administrative Agent or replacement of any Lender) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this Agreement
or the Loans or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Borrower shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.

          (ii) In no event shall any site visit, observation, or testing by the
     Administrative Agent or any Lender (or any contractee of the Administrative
     Agent or any Lender) be deemed a representation or warranty that Hazardous
     Materials are or are not present in, on, or under, the site, or that there
     has been or shall be compliance with any Environmental Law. Neither the
     Borrower nor any other Person is entitled to rely on any site visit,
     observation, or testing by the Administrative Agent or any Lender. Neither
     the Administrative Agent nor any Lender owes any duty of care to protect
     the Borrower or any
                                        43
<PAGE>

     other Person against, or to inform the Borrower or any other party of, any
     Hazardous Materials or any other adverse condition affecting any site or
     property. Neither the Administrative Agent nor any Lender shall be
     obligated to disclose to the Borrower or any other Person any report or
     findings made as a result of, or in connection with, any site visit,
     observation, or testing by the Administrative Agent or any Lender.

          (iii) Survival; Defense.  The obligations in this Section shall
     survive payment of all other Obligations. At the election of any
     Indemnified Person, the Borrower shall defend such Indemnified Person using
     legal counsel satisfactory to such Indemnified Person in such Person's sole
     discretion, at the sole cost and expense of the Borrower. All amounts owing
     under this Section shall be paid within 30 days after demand in writing
     setting forth in reasonable detail the reason for such demand.

     (f) Judgment Currency.

          (i) All sums due and payable hereunder shall be paid in United States
     Dollars. If, for the purposes of obtaining judgment in any court, it is
     necessary to convert a sum due hereunder in Dollars into another currency,
     the Borrower and the Lenders agree, to the fullest extent permitted bylaw,
     that the rate of exchange used shall be that at which in accordance with
     normal banking procedures the Administrative Agent could purchase United
     States Dollars with such other currency on the business day preceding that
     on which the final judgment is given.

          (ii) The obligation of the Borrower in respect of any sum due from it
     to the Lenders hereunder shall, notwithstanding any judgment in a currency
     other than Dollars, be discharged only to the extent that on the business
     day following receipt by the Lenders of any sum adjudged to be so due in
     such other currency the Lenders may in accordance with normal banking
     procedures purchase Dollars with such other currency, if the Dollars so
     purchased are less than the sum originally due to the Lenders in Dollars,
     the Borrower agrees, as a separate obligation and notwithstanding any such
     judgment, to indemnify the Lenders against such loss, and if the Dollars so
     purchased exceed the sum originally due to the Lenders in the Dollars, the
     Lenders agree to remit to the Borrower such excess.

     (g) Marshalling; Payments Set Aside.  Neither the Administrative Agent nor
the Lenders shall be under any obligation to marshall any assets in favor of the
Borrower or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment to the
Administrative Agent or the Lenders, or the Administrative Agent or the Lenders
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent.

     (h) Successors and Assigns.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent and each Lender.

     (i) Assignments, Participations, etc.  Any Lender may, with the written
consent of the Borrower (at all times other than during the existence of an
Event of Default) and the Administrative Agent, which consent of the Borrower
shall not be unreasonably withheld, at any time assign and delegate to one or
more Eligible Assignees (provided that no written consent of the Borrower or the
Administrative Agent shall be required in connection with any assignment and
delegation by a Lender to an Eligible Assignee that is an Affiliate of such
Lender) (each an "Assignee") all, or any ratable part of all, of the Loans and
the other rights and obligations of such Lender hereunder, in a minimum amount
of $10,000,000; provided, however, that the Borrower and the Administrative
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment

                                        44
<PAGE>

instructions, addresses and related information with respect to the Assignee,
shall have been given to the Borrower and the Administrative Agent by such
Lender and the Assignee; (B) such Lender and its Assignee shall have delivered
to the Borrower and the Administrative Agent an Assignment and Acceptance in the
form of Exhibit C ("Assignment and Acceptance") and (C) the assignor Lender or
Assignee has paid to the Administrative Agent a processing fee in the amount of
$3,500.

          (ii) From and after the date that the Administrative Agent notifies
     the assignor Lender that it has received (and provided its consent as set
     forth in clause (a) above with respect to) an executed Assignment and
     Acceptance and payment of the above-referenced processing fee, (i) the
     Assignee thereunder shall be a party hereto and, to the extent that rights
     and obligations hereunder have been assigned to it pursuant to such
     Assignment and Acceptance, shall have the rights and obligations of a
     Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
     extent that rights and obligations hereunder and under the other Loan
     Documents have been assigned by it pursuant to such Assignment and
     Acceptance, relinquish its rights and be released from its obligations
     under the Loan Documents.

          (iii) Immediately upon each Assignee's making its processing fee
     payment under the Assignment and Acceptance, this Agreement shall be deemed
     to be amended to the extent, but only to the extent, necessary to reflect
     the addition of the Assignee.

          (iv) Any Lender may at any time sell to one or more commercial banks
     or other Persons not property and casualty insurance companies or
     Affiliates thereof or Affiliates of the Borrower (a "Participant")
     participating interests in any Loan, and the other interests of that Lender
     (the "originating Lender") hereunder and under the other Loan Documents;
     provided, however, that (i) the originating Lender's obligations under this
     Agreement shall remain unchanged, (ii) the originating Lender shall remain
     solely responsible for the performance of such obligations, (iii) the
     Borrower and the Administrative Agent shall continue to deal solely and
     directly with the originating Lender in connection with the originating
     Lender's rights and obligations under this Agreement and the other Loan
     Documents, and (iv) no Lender shall transfer or grant any participating
     interest under which the Participant has rights to approve any amendment
     to, or any consent or waiver with respect to, this Agreement or any other
     Loan Document, except to the extent such amendment, consent or waiver would
     require unanimous consent of the Lenders as described in the first proviso
     to Section 10.1. In the case of any such participation, the Participant
     shall be entitled to the benefit of Sections 3.1, 3.3 and 10.5 as though it
     were also a Lender hereunder, and if amounts outstanding under this
     Agreement are due and unpaid, or shall have been declared or shall have
     become due and payable upon the occurrence of an Event of Default, each
     Participant shall be deemed to have the right of set-off in respect of its
     participating interest in amounts owing under this Agreement to the same
     extent as if the amount of its participating interest were owing directly
     to it as a Lender under this Agreement.

          (v) Notwithstanding any other provision in this Agreement, any Lender
     may at any time create a security interest in, or pledge, all or any
     portion of its rights under and interest in this Agreement in favor of any
     Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
     Treasury Regulation 31 CFR sec.203.14, and such Federal Reserve Bank may
     enforce such pledge or security interest in any manner permitted under
     applicable law.

          (vi) Notwithstanding anything to the contrary contained herein, any
     Lender (a "Granting Lender") may grant to a special purpose funding vehicle
     (an "SPC"), identified as such in writing from time to time by the Granting
     Lender to the Administrative Agent and the Borrower, the option to provide
     to the Borrower all or any part of any Loan that such Granting Lender would
     otherwise be obligated to make to the Borrower pursuant to this Agreement;
     provided that no SPC or Granting Lender shall be entitled to receive any
     greater amounts pursuant to Section 3.1, 3.3 or 3.4, than the Granting
     Lender would have been entitled to receive had the Granting Lender not
     otherwise granted such SPC the option to provide any Loan to the Borrower.
     Each party hereto hereby agrees that no SPC shall be liable for any
     indemnity or similar payment obligation under this Agreement (all liability
     for which shall remain with the Granting Lender). In furtherance of the
     foregoing, each party hereto hereby agrees (which agreement

                                        45
<PAGE>

     shall survive the termination of this Agreement) that, prior to the date
     that is one year and one day after the payment in full of all outstanding
     commercial paper or other senior indebtedness of any SPC, it will not
     institute against, or join any other person in instituting against, such
     SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
     proceedings under the laws of the United States or any State thereof.
     Notwithstanding the foregoing, the Granting Lender unconditionally agrees
     to indemnify the Borrower, the Administrative Agent and each Lender against
     all liabilities, obligations, losses, damages, penalties, actions,
     judgments, suits, costs, expenses or disbursements of any kind or nature
     whatsoever which may be incurred by or asserted against the Borrower, the
     Administrative Agent, or such Lender, as the case may be, in any way
     relating to or arising as a consequence of any such forbearance or delay in
     the initiation of any such proceeding against its SPC. Each party hereto
     hereby acknowledges and agrees that no SPC shall have the rights of a
     Lender hereunder, such rights being retained by the applicable Granting
     Lender. Accordingly, and without limiting the foregoing, each party hereby
     further acknowledges and agrees that no SPC shall have any voting rights
     hereunder and that the voting rights attributable to any Loan made by an
     SPC shall be exercised only by the relevant Granting Lender and that each
     Granting Lender shall serve as the agent and attorney-in-fact for its SPC
     and shall on behalf of its SPC receive any and all payments made for the
     benefit of such SPC. In addition, notwithstanding anything to the contrary
     contained in this Section 10.9(f), any SPC may (i) with notice to, but
     without the prior written consent of, the Borrower and the Administrative
     Agent and without paying any processing fee therefor, assign all or a
     portion of its interests in any Loans to the Granting Lender or to any
     financial institutions (consented to by the Borrower and Administrative
     Agent) providing liquidity and/or credit support to or for the account of
     such SPC to support the funding or maintenance of Loans and (ii) disclose
     on a confidential basis in accordance with this Agreement any non-public
     information relating to its Loans to any rating agency, commercial paper
     dealer or provider of any surety, guarantee or credit or liquidity
     enhancement to such SPC. This section may not be amended without the
     written consent of each Granting Lender, all or any part of whose Loan is
     being funded by an SPC at the time of such amendment.

     (j) Confidentiality.  Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all non-public information by the Borrower and
provided to it by the Borrower or any Subsidiary, or by the Administrative Agent
on the Borrower's or such Subsidiary's behalf, under this Agreement or any other
Loan Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Borrower or any Subsidiary; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Lender, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Borrower, provided that such source is not bound by a confidentiality agreement
with the Borrower known to the Lender; provided, however, that any Lender may
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Authority to which the Lender is subject or in connection with
an examination of such Lender by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the
Administrative Agent, any Lender or their respective Affiliates may be party;
(E) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors; (G) to any Participant or
Assignee, actual or potential, provided that such Person agrees in writing to
keep such information confidential to the same extent required of the Lenders
hereunder; (H) as to any Lender or its Affiliate, as expressly permitted under
the terms of any other document or agreement regarding confidentiality to which
the Borrower or any Subsidiary is party or is deemed party with such Lender or
such Affiliate; and (I) to its Affiliates.

     (k) Set-off.  In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
                                        46
<PAGE>

final) at any time held by, and other indebtedness at any time owing by, such
Lender to or for the credit or the account of the Borrower against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not the Administrative Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrower and
the Administrative Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.

     (l) Notification of Addresses, Lending Offices, Etc.  Each Lender shall
notify the Administrative Agent in writing of any changes in the address to
which notices to the Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.

     (m) Counterparts.  This Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument.

     (n) Severability.  The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.

          (i) No Third Parties Benefitted.  This Agreement is made and entered
     into for the sole protection and legal benefit of the Borrower, the
     Lenders, the Administrative Agent and the Administrative Agent-Related
     Persons, and their permitted successors and assigns, and no other Person
     shall be a direct or indirect legal beneficiary of, or have any direct or
     indirect cause of action or claim in connection with, this Agreement or any
     of the other Loan Documents.

     (o) Governing Law and Jurisdiction.  THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK;
PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.

          (ii) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
     ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
     YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
     EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE
     ADMINISTRATIVE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF
     ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF
     THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES
     ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
     THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
     THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
     THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER, THE
     ADMINISTRATIVE AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY
     SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
     PERMITTED BY NEW YORK LAW.

     (p) Waiver of Jury Trial.  THE BORROWER, THE LENDERS AND THE ADMINISTRATIVE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE AGENT-RELATED PERSON, PARTICIPANT
OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWER,

                                        47
<PAGE>

THE LENDERS AND THE ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

     (q) Entire Agreement.  This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Borrower,
the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.

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

<Table>
<S>  <C>                                        <C>

ODYSSEY RE HOLDINGS CORP.

By:  /s/  CHARLES D. TROIANO
     ------------------------------------------
     Title: Vice President

By:  /s/  DONALD L. SMITH
     ------------------------------------------
     Title: Vice President

BANK OF AMERICA, N.A.,
as Administrative Agent and Lender

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

JP MORGAN CHASE BANK,
as Documentation Agent and a Lender

By:  /s/
     ------------------------------------------
     Title: Vice President
</Table>

                                        48
<PAGE>

                                  SCHEDULE 2.1

                           LOANS AND PRO RATA SHARES

<Table>
<Caption>
                                                                               PRO RATA
LENDER                                                             LOAN         SHARE
------                                                          -----------    --------
<S>                                                             <C>            <C>
Bank of America, N.A........................................    $25,000,000       50%
JP Morgan Chase Bank........................................    $25,000,000       50%
                                                                -----------      ---
  TOTAL.....................................................    $50,000,000      100%
                                                                ===========      ===
</Table>
<PAGE>

                                  SCHEDULE 5.4

                                    LICENSES

                              Please see attached.

                               [GRAPHIC OMITTED]
<PAGE>

                                  SCHEDULE 5.7

                                  SUBSIDIARIES

                              Please see attached.

                               [GRAPHIC OMITTED]
<PAGE>

                                SCHEDULE 5.14(A)

                             ENVIRONMENTAL MATTERS

                                      NONE
<PAGE>

                                SCHEDULE 5.14(B)

                             ENVIRONMENTAL MATTERS

                                      NONE
<PAGE>

                                 SCHEDULE 5.18

                               MATERIAL CONTRACTS

1.  Administrative Service Agreement between Odyssey America Reinsurance
    Corporation and Compagnie Transcontinentale de Reassurance (France),
    effective from July 1, 2000

2.  Administrative Service Agreement between Odyssey America Reinsurance
    Corporation and Compagnie Transcontinentale de Reassurance (Singapore),
    effective from July 1, 2000

3.  Affiliate Guarantee by Odyssey America Reinsurance Corporation dated as of
    July 14, 2000 relating to Compagnie Transcontinentale de Reassurance

4.  Blanket Assumption Endorsement Agreement between Ranger Insurance Company
    and Odyssey America Reinsurance Corporation dated as of July 1, 1999

5.  Tax Allocation Agreement among Fairfax Inc., Odyssey Re Holdings Corp.,
    Odyssey America Reinsurance Corporation, Odyssey Reinsurance Corporation,
    and Hudson Insurance Company dated as of June 19, 2001

6.  Amended and Restated Employment Agreement dated as of April 1, 2001 between
    Andrew Barnard and Odyssey Re Holdings Corp.

7.  Employment Agreement dated as of October 1, 2001 between Charles D. Troiano
    and Odyssey Re Holdings Corp.

8.  Employment Agreement dated as of May 23, 2001 between Michael Wacek and
    Odyssey Re Holdings Corp.

9.  Lease Agreement between Odyssey America Reinsurance Corporation and First
    Stamford Place Company in relation to 300 First Stamford Place, Stamford,
    Connecticut

10. Registration Rights Agreement between Odyssey Re Holdings Corp., TIG
    Insurance Company and ORH Holdings Inc dated as of June 19, 2001

11. Investment Management Agreement between Hamblin Watsa Investment Counsel
    Ltd. and TIG Reinsurance Company dated as of April 13, 1999

12. Investment Management Agreement between Hamblin Watsa Investment Counsel
    Ltd. and Odyssey Reinsurance Corporation dated as of May 11, 2001

13. Investment Management Agreement between Hamblin Watsa Investment Counsel
    Ltd. and Hudson Insurance Company dated as of May 11, 2001

14. Investment Administration Agreement between Fairfax Financial Holdings
    Limited and TIG Reinsurance Company dated as of April 13, 1999

15. Investment Administration Agreement between Fairfax Financial Holdings
    Limited and Odyssey Reinsurance Corporation dated as of May 11, 2001

16. Investment Administration Agreement between Fairfax Financial Holdings
    Limited and Hudson Insurance Company dated as of May 11, 2001

17. Indemnification Agreements between Odyssey Re Holdings Corp. and each of its
    directors and officers

18. Term Note dated June 19, 2001 issued by Odyssey Re Holdings Corp. and held
    by Fairfax Inc.

19. Investment Management Agreement between Hamblin Watsa Investment Counsel
    Ltd. and Newline Underwriting Management Ltd. dated as of February 16, 2001

20. Indemnification Agreement in favor of Odyssey Reinsurance Corporation and
    Hudson Insurance Company from Fairfax Financial Holdings Limited dated as of
    March 22, 2001
<PAGE>

21. Indemnification Agreement in favor of Odyssey Reinsurance Corporation from
    Fairfax Financial Holdings Limited dated as of March 20, 2001

22. Odyssey America Reinsurance Corporation Restated Employees Retirement Plan

23. Odyssey America Reinsurance Corporation Profit Sharing Plan

24. Odyssey Re Holdings Corp. Restricted Share Plan

25. Odyssey Re Holdings Corp. Stock Option Plan

26. Odyssey Re Holdings Corp. Long-Term Incentive Plan

27. Odyssey Re Holdings Corp. Employee Share Purchase Plan

28. Odyssey America Reinsurance Corporation 401(k) Excess Plan

29. Odyssey America Reinsurance Corporation Restated Supplemental Retirement
    Plan

30. Exchange Agreement among TIG Insurance Company, ORH Holdings Inc. and
    Odyssey Re Holdings Corp. dated as of June 19, 2001

31. Tax Services Agreement between Fairfax Inc., Odyssey America Reinsurance
    Corporation, and Odyssey Reinsurance Corporation dated as of May 10, 2001

32. Tax Services Agreement between Fairfax Inc. and Odyssey Re Holdings Corp.
    dated as of May 10, 2001

33. Note Purchase Agreement dated as of November 15, 2001 among Odyssey Re
    Holdings Corp. and the purchasers listed in Schedule A attached thereto

34. Notes due November 30, 2006 issued in connection with the Note Purchase
    Agreement dated November 15, 2001

35. Credit Facility dated as of December 31, 2001 among Odyssey Re Holdings
    Corp., Bank of America, N.A., as Administrative Agent, JP Morgan Chase Bank,
    as Documentation Agent, and the other financial institutions party thereto

                                        2
<PAGE>

                                 SCHEDULE 5.19

                       REINSURERS AND COLLATERAL SECURING
                        CERTAIN REINSURERS' OBLIGATIONS

                              Please see attached.

                               [GRAPHIC OMITTED]
<PAGE>

                                  SCHEDULE 7.3

                                PERMITTED LIENS

                                      NONE
<PAGE>

                                  SCHEDULE 7.6

                          TRANSACTIONS WITH AFFILIATES

           Please refer to Schedule 5.18 for affiliate transactions.
<PAGE>

                                 SCHEDULE 10.2

                                LENDING OFFICES,
                             ADDRESSES FOR NOTICES

BANK OF AMERICA, N.A.,
  as Administrative Agent

Bank of America, N.A.
Agency Management
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Bettye Hill
Facsimile: (312) 987-0889

BANK OF AMERICA, N.A.,
  as Lender

Lending Office and Notices:

Bank of America, National Association
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mehul Mehta
Telephone: (312) 828-2147
Facsimile: (312) 987-0889

JP MORGAN CHASE BANK,
  as Lender

Lending Office:

JP Morgan Chase Bank
One Chase Manhattan Plaza
New York, New York 10005
Attention: Laura Rebecca
Telephone: (212) 552-7253
Facsimile: (212) 552-7490

Notices (other than Borrowing Notices):

JP Morgan Chase Bank
270 Park Avenue
New York, New York 10017
Attention: Helen Newcomb
Telephone: (212) 270-6260
Facsimile: (212) 270-1511

ODYSSEY RE HOLDINGS CORP.
300 First Stamford Place
Stamford, Conn. 06902
Attention: Don Smith
Telephone: (203) 977-8024
Facsimile: (203) 965-7995

                                 Schedule 10.2-1
<PAGE>

                                   EXHIBIT A

                       NOTICE OF CONVERSION/CONTINUATION

                                                          Date:           , 2002

To: Bank of America, N.A., as Administrative Agent for the Lenders parties to
    the Amended and Restated Credit Agreement dated as of January 31, 2002, (as
    extended, renewed, amended or restated from time to time, the "Credit
    Agreement") among Odyssey Re Holdings Corp., certain Lenders which are
    signatories thereto, JP Morgan Chase Bank, as Documentation Agent and Bank
    of America, N.A., as Administrative Agent

Ladies and Gentlemen:

     The undersigned, Odyssey Re Holdings Corp., refers to the Credit Agreement,
the terms defined therein being used herein as therein defined, and hereby gives
you notice irrevocably, pursuant to Section 2.3 of the Credit Agreement, of the
[conversion] [continuation] of the Loans specified herein, that:

     1. The Conversion/Continuation Date is           , 200  .

     2. The aggregate amount of the Loans to be [converted] [continued] is
        $          .

     3. The Loans are to be [converted into] [continued as] [Offshore Rate]
        [Base Rate] Loans.

     4. [If applicable:] The duration of the Interest Period for the Loans
        included in the [conversion] [continuation] shall be [       months].

                                          ODYSSEY RE HOLDINGS CORP

                                          By:
                                          --------------------------------------

                                          Title:
                                          --------------------------------------

                                   Exhibit A-1
<PAGE>

                                   EXHIBIT B

                            ODYSSEYRE HOLDINGS CORP.

                             COMPLIANCE CERTIFICATE

                                       Financial Statement Date:           , 200

     Reference is made to that certain Amended and Restated Credit Agreement
dated as of January 31, 2002 (as extended, renewed, amended or restated from
time to time, the "Credit Agreement") among OdysseyRe Holdings Corp. (the
"Borrower"), the several financial institutions from time to time parties to
this Credit Agreement (the "Lenders"), JP Morgan Chase Bank, as documentation
agent and Bank of America National, N.A., as agent for the Banks (in such
capacity, the "Administrative Agent"). Unless otherwise defined herein,
capitalized terms used herein have the respective meanings assigned to them in
the Credit Agreement.

     The undersigned Responsible Officer of           , hereby certifies as of
the date hereof that he/she is the           of the Borrower, and that, as such,
he/she is authorized to execute and deliver this Certificate to the Lender and
the Administrative Agent on the behalf of the Company and its consolidated
Subsidiaries, and that:

[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.1(a)] of the Credit
Agreement.]

     1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of the fiscal year ended           , 200  and (b) the
related consolidated statements of income and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit and
accompanied by the opinion of a nationally recognized certified independent
public accounting firm (the "Independent Auditor") which report shall state that
such consolidated financial statements are complete and correct and have been
prepared in accordance with GAAP, and fairly present, in all material respects,
the financial position of the Borrower and its consolidated Subsidiaries for the
periods indicated and on a basis consistent with prior periods.

                                       OR

[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.1(b)] of the Credit
Agreement.]

     1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of the end of the fiscal quarter ended           , 200  , and
(b) the related unaudited consolidated statements of income, and cash flows for
the period commencing on the first day and ending on the last day of such
quarter, prepared in accordance with GAAP (subject only to ordinary, good faith
year-end audit adjustments and the absence of footnotes) and fairly presenting,
in all material respects, the financial position and the results of operations
of the Borrower and its consolidated Subsidiaries.

     2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions (financial or
otherwise) of the Borrower during the accounting period covered by the attached
financial statements.

     3. To the best of the undersigned's knowledge, the Borrower, during such
period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Credit Agreement to be
observed, performed or satisfied by the Company, and the undersigned has no
knowledge of any Default or Event of Default.

                                   Exhibit B-1
<PAGE>

     4. The following financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
          , 200  .

                                          ODYSSEY RE HOLDINGS CORP

                                          By:
                                          --------------------------------------

                                          Title:
                                          --------------------------------------

                                   Exhibit B-2
<PAGE>

                                   SCHEDULE 2

                         to the Compliance Certificate
                ($ in 000's Calculation of Financial Covenants)

                                   Exhibit B-3
<PAGE>

                                   EXHIBIT C

                 [FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT

     This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
dated as of           ,      is made between           (the "Assignor") and
          (the "Assignee").

                                    RECITALS

     WHEREAS, the Assignor is party to that certain Amended and Restated Credit
Agreement dated as of January 31, 2002 (as amended, amended and restated,
modified, supplemented or renewed, the "Credit Agreement") among OdysseyRe
Holdings Corp., Bank of America, N.A., as Administrative Agent, JP Morgan Chase
Bank, as Documentation Agent, and the various Lenders (including the Assignor)
which are parties thereto. Any terms defined in the Credit Agreement and not
defined in this Assignment and Acceptance are used herein as defined in the
Credit Agreement;

     WHEREAS, as provided under the Credit Agreement, the Assignor has made
Loans to the Borrower in an aggregate amount of $          ;

     WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect of
its Loans in an amount equal to $          (the "Assigned Amount") on the terms
and subject to the conditions set forth herein and the Assignee wishes to accept
assignment of such rights and to assume such obligations from the Assignor on
such terms and subject to such conditions;

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

1. ASSIGNMENT AND ACCEPTANCE.

     (a) Subject to the terms and conditions of this Assignment and Acceptance,
(i) the Assignor hereby sells, transfers and assigns to the Assignee, and (ii)
the Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse and without representation or warranty (except as provided in this
Assignment and Acceptance)      % (the "Assignee's Percentage Share") of the
Loans of the Assignor and all related rights, benefits, obligations, liabilities
and indemnities of the Assignor under and in connection with the Credit
Agreement and the other Loan Documents.

[If appropriate, add paragraph specifying payment to Assignor by Assignee of
outstanding principal of, accrued interest on, and fees with respect to, Loans
assigned.]

     (b) With effect on and after the Effective Date (as defined in Section 5
hereof), the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Lender
under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with Loans in an amount
equal to the Assigned Amount (in addition to any such rights and obligations
theretofore held by it). The Assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender. The Assignor shall
relinquish its rights and be released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee;
provided, however, the Assignor shall not relinquish its rights under Article
III and Section 8.4 of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.

     (c) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignee's Loans will be $          .

     (d) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignor's Loans will be $          .

                                   Exhibit C-1
<PAGE>

2. PAYMENTS.

     (a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
in immediately available funds an amount equal to $          .

     (b) The [Assignor] [Assignee] agrees to pay to the Administrative Agent a
processing fee in the amount specified in Section 8.8(a) of the Credit
Agreement.

3. REALLOCATION OF PAYMENTS.

     Any interest, fees and other payments accrued to the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignor. Any
interest, fees and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignee. Each of
the Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.

4. INDEPENDENT CREDIT DECISION.

     The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Credit
Agreement.

5. EFFECTIVE DATE; NOTICES.

     (a) As between the Assignor and the Assignee, the effective date for this
Assignment and Acceptance shall be           , 20 (the "Effective Date");
provided that the following conditions precedent have been satisfied on or
before the Effective Date:

          (i) this Assignment and Acceptance shall have been executed and
     delivered by the Assignor and the Assignee;

          (ii) the consent of the Borrower, if needed, and the Administrative
     Agent required for an effective assignment of the Assigned Amount by the
     Assignor to the Assignee under Section 8.8(a) of the Credit Agreement shall
     have been duly obtained and shall be in full force and effect as of the
     Effective Date;

          (iii) the Assignee shall have paid to the Assignor all amounts due to
     the Assignor under this Assignment and Acceptance;

          (iv) the Assignee shall have complied with Section 8.8(a) of the
     Credit Agreement (if applicable);

          (v) the processing fee referred to in Section 2(b) hereof and in
     Section 8.8(a) of the Credit Agreement shall have been paid to the
     Administrative Agent; and

          (vi) the Assignor shall have assigned and the Assignee shall have
     assumed a percentage equal to the Assignee's Pro Rata Share of the rights
     and obligations of the Assignor with respect to the Loans and under the
     Credit Agreement (if such agreement exists).

     (b) Promptly following the execution of this Assignment and Acceptance, the
Assignor shall deliver to the Borrower and the Administrative Agent for
acknowledgment by the Administrative Agent, a Notice of Assignment substantially
in the form attached hereto as Schedule 1.

                                   Exhibit C-2
<PAGE>

6. AGENT. [INCLUDE ONLY IF ASSIGNOR IS THE ADMINISTRATIVE AGENT]

     (a) The Assignee hereby appoints and authorizes the Assignor to take such
action as Administrative Agent on its behalf and to exercise such powers under
the Credit Agreement as are delegated to the Administrative Agent by the Lenders
pursuant to the terms of the Credit Agreement.

     (b) The Assignee shall assume no duties or obligations held by the Assignor
in its capacity as Administrative Agent under the Credit Agreement.

7. WITHHOLDING TAX.

     The Assignee (a) represents and warrants to the Assignor, the
Administrative Agent and the Borrower that under applicable law and treaties no
tax will be required to be withheld with respect to any payments to be made to
the Assignee under the Credit Agreement, (b) agrees to furnish (if it is
organized under the laws of any jurisdiction other than the United States or any
State thereof) to the Administrative Agent and the Borrower prior to the time
that the Administrative Agent or Borrower is required to make any payment of
principal, interest or fees under the Credit Agreement, duplicate executed
originals of either U.S. Internal Revenue Service Form W-9 or U.S. Internal
Revenue Service Form W-8BEN (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.

8. REPRESENTATIONS AND WARRANTIES.

     (a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.

     (b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Borrower or the performance or observance by the Borrower of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.

     (c) The Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance; and apart from any
agreements or
                                   Exhibit C-3
<PAGE>

undertakings or filings required by the Credit Agreement, no further action by,
or notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against the Assignee in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles; and (iv) it is
an Eligible Assignee.

9. FURTHER ASSURANCES.

     The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Borrower or the Administrative Agent which may be required in
connection with the assignment and assumption contemplated hereby.

10. MISCELLANEOUS.

     (a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.

     (b) All payments made hereunder shall be made without any set-off or
counterclaim.

     (c) The Assignor and the Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.

     (d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.

     (e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. The Assignor and the Assignee
each irrevocably submits to the non-exclusive jurisdiction of any State or
Federal court sitting in New York, New York over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.

     [Other provisions to be added as may be negotiated between the Assignor and
the Assignee, provided that such provisions are not inconsistent with the Credit
Agreement.]

                                   Exhibit C-4
<PAGE>

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.

<Table>
<S>                                            <C>       <C>

                                               [ASSIGNOR]

                                               By:
                                                         --------------------------------------

                                               Title:
                                                         --------------------------------------

                                               By:
                                                         --------------------------------------

                                               Title:
                                                         --------------------------------------

                                               Address:

                                               [ASSIGNEE]

                                               By:
                                                         --------------------------------------

                                               Title:
                                                         --------------------------------------

                                               By:
                                                         --------------------------------------

                                               Title:
                                                         --------------------------------------

                                               Address:
</Table>

                                   Exhibit C-5
<PAGE>

                                   SCHEDULE 1

                      NOTICE OF ASSIGNMENT AND ACCEPTANCE

                                                               ,

Bank of America, N.A., as Administrative Agent
231 S. LaSalle Street
Chicago, IL 60603

Odyssey Re Holdings Corp.
300 Stamford Place
Stamford, CN 06902

Ladies and Gentlemen:

     We refer to the Amended and Restated Credit Agreement dated as of January
31, 2002 (as amended, amended and restated, modified, supplemented or renewed,
the "Credit Agreement") among OdysseyRe Holdings Corp., Bank of America, N.A.,
as Administrative Agent, JP Morgan Chase Bank, as Documentation Agent, and the
various Lenders which are parties thereto. Terms defined in the Credit Agreement
are used herein as therein defined.

     1. We hereby give you notice of, and request your consent to, the
assignment by                (the "Assignor") to                (the "Assignee")
of $          of Loans made by the Assignor pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). Before
giving effect to such assignment the Assignor's outstanding Loans are
$          .

     2. The Assignee agrees that, upon receiving the consent of the
Administrative Agent and, if applicable, the Borrower to such assignment, the
Assignee will be bound by the terms of the Credit Agreement as fully and to the
same extent as if the Assignee were the Lender originally holding such interest
in the Credit Agreement.

     3. The following administrative details apply to the Assignee:

<Table>
<S>  <C>              <C>

(A)  Notice Address:  -----------------------------------------------------------

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

     Assignee name:   -----------------------------------------------------------

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

     Address:         -----------------------------------------------------------

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

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

     Attention:       -----------------------------------------------------------

     Telephone: ( ------------)
     ---------------------------------------------------

     Telecopier: ( ------------)
     --------------------------------------------------
</Table>

                                   Exhibit C-6
<PAGE>
<Table>
<S>  <C>              <C>

(B)  Payment Instructions:

     Account No.:     -----------------------------------------------------------

     At:              -----------------------------------------------------------

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

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

     Reference:       -----------------------------------------------------------

     Attention:       -----------------------------------------------------------
</Table>

     4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.

<Table>
<S>                                            <C>     <C>

                                               Very truly yours,

                                               [NAME OF ASSIGNOR]

                                                       -----------------------------------------
                                               By:

                                                       -----------------------------------------
                                               Title:

                                               [NAME OF ASSIGNEE]

                                                       -----------------------------------------
                                               By:

                                                       -----------------------------------------
                                               Title:
</Table>

<Table>
<S>     <C>                                       <C>

ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO:

ODYSSEYRE HOLDINGS CORP.

By:     -----------------------------------------

Title:  -----------------------------------------

BANK OF AMERICA, N.A.,
as Administrative Agent

By:     -----------------------------------------

Title:  -----------------------------------------
</Table>

                                   Exhibit C-7
<PAGE>

                                   EXHIBIT D

                                 [FORM OF] NOTE

$                                                                         , 2002

     FOR VALUE RECEIVED, the undersigned, OdysseyRe Holdings Corp. (the
"Borrower"), hereby promises to pay to the order of           (the "Lender") the
principal sum of           Dollars($          ) or, if less, the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower pursuant
to the Amended and Restated Credit Agreement, dated as of January 31, 2002 (such
Amended and Restated Credit Agreement, as it may be amended, restated,
supplemented or otherwise modified from time to time, being herein called the
"Credit Agreement"), among the Borrower, Bank of America, N.A., as
Administrative Agent, JP Morgan Chase Bank, as Documentation Agent, and the
Lenders which are parties thereto, on the dates and in the amounts provided in
the Credit Agreement. The Borrower further promises to pay interest on the
unpaid principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.

     The Lender is authorized to endorse each payment of principal on the Loan
on the schedule annexed hereto and made a part hereof, and continuations thereof
which shall be attached hereto and made a part hereof; provided, that any
failure to endorse such information on such schedule or continuation thereof
shall not in any manner affect any obligation of the Borrower under the Credit
Agreement and this Note (the "Note").

     This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement, which Credit Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.

     Terms defined in the Credit Agreement are used herein with their defined
meanings therein unless otherwise defined herein. This Note shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.

<Table>
<S>                                         <C>     <C>

                                            ODYSSEYRE HOLDINGS CORP

                                            By:
                                                    -------------------------------------------

                                            Title:
                                                    -------------------------------------------
</Table>

                                   Exhibit D-1
<PAGE>

                                SCHEDULE TO NOTE

                          LOANS AND REPAYMENT OF LOANS

<Table>
<Caption>
                        AMOUNT     AMOUNT    NOTATION
DATE                   OF LOAN     REPAID    MADE BY
----                   --------   --------   --------
<S>                    <C>        <C>        <C>

</Table>

                                   Exhibit D-2
<PAGE>

                                   EXHIBIT E

                               GUARANTOR CONSENT

     Reference is made to the Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of January 31, 2002 among OdysseyRe Holdings Corp., certain
lenders, JP Morgan Chase Bank, as Documentation Agent, and Bank of America,
N.A., as Administrative Agent. All capitalized terms used in the Credit
Agreement shall have the meanings set forth therein unless otherwise defined or
the context otherwise requires. The Credit Agreement is an amendment and
restatement of a Credit Agreement dated as of December 31, 2001 (the "Existing
Credit Agreement"). Pursuant to the Existing Credit Agreement, the undersigned
delivered a guaranty (the "Guaranty") dated as of December 31, 2001. The
undersigned hereby reaffirms its obligations under the Guaranty and agrees that
all references in the Guaranty to the Existing Credit Agreement shall be deemed
references to the Credit Agreement.

     IN WITNESS WHEREOF, the undersigned has executed this Consent this 31st day
of January, 2002.

<Table>
<S>                                         <C>     <C>

                                            FAIRFAX FINANCIAL HOLDINGS LIMITED

                                            By:
                                                    -------------------------------------------

                                            Title:
                                                    -------------------------------------------
</Table>

                                   Exhibit E-1
<PAGE>

                                  CERTIFICATE

     The undersigned as -------------------- of OdysseyRe Holdings Corp. hereby
certifies that:

          (a) The representations and warranties contained in Article V of the
     Credit Agreement are true and correct in all material respects on and as of
     the date hereof, as though made on and as of such date;

          (b) No Default or Event of Default exists;

          (c) There has occurred since September 30, 2001, no event or
     circumstances that has resulted or could reasonably be expected to result
     in a Material Adverse Effect; and

          (d) No actions, suits, investigations or proceedings are pending or to
     my knowledge threatened, in any court or before any arbitrator or
     governmental authority that if adversely determined would have a Material
     Adverse Effect.

     Reference is made to the Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of January 31, 2002 among OdysseyRe Holdings Corp., certain
Lenders, Bank of America, N.A., as Administrative Agent and JP Morgan Chase
Bank, as Documentation Agent. All the defined terms used in this Certificate
shall have the meanings set forth in the Credit Agreement unless otherwise
defined or the context otherwise requires.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate this 31st
day of January, 2002.

<Table>
<S>                                         <C>     <C>

                                            ODYSSEYRE HOLDINGS CORP

                                            By:
                                                    -------------------------------------------

                                            Title:
                                                    -------------------------------------------
</Table>
<PAGE>

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                             PAGE
                                                                             ----
<S>           <C>                                                            <C>
ARTICLE I     DEFINITIONS.................................................     1
      1.1     Certain Defined Terms.......................................     1
      1.2     Other Interpretive Provisions...............................    18
      1.3     Accounting Principles.......................................    19
ARTICLE II    THE CREDITS.................................................    19
      2.1     Terms of Commitments........................................    19
      2.2     Loan Accounts...............................................    20
      2.3     Procedure for Borrowing.....................................    20
      2.4     Conversion and Continuation Elections.......................    21
      2.5     Voluntary Termination or Reduction of Commitments...........    22
      2.6     Optional Prepayments........................................    22
      2.7     Mandatory Prepayments of Loans; Mandatory Commitment            23
              Reductions..................................................
      2.8     Use of Proceeds.............................................    23
      2.9     Interest....................................................    23
      2.10    Fees........................................................    24
      2.11    Computation of Fees and Interest............................    25
      2.12    Payments by the Borrower....................................    25
      2.13    Payments by the Lenders to the Administrative Agent.........    25
      2.14    Sharing of Payments, Etc....................................    26
ARTICLE III   TAXES, YIELD PROTECTION AND ILLEGALITY......................    27
      3.1     Taxes.......................................................    27
      3.2     Illegality..................................................    28
      3.3     Increased Costs and Reduction of Return.....................    28
      3.4     Funding Losses..............................................    29
      3.5     Inability to Determine Rates................................    29
      3.6     Certificates of Lenders.....................................    30
      3.7     Substitution of Lenders.....................................    30
      3.8     Survival....................................................    30
ARTICLE IV    CONDITIONS PRECEDENT........................................    30
      4.1     Conditions of Initial Loans.................................    30
      4.2     Conditions to All Borrowings................................    32
ARTICLE V     REPRESENTATIONS AND WARRANTIES..............................    32
      5.1     Corporate Existence and Power...............................    32
      5.2     Corporate Authorization.....................................    32
      5.3     No Violation................................................    33
      5.4     Third Party Consent.........................................    33
      5.5     Litigation..................................................    33
      5.6     Taxes.......................................................    34
      5.7     Subsidiaries................................................    34
      5.8     Full Disclosure.............................................    34
      5.9     Margin Regulations..........................................    34
      5.10    No Material Adverse Affect..................................    35
      5.11    Financial Matters...........................................    35
</Table>

                                        i
<PAGE>

<Table>
<Caption>
                                                                             PAGE
                                                                             ----
<S>           <C>                                                            <C>
      5.12    Ownership of Properties.....................................    36
      5.13    ERISA.......................................................    36
      5.14    Environmental Matters.......................................    36
      5.15    Compliance with Laws........................................    37
      5.16    Regulated Industries........................................    37
      5.17    Insurance...................................................    37
      5.18    Certain Contracts...........................................    38
      5.19    Reinsurance Agreements......................................    38
ARTICLE VI    AFFIRMATIVE COVENANTS.......................................    38
      6.1     GAAP Financial Statements...................................    39
      6.2     Statutory Financial Statements..............................    39
      6.3     Other Business and Financial Information....................    40
      6.4     Corporate Existence; Franchises; Maintenance of                 43
              Properties..................................................
      6.5     Compliance with Laws........................................    43
      6.6     Payment of Obligations......................................    43
      6.7     Insurance...................................................    44
      6.8     Maintenance of Books and Records; Inspection................    44
      6.9     Dividends...................................................    44
      6.10    Ownership of Insurance Subsidiaries.........................    45
      6.11    Financial Covenants.........................................    45
ARTICLE VII   NEGATIVE COVENANTS..........................................    45
      7.1     Merger; Consolidation; Disposition of Assets................    45
      7.2     Indebtedness................................................    46
      7.3     Liens.......................................................    46
      7.4     Investments; Acquisitions...................................    47
      7.5     Restricted Payments.........................................    48
      7.6     Transactions with Affiliates................................    48
      7.7     Certain Amendments..........................................    48
      7.8     Lines of Business...........................................    49
      7.9     Limitations on Certain Restrictions.........................    49
      7.10    Fiscal Year.................................................    49
      7.11    Accounting Changes..........................................    49
      7.12    Reinsurance Agreements......................................    49
      7.13    Capital Expenditures........................................    49
ARTICLE VIII  EVENTS OF DEFAULT...........................................    50
      8.1     Event of Default............................................    50
      8.2     Remedies....................................................    52
      8.3     Rights Not Exclusive........................................    52
ARTICLE IX    THE AGENT...................................................    52
      9.1     Appointment and Authorization; Administrative Agent.........    53
      9.2     Delegation of Duties........................................    53
      9.3     Liability of Administrative Agent...........................    53
      9.4     Reliance by Administrative Agent............................    53
      9.5     Notice of Default...........................................    54
</Table>

                                        ii
<PAGE>

<Table>
<Caption>
                                                                             PAGE
                                                                             ----
<S>           <C>                                                            <C>
      9.6     Credit Decision.............................................    54
      9.7     Indemnification of Administrative Agent.....................    55
      9.8     Administrative Agent in Individual Capacity.................    55
      9.9     Successor Administrative Agent..............................    55
      9.10    Withholding Tax.............................................    56
      9.11    Syndication Agent; Documentation Agent......................    57
ARTICLE X     MISCELLANEOUS...............................................    57
      10.1    Amendments and Waivers......................................    57
      10.2    Notices.....................................................    57
      10.3    No Waiver; Cumulative Remedies..............................    58
      10.4    Costs and Expenses..........................................    58
      10.5    Borrower Indemnification....................................    59
      10.6    Marshalling; Payments Set Aside.............................    60
      10.7    Successors and Assigns......................................    60
      10.8    Assignments, Participations, etc............................    60
      10.9    Confidentiality.............................................    62
      10.10   Set-off.....................................................    62
      10.11   Notification of Addresses, Lending Offices, Etc.............    62
      10.12   Counterparts................................................    63
      10.13   Severability................................................    63
      10.14   No Third Parties Benefitted.................................    63
      10.15   Removal and Replacement of Lenders..........................    63
      10.16   Governing Law and Jurisdiction..............................    63
      10.17   Waiver of Jury Trial........................................    64
      10.18   Entire Agreement............................................    64
</Table>

                                       iii
<PAGE>

                                   SCHEDULES

<Table>
<S>                 <C>
Schedule 1.1        Management Group
Schedule 2.1        Loans
Schedule 5.4        Licenses
Schedule 5.6        Taxes
Schedule 5.7        Subsidiaries
Schedule 5.14(a)    Environmental Matters
Schedule 5.14(b)    Environmental Matters
Schedule 5.18       Material Contracts
                    Reinsurers and Collateral Securing Certain Reinsurers'
Schedule 5.19       Obligations
Schedule 7.3        Permitted Liens
Schedule 7.6        Transactions with Affiliates
Schedule 10.2       Lending Offices; Addresses for Notices
</Table>

                                    EXHIBITS

<Table>
<S>                 <C>
Exhibit A           Form of Notice of Borrowing
Exhibit B           Form of Notice of Conversion/Continuation
Exhibit C           Form of Compliance Certificate
Exhibit D           Form of Legal Opinion of Borrower's and Guarantor's Counsel
Exhibit E           Form of Assignment and Acceptance
Exhibit F           Form of Promissory Note
Exhibit G           Form of Guaranty
</Table>

                                        iv

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