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EXHIBIT 10.24  

 
 

SEVERANCE/CHANGE IN CONTROL POLICY    
  

1.    PURPOSE  

        To provide economic security to covered terminated employees in the event of a "Change of Control" (as defined herein) of the Company, and to assist in recruiting
and retaining valued employees in the event of a threatened Change of Control. 

2.    SCOPE  

        All eligible Employees (as defined below) of ESG Re Limited and its wholly-owned subsidiaries. 

3.    EFFECTIVE DATE  

        This Plan shall be effective January 1, 2000. 

4.    ELIGIBILITY  

        Employees of the Company on the date of a Change of Control (with the exception of those employees covered by a contract who have not elected coverage under this
Plan in place of any contractually required benefits). No enrollment is necessary for eligibility or coverage under the Plan. 

5.    ADMINISTRATION  

        This Plan is provided at the discretion of the Company and the Company reserves the right to interpret Plan provisions. 

6.    DEFINITIONS  

	6.1
	"Change in Control" shall mean an event, whereby:

	(a)
	(i)
any individual, firm, corporation or other entity, or any group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934) (the "Act")) becomes, directly or
indirectly, the beneficial owner (as defined in the General Rules and Regulations of the Securities and Exchange Commission with respect to Sections 13(d) and 13(g) of the Act) of more than 35% of the
then outstanding shares of the company's capital stock entitled to vote generally in the election of directors of the Company; or

	(ii)
	the
stockholders of the Company approve a definitive agreement for (A) the merger or other business combination of the Company with or into
another corporation pursuant to which the stockholders of the Company do not own, immediately after the transaction, more than 50% of the voting power of the corporation that survives and is a
publicly owned corporation and not a subsidiary of another corporation, or (B) the sale, exchange or other disposition of all or substantially all of the assets of the Company; or

	(iii)
	during
any period of two years or less, individuals who at the beginning of such period constituted the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof unless the election or the nomination for election by the stockholders of the Company, of each new director was approved by a vote of at least 75% of
the directors then still in office who were directors at the beginning of the period; or

	(iv)
	such
other event as the Board of Directors of the Company may designate. 

provided, however, that a "Change of Control" shall not be deemed to have taken place if beneficial ownership is acquired by, or a tender or exchange
offer is commenced by, the Company or any of its subsidiaries, any profit-sharing, Employee ownership or other employee benefit plan of the Company or any subsidiary or any trustee of or fiduciary
with respect to any such plan when acting in such capacity, or any group comprised solely of such entities. 

	6.2
	"Company" shall mean ESG Re Limited and its wholly-owned subsidiaries.

	6.3
	"Disability" shall mean a disability leave of absence approved by the Company.

	6.4
	"Employee" shall mean those individuals of the Company who: (a) receive regular paycheques from the Company from under the
Company's payroll systems; (b) have been employed by the Company more than one year and (c) work exclusively for the Company. Independent contractors shall not be considered Employees.
Nothing herein, however, shall prohibit the Board of Directors of the Company from specially designating an independent contractor an Employee for purposes of receipt of benefits under the Plan.

	6.5
	"Monthly Change in Control/Severance benefit" shall mean the total of:

	(a)
	the
Employee's Salary (as defined in subsection 6.10 below);

	(b)
	an
amount equal to the average annual bonus payable to the Employee for the past three (3) fiscal years of the Company during which the Employee was in the employ of the
Company (or such lesser period for which the Employee was employed, with any bonus payable for any period of employment of less than a full fiscal year annualized for the purposes of this calculation)
ending immediately prior to the Termination Date, divided by twelve (12);

	(c)
	an
amount equal to the monthly aggregate value to the Employee of the medical, dental, vision, life insurance, travel accident, and disability insurance benefits offered by the
Company. Where appropriate, the "value to the Employee" shall be measured by determining the cost to the Employee of such insurance benefit if the Employee purchased such benefit as an individual on
the open market; and

	(d)
	the
aggregate amount of the annual vacation and sick pay to which the Employee is entitled, divided by twelve (12). 

	6.6
	"Plan" shall mean the Company's Change of Control Severance Plan.

	6.7
	"Resignation" shall mean the termination of employment effected by an Employee. Resignation shall occur on the date an Employee
notifies a representative of the Company that the Employee has decided to terminate employment.

	6.8
	"Resignation for Good Reason" shall mean the resignation of an eligible Employee within sixty (60) days of any action by the
Company resulting in: (i) a reduction of the Employee's salary or incentive opportunities; (ii) any significant reduction in the Employee's responsibilities; (iii) the Company's
requiring the Employee to be based at any office or location more than thirty-five (35) miles from that location where the Employee principally performs services for the Company; or
(iv) any other significant adverse change in the Employee's position. This provision may be waived with the written consent of the Employee.

	6.9
	"Retirement" shall mean termination of employment at the sole election of an Employee.

	6.10
	"Salary" shall mean the monthly base salary of an Employee in effect on the last pay date before the Termination Date.

	6.11
	"Separation" shall mean all involuntary terminations of an Employee's employment other than Termination for Cause. A Separation does
not occur: (i) upon the sale or divestiture of a subsidiary or unit of the Company where an individual continues or is offered employment, at the same or another location, with the acquiring
company; or (ii) upon the Employee's Resignation or Retirement. An authorized leave of absence is not a Separation nor is the cessation of employment of an Employee who fails to return from an
authorized leave of absence.

	6.12
	"Service" shall mean the number of full years of employment with the Company (including successive or concurrent service with more
than one entity included in the term Company) including service with any successor company. With respect to employment with any employer whose company or business is acquired by or merged into the
Company, Service shall include all employment with such employer prior to the date of such merger or acquisition. 

	6.13
	"Change in Control/Severance Benefit" shall mean the payment to be made to a Participant under section 8.

	6.14
	"Termination Date" shall be deemed to be the last day on which an Employee is carried as an active Employee on the records of the
Company.

	6.15
	"Termination for Cause" shall mean the termination of employment resulting from misconduct by an Employee as determined in the good
faith belief of the Company that the Employee has engaged in certain acts including, but not limited to, breach of fiduciary duty, theft, fraud, dishonesty, embezzlement, violation of securities laws,
violation of non-competition, non-solicitation or confidentiality agreements, falsification of employment application or other business records, gross insubordination, habitual
absenteeism or tardiness, willful malfeasance or gross negligence in a material respect in the performance of position responsibilities, adverse or disloyal acts or interests, unethical activity,
material violation of Company policies, unsatisfactory performance of the duties and responsibilities of an Employee's position, including, but not limited to, the failure to maintain a satisfactory
level of job performance, work output (quality or quantity) not meeting the minimum requirements of the job; work frequently off schedule; or inability to maintain satisfactory employment
relationships with others. The determination whether misconduct has occurred rests in the sole discretion or the Company. 

7.    QUALIFICATION  

        Coverage under the Plan is provided to eligible Employees whose employment terminates during the one (1) year period following a Change of Control, where
the employment terminates due to: (a) the Employee's death; (b) Disability; (c) Separation; or (d) Resignation For Good Reason pursuant to Section 6.8 above.
Employees who terminate as a result of Resignation, Retirement or a Termination for Cause as described in subsections 6.7, 6.9, or 6.15 respectively, do not qualify for coverage under the Plan.
Qualification for coverage under the Plan does not constitute a vested right to benefits under the Plan, however, in the event of a Change of Control, all benefits become fully vested and are not
subject to change, modification, or forfeiture by the Employee, except as specified in this plan. An Employee forfeits benefits if the basis for the termination constitutes Termination for Cause under
subsection 6.15 prior to the planned Termination Date. 

8.    CHANGE IN CONTROL/SEVERANCE BENEFITS

	(a)
	In
the event of: (x) a Change of Control, and (y) the Employee's employment terminates during the one (1) year period following a Change of Control due to the
Employee's: (i) Death; (ii) Disability; (iii) Separation; or (iv) Resignation For Good Reason, the Employee shall be paid the Monthly Severance Benefit multiplied times the
number of months specified in subsection 8(b) below.

	(b)
	All
Employees shall be entitled to one (1) month of Severance Benefit for each year of Service up to a maximum payment of six months. The Board of Directors of the Company in
its sole discretion may,
in using lieu of the formula in the preceding sentence, designate certain officers and Employees to receive benefits by designating them as follows:

	(1)
	Level
I Employees, who shall receive twelve (12) times the amount defined in Paragraph 6.5 (a)

	(2)
	Level
II Employees, who shall receive twenty-four (24) times the amount defined in Paragraphs 6.5 (a) and 6.5 (b); and

	(3)
	Level
III Employees, who shall receive thirty-six (36) times the amounts defined in Paragraphs 6.5 (a), 6.5 (b) and 6.5 (c). 

The
Board of Directors may at any time prior to a Change in Control remove or change any such designations. 

	(c)
	The
Severance Benefit shall be paid in cash in a single lump sum as soon as practicable, but in no event more than thirty (30) days (or at such earlier date required by law),
following the Termination Date.

	(d)
	Any
statutory severance benefits to which an Employee may be entitled shall be subtracted from the Change in Control/Severance Benefit payable under this Plan.

	(e)
	Any
Employee may waive all or any portion of the Severance Benefit payable under the Plan. 

9.    UNFUNDED STATUS OF THE PLAN  

        The Plan is intended to constitute an "unfunded" plan and all amounts due and benefits provided under the Plan shall constitute general obligations of the Company
or a subsidiary in accordance with the terms of the Plan, until the occurrence of a Change of Control. Prior to a Change of Control, an Employee shall have only an unsecured right to payments under
the Plan out of the general assets of the Company or a subsidiary. Notwithstanding the foregoing, in the event of a Change of Control the Company shall create an irrevocable trust at a Bank acceptable
to both the Company and the majority of the Participants, and shall appoint said Bank as trustee of such trust, to make payments to
Participants in accordance with the terms of the Plan. Such trust shall be fully funded by the Company within ten (10) days of a Change of Control, and the Company shall have no authority or
control over the investment, disbursement, or payment of the assets of the trust thereafter. 

10.  TERMINATION AND AMENDMENT OF THE PLAN  

        Notwithstanding anything to the contrary contained in this Plan, for the period of three (3) years following a Change of Control, the provisions of this
Plan, including any schedules of benefits, agreements, or exhibits incorporated by reference into, referred to or otherwise necessary to the operation of the Plan, in effect immediately prior to the
change of control, shall be binding on any successor to the Company and may not be amended or terminated. 

11.  NO GUARANTEE OF EMPLOYMENT CREATED  

        Notwithstanding anything in the Plan to the contrary, this Plan shall not constitute an employment contract or give any Employee a right of continued employment
or preclude the Company from terminating an Employee's employment. 

12.  OTHER OBLIGATIONS  

        Nothing in this policy shall supercede any contractual obligations the Company may have to any Employee. In such event the Employee shall not be eligible to
receive any benefits under this Plan, unless the Employee expressly elects in writing: (i) to waive the contractual entitlement to any severance benefits specified in any such agreement or
agreements, and (ii) elects to receive benefits under this Plan instead. Upon the expiration or non-renewal of any contract providing for severance benefits following a Change of
Control, the Employee's contractual right to any special severance benefit will terminate, and the Employee will only be eligible for benefits under this Plan. 

13.  TAX WITHHOLDING  

        All payments hereunder shall be made net of any and all applicable taxes required by law to be withheld. 

14.  GOVERNING LAW  

        The Plan shall be governed by the laws of Bermuda, except with respect to its conflicts of laws principles. 

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Exhibit 10.27  

Note: Redacted portions have been marked with (***). The redacted portions are subject to a Request for Confidential Treatment that has been filed with the Securities and
Exchange Commission.

EXECUTION COPY

(1) ACE Capital Re Overseas Ltd.

as PRINCIPAL  

and  

(2) ESG Re North America Ltd.

as AGENT  

REINSURANCE MANAGEMENT AGREEMENT  

Note: Redacted portions have been marked with (***). The redacted portions are subject to a Request for Confidential Treatment that has been filed with the Securities and
Exchange Commission.

 
 

REINSURANCE MANAGEMENT AGREEMENT    
  

        This REINSURANCE MANAGEMENT AGREEMENT (this "AGREEMENT"), dated as of November 1, 2001, is entered into
between ACE Capital Re Overseas Ltd. and ESG Re North America Ltd. 

W I T N E S S E T H

WHEREAS:  

	(A)
	The
PRINCIPAL wishes to appoint the AGENT to provide certain SERVICES (defined below); and

	(B)
	The
PRINCIPAL and the AGENT have agreed to record in writing the terms and conditions of the AGENT's appointment by the PRINCIPAL. 

        NOW, THEREFORE, in consideration of the foregoing and of the mutual promises, covenants and payments set forth
herein, IT IS HEREBY AGREED AS FOLLOWS:

ARTICLE I—DEFINITIONS  

        As used in this AGREEMENT (including, but not limited to, any schedule hereto), the following terms shall have the following defined meanings. 

	1.1
	"AGENT" shall mean ESG Re North America Ltd.

	1.2
	"ANNIVERSARY DATE" shall mean 1 January 2002, and thereafter, the next following January 1st.

	1.3
	"BUSINESS DAY" shall mean a calendar day other than a Saturday, Sunday, or a United States bank holiday.

	1.4
	[Intentionally Omitted]

	1.5
	"CEDING COMMISSION" shall mean original acquisition costs in respect of policies ceded under Original Reinsurance Contracts (including
all premium taxes), which shall in no event exceed (***) of ORIGINAL GROSS PREMIUMS, and reinsurance brokerage fees on ORIGINAL REINSURANCE CONTRACTS (the reasonableness of which shall be determined
by AGENT).

	1.6
	"CLAIM AND SERVICES ACCOUNT" shall mean a segregated account maintained by the PRINCIPAL with Bank of America (or other financial
institution pre-approved in writing by the PRINCIPAL's Treasury Department) to which the AGENT shall have limited access in accordance with Paragraph 6.3 of this
AGREEMENT.

	1.7
	"CLAIM AND SERVICES FUND AMOUNT" shall mean the amount of monies belonging to the PRINCIPAL to be held on deposit in the CLAIM AND
SERVICES ACCOUNT.

	1.8
	"CLAIMS PAYMENT" shall mean the payment of an ORIGINAL REINSURANCE CLAIM made by the AGENT on behalf of the PRINCIPAL to a REINSURED
pursuant to the PRINCIPAL's obligations under an ORIGINAL REINSURANCE CONTRACT.

	1.9
	"EFFECTIVE DATE" shall mean the date of this AGREEMENT first above written. For avoidance of doubt, the phrase "effective date", when
used in lower case format, does not mean EFFECTIVE DATE as defined in this Section 1.9.

	1.10
	"GROSS REINSURANCE PREMIUMS" shall mean the total monetary compensation due from a REINSURED to the PRINCIPAL and received by the
PRINCIPAL pursuant to an ORIGINAL REINSURANCE CONTRACT. 

 
	1.11
	"INTELLECTUAL PROPERTY RIGHTS" shall mean all patents, trademarks, trade names, service marks, service names, trade secrets,
copyrights, and other proprietary intellectual property rights and applications therefor.

	1.12
	"LEAD REINSURER" shall mean ESG Re Ireland Ltd.

	1.13
	"LOSS ADJUSTMENT EXPENSES" shall mean reasonable out-of-pocket expenses (not including salary of AGENT's
employees or overhead costs) incurred by the AGENT in providing the SERVICES listed in Parts D, E and G of Schedule 1 to the PRINCIPAL.

	1.14
	"MANAGEMENT FEES" shall mean the remuneration to be paid by the PRINCIPAL to the AGENT pursuant to Paragraph 6.6 of this
AGREEMENT for SERVICES as defined at Paragraph 1.21 of this AGREEMENT.

	1.15
	"NOTICE" shall mean a written communication given in accordance with the terms of Article XIX.

	1.16
	"ORIGINAL GROSS PREMIUMS" shall mean, with respect to policies ceded under an ORIGINAL REINSURANCE CONTRACT, the gross original
written premiums on such policies less return premiums on such policies, including amounts refunded to policyholders due to cancellations.

	1.17
	"ORIGINAL REINSURANCE CLAIM" shall mean a written request by a REINSURED for payment under an ORIGINAL REINSURANCE CONTRACT.

	1.18
	"ORIGINAL REINSURANCE CONTRACT" shall mean all slips, binding letters of intent, binders, contracts, agreements and treaties of
reinsurance with an effective date in calendar year 2001 (and addenda and endorsements thereto) issued to a REINSURED by the AGENT on behalf of both
LEAD REINSURER and the PRINCIPAL that conform to all the requirements of Schedule 3 to this AGREEMENT.

	1.19
	"PRINCIPAL" shall mean ACE Capital Re Overseas Ltd or its
non-United States domiciled, lawfully acting affiliate to whom this AGREEMENT is assigned pursuant to the provisions of Section 18.2.

	1.20
	"REINSURED" shall mean the insurance company or reinsurance company to which the PRINCIPAL issues an ORIGINAL REINSURANCE CONTRACT
through the AGENT.

	1.21
	"SERVICES" shall mean the functions and duties to be performed by the AGENT, as described in  Schedule 1 and Schedule 3 to this AGREEMENT.

	1.22
	"SERVICE STANDARDS" shall mean the quality and level of SERVICES to be provided by the AGENT, as described in  Schedule 2 to this AGREEMENT.

	1.23
	"TERRITORY" shall mean the United States.

	1.24
	All
references to "$" contained in this AGREEMENT are references to U.S. dollars. 

ARTICLE II—APPOINTMENT OF AGENT  

	2.1
	As
of the EFFECTIVE DATE, and subject to the terms, conditions and limitations set forth herein, the PRINCIPAL hereby appoints the AGENT to provide SERVICES to the PRINCIPAL and the
AGENT hereby accepts such appointment.

	2.2
	It
is expressly understood by both the PRINCIPAL and AGENT that the PRINCIPAL's appointment of the AGENT to provide SERVICES under this AGREEMENT shall be
non-exclusive. 

2

 
	2.3
	In
the event that this AGREEMENT is assigned by the PRINCIPAL to an affiliate domiciled in the United States or Canada, it is further understood that the PRINCIPAL's
appointment of the AGENT is limited to those jurisdictions in the TERRITORY in which the AGENT is licensed or otherwise authorized to provide SERVICES. 

ARTICLE III—AUTHORITY OF AGENT  

	3.1
	The
AGENT's authority under this AGREEMENT shall be limited to the provision of SERVICES to the PRINCIPAL.

	3.2
	The
authority conferred upon the AGENT under this AGREEMENT, including but not limited to underwriting and claims, is personal in nature and as such, the AGENT shall not delegate,
transfer or sub-contract or otherwise assign all or part of such authority to any person or entity except (i) existing SERVICES which are currently delegated to Claims Risk
Management, Inc. or (ii) to the extent that the PRINCIPAL approves such delegation, transfer, sub-contracting or assignment in writing in advance.

	3.3
	The
underwriting and claims authority conferred upon the AGENT under this AGREEMENT is subject to any further limitations dictated by the terms of all
Schedules to this AGREEMENT.

	3.4
	The
AGENT shall not engage any third party (including, but not limited to, any attorney or special investigator) to act for or on behalf of the PRINCIPAL or AGENT (either directly or
indirectly) in connection with this AGREEMENT, the ORIGINAL REINSURANCE CONTRACTS, or any ORIGINAL REINSURANCE CLAIMS presented thereunder unless and until it informs the PRINCIPAL of any such
engagement.

	3.5
	Except
as provided in Schedule 1, the AGENT shall not bind any outwards reinsurance of ORIGINAL REINSURANCE CONTRACTS on behalf of the PRINCIPAL.

	3.6
	AGENT
shall only have authority to bind PRINCIPAL to a 50% participation in each ORIGINAL REINSURANCE CONTRACT, provided that, such authority shall be further conditioned on the LEAD
REINSURER being bound to the remaining 50% participation in each such contract, provided further that, AGENT shall have the limited authority to reduce PRINCIPAL's participation in an
ORIGINAL REINSURANCE CONTRACT where the LEAD REINSURER has committed to retrocede a portion of its share of such contract to a captive reinsurer owned or controlled by the managing general underwriter
receiving a commission on such ORIGINAL REINSURANCE CONTRACT. Any such reduction in PRINCIPAL's participation shall be limited to the extent necessary
to provide PRINICIPAL and LEAD REINSURER with equal participations in the ORIGINAL REINSURANCE CONTRACT after netting out the retrocession described in the preceding sentence. 

ARTICLE IV—REPRESENTATIONS AND WARRANTIES  

	4.1
	The
AGENT REPRESENTS AND WARRANTS that at all times relevant to the execution, performance, and/or termination of this AGREEMENT, it
was and will be legally authorized and/or licensed to provide all SERVICES contemplated hereunder in any jurisdiction of the TERRITORY in which it is or will be operating.

	4.2
	The
AGENT further REPRESENTS AND WARRANTS that at all times relevant to the execution, performance and/or termination of the AGREEMENT,
it was and will be legally authorized to serve as the agent of the LEAD REINSURER for purposes of procuring, underwriting and servicing ORIGINAL REINSURANCE CONTRACTS, collecting reinsurance premiums,
and handling, servicing and paying ORIGINAL REINSURANCE CLAIMS. 

3

 

ARTICLE V—OBLIGATIONS OF AGENT  

	5.1
	The
AGENT shall, subject to all applicable laws, provide SERVICES to the PRINCIPAL in accordance with the SERVICE STANDARDS.

	5.2
	The
AGENT shall follow all lawful instructions given by the PRINCIPAL in connection with the provision of SERVICES under this AGREEMENT.

	5.3
	For
a period of at least six (6) years after the termination of this AGREEMENT, the AGENT shall prepare and maintain full and complete records in relation to every aspect of
the SERVICES provided pursuant to this AGREEMENT, including, but not limited to such records as are necessary to document and substantiate any claims for remuneration and/or reimbursement under this
AGREEMENT.

	5.4
	The
AGENT agrees to execute and/or deliver at its cost, all such other documents, reports or instruments and to take all such reasonable actions, as the PRINCIPAL may from time to
time reasonably request, in order to give full effect to the purposes of this AGREEMENT.

	5.5
	In
addition to the foregoing obligations and for as long as the PRINCIPAL has any obligations under this AGREEMENT, the AGENT shall, within five (5) BUSINESS DAYS of receiving
NOTICE of intent to inspect from the PRINCIPAL, make available for inspection and copying by the PRINCIPAL or its designated representatives, all records containing information relating to this
AGREEMENT (including, but not limited to, any SERVICES provided hereunder). All such information in the AGENT's possession, custody or control shall be made available at the AGENT's registered office
during normal working hours.

	5.6
	The
AGENT shall, at all times, comply with all applicable statutes, rules and regulations, in providing SERVICES to the PRINCIPAL.

	5.7
	The
AGENT warrants that it now has and will maintain during the term of this Agreement insurance coverage for (***) in amounts no less than (***) with an insurer that is reasonably
acceptable to the PRINCIPAL. The AGENT shall provide the PRINCIPAL with a certificate of insurance issued by the insurer in the PRINCIPAL's name containing the following provision: "The
PRINCIPAL will receive 30 days' prior written notice of any change, cancellation or other termination of this policy."

	5.8
	The
AGENT will use reasonable efforts to obtain a fidelity bond on a form and with a deductible reasonably satisfactory to the PRINCIPAL covering all operations and employees of the
AGENT. If such a fidelity bond is obtained, the AGENT will provide the PRINCIPAL with a certificate issued by the fidelity bond carrier in the PRINCIPAL's name containing the following
provision: "The PRINCIPAL will receive 30 days' prior written notice of any change, cancellation or other termination of this policy." 

ARTICLE VI—OBLIGATIONS OF PRINCIPAL  

	6.1
	The
PRINCIPAL agrees to execute and deliver at its cost all documents, reports or instruments and to take all such reasonable actions, as the AGENT may from time to time reasonably
request, in order to give full effect to the purposes of this AGREEMENT.

	6.2
	On
or within ten (10) BUSINESS DAYS of the EFFECTIVE DATE, the PRINCIPAL shall establish and place on deposit in the CLAIM AND SERVICES ACCOUNT, the sum of (***).

	6.3
	For
as long as the AGENT shall be obligated to provide SERVICES to the PRINCIPAL, the PRINCIPAL shall afford the AGENT access to draw upon the CLAIM AND SERVICES ACCOUNT in the manner
and for the limited purposes specified in Schedule 1 (Part K) to this AGREEMENT. 

4

 
	6.4
	In
the event that the CLAIM AND SERVICES ACCOUNT falls to less than (***), the PRINCIPAL shall, within five (5) BUSINESS DAYS of receiving NOTICE from the AGENT, restore the
CLAIM AND SERVICES ACCOUNT to (***). If at any time, the funds contained in the CLAIM AND SERVICES ACCOUNT are insufficient to satisfy the PRINCIPAL's obligation to pay the currently
due items set forth in Part K of Schedule 1, PRINCIPAL agrees to fund the CLAIM AND SERVICES ACCOUNT with the amounts required to pay such items within (***) of receiving a written cash
call for such amounts from the AGENT.

	6.5
	The
PRINCIPAL shall take all steps reasonably necessary to effectuate the obligations set forth at Paragraph 6.2 of this AGREEMENT.

	6.5.1
	Notwithstanding
the foregoing, it is expressly understood that:

	(a)
	the
PRINCIPAL shall be the sole owner of the CLAIM AND SERVICES ACCOUNT;

	(b)
	all
interest generated by the CLAIM AND SERVICES ACCOUNT shall likewise belong to the PRINCIPAL; and

	(c)
	the
PRINCIPAL shall have sole authority to direct the investment of all funds contained in the CLAIM AND SERVICES ACCOUNT. 

	6.6
	The
PRINCIPAL hereby agrees to pay the AGENT a MANAGEMENT FEE in the amount of (***) of the GROSS REINSURANCE PREMIUM that is earned by the PRINCIPAL in 2002 and 2003 in respect of
ORIGINAL REINSURANCE CONTRACTS. The PRINCIPAL shall earn GROSS REINSURANCE PREMIUMS in accordance with generally accepted accounting principles.

	6.7
	For
a period of one year from the last date that AGENT can bind PRINCIPAL to ORIGINAL REINSURANCE CONTRACTS under the terms of this AGREEMENT, PRINCIPAL agrees not to introduce, sell
or otherwise promote any reinsurance or insurance products which are in direct competition with the medical excess reinsurance currently underwritten by AGENT and which is the subject of this
AGREEMENT. For purposes of this AGREEMENT, a reinsurance or insurance product shall be deemed to be in direct competition with the medical excess reinsurance currently underwritten by AGENT only if
(i) it involves the medical excess reinsurance lines of business currently underwritten by AGENT and (ii) the original insurance policies comprising such business have been underwritten
by the managing general underwriters or carriers listed in Exhibit A hereto. For the avoidance of doubt, this provision shall not restrict or prevent PRINCIPAL or its affiliates from
introducing, selling or otherwise promoting any reinsurance or insurance products, including without limitation medical excess insurance and reinsurance products, in connection with programs that are
not the subject of this AGREEMENT.

	6.8
	All
premium payments due to PRINCIPAL or LEAD REINSURER under ORIGINAL REINSURANCE CONTRACTS shall be deposited by REINSURED or its agent in an escrow account governed by an escrow
agreement to be executed by the parties promptly following the EFFECTIVE DATE. AGENT shall have limited authority to allocate the funds contained in such account between PRINCIPAL and LEAD REINSURER
and shall instruct the escrow agent to distribute the amount constituting GROSS REINSURANCE PREMIUMS to PRINCIPAL on a weekly basis. 

ARTICLE VII—TERM  

	7.1
	This
AGREEMENT shall be deemed to take effect on the EFFECTIVE DATE at 12:01 a.m. at the site of the PRINCIPAL's registered office and shall thereafter remain in
full force and effect through the later of (i) the date that all obligations and liabilities under ORIGINAL 

5

 

REINSURANCE
CONTRACTS and outward reinsurance contracts have terminated or expired or (ii) the date that all SERVICES to be performed by the AGENT have been fully performed. 

ARTICLE VIII—SPECIAL TERMINATION  

	8.1
	Notwithstanding
the provisions of Articles VII and IX, AGENT shall have the right to be relieved of its obligation to bind PRINICIPAL to additional ORIGINAL REINSURANCE CONTRACTS
immediately by giving NOTICE to PRINCIPAL, in the event that:

	(a)
	PRINCIPAL
is declared insolvent or put into liquidation by any competent regulatory authority or court of competent jurisdiction or is otherwise unable to pay its debts; or

	(b)
	PRINCIPAL
has its regulatory authority to transact any business or perform any obligations relevant to this AGREEMENT withdrawn, suspended or made conditional and such conditions are,
in the opinion of the AGENT, unduly onerous for the proper performance of this AGREEMENT; or

	(c)
	PRINCIPAL
fails to comply with any of the terms or conditions of this AGREEMENT and, provided such breach is curable, fails to rectify such failure within thirty (30) BUSINESS
DAYS of receiving NOTICE of such failure, or is otherwise negligent in the performance of its duties and obligations hereunder. 

	8.2
	Notwithstanding
the provisions of Articles VII and IX, PRINCIPAL shall have the right to either terminate this AGREEMENT or revoke AGENT's authority to bind it to new contracts
immediately by giving NOTICE, in the event that:

	(a)
	AGENT
or LEAD REINSURER is declared insolvent or put into liquidation by any competent regulatory authority or court of competent jurisdiction or is otherwise unable to pay its debts;
or

	(b)
	AGENT
has its regulatory authority to transact any business or perform any obligations relevant to this AGREEMENT withdrawn, suspended or made conditional and such conditions are, in
the opinion of the PRINCIPAL, unduly onerous for the proper performance of this AGREEMENT;

	(c)
	AGENT
fails to comply with any of the terms or conditions of this AGREEMENT and, provided such breach is curable, fails to rectify such failure within thirty (30) BUSINESS DAYS
of receiving NOTICE of such failure, or is otherwise negligent in the performance of its duties and obligations hereunder; or

	(d)
	any
"key personnel" of AGENT cease to be employed by AGENT or are materially less involved with the business covered by this AGREEMENT, and AGENT fails to provide evidence to
PRINCIPAL, within 60 days after the date any key personnel terminates his or her employment or becomes materially less involved with the business covered by this AGREEMENT, that satisfies
PRINCIPAL (such satisfaction to be determined in the sole discretion of PRINCIPAL) that AGENT
still employs appropriate personnel to satisfactorily provide the SERVICES. For purposes of this provision "key personnel" means (***). 

	8.3
	Notwithstanding
the provisions of Sections 8.1 and 8.2, if, by reason of an event described in Section 12.1, the PRINCIPAL or the AGENT shall be delayed or prevented from
performing any of its obligations hereunder, such delay shall be excused during the continuance, and to the extent of, such event. Notwithstanding the preceding sentence, should such delay or
non-performance persist for thirty (30) consecutive days, any applicable provision of Section 8.1 or 8.2 will apply at the conclusion of such thirty (30) day period. 

6

 

ARTICLE IX—CONSEQUENCES OF TERMINATION  

	9.1
	The
PRINCIPAL may, at its option, upon NOTICE to the AGENT, suspend the authority of the AGENT to assume or cede business during the pendency of any dispute regarding termination
under Article VII or VIII of this AGREEMENT.

	9.2
	Upon
receiving NOTICE of termination, the AGENT shall cooperate in all respects with all reasonable requests by PRINCIPAL, including, but not limited to, the transfer of books and
records relating to ORIGINAL REINSURANCE CONTRACTS and related matters and PRINCIPAL's efforts to transfer the responsibilities and duties delegated to the AGENT by the PRINCIPAL to
another entity.

	9.3
	Such
cooperation shall include, but not be limited to, the timely production of whatever final reports, invoices and/or statements the PRINCIPAL may reasonably request. 

ARTICLE X—INDEMNITY; SURVIVAL  

        (***)
(Three pages redacted) 

ARTICLE XI—CONFIDENTIALITY  

	11.1
	Each
of the parties hereto agrees to treat and hold as confidential (and not disclose or provide access to any person, except (i) as expressly required to fulfill its duties
under this AGREEMENT, (ii) as necessary or desirable to conduct its business or (iii) as determined by such party to be required by law or by an administrative or regulatory body with
jurisdiction over such party), all information with respect to this AGREEMENT and the transactions contemplated hereby, including but not limited to information embodied in or relating to, as
appropriate, trade secrets, processes, claims data, medical data relating to policies underlying the ORIGINAL REINSURANCE CONTRACTS, product development, pricing of products and services, customer and
supplier lists, pricing and marketing plans, policies and strategies, client, customer, vendor, payor, provider, employee, supplier and consultant contracts and relations, operations methods, product
development techniques, business acquisition plans, new personnel acquisition plans. Each of the parties agrees and acknowledges that remedies at law for any breach of their obligations under this
Section 11.1 are inadequate and that in addition thereto the disclosing party shall be entitled to seek equitable relief, including injunctive relief and specific performance, in the event of
any such breach. 

ARTICLE XII—FORCE MAJEURE  

	12.1
	Neither
the PRINCIPAL nor the AGENT shall be held responsible or liable for delay or failure in performance of this AGREEMENT, in whole or in part, if such delay or failure is due to
any cause beyond its reasonable control, such as, but not limited to, fire, earthquake, floods, storms, war, terrorist attacks, invasion of armed forces, strikes, blockade, insurrection, lockouts or
other industrial disputes. 

ARTICLE XIII—BUSINESS REVIEW  

	13.1
	A
business review shall take place when reasonably requested by PRINCIPAL or required by law.

	13.2
	The
purpose of the review shall generally be to examine and discuss all issues arising under this AGREEMENT, proposals for amendments to this AGREEMENT and the resolution of any
disputes that may have arisen. 

7

   ARTICLE XIV—RELATIONSHIP BETWEEN THE PARTIES  

	14.1
	Neither
of the parties is a partner of the other, and nothing in this AGREEMENT shall create or be deemed to create a partnership or joint venture between the PRINCIPAL and the AGENT
or between the PRINCIPAL and the LEAD REINSURER. 

ARTICLE XV—ANNOUNCEMENTS  

	15.1
	The
AGENT shall not issue any announcement and/or release any information or statement to any person (including, but not limited to, the press) in any way relating to this AGREEMENT,
the ORIGINAL REINSURANCE CONTRACTS, and/or any SERVICES provided hereunder unless and until the AGENT receives NOTICE of the PRINCIPAL's consent to such announcement, release or
statement. No such consent shall be required in the case of disclosures by the AGENT to a regulatory body pursuant to a statutory obligation. 

ARTICLE XVI—SEVERABILITY  

	16.1
	Subject
to the provisions of Article VIII, in the event that any portion of this AGREEMENT (or the application thereof to any person or circumstance) shall, to any extent, be
invalid or unenforceable, the remainder of this AGREEMENT (or the application thereof to persons or circumstances other than those to which it is invalid or unenforceable) shall not be affected
thereby, and shall be valid and enforced to the fullest extent permitted by law. 

ARTICLE XVII—MERGER  

	17.1
	This
AGREEMENT is an integrated document, containing the entire undertaking between the AGENT and the PRINCIPAL regarding the matters addressed herein and may be varied only by a
writing signed by both the AGENT and the PRINCIPAL.

	17.2
	Except
as set forth in this AGREEMENT, no representations, warranties or promises have been made or relied upon by the AGENT and the PRINCIPAL.

	17.3
	This
AGREEMENT shall prevail over prior communications between the AGENT and the PRINCIPAL regarding any of the matters discussed herein, including but not limited to the
Confidentiality Agreement and Letter of Intent previously executed by the parties.

	17.4
	The
headings contained within this AGREEMENT are for convenience only and are not a part of this AGREEMENT. 

ARTICLE XVIII—NON-WAIVER; ASSIGNMENT  

	18.1
	Any
extension or waiver of the requirements hereunder shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this AGREEMENT. The failure
of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

	18.2
	This
AGREEMENT may not be assigned by operation of law or otherwise without the express written consent of the AGENT and the PRINCIPAL (which consent may be granted or withheld in
the sole discretion of either party); provided, however, that (i) the PRINCIPAL may assign this
AGREEMENT in whole or in part to a non-United States domiciled affiliate of the PRINCIPAL that is lawfully permitted to underwrite ORIGINAL REINSURANCE CONTRACTS, without the consent of
AGENT. 

8

 

ARTICLE XIX—NOTICES  

	19.1
	NOTICE(s)
shall only be effective if it is made by either the PRINCIPAL or the AGENT in writing.

	19.2
	NOTICE(s)
shall be sent to the intended recipient at its address or number set out below. 

	PRINCIPAL	 	ACE Capital Re Overseas Ltd.

Victoria Hall

11 Victoria Street

P.O. Box HM 1826

Hamilton HM HX

Bermuda

Attn: Corporate Secretary	 	Phone:

Fax:	 	441-292-4402

441-299-8813
	

 	
 	

with a copy to:	
 	

 	
 	

 
	

 	
 	

ACE Capital Re Inc.

1325 Avenue of the Americas

New York, New York 10019

Attn: General Counsel	
 	

Phone:

Fax:	
 	

212-974-0100

212-581-3268
	

AGENT	
 	

ESG Re North America Ltd.

1 Adelaide Street East

Suite 2610

Toronto, Ontario M5C 219	
 	

Phone:

Fax:	
 	

1 416 864 7443

1 416 864 9615

	19.3
	Either
party may change its NOTICE details on giving NOTICE to the other party of the change in accordance with this Article. Such change shall be effective five (5) BUSINESS
DAYS after the NOTICE has been given, or such later date as may be specified in the NOTICE.

	19.4
	Any
NOTICE given under this AGREEMENT shall, in the absence of proof of earlier receipt, be deemed to have been duly given as follows:

	(a)
	if
delivered personally, on delivery;

	(b)
	if
sent by facsimile, when dispatched with proof of receipt by recipient;

	(c)
	if
sent by overnight courier service, upon delivery to recipient. 

NOTICES
under this AGREEMENT may be personally delivered, sent by facsimile or sent by overnight courier service. 

	19.5
	Any
NOTICE given under this AGREEMENT outside working hours in the place to which it is addressed will be deemed not to have been given until the start of the next period of working
hours in such place.

	19.6
	NOTICE
under this AGREEMENT may only be withdrawn or revoked by separate NOTICE given in accordance with this Article.

	19.7
	Each
NOTICE given or made must be unconditional and signed by a duly authorized person. 

ARTICLE XX—INTELLECTUAL PROPERTY RIGHTS AND TRADEMARKS  

	20.1
	Each
party hereto retains all of its rights, title and interest to all INTELLECTUAL PROPERTY RIGHTS held by it. Except as expressly authorized in writing by the holder of such
INTELLECTUAL PROPERTY RIGHTS, the other party shall have no interest in and shall have no right to use such holder's INTELLECTUAL PROPERTY RIGHTS for any purpose, provided 

9

 

that
AGENT shall be permitted to use PRINCIPAL's name in the ORIGINAL REINSURANCE CONTRACTS to the extent necessary to perform the SERVICES. 

ARTICLE XXI—ARBITRATION CLAUSE  

	21.1
	As
a condition precedent to any right of action hereunder, any dispute or difference arising out of the interpretation, performance or breach of this AGREEMENT (including the
formation or validity thereof) shall be referred to arbitration under the most current version of the ARIAS (US) Arbitration Rules.

	21.2
	Arbitration
shall be commenced by the claimant giving NOTICE to the respondent demanding arbitration.

	21.3
	The
Arbitration Tribunal shall consist of three (3) arbitrators, one to be appointed by the Claimant, one to be appointed by the Respondent and the third to be appointed by
the two party-appointed arbitrators. Each party-appointed arbitrator shall be identified to the other party within thirty (30) days after the NOTICE referred to in Section 21.2 is
delivered to the respondent.

	21.4
	The
third member of the Tribunal shall be appointed as soon as practicable (and no later than twenty eight (28) days) after the appointment of the two party-appointed
arbitrators. The Tribunal shall be constituted upon the appointment of the third arbitrator.

	21.5
	The
arbitrators shall be disinterested persons (including those who have retired) with not less than ten (10) years of experience as officers or directors within the insurance
or reinsurance industry or as lawyers or other professional advisers serving the industry.

	21.6
	Where
a party fails to appoint an arbitrator within thirty (30) days after the date the NOTICE referred to in Section 21.2 has been delivered to the respondent or where
the two party-appointed arbitrators fail to appoint a third arbitrator within twenty eight (28) days of their appointment, then upon application by either party, ARIAS (US) will appoint an
arbitrator to fill the vacancy. At any time prior to the appointment by ARIAS (US) the party or arbitrators in default may make such appointment.

	21.7
	The
Tribunal may, in its sole discretion, make such orders and directions as it considers to be necessary for the final determination of the matters in dispute. The Tribunal shall
have the widest discretion permitted under the law governing the arbitral procedure when making such orders or directions.

	21.8
	The
seat of arbitration shall be New York, New York. 

ARTICLE XXII—GOVERNING LAW  

	22.1
	This
AGREEMENT shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to any choice or conflict of laws provisions thereof). 

ARTICLE XXIII—COUNTERPARTS  

	23.1
	This
AGREEMENT may be executed in any number of counterparts or duplicates, each of which shall be an original but such counterparts or duplicates shall, together, constitute one and
the same AGREEMENT. 

ARTICLE XXIV—SCHEDULES  

	24.1
	Any
schedule hereto, together with any appendices or attachments thereto, shall be incorporated into and made part of this AGREEMENT. 

10

 
	24.2
	In
the event of any conflict between this AGREEMENT and the Schedules hereto, the terms contained in the Schedules shall apply. 

ARTICLE XXV—NON-SOLICITATION  

	25.1
	The
PRINCIPAL (for itself and the ACE Capital Re Affiliates) and the AGENT agree not to solicit or entice away from the other's employment (or employment by any affiliated company)
any person employed by the other (or its affiliate) until the expiry of twelve (12) months from the earlier of the last date on which the AGENT is obligated to provide SERVICES to the PRINCIPAL
under this AGREEMENT or the date when such employee's employment with the other party (or its affiliate) terminated. For purposes of this provision, the term "ACE Capital Re Affiliates" means ACE
Capital Re International Ltd. and each of its direct and indirect subsidiaries. 

        IN WITNESS WHEREOF, the PRINCIPAL and the AGENT have caused this AGREEMENT to be executed in duplicate, by their duly authorized
representatives. 

	ACE Capital Re Overseas Ltd., as

PRINCIPAL	 	ESG Re North America Ltd., as AGENT
	

Signed in Bermuda	
 	

Signed in	
 	

 
	 	 	 	 	

	this 1st day of November, 2001	 	this 1st day of November, 2001

	By:	 	 	 	By:	 	 
	 	 	
	 	 	 	

	 	 	Name:	 	 	 	Name:
	 	 	Title:	 	 	 	Title:
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:

11

Note: Redacted portions have been marked with (***). The redacted portions are subject to a Request for Confidential Treatment that has been filed with the Securities and
Exchange Commission.

 
 

SCHEDULE 1    
  

        (***)
(Eight pages redacted) 

 
 

SCHEDULE 2    
  

        (***)
(Two pages redacted) 

 
 

SCHEDULE 3    
  

        (***)
(Three pages redacted) 

 
 

EXHIBIT A    
  

        (***)
(One page redacted) 

 
 

EXHIBIT B    
  

        (***)
(Four pages redacted) 

 
 

EXHIBIT C    
  

        (***)
(One page redacted) 

 
 

AGREEMENT    
  

        AGREEMENT, dated as of November 1, 2001, (the "Agreement") by and between ACE Capital Re Overseas Ltd. (the "Principal") and ESG Re
Ireland Ltd. (the "Lead Reinsurer"). 

W I T N E S S E T H:

        WHEREAS,
the Principal and ESG Re North America Ltd. (the "Agent") are parties to a Reinsurance Management Agreement dated as of November 1, 2001 (the "RMA"); 

        WHEREAS,
it is an agreed condition to the execution of the RMA by Principal that the Lead Reinsurer agree to be bound by the terms set forth herein; 

        WHEREAS,
the Principal and Lead Reinsurer have agreed to enter into this agreement to satisfy this condition to the execution of the RMA; 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by each of the parties hereto, the parties hereto, intending to be legally
bound, do hereby agree as follows: 

        1.    Capitalized
terms not defined herein shall have the meaning assigned to them in the RMA. 

        2.    The
Lead Reinsurer represents, warrants and covenants that at all times prior to the termination of all ORIGINAL REINSURANCE CONTRACTS, it shall retain a participation
with respect to each
such effective contract at least equal to the level of participation in such contract originally allocated to Principal by Agent under the RMA. 

        3.    The
Lead Reinsurer shall use commercially prudent judgment with respect to all other matters referred by the Agent to the Lead Reinsurer pursuant to the terms of this
RMA. 

        4.    The
Lead Reinsurer shall provide NOTICE to the Principal within three (3) BUSINESS DAYS if Lead Reinsurer becomes insolvent or is otherwise unable to perform its
obligations under (i) this Agreement, (ii) its agreement with the Agent regarding ORIGINAL REINSURANCE CONTRACTS or (iii) and ORIGINAL REINSURANCE CONTRACT. 

        5.    This
Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to any choice or conflict of laws provisions
thereof) and both parties (i) agree that the exclusive jurisdiction with respect to any matter arising under this Agreement shall be in the federal and state courts sitting in New York County,
New York, and (ii) expressly submit to the jurisdiction of such courts. 

        6.    This
Agreement may be executed in any number of counterparts or duplicates, each of which shall be an original but such counterparts or duplicates shall, together,
constitute one and the same Agreement. 

        IN
WITNESS WHEREOF, the Principal and the Lead Reinsurer have cause this Agreement to be executed in duplicate, by their duly authorized representatives. 

	ACE Capital Re Overseas Ltd., a Principal	 	ESG Re Ireland Ltd, as Lead Reinsurer
	

Signed in Bermuda

this 1st day of November, 2001	
 	

Signed in Dublin, Ireland

this 1st day of November, 2001
	

By:	
 	

 	
 	

By:	
 	

/s/ Margaret L. Webster

	Name:	 	 	 	Name:	 	Margaret Webster
	Title:	 	 	 	Title:	 	Chief Administrative Officer
	

 	
 	

 	
 	

By:	
 	

/s/ Mark E. Oleksik

	 	 	 	 	Name:	 	Mark E. Oleksik
	 	 	 	 	Title:	 	Senior Financial Officer

QuickLinks

REINSURANCE MANAGEMENT AGREEMENT

SCHEDULE 1

SCHEDULE 2

SCHEDULE 3

EXHIBIT A

EXHIBIT B

EXHIBIT C

AGREEMENT

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