Document:

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                                                                    EXHIBIT 10.1

Credit Agreement

                                       -2-

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                                  $200,000,000

                                CREDIT AGREEMENT

                            Dated as of July 1, 2003

                                      among

                                 IPCRe LIMITED,
                                as the Borrower,

                            THE LENDERS NAMED HEREIN,

                                  CITIBANK, NA,
                              as Syndication Agent,

                                BARCLAYS BANK plc
                                       and
                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                            as Documentation Agents,

                          ING BANK N.V., London Branch
                                       and
                              ABN AMRO BANK, N.V.,
                               as Managing Agents,

                                       and

                                  BANK ONE, NA,
                                  as the Agent

                     Joint Lead Arrangers and Book Runners:

                         BANC ONE CAPITAL MARKETS, INC.
                                       and
                          CITIGROUP GLOBAL MARKETS INC.

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                                  <C>
ARTICLE I DEFINITIONS.............................................................................................    1

ARTICLE II THE CREDITS............................................................................................   11
   2.1.  Commitment...............................................................................................   11
   2.2.  Required Payments; Termination...........................................................................   11
   2.3.  Ratable Loans............................................................................................   11
   2.4.  Types of Advances........................................................................................   11
   2.5.  Facility Fee; Reductions in Aggregate Commitment.........................................................   11
   2.6.  Minimum Amount of Each Advance...........................................................................   11
   2.7.  Optional Principal Payments..............................................................................   11
   2.8.  Method of Selecting Types and Interest Periods for New Advances..........................................   12
   2.9.  Conversion and Continuation of Outstanding Advances......................................................   12
   2.10.  Changes in Interest Rate, etc...........................................................................   13
   2.11.  Rates Applicable After Default..........................................................................   13
   2.12.  Method of Payment.......................................................................................   13
   2.13.  Noteless Agreement; Evidence of Indebtedness............................................................   13
   2.14.  Telephonic Notices......................................................................................   14
   2.15.  Interest Payment Dates; Interest and Fee Basis..........................................................   14
   2.16.  Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.........................   15
   2.17.  Lending Installations...................................................................................   15
   2.18.  Non-Receipt of Funds by the Agent.......................................................................   15

ARTICLE III YIELD PROTECTION; TAXES...............................................................................   15
   3.1.  Yield Protection.........................................................................................   15
   3.2.  Changes in Capital Adequacy Regulations..................................................................   17
   3.3.  Availability of Types of Advances........................................................................   17
   3.4.  Funding Indemnification..................................................................................   17
   3.5.  Taxes....................................................................................................   17
   3.6.  Lender Statements; Survival of Indemnity.................................................................   19
   3.7.  Right to Substitute Lender...............................................................................   20

ARTICLE IV CONDITIONS PRECEDENT...................................................................................   20
   4.1.  Conditions to Effectiveness..............................................................................   20
   4.2.  Each Advance.............................................................................................   21

ARTICLE V REPRESENTATIONS AND WARRANTIES..........................................................................   21
   5.1.  Existence and Standing...................................................................................   22
   5.2.  Authorization and Validity...............................................................................   22
   5.3.  Compliance with Laws and Contracts.......................................................................   22
   5.4.  Governmental Consents....................................................................................   22
   5.5.  Financial Statements.....................................................................................   23
   5.6.  Material Adverse Change..................................................................................   23
   5.7.  Taxes....................................................................................................   23
   5.8.  Litigation and Contingent Obligations....................................................................   23
   5.9.  Capitalization...........................................................................................   23
</TABLE>

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<TABLE>
<S>                                                                                                                  <C>
   5.10.  Defaults................................................................................................   24
   5.11.  Federal Reserve Regulations.............................................................................   24
   5.12.  Investment Company......................................................................................   24
   5.13.  Certain Fees............................................................................................   24
   5.14.  Ownership of Properties.................................................................................   24
   5.15.  Indebtedness............................................................................................   25
   5.16.  Material Agreements.....................................................................................   25
   5.17.  Insurance...............................................................................................   25
   5.18.  Insurance Licenses......................................................................................   25
   5.19.  Filing..................................................................................................   25
   5.20.  Disclosure..............................................................................................   26

ARTICLE VI COVENANTS..............................................................................................   26
   6.1.  Financial Reporting......................................................................................   26
   6.2.  Use of Proceeds..........................................................................................   28
   6.3.  Notice of Default........................................................................................   28
   6.4.  Conduct of Business......................................................................................   28
   6.5.  Taxes....................................................................................................   29
   6.6.  Insurance................................................................................................   29
   6.7.  Compliance with Laws.....................................................................................   29
   6.8.  Maintenance of Properties................................................................................   29
   6.9.  Inspection...............................................................................................   29
   6.10.  Dividends...............................................................................................   29
   6.11.  Indebtedness............................................................................................   29
   6.12.  Merger..................................................................................................   30
   6.13.  Sale of Assets..........................................................................................   30
   6.14.  Investments and Acquisitions............................................................................   30
   6.15.  Contingent Obligations..................................................................................   31
   6.16.  Liens...................................................................................................   31
   6.17.  Affiliates..............................................................................................   31
   6.18.  Change in Structure; Fiscal Year........................................................................   32
   6.19.  Inconsistent Agreements.................................................................................   32
   6.20.  Financial Covenants.....................................................................................   32
   6.21.  Reinsurance.............................................................................................   32
   6.22.  ERISA...................................................................................................   33

ARTICLE VII DEFAULTS..............................................................................................   33

ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.......................................................   35
   8.1.  Acceleration.............................................................................................   35
   8.2.  Amendments...............................................................................................   35
   8.3.  Preservation of Rights...................................................................................   36

ARTICLE IX GENERAL PROVISIONS.....................................................................................   36
   9.1.  Survival of Representations..............................................................................   36
   9.2.  Governmental Regulation..................................................................................   36
   9.3.  Headings.................................................................................................   36
</TABLE>

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<TABLE>
<S>                                                                                                                  <C>
   9.4.  Entire Agreement.........................................................................................   36
   9.5.  Several Obligations; Benefits of this Agreement..........................................................   36
   9.6.  Expenses; Indemnification................................................................................   37
   9.7.  Numbers of Documents.....................................................................................   37
   9.8.  Accounting...............................................................................................   37
   9.9.  Severability of Provisions...............................................................................   37
   9.10.  Nonliability of Lenders.................................................................................   37
   9.11.  Confidentiality.........................................................................................   38
   9.12.  Nonreliance.............................................................................................   38
   9.13.  Disclosure..............................................................................................   38

ARTICLE X THE AGENT...............................................................................................   39
   10.1.  Appointment; Nature of Relationship.....................................................................   39
   10.2.  Powers..................................................................................................   39
   10.3.  General Immunity........................................................................................   39
   10.4.  No Responsibility for Loans, Recitals, etc..............................................................   39
   10.5.  Action on Instructions of Lenders.......................................................................   40
   10.6.  Employment of Agents and Counsel........................................................................   40
   10.7.  Reliance on Documents; Counsel..........................................................................   40
   10.8.  Agent's Reimbursement and Indemnification...............................................................   40
   10.9.  Notice of Default.......................................................................................   41
   10.10.  Rights as a Lender.....................................................................................   41
   10.11.  Lender Credit Decision.................................................................................   41
   10.12.  Successor Agent........................................................................................   41
   10.13.  Agent's and Arranger's Fees............................................................................   42
   10.14.  Delegation to Affiliates...............................................................................   42
   10.15.  Co-Agents, Documentation Agent, Syndication Agent, Managing Agent, etc.................................   42

ARTICLE XI SETOFF; RATABLE PAYMENTS...............................................................................   42
   11.1.  Setoff..................................................................................................   42
   11.2.  Ratable Payments........................................................................................   43

ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.....................................................   43
   12.1.  Successors and Assigns..................................................................................   43
   12.2.  Participations..........................................................................................   43
   12.3.  Assignments.............................................................................................   44
   12.4.  Dissemination of Information............................................................................   46
   12.5.  Tax Treatment...........................................................................................   46

ARTICLE XIII NOTICES..............................................................................................   46
   13.1.  Notices.................................................................................................   46
   13.2.  Change of Address.......................................................................................   47

ARTICLE XIV COUNTERPARTS..........................................................................................   47

ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...........................................   47
</TABLE>

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<TABLE>
<S>                                                                                                                  <C>
   15.1.  CHOICE OF LAW...........................................................................................   47
   15.2.  CONSENT TO JURISDICTION.................................................................................   47
   15.3.  WAIVER OF JURY TRIAL....................................................................................   48
   15.4.  Judgment Currency.......................................................................................   48
</TABLE>

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                                    EXHIBITS

Exhibit A     - Note
Exhibit B     - Compliance Certificate
Exhibit C     - Assignment Agreement

                                    SCHEDULES

Pricing Schedule
Schedule I    - Commitments
Schedule 5.9  - Capitalization
Schedule 5.14 - Owned Properties
Schedule 5.15 - Indebtedness
Schedule 5.18 - Insurance Licenses
Schedule 6.16 - Liens

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                                CREDIT AGREEMENT

         This Agreement, dated as of July 1, 2003, is among IPCRe Limited, the
Lenders and Bank One, NA, a national banking association having its principal
office in Chicago, Illinois, as Agent.

                                R E C I T A L S:

         A.       The Borrower has requested that the Lenders make financial
accommodations to it in the aggregate principal amount of $200,000,000, the
proceeds of which the Borrower may use for its general corporate needs.

         B.       The Lenders are willing to extend such financial
accommodations on the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Lenders and the Agent hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         As used in this Agreement:

         "ABR Advance" means an Advance which bears interest at the Alternate
Base Rate.

         "Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger,
amalgamation or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at
least a majority (in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors (other than securities
having such power only by reason of the happening of a contingency) or a
majority (by percentage or voting power) of the outstanding ownership interests
of a partnership or limited liability company.

         "Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Loans made on the
same Borrowing Date (or date of conversion or continuation) by the Lenders to
the Borrower of the same Type and, in the case of Eurodollar Advances, for the
same Interest Period.

         "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power

<PAGE>

to direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or otherwise.

         "Agent" means Bank One, in its capacity as contractual representative
of the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.

         "Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.

         "Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.

         "Agreement Accounting Principles" means generally accepted accounting
principles in the United States as in effect from time to time, applied in a
manner consistent with that used in preparing the financial statements referred
to in Section 5.5(i) and (ii).

         "Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day or (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.

         "Annual Statement" means the annual statutory financial statement of
the Borrower or any Insurance Subsidiary required to be filed with the insurance
commissioner (or similar authority) of its jurisdiction of formation, which
statement shall be in form required by the Borrower's or such Insurance
Subsidiary's jurisdiction of formation, together with all exhibits or schedules
filed therewith.

         "Applicable Fee Rate" means, at any time, the percentage rate per annum
at which Facility Fees are accruing on the Aggregate Commitment (without regard
to usage) at such time as set forth in the Pricing Schedule.

         "Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.

         "Approved Fund" means any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender, or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

         "Arranger" means, collectively, Banc One Capital Markets, Inc., a
Delaware corporation, Citigroup Global Markets, Inc. and their successors in
their capacities as Joint Lead Arranger and Joint Book Runner.

         "Article" means an article of this Agreement unless another document is
specifically referenced.

         "Authorized Officer" means any of the president or the chief financial
officer of the Borrower, acting singly.

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         "Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.

         "Borrower" means IPCRe Limited, a Bermuda company, and its successors
and assigns.

         "Borrowing Date" means a date on which an Advance is made hereunder.

         "Borrowing Notice" is defined in Section 2.8.

         "Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, New York and London for the conduct
of substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago and New York for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made on the
Fedwire system.

         "Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.

         "Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.

         "Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $500,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

         "Change in Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding voting shares of the
Parent, or (ii) the Parent shall cease to own beneficially and of record, free
and clear of all Liens, other encumbrances, or voting agreements, restrictions
or trusts of any kind, 100% of the outstanding voting shares of the Borrower on
a fully diluted basis, or (iii) during any period of 12 consecutive calendar
months, commencing on the date of this Agreement, the ceasing of those
individuals (the "Continuing Directors") who (a) were directors of the Parent on
the first day of each such period or (b) subsequently became directors of the
Parent and whose initial election or initial nomination for election subsequent
to that date was approved by a majority of the Continuing Directors then on the
board of directors of the Parent, to constitute a majority of the board of
directors of the Parent.

                                      - 3 -

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         "Charter Documents" means (i) in respect of the Borrower, its
Certificate of Incorporation, Memorandum of Association and Bye-Laws and (ii) in
respect of each Subsidiary, its charter documents, in each case as amended,
supplemented or modified from time to time.

         "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

         "Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth on Schedule I hereto or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.

         "Consolidated Borrower Net Income" means, with reference to any period,
the net income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles.

         "Consolidated Borrower Net Worth" means at any time the consolidated
shareholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles, excluding, however, for the purposes of Section 6.20, the effect of
any unrealized gain or loss reported under Statement of Financial Accounting
Standards No. 115.

         "Consolidated Parent Net Income" means, with reference to any period,
the net income (or loss) of the Parent and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles.

         "Consolidated Parent Net Worth" means at any time the consolidated
shareholders' equity of the Parent and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles, excluding, however, for the purposes of Section 6.20, the effect of
any unrealized gain or loss reported under Statement of Financial Accounting
Standards No. 115.

         "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract; provided, that "Contingent Obligation" shall
not include the obligations of the Borrower or any Insurance Subsidiary arising
under any insurance policy or reinsurance agreement entered into in the ordinary
course of business.

         "Conversion/Continuation Notice" is defined in Section 2.9.

         "Default" means an event described in Article VII.

         "Effective Date" is defined in Section 4.1.

                                      - 4 -

<PAGE>

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.

         "Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.

         "Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.

         "Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.

         "Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.

         "Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, any and all taxes imposed on its overall net
profits or net income, and franchise taxes imposed on it, by (i) the
jurisdiction under the laws of which such Lender or the Agent is incorporated or
organized or (ii) the jurisdiction in which the Agent's or such Lender's
principal executive office or such Lender's applicable Lending Installation
(including any Lending Installation to which such Lender transfers the
applicable Loan in accordance with Section 2.17) is located.

         "Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.

         "Facility Fee" is defined in Section 2.5.

         "Facility Termination Date" means July 1, 2006 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.

         "Federal Funds Effective Rate" means, for any day, an interest rate per
annum 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such

                                      - 5 -

<PAGE>

day on such transactions received by the Agent from three Federal funds brokers
of recognized standing selected by the Agent.

         "Financial Statements" is defined in Section 5.5.

         "Fiscal Quarter" means each of the four quarterly accounting periods in
each Fiscal Year.

         "Fiscal Year" means the twelve month accounting period commencing on
January 1 and ending on December 31 of each year.

         "Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

         "Governmental Authority" means any nation or government (foreign or
domestic), any state or other political subdivision thereof or any governmental
body, agency, authority, department or commission (including without limitation
any board of insurance, insurance department or insurance commissioner and any
taxing authority or political subdivision) or any instrumentality or officer
thereof (including without limitation any court or tribunal) exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation, partnership or other entity
directly or indirectly owned or controlled by or subject to the control of any
of the foregoing.

         "Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
property arising out of or in connection with the sale of the same or
substantially similar securities or property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations, (viii) obligations for which such
Person is obligated pursuant to or in respect of a Letter of Credit, including
without limitation any application for a Letter of Credit, (ix) repurchase
obligations or liabilities of such Person with respect to accounts or notes
receivable sold by such Person, and (x) any other obligation for borrowed money
or other financial accommodation which in accordance with Agreement Accounting
Principles would be shown as a liability on the consolidated balance sheet of
such Person. For the purpose of determining compliance with Section 6.11, the
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

         "Insurance Subsidiary" means any Subsidiary which is engaged in the
insurance business.

         "Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this

                                      - 6 -

<PAGE>

Agreement. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.

         "Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.

         "Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.

         "Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.17.

         "Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

         "Leverage Ratio" means, at any time, the ratio of (i) the consolidated
Indebtedness of the Borrower and its Subsidiaries (excluding secured Letter of
Credit obligations incurred by the Borrower and its Subsidiaries in the ordinary
course of business) at such time to (ii) the sum of the consolidated
Indebtedness of the Borrower and its Subsidiaries (excluding secured Letter of
Credit obligations incurred by the Borrower and its Subsidiaries in the ordinary
course of business) plus Consolidated Borrower Net Worth at such time.

         "License" means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.

         "Lien" means any lien (statutory or other), charge, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).

         "Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).

                                      - 7 -

<PAGE>

         "Loan Documents" means this Agreement and any Notes issued pursuant to
Section 2.13 and the other documents and agreements contemplated hereby and
executed by the Borrower in favor of the Agent or any Lender.

         "Margin Stock" has the meaning assigned to that term under Regulation
U.

         "Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the
Borrower to perform its obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent or the Lenders thereunder.

         "Moody's" means Moody's Investors Service, Inc.

         "NAIC" means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.

         "Net Proceeds" means cash or readily available marketable cash
equivalents received in respect of any sale or issuance of equity securities of
any Person or any capital contributions received by such Person, net of all
legal expenses, commissions and other fees and all costs and expenses incurred
as a result of such sale or issuance.

         "Non-U.S. Borrower" is defined in Section 3.1(b).

         "Non-U.S. Lender" is defined in Section 3.5(iv).

         "Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit A.

         "Notice of Assignment" is defined in Section 12.3.2.

         "Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party arising under the Loan
Documents.

         "Other Taxes" is defined in Section 3.5(ii).

         "Parent" means IPC Holdings, Ltd., a Bermuda company.

         "Participants" is defined in Section 12.2.1.

         "Payment Date" means the last day of each March, June, September and
December.

                                      - 8 -

<PAGE>

         "Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

         "Pricing Schedule" means the Schedule attached hereto identified as
such.

         "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

         "Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.

         "Purchasers" is defined in Section 12.3.1.

         "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.

         "Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by securities brokers and dealers for the
purpose of purchasing or carrying margin stocks applicable to such Persons.

         "Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve System.

         "Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.

         "Required Lenders" means Lenders in the aggregate having at least 51%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the aggregate unpaid principal
amount of the outstanding Advances.

         "Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.

         "SAP" means, with respect to the Borrower or any Insurance Subsidiary,
the statutory accounting principles prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of such Person for
the preparation of Annual Statements in effect

                                      - 9 -

<PAGE>

from time to time, applied in a manner consistent with those used in preparing
the Annual Statements referred to in Section 6.1(iii).

         "S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.

         "Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.

         "Section" means a numbered section of this Agreement, unless another
document is specifically referenced.

         "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.

         "Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.

         "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings imposed by a Governmental Authority
with respect to Loans or the Commitments, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.

         "Transferee" is defined in Section 12.4.

         "Type" means, with respect to any Advance, its nature as an ABR Advance
         or a Eurodollar Advance.

         "Unmatured Default" means an event which but for the lapse of time or
         the giving of notice, or both, would constitute a Default.

         "Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.

                                      - 10 -

<PAGE>

         The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.

                                   ARTICLE II

                                   THE CREDITS

         2.1.     Commitment. From and including the date hereof and prior to
the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the amount of its Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the Facility
Termination Date.

         2.2.     Required Payments; Termination. Any outstanding Advances and
all other unpaid Obligations shall be paid in full by the Borrower on the
Facility Termination Date.

         2.3.     Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.

         2.4.     Types of Advances. The Advances may be ABR Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.

         2.5.     Facility Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender a facility fee (the
"Facility Fee") at a per annum rate equal to the Applicable Fee Rate on the
Aggregate Commitment (regardless of usage) from the date hereof to and including
the Facility Termination Date, payable on each Payment Date hereafter and on the
Facility Termination Date. The Borrower may permanently reduce the Aggregate
Commitment in whole, or in part ratably among the Lenders in a minimum amount of
$5,000,000 (and integral multiples of $1,000,000 in excess thereof), upon at
least three Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction, provided, however, that the amount of
the Aggregate Commitment may not be reduced below the aggregate principal amount
of the outstanding Advances. All accrued Facility Fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder.

         2.6.     Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in
excess thereof), and each ABR Advance shall be in the minimum amount of
$5,000,000 (and in multiples of $1,000,000 if in excess thereof); provided,
however, that any ABR Advance may be in the amount of the unused Aggregate
Commitment.

         2.7.     Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding ABR Advances, or, in a
minimum aggregate amount of $1,000,000 any portion of the outstanding ABR
Advances, upon one Business Day's prior notice

                                      - 11 -

<PAGE>

to the Agent. The Borrower may from time to time pay, subject to the payment of
any funding indemnification amounts required by Section 3.4 but without penalty
or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate
amount of $5,000,000 or any integral multiple of $1,000,000 in excess thereof,
any portion of the outstanding Eurodollar Advances upon three Business Days'
prior notice to the Agent.

         2.8.     Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each ABR Advance and three Business Days before the Borrowing
Date for each Eurodollar Advance, specifying:

     (i)          the Borrowing Date, which shall be a Business Day, of such
                  Advance,

     (ii)         the aggregate amount of such Advance,

     (iii)        the Type of Advance selected, and

     (iv)         in the case of each Eurodollar Advance, the Interest Period
                  applicable thereto.

Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.

         2.9.     Conversion and Continuation of Outstanding Advances. ABR
Advances shall continue as ABR Advances unless and until such ABR Advances are
converted into Eurodollar Advances pursuant to this Section 2.9 or are repaid in
accordance with Section 2.2 or 2.7. Each Eurodollar Advance shall continue as a
Eurodollar Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Advance shall be automatically converted
into an ABR Advance unless (x) such Eurodollar Advance is or was repaid in
accordance with Section 2.2 or 2.7 or (y) the Borrower shall have given the
Agent a Conversion/Continuation Notice (as defined below) requesting that, at
the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another Interest Period. Subject to the terms
of Section 2.6, the Borrower may elect from time to time to convert all or any
part of an ABR Advance into a Eurodollar Advance. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of an ABR Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (Chicago time) at least three Business Days
prior to the date of the requested conversion or continuation, specifying:

     (i)          the requested date, which shall be a Business Day, of such
                  conversion or continuation,

     (ii)         the aggregate amount and Type of the Advance which is to be
                  converted or continued, and

                                      - 12 -

<PAGE>

     (iii)        the amount of such Advance which is to be converted into or
                  continued as a Eurodollar Advance and the duration of the
                  Interest Period applicable thereto.

         2.10.    Changes in Interest Rate, etc. Each ABR Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into an ABR Advance pursuant to Section 2.9, to but excluding
the date it is paid or is converted into a Eurodollar Advance pursuant to
Section 2.9 hereof, at a rate per annum equal to the Alternate Base Rate for
such day. Changes in the rate of interest on that portion of any Advance
maintained as an ABR Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period
may end after the Facility Termination Date.

         2.11.    Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of an
Unmatured Default pursuant to Section 7.2 or a Default, the Required Lenders
may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that no Advance may be made as, converted into or continued as a
Eurodollar Advance. During the continuance of a Default the Required Lenders
may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each Eurodollar Advance shall bear interest for the remainder
of the applicable Interest Period at the rate otherwise applicable to such
Interest Period plus 2% per annum and (ii) each ABR Advance shall bear interest
at a rate per annum equal to the Alternate Base Rate in effect from time to time
plus 2% per annum, provided that, during the continuance of a Default under
Section 7.6 or 7.7, the interest rates set forth in clauses (i) and (ii) above
shall be applicable to all Advances without any election or action on the part
of the Agent or any Lender.

         2.12.    Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII , or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with Bank One
for each payment of principal, interest and fees as it becomes due hereunder.

         2.13.    Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the

                                      - 13 -

<PAGE>

Borrower to such Lender resulting from each Loan made by such Lender from time
to time, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.

         (ii)  The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made  hereunder,  the Type  thereof and the Interest
Period with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender  hereunder
and (c) the amount of any sum received by the Agent  hereunder from the Borrower
and each Lender's share thereof.

         (iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.

         (iv)  Any Lender may request that its Loans be evidenced by a Note. In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender in a form supplied by the Agent.
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after any assignment pursuant to Section 12.3) be represented
by one or more Notes payable to the order of the payee named therein or any
assignee pursuant to Section 12.3, except to the extent that any such Lender or
assignee subsequently returns any such Note for cancellation and requests that
such Loans once again be evidenced as described in paragraphs (i) and (ii)
above.

         2.14.    Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.

         2.15.    Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each ABR Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the ABR Advance is prepaid, whether due to acceleration or otherwise, and at
maturity. Interest accrued on that portion of the outstanding principal amount
of any ABR Advance converted into a Eurodollar Advance on a day other than a
Payment Date shall be payable on the date of conversion. Interest accrued on
each Eurodollar Advance shall be payable on the last day of its applicable
Interest Period, on any date on which the Eurodollar Advance is prepaid, whether
by acceleration or otherwise, and at maturity. Interest accrued on each
Eurodollar Advance having an Interest Period longer than three months shall also
be payable on the last day of each three-month interval during such Interest
Period. Interest on Eurodollar Advances and Facility Fees shall be calculated
for actual days elapsed on the basis of a 360-day year, and interest on ABR
Advances shall be calculated for the actual days elapsed on the basis of a 365
or 366 day year, as applicable. Interest shall be payable for the day

                                      - 14 -

<PAGE>

an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.

         2.16.    Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.

         2.17.    Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of such Lending Installation. Each
Lender may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it and for whose account Loan payments are to be
made.

         2.18.    Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

                                   ARTICLE III

                             YIELD PROTECTION; TAXES

         3.1.     Yield Protection. (a) If, on or after the date of this
Agreement, the adoption of any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any change in the interpretation or administration thereof by
any governmental or quasi-governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender or applicable Lending Installation with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:

                                      - 15 -

<PAGE>

     (i)          subjects any Lender or any applicable Lending Installation to
                  any Taxes, or changes the basis of taxation of payments (other
                  than with respect to Excluded Taxes) to any Lender in respect
                  of its Eurodollar Loans, or

     (ii)         imposes or increases or deems applicable any reserve,
                  assessment, insurance charge, special deposit or similar
                  requirement against assets of, deposits with or for the
                  account of, or credit extended by, any Lender or any
                  applicable Lending Installation (other than reserves and
                  assessments taken into account in determining the interest
                  rate applicable to Eurodollar Advances), or

     (iii)        imposes any other condition the result of which is to increase
                  the cost to any Lender or any applicable Lending Installation
                  of making, funding or maintaining its Eurodollar Loans or
                  reduces any amount receivable by any Lender or any applicable
                  Lending Installation in connection with its Eurodollar Loans,
                  or requires any Lender or any applicable Lending Installation
                  to make any payment calculated by reference to the amount of
                  Eurodollar Loans held or interest received by it, by an amount
                  deemed material by such Lender,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received; provided, however, that if any such Lender
fails to deliver such demand within 180 days after the date on which an officer
of such Lender has actual knowledge of its right to compensation under this
Section 3.1, then such Lender shall only be entitled to additional compensation
for any such increases required from and after the date that is 180 days prior
to the date such Lender delivers such demand.

     (b)          Non-U.S. Reserve Costs With Respect to Loans to Non-U.S.
Borrowers. If any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive of any jurisdiction outside of the
United States of America or any subdivision thereof (whether or not having the
force of law), imposes or deems applicable any reserve requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender or any applicable Lending Installation, and the result of the foregoing
is to increase the cost to such Lender or applicable Lending Installation of
making or maintaining its Eurodollar Loans to any Borrower that is not
incorporated under the laws of the United States of America or a state thereof
(each a "Non-U.S. Borrower") or its Commitment to any Non-U.S. Borrower or to
reduce the return received by such Lender or applicable Lending Installation in
connection with such Eurodollar Loans to any Non-U.S. Borrower or Commitment to
any Non-U.S. Borrower, then, within 15 days of demand by such Lender, such
Non-U.S. Borrower shall pay such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction in amount
received, provided that such Non-U.S. Borrower shall not be required to
compensate any Lender for such non-U.S. reserve costs to the extent that an
amount equal to such reserve costs is received by such Lender as a result of the
calculation of the interest rate applicable to Eurodollar Advances pursuant to
clause (i)(b) of the definition of "Eurodollar Rate."

                                      - 16 -

<PAGE>

         3.2.     Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change, then, within 15 days of demand
by such Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans or its Commitment to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy); provided, however,
that if any such Lender fails to deliver such demand within 180 days after the
date on which an officer of such Lender has actual knowledge of its right to
compensation under this Section 3.2, then such Lender shall only be entitled to
additional compensation for any such increases in capital required from and
after the date that is 180 days prior to the date such Lender delivers such
demand. "Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basel Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.

         3.3.     Availability of Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, then the Agent shall suspend the availability of the
affected Type of Advance and require any affected Eurodollar Advances to be
repaid or converted to ABR Advances, subject to the payment of any funding
indemnification amounts required by Section 3.4. If the Required Lenders
determine that (i) deposits of a type and maturity appropriate to match fund
Eurodollar Advances are not available or (ii) the interest rate applicable to a
Type of Advance does not accurately reflect the cost of making or maintaining
such Advance, then the Agent shall suspend the availability of the affected Type
of Advance for any Advance made subsequent to the date of such suspension,
subject to the payment of any funding indemnification amounts required by
Section 3.4.

         3.4.     Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made, converted or continued on the date specified by
the Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.

         3.5.     Taxes. (i) All payments by the Borrower to or for the account
of any Lender or the Agent hereunder or under any Note shall be made free and
clear of and without deduction for

                                      - 17 -

<PAGE>

any and all Taxes. If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to any Lender or the Agent, (a)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 3.5) such Lender or the Agent (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (b) the Borrower shall make such deductions, (c) the Borrower shall pay
the full amount deducted to the relevant authority in accordance with applicable
law and (d) the Borrower shall furnish to the Agent the original copy of a
receipt evidencing payment thereof within 30 days after such payment is made.

         (ii)     In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").

         (iii)    The Borrower hereby agrees to indemnify the Agent and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent or such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within 30 days of the date
the Agent or such Lender makes demand therefor pursuant to Section 3.6.

         (iv)     Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Lender") agrees
that it will, not more than ten Business Days after the date of this Agreement,
(i) deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form W-9, W-8BEN, W-8ECI, or W-8IMY
(including all required attachments thereto), as applicable, and (ii) such forms
shall certify that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (including any backup withholding tax). Each Non-U.S. Lender further
undertakes to deliver to each of the Borrower and the Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete as may be reasonably requested by the
Borrower or the Agent, and (y) after the occurrence of any event requiring a
change in the most recent forms so delivered by it, such additional forms or
amendments thereto reflecting such change. All forms or amendments described in
the preceding sentence shall certify that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation or any change in the interpretation or
administration thereof by any Governmental Authority) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such Lender
advises the Borrower and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.

         (v)      For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any

                                      - 18 -

<PAGE>

Governmental Authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be
entitled to indemnification under this Section 3.5 with respect to Taxes imposed
by the United States; provided that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under clause (iv),
above, the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.

         (vi)     Any Non-U.S. Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.

         (vii)    If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement. Nothing in this Section 3.5(vii) is intended to,
nor shall it, preclude the Borrower from pursuing any rights or remedies as it
may have against any Lender.

         3.6.     Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Loans to reduce any liability of the Borrower
to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.

                                      - 19 -

<PAGE>

         3.7.     Right to Substitute Lender. Any Lender claiming any additional
amounts payable pursuant to Section 3.1 or 3.2 or unable to make a Type of
Advance available in accordance with Section 3.3, shall, so long as no Default
or Unmatured Default has occurred and is continuing, upon the written request of
the Borrower delivered to such Lender and the Agent, assign, pursuant to and in
accordance with the provisions of Section 12.3, all of its rights and
obligations under this Agreement and under the Loan Documents to another Lender
or to a commercial bank, other financial institution, commercial finance company
or other business lender selected by the Borrower and reasonably acceptable to
the Agent that has agreed not to claim any additional amounts under Section 3.1
or 3.2 with respect to some or all of the taxes or regulatory changes that gave
rise to such assigning Lender's claim for such compensation, or that has agreed
to make the Type of Advance available that was not made available from such
assigning Lender, in consideration for the payment by such assignee to such
assigning Lender of the principal of, and interest accrued and unpaid to the
date of such assignment on, the Loans held by such assigning Lender, the payment
by the Borrower to such assigning Lender of any and all other amounts owing to
such assigning Lender under any provision of this Agreement accrued and unpaid
to the date of such assignment and the Borrower's release of such assigning
Lender from any further obligation or liability under this Agreement and the
Loan Documents. Notwithstanding anything to the contrary contained in this
Section 3.7, in no event shall the replacement of any Lender result in a
decrease or reallocation of the Aggregate Commitment without the prior written
consent of each of the remaining Lenders.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         4.1.     Conditions to Effectiveness. This Agreement shall become
effective on the date (the "Effective Date") upon which the Agent receives (with
sufficient copies for the Lenders) each of the following documents:

     (i)          Charter; Certificate of Compliance. Copies of the memorandum
                  of association of the Borrower, together with all amendments,
                  and a certificate of compliance of the Borrower, each
                  certified by the Bermuda Registrar of Companies.

     (ii)         Bye-Laws and Resolutions. Copies, certified by the Secretary
                  or Assistant Secretary of the Borrower, of its bye-laws and of
                  its Board of Directors' resolutions and of resolutions or
                  actions of any other body authorizing the execution of the
                  Loan Documents.

     (iii)        Secretary's Certificate. An incumbency certificate, executed
                  by the Secretary or Assistant Secretary of the Borrower, which
                  shall identify by name and title and bear the signatures of
                  the Authorized Officers and any other officers of the Borrower
                  authorized to sign the Loan Documents to which the Borrower is
                  a party, upon which certificate the Agent and the Lenders
                  shall be entitled to rely until informed of any change in
                  writing by the Borrower.

     (iv)         Officer's Certificate. A certificate, signed by the chief
                  financial officer of the Borrower, stating that (a) on the
                  Effective Date no Default or Unmatured Default

                                      - 20 -

<PAGE>

                  has occurred and is continuing, and (b) each of the
                  representations and warranties set forth in Article V of this
                  Agreement is true and correct on and as of such date.

     (v)          Legal Opinions. Written opinions of the Borrower's U.S. and
                  Bermuda counsel, addressed to Agent and the Lenders in form
                  and substance reasonably acceptable to the Agent and its
                  counsel.

     (vi)         Notes. Any Notes requested by a Lender pursuant to Section
                  2.13 payable to the order of each such requesting Lender.

     (vii)        Loan Documents. Originals of this Agreement and each of the
                  other Loan Documents, which shall be executed by all parties
                  thereto and in full force and effect, together with all
                  schedules, exhibits, certificates, instruments, documents and
                  financial statements required to be delivered pursuant hereto
                  or thereto.

     (viii)       Termination of Existing Credit Agreement. The Agent shall have
                  received evidence satisfactory to the Agent that all
                  principal, interest and other amounts due under that certain
                  Credit Agreement dated as of June 30, 1998 among the Borrower,
                  the Lenders party thereto and Bank One, as Agent, and all
                  other loan documents identified therein shall have been paid
                  in full and such agreement and all related documents shall
                  have been terminated.

     (ix)         Other. Such other documents as any Lender or its counsel may
                  have reasonably requested.

         4.2.     Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances) unless on the applicable Borrowing Date:

     (i)          There exists no Default or Unmatured Default.

     (ii)         The representations and warranties contained in Article V are
                  true and correct as of such Borrowing Date except to the
                  extent any such representation or warranty is stated to relate
                  solely to an earlier date, in which case such representation
                  or warranty shall have been true and correct on and as of such
                  earlier date.

         Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making an Advance.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to the Lenders that:

                                      - 21 -

<PAGE>

         5.1.     Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation, partnership (in the case of Subsidiaries only) or
limited liability company duly and properly incorporated or organized, as the
case may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.

         5.2.     Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.

         5.3.     Compliance with Laws and Contracts. The Borrower and its
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any Governmental
Authority having jurisdiction over the conduct of their respective businesses or
the ownership of their respective properties, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.
Neither the execution and delivery by the Borrower of the Loan Documents, nor
the consummation of the transactions therein contemplated, nor compliance with
the provisions thereof will, or at the relevant time did, (i) violate any law,
rule, regulation (including Regulations T, U and X), order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its Subsidiaries
or the Borrower's or any Subsidiary's Charter Documents, (ii) violate the
provisions of or require the approval or consent of any indenture, instrument or
agreement to which the Borrower or any of its Subsidiaries is a party or is
subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement, or (iii)
require the consent or approval of any Person, except for any violation of, or
failure to obtain an approval or consent required under, any such indenture,
instrument or agreement that could not reasonably be expected to have a Material
Adverse Effect.

         5.4.     Governmental Consents. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, any subdivision thereof or any
securities exchange is or at the relevant time was necessary or required to
authorize, or is or at the relevant time was required in connection with the
execution, delivery, consummation or performance of, or the legality, validity,
binding effect or enforceability of, any of the Loan Documents, the application
of the proceeds of the Loans, or the consummation of any other transaction
contemplated by the Loan Documents. Neither the Borrower nor any Subsidiary is
in default under or in violation of any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding upon or applicable to the Borrower
or such Subsidiary, in each case the consequences of which default or violation
could reasonably be expected to have a Material Adverse Effect.

                                      - 22 -

<PAGE>

         5.5.     Financial Statements. The Borrower has heretofore furnished to
each of the Lenders (i) the December 31, 2002 audited consolidated financial
statements of the Borrower and its Subsidiaries, and (ii) the unaudited
consolidated financial statements of the Parent and its subsidiaries through
March 31, 2003 (collectively, the "Financial Statements"). Each of the Financial
Statements was prepared in accordance with Agreement Accounting Principles, and
such Financial Statements fairly present the consolidated financial condition
and operations of the Borrower and its Subsidiaries and the Parent and its
subsidiaries at such dates and the consolidated results of their operations for
the respective periods then ended (except, in the case of such unaudited
statements, for normal year-end audit adjustments).

         5.6.     Material Adverse Change. No material adverse change in the
business, Property, condition (financial or otherwise) or results of operations
of the Borrower or of the Borrower and its Subsidiaries taken as a whole, has
occurred since December 31, 2002.

         5.7.     Taxes. The Borrower and its Subsidiaries have filed or caused
to be filed on a timely basis and in correct form all tax returns which are
required to be filed and have paid all taxes due and payable pursuant to said
returns or pursuant to any assessment received by the Borrower or any of its
Subsidiaries, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided in accordance with
Agreement Accounting Principles and as to which no Lien exists. As of the date
hereof, there are no pending audits or investigations regarding the Borrower's
or its Subsidiary's tax returns. No tax liens have been filed and no claims are
being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are in accordance with Agreement Accounting
Principles or SAP, as applicable.

         5.8.     Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Loans under this Agreement or the consummation of the transactions
contemplated by this Agreement. Neither the Borrower nor any Subsidiary has any
material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.5 other than contingent obligations arising
under any policy of insurance or contract of reinsurance issued or entered into
in the ordinary course of business.

         5.9.     Capitalization. Schedule 5.9 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable. No authorized but unissued or
treasury shares of the Borrower or any Subsidiary are subject to any option,
warrant, right to call or commitment of any kind or character, except (a) as set
forth on Schedule 5.9 and (b) in respect of the Borrower, as set forth in its
Charter Documents. Except as set forth on Schedule 5.9, neither the Borrower nor
any Subsidiary has any outstanding shares or securities convertible into or
exchangeable for any

                                      - 23 -

<PAGE>

shares, or any right issued to any Person to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to any of its shares or any shares or securities convertible
into or exchangeable for any of its shares other than as expressly set forth in
the Charter Documents of the Borrower or such Subsidiary. Neither the Borrower
nor any Subsidiary is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares or any convertible
securities, rights or options of the type described in the preceding sentence
except as otherwise set forth on Schedule 5.9.

         5.10.    Defaults. No Default or Unmatured Default has occurred and is
continuing.

         5.11.    Federal Reserve Regulations. Neither the Borrower nor any
Subsidiary is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock.
Neither the making of any Advance hereunder nor the use of the proceeds thereof
will violate or result in a violation of the provisions of Regulation T,
Regulation U or Regulation X. Margin Stock constitutes less than 25% of the
value of the assets of the Borrower and its Subsidiaries which are subject to
any limitation on sale, pledge, or other restriction hereunder.

         5.12.    Investment Company. Neither the Borrower nor any Subsidiary
is, or after giving effect to any Advance will be, an "investment company" or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.

         5.13.    Certain Fees. No broker's or finder's fee or commission was,
is or will be payable by the Borrower or any Subsidiary with respect to any of
the transactions contemplated by this Agreement. The Borrower hereby agrees to
indemnify the Agent and the Lenders against and agrees that it will hold each of
them harmless from any claim, demand or liability for any broker's or finder's
fees or commissions alleged to have been incurred by the Borrower in connection
with any of the transactions contemplated by this Agreement and any expenses
(including, without limitation, attorneys' fees and time charges of attorneys
for the Agent or any Lender, which attorneys may be employees of the Agent or
any Lender) arising in connection with any such claim, demand or liability.

         5.14.    Ownership of Properties. Except as set forth on Schedule 5.14,
on the date of this Agreement, the Borrower and its Subsidiaries have good
title, free of all Liens other than those permitted by Section 6.16, to all of
the Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Lenders as owned by the Borrower and its
Subsidiaries. The Borrower and its Subsidiaries own or possess rights to use all
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names necessary to continue to conduct their business as heretofore
conducted, and no such license, patent or trademark has been declared invalid,
been limited by order of any court or by agreement or is the subject of any
infringement, interference or similar proceeding or challenge, except for
proceedings and challenges which could not reasonably be expected to have a
Material Adverse Effect.

                                      - 24 -

<PAGE>

         5.15.    Indebtedness. Attached hereto as Schedule 5.15 is a complete
and correct list of all Indebtedness of the Borrower and its Subsidiaries
outstanding on the date of this Agreement (other than Indebtedness in a
principal amount not exceeding $3,000,000 for a single item of Indebtedness and
$15,000,000 in the aggregate for all such Indebtedness listed), showing the
aggregate principal amount which was outstanding on such date.

         5.16.    Material Agreements. Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument (other than insurance policies and
reinsurance agreements entered into in the ordinary course of business) or
subject to any charter or other corporate restriction which could reasonably be
expected to have a Material Adverse Effect . Neither the Borrower nor any
Subsidiary is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in (i) any agreement to which
it is a party, which default could reasonably be expected to have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness.

         5.17.    Insurance. The Borrower and its Subsidiaries maintain with
financially sound and reputable insurance companies the insurance on their
Property in such amounts and covering such risks as are consistent with sound
business practice.

         5.18.    Insurance Licenses. Schedule 5.18 hereto lists all of the
jurisdictions in which the Borrower or any Insurance Subsidiary holds a License
and is authorized to transact insurance business as of the date of this
Agreement. No License held by the Borrower or any Insurance Subsidiary, the loss
of which could reasonably be expected to have a Material Adverse Effect, is the
subject of a proceeding for suspension or revocation. To the Borrower's
knowledge, there is not a sustainable basis for such suspension or revocation,
and no such suspension or revocation has been threatened by any Governmental
Authority. Schedule 5.18 also indicates the line or lines of insurance in which
each such Insurance Subsidiary is engaged and the jurisdictions in which such
Insurance Subsidiary is licensed to engage in any line of insurance, in each
case as of the date of this Agreement.

         5.19.    Filing. To ensure the enforceability or admissibility in
evidence of this Agreement and the other Loan Documents in Bermuda, it is not
necessary that this Agreement, any other Loan Document or any other document be
filed or recorded with any court (other than court filings relating to specific
litigation) or other authority in Bermuda or that any stamp or similar tax be
paid to or in respect of this Agreement or the other Loan Documents. The
qualification by the Agent or any Lender for admission to do business under the
laws of Bermuda does not constitute a condition to, and the failure to so
qualify does not affect, the exercise (other than in or from Bermuda by a Person
not licensed under the Investment Business Act 1998 of Bermuda) by the Agent or
any Lender of any right, privilege, or remedy afforded to the Agent or any
Lender in connection with this Agreement or any other Loan Document or the
enforcement of any such right, privilege or remedy. The performance (other than
in or from Bermuda by a Person not licensed under the Investment Business Act
1998 of Bermuda) by the Agent or any Lender of any action required or permitted
under this Agreement or any other Loan Document will not violate any law or
regulation of Bermuda or any political subdivision thereof or result in any tax
liability or other unfavorable consequence to any such party pursuant to the
laws of Bermuda or any political subdivision or taxing authority thereof or any
rule or regulation of any federation or organization or similar entity of which
Bermuda is a member.

                                      - 25 -

<PAGE>

         5.20.    Disclosure. None of the (i) information, exhibits or reports
furnished or to be furnished by the Borrower or any Subsidiary to the Agent or
to any Lender in connection with the negotiation of the Loan Documents, or (ii)
representations or warranties of the Borrower or any Subsidiary contained in
this Agreement, the other Loan Documents or any other document, certificate or
written statement furnished to the Agent or the Lenders by or on behalf of the
Borrower or any Subsidiary for use in connection with the transactions
contemplated by this Agreement contained, contains or will contain any untrue
statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. There is
no fact known to the Borrower (other than matters of a general economic nature)
that has had or could reasonably be expected to have a Material Adverse Effect
and that has not been disclosed herein or in such other documents, certificates
and statements furnished to the Lenders for use in connection with the
transactions contemplated by this Agreement.

                                   ARTICLE VI

                                    COVENANTS

         During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:

         6.1.     Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, consistently applied,
and will furnish to the Lenders:

         (i)      As soon as practicable and in any event within 100 days after
                  the close of each of its Fiscal Years, an unqualified audit
                  report certified by independent certified public accountants
                  acceptable to the Lenders, prepared in accordance with
                  Agreement Accounting Principles on a consolidated and
                  consolidating basis (consolidating statements need not be
                  certified by such accountants) for each of (x) the Parent and
                  its Subsidiaries and (y) the Borrower and its Subsidiaries,
                  including balance sheets as of the end of such period and
                  related statements of income, shareholders' equity and cash
                  flows, accompanied by (a) any management letter prepared by
                  said accountants, (b) a certificate of said accountants for
                  the Borrower that, in the course of their examination
                  necessary for their certification of the foregoing, they have
                  obtained no knowledge of any Default or Unmatured Default, or
                  if, in the opinion of such accountants, any Default or
                  Unmatured Default shall exist, stating the nature and status
                  thereof and (c) a copy of a written reconciliation between SAP
                  and Agreement Accounting Principles with respect to such
                  financial statements if such reconciliation is provided to the
                  insurance regulatory authority in the jurisdiction of domicile
                  of the Borrower or any Insurance Subsidiary.

         (ii)     As soon as practicable, and in any event within 60 days after
                  the close of each of the first three Fiscal Quarters of each
                  of its Fiscal Years, for each of (a) the Parent and its
                  Subsidiaries and (b) the Borrower and its Subsidiaries,
                  consolidated and consolidating unaudited balance sheets as at
                  the close of each such period and

                                      - 26 -

<PAGE>

                  consolidated and consolidating statements of income,
                  shareholders' equity and cash flows for the period from the
                  beginning of such Fiscal Year to the end of such Fiscal
                  Quarter, all certified by the chief financial officer of the
                  Parent or the Borrower, as applicable, as being prepared in
                  accordance with Agreement Accounting Principles, subject to
                  year-end adjustment.

         (iii)    Upon the earlier of (1) fifteen days after the regulatory
                  filing date or (2) 100 days after the close of each of its
                  Fiscal Years, copies of the audited Annual Statement of the
                  Borrower that is required to be filed with a Governmental
                  Authority, certified by the chief financial officer or
                  treasurer of the Borrower as fairly presenting the financial
                  condition and results of operations of the Borrower in
                  accordance with SAP consistently applied throughout the
                  periods reflected therein.

         (iv)     Together with the financial statements required under Sections
                  6.1(i) and (ii), a compliance certificate in substantially the
                  form of Exhibit B signed by the chief financial officer of the
                  Borrower showing the calculations, if any, necessary to
                  determine compliance with Sections 6.11, 6.14 and 6.20 of this
                  Agreement and stating that no Default or Unmatured Default
                  exists, or if any Default or Unmatured Default exists, stating
                  the nature and status thereof.

         (v)      Together with the financial statements required under Sections
                  6.1(i) and (ii), a certificate of an Authorized Officer of the
                  Borrower stating that neither the Borrower nor any Subsidiary
                  has entered into any retrocession agreement for the benefit of
                  the Borrower with a reinsurer having a financial strength
                  rating that is not at least comparable to the credit standing
                  of the Borrower.

         (vi)     As soon as possible and in any event within 10 days after
                  receipt by the Borrower, a copy of (a) any notice or claim to
                  the effect that the Borrower or any of its Subsidiaries is or
                  may be liable to any Person as a result of the release by the
                  Borrower, any of its Subsidiaries, or any other Person of any
                  toxic or hazardous waste or substance into the environment,
                  and (b) any notice alleging any violation of any federal,
                  state or local environmental, health or safety law or
                  regulation by the Borrower or any of its Subsidiaries.

         (vii)    Promptly upon the filing thereof, copies of all registration
                  statements and annual, quarterly, monthly or other regular
                  reports which the Parent, the Borrower or any of its
                  Subsidiaries files with the Securities and Exchange
                  Commission, the National Association of Securities Dealers or
                  any securities exchange and the Annual Statement.

         (viii)   Promptly following the receipt thereof, copies of the
                  executive summary of any independent actuarial opinion
                  commissioned by the Borrower or any Insurance Subsidiary.

                                      - 27 -

<PAGE>

         (ix)     Such other non-confidential or non-proprietary information
                  (including non-financial information) relating to the
                  operations or financial condition of the Borrower as the Agent
                  or any Lender may from time to time reasonably request.

         6.2.     Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances to meet the general corporate
needs of the Borrower. The Borrower will not, nor will it permit any Subsidiary
to, use any of the proceeds of the Advances to purchase or carry any "margin
stock" (as defined in Regulation U).

         6.3.     Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of (i) the
occurrence of any Default or Unmatured Default, (ii) the occurrence of any other
development relating specifically to the financial condition or operations of
the Borrower or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, (iii) the receipt of any notice from any
Governmental Authority of the expiration without renewal, revocation or
suspension of, or the institution of any proceedings to revoke or suspend, any
License now or hereafter held by the Borrower or any Insurance Subsidiary which
is required to conduct insurance business in compliance with all applicable laws
and regulations and the expiration, revocation or suspension of which could
reasonably be expected to have a Material Adverse Effect, (iv) the receipt of
any notice from any Governmental Authority of the institution of any
disciplinary proceedings against or in respect of the Borrower or any Insurance
Subsidiary, or the issuance of any order, the taking of any action or any
request for an extraordinary audit for cause by any Governmental Authority
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect, (v) any judicial or administrative order limiting or controlling
the business of the Borrower or any Subsidiary (and not the industry in which
the Borrower or such Subsidiary is engaged generally) which has been issued or
adopted which could reasonably be expected to have a Material Adverse Effect, or
(vi) the commencement of any litigation in which Borrower or any of its
Subsidiaries is named as a party and which could reasonably be expected to
result in a Material Adverse Effect.

         6.4.     Conduct of Business. The Borrower will, and will cause each
Subsidiary to, (i) carry on and conduct its business only in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted, (ii) (a) with respect to the Borrower and each Insurance
Subsidiary, only engage in the insurance business or reasonably incidental
activities, and (b) with respect to each other Subsidiary, only engage in other
activities reasonably incidental to the insurance business, all substantially to
the extent in which it is engaged as of the date hereof, (iii) do all things
necessary to remain duly incorporated, validly existing and in good standing in
its jurisdiction of incorporation and its jurisdiction of domicile and maintain
all requisite authority to conduct its business in each other jurisdiction in
which such qualification is required, except where the failure to maintain such
qualification could not reasonably be expected to have a Material Adverse
Effect, and (iv) do all things necessary to renew, extend and continue in effect
all Licenses which may at any time and from time to time be necessary for the
Borrower or any Insurance Subsidiary to operate its business in compliance with
all applicable laws and regulations. Neither Borrower nor any Insurance
Subsidiary shall change its jurisdiction of domicile or incorporation without
the prior written consent of the Required Lenders.

                                      - 28 -

<PAGE>

         6.5.     Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct tax returns required by applicable law and pay
when due all taxes, assessments and governmental charges and levies upon it or
its income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with Agreement Accounting Principles or SAP,
as applicable.

         6.6.     Insurance. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts and covering such risks as is consistent
with sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.

         6.7.     Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject.

         6.8.     Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.

         6.9.     Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may designate. The
Borrower will keep or cause to keep, appropriate records and books of account in
which complete entries are to be made reflecting its and their business and
financial transactions, such entries to be made in accordance with Agreement
Accounting Principles or SAP, as applicable, consistently applied.

         6.10.    Dividends. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding, except (i) that any Subsidiary may declare and pay dividends or
make distributions to the Borrower or to a Wholly-Owned Subsidiary and (ii) the
Borrower may declare and pay dividends on, make distributions in respect of or
repurchase, redeem, retire or otherwise acquire its ordinary shares so long as
no Default or Unmatured Default is pending before or after giving effect to the
declaration or payment of such dividends, distributions, repurchases or other
acquisitions.

         6.11.    Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

         (i)      The Loans.

                                      - 29 -

<PAGE>

         (ii)     Indebtedness existing on the date hereof and described in
                  Schedule 5.15.

         (iii)    Indebtedness incurred by the Borrower relating to Letters of
                  Credit incurred in the ordinary course of business.

         (iv)     Other Indebtedness at no time exceeding $15,000,000 in
                  aggregate principal amount.

         6.12.    Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge, amalgamate or consolidate with or into any other Person,
except that a Subsidiary may merge or amalgamate into the Borrower or a
Wholly-Owned Subsidiary of the Borrower.

         6.13.    Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:

         (i)      Sales of investment assets in the ordinary course of business.

         (ii)     Leases, sales or other dispositions of its Property that,
                  together with all other Property of the Borrower and its
                  Subsidiaries previously leased, sold or disposed of (other
                  than investment assets in the ordinary course of business) as
                  permitted by this Section during the twelve-month period
                  ending with the month in which any such lease, sale or other
                  disposition occurs, do not constitute a Substantial Portion of
                  the Property of the Borrower and its Subsidiaries.

         6.14.    Investments and Acquisitions. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisitions, except:

         (i)      Cash Equivalent Investments.

         (ii)     Investments in debt securities rated A- or better by S&P, A-3
                  or better by Moody's or NAIC-1 or better by the NAIC.

         (iii)    Existing Investments in Subsidiaries and other Investments in
                  existence on the date hereof.

         (iv)     Investments in debt securities not satisfying any of the
                  standards set forth in clause (ii) above but rated BBB- or
                  better by S&P, Baa-3 or better by Moody's or NAIC-3 or better
                  by the NAIC; provided, that such Investments do not exceed, in
                  the aggregate at any one time outstanding, 5% of the combined
                  Investments of the Borrower and its Subsidiaries.

         (v)      Investments by the Borrower in equity securities in an
                  aggregate amount not to exceed 25% of Consolidated Borrower
                  Net Worth; provided, that no single Investment in equity
                  securities (other than an Investment in a mutual fund) shall
                  be in an amount in excess of 5% of Consolidated Borrower Net
                  Worth; provided,

                                      - 30 -

<PAGE>

                  further, that no single Investment in a mutual fund shall be
                  in an amount in excess of 15% of Consolidated Borrower Net
                  Worth.

         (vi)     Other Investments after the date hereof in an aggregate amount
                  not to exceed $25,000,000.

         6.15.    Contingent Obligations. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Contingent Obligation
(including, without limitation, any Contingent Obligation with respect to the
obligations of a Subsidiary), except by endorsement of instruments for deposit
or collection in the ordinary course of business.

         6.16.    Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:

         (i)      Liens for taxes, assessments or governmental charges or levies
                  on its Property if the same shall not at the time be
                  delinquent or thereafter can be paid without penalty, or are
                  being contested in good faith and by appropriate proceedings
                  and for which adequate reserves in accordance with Agreement
                  Accounting Principles shall have been set aside on its books.

         (ii)     Liens imposed by law, such as carriers', warehousemen's and
                  mechanics' liens and other similar liens arising in the
                  ordinary course of business which secure payment of
                  obligations not more than 60 days past due or which are being
                  contested in good faith by appropriate proceedings and for
                  which adequate reserves in accordance with Agreement
                  Accounting Principles or SAP, as applicable, shall have been
                  set aside on its books.

         (iii)    Liens arising out of pledges or deposits under worker's
                  compensation laws, unemployment insurance, old age pensions,
                  or other social security or retirement benefits, or similar
                  legislation.

         (iv)     Utility easements, building restrictions and such other
                  encumbrances or charges against real property as are of a
                  nature generally existing with respect to properties of a
                  similar character and which do not in any material way affect
                  the marketability of the same or interfere with the use
                  thereof in the business of the Borrower or its Subsidiaries.

         (v)      Liens arising out of repurchase obligations and reverse
                  repurchase obligations in the ordinary course of business.

         (vi)     Liens existing on the date hereof and described in Schedule
                  6.16 (provided, that in no event shall such Liens secure more
                  than $200,000,000 of Indebtedness in respect of Letters of
                  Credit).

         6.17.    Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) those that exist on the

                                      - 31 -

<PAGE>

date hereof and (ii) in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary
than the Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.

         6.18.    Change in Structure; Fiscal Year. The Borrower will not, nor
will it permit any Subsidiary to, (i) permit any amendment or modification to be
made to its or any Subsidiary's Charter Documents which is materially adverse to
the interests of the Lenders (provided that the Borrower shall notify the Agent
of any other amendment or modification thereto as soon as practicable
thereafter) or (ii) change its or any Subsidiary's Fiscal Year to end on a date
other than December 31 of each year.

         6.19.    Inconsistent Agreements. The Borrower will not, nor will it
permit any Subsidiary to, enter into any indenture, agreement, instrument or
other arrangement which, (i) directly or indirectly prohibits or restrains, or
has the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence of the Obligations or the amendment of the Loan
Documents, or (ii) contains any provision which would be violated or breached by
the making of Advances or by the performance by the Borrower of any of its
obligations under any Loan Document.

         6.20.    Financial Covenants.

                  6.20.1.  Leverage Ratio. The Borrower will not permit the
Leverage Ratio to exceed 0.25 to 1.0 at any time.

                  6.20.2.  Minimum Consolidated Borrower Net Worth. The Borrower
will at all times maintain Consolidated Borrower Net Worth of not less than the
sum of (i) $900,000,000 plus (ii) 50% of the positive Consolidated Borrower Net
Income, if any, earned in each Fiscal Quarter beginning with the Fiscal Quarter
ended June 30, 2003, plus (iii) 75% of the Net Proceeds of any equity issuance
(including any capital contribution to surplus of the Borrower in respect of
which no additional shares are issued) by the Borrower after the date hereof.

                  6.20.3.  Minimum Consolidated Parent Net Worth. The Borrower
will not permit Consolidated Parent Net Worth at any time to be less than the
sum of (i) $900,000,000 plus (ii) 50% of the positive Consolidated Parent Net
Income, if any, earned in each Fiscal Quarter beginning with the Fiscal Quarter
ended June 30, 2003, plus (iii) 75% of the Net Proceeds of any equity issuance
(including any capital contributions to the Parent in respect of which no
additional shares are issued) by the Parent after the date hereof.

                  6.20.4   Minimum Unencumbered Assets. The Borrower will at all
times maintain at least $400,000,000 of assets which are free of Liens.

         6.21.    Reinsurance. The Borrower will not, nor will it permit any
Subsidiary to, enter into any other (or renew, extend or materially modify any
existing) retrocession arrangements for the benefit of the Borrower except in
the ordinary course of business with reinsurers having financial strength
ratings at least comparable to the credit standing of the Borrower.

                                      - 32 -

<PAGE>

         6.22.    ERISA. The Borrower will not, nor will it permit any
Subsidiary to, maintain, or incur or suffer to exist any liability (direct or
contingent) to or in respect of, any employee pension plan which is covered by
ERISA.

                                   ARTICLE VII

                                    DEFAULTS

         The occurrence of any one or more of the following events shall
constitute a Default:

         7.1.     Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.

         7.2.     Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any Facility Fee or other obligations under any of
the Loan Documents within five days after the same becomes due.

         7.3.     The breach by the Borrower of any of the terms or provisions
of Section 6.2, 6.3(i), or 6.10 through 6.22.

         7.4.     The breach by the Borrower (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement or any Loan Document which is not remedied
within thirty days after written notice from the Agent or any Lender.

         7.5.     Failure of the Borrower or any of its Subsidiaries or the
Parent to pay when due any Indebtedness aggregating in excess of $5,000,000; or
the default by the Borrower or any of its Subsidiaries or the Parent in the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed, or any other event shall
occur or condition exist, the effect of which default or event is to cause, or
to permit the holder or holders of such Indebtedness to cause, such Indebtedness
to become due prior to its stated maturity; or any Indebtedness of the Borrower
or any of its Subsidiaries or the Parent shall be declared to be due and payable
or required to be prepaid or repurchased (other than by a regularly scheduled
payment) prior to the stated maturity thereof; or the Borrower or any of its
Subsidiaries or the Parent shall not pay, or shall admit in writing its
inability to pay, its debts generally as they become due.

         7.6.     The Borrower or any of its Subsidiaries or the Parent shall
(i) have an order for relief entered with respect to it under any existing or
future law of Bermuda or any other jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors, (ii) make an assignment for the
benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any Substantial Portion of its Property, (iv) institute any
proceeding seeking an order for relief under any existing or future law of
Bermuda or any other jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or

                                      - 33 -

<PAGE>

composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.

         7.7.     Without the application, approval or consent of the Borrower
or any of its Subsidiaries or the Parent, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or any of its
Subsidiaries or the Parent or any Substantial Portion of their respective
Properties, or a proceeding described in Section 7.6(iv) shall be instituted
against the Borrower or any of its Subsidiaries or the Parent and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 60 consecutive days.

         7.8.     Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Borrower or any of its Subsidiaries which, when
taken together with all other Property of the Borrower and its Subsidiaries so
condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such action occurs,
constitutes a Substantial Portion.

         7.9.     The Borrower or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $5,000,000, which is not stayed on appeal or otherwise
being appropriately contested in good faith.

         7.10.    Any Change in Control shall occur.

         7.11.    Any License of the Borrower or any Insurance Subsidiary (i)
shall be revoked by the Governmental Authority which issued such License, or any
action (administrative or judicial) to revoke such License shall have been
commenced against the Borrower or such Insurance Subsidiary and shall not have
been dismissed within 30 days after the commencement thereof, (ii) shall be
suspended by such Governmental Authority for a period in excess of 30 days, or
(iii) shall not be reissued or renewed by such Governmental Authority upon the
expiration thereof following timely application for such reissuance or renewal
by the Borrower or such Insurance Subsidiary.

         7.12.    The Borrower or any Insurance Subsidiary shall be the subject
of a final non-appealable order imposing a fine in an amount in excess of
$1,000,000 in any single instance or other such orders imposing fines in excess
of $5,000,000 in the aggregate after the date of this Agreement by or at the
request of any insurance regulatory agency as a result of the violation by the
Borrower or such Insurance Subsidiary of any applicable insurance laws or the
regulations promulgated in connection therewith.

         7.13.    The Borrower or any Insurance Subsidiary shall become subject
to (a) any conservation or liquidation order issued by any Governmental
Authority having jurisdiction over insurance companies or (b) any other
directive or mandate issued by any Governmental

                                      - 34 -

<PAGE>

Authority having jurisdiction over insurance companies which could reasonably be
expected to have a Material Adverse Effect, which in either case is not stayed
within ten (10) days.

         7.14     The aggregate principal amount of Indebtedness of the Parent
shall exceed $25,000,000.

         7.15     American International Group, Inc. shall cease to own
beneficially and of record, free and clear of all liens, other encumbrances
(other than any encumbrances existing on the date of this Agreement) at least
20% of the outstanding common shares of the Parent on a fully diluted basis or
shall cease to maintain a voting interest in the Parent of at least 9%.

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

         8.1.     Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender and without presentment, demand, protest or notice of
any kind, all of which the Borrower hereby expressly waives. If any other
Default occurs, the Required Lenders (or the Agent with the consent of the
Required Lenders) may terminate or suspend the obligations of the Lenders to
make Loans hereunder, or declare the Obligations to be due and payable, or both,
whereupon such obligations to make Loans shall immediately be terminated or
suspended, as the case may be, and/or the Obligations shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower hereby expressly waives.

         If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.

         8.2.     Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:

         (i)      Extend the final maturity of any Loan or forgive all or any
                  portion of the principal amount thereof, or reduce the rate or
                  extend the time of payment of interest or fees thereon.

         (ii)     Reduce the percentage specified in the definition of Required
                  Lenders.

                                      - 35 -

<PAGE>

         (iii)    Extend the Facility Termination Date, increase the amount of
                  the Commitment of any Lender hereunder, or permit the Borrower
                  to assign its rights under this Agreement.

         (iv)     Amend this Section 8.2.

No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement.

         8.3.     Preservation of Rights. No delay or omission of the Lenders or
the Agent to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or an acquiescence therein, and
the making of a Loan notwithstanding the existence of a Default or the inability
of the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.

                                   ARTICLE IX

                               GENERAL PROVISIONS

         9.1.     Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the making
of the Loans herein contemplated.

         9.2.     Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

         9.3.     Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.

         9.4.     Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the Agent
and the Lenders relating to the subject matter thereof other than the fee letter
described in Section 10.13.

         9.5.     Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or

                                      - 36 -

<PAGE>

benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns, provided, however, that the parties hereto
expressly agree that the Arranger shall enjoy the benefits of the provisions of
Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.

         9.6.     Expenses; Indemnification. (i) The Borrower shall reimburse
the Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent, which attorneys may be employees of the Agent) paid or incurred
by the Agent or the Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, distribution (including, without limitation,
via Intralinks or a similar internet product which is available commercially),
review, amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent, the Arranger and the Lenders for
any costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Agent, the Arranger and the Lenders,
which attorneys may be employees of the Agent, the Arranger or the Lenders) paid
or incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents.

         (ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger and each Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Agent, the Arranger or any Lender is a party
thereto) which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated hereby or the
direct or indirect application or proposed application of the proceeds of any
Loan hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.

         9.7.     Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.

         9.8.     Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.

         9.9.     Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.

         9.10.    Nonliability of Lenders. The relationship between the Borrower
on the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender.

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<PAGE>

Neither the Agent, the Arranger nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Agent, the Arranger nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent, the Arranger nor any
Lender shall have liability to the Borrower (whether sounding in tort, contract
or otherwise) for losses suffered by the Borrower in connection with, arising
out of, or in any way related to, the transactions contemplated and the
relationship established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger nor any Lender shall have
any liability with respect to, and the Borrower hereby waives, releases and
agrees not to sue for, any special, indirect or consequential damages suffered
by the Borrower in connection with, arising out of, or in any way related to the
Loan Documents or the transactions contemplated thereby.

         9.11.    Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's contractual
counterparties in swap agreements or to legal counsel, accountants and other
professional advisors to such counterparties, (vii) permitted by Section 12.4
and (viii) to rating agencies if requested or required by such agencies in
connection with a rating relating to the Advances hereunder. Notwithstanding
anything herein to the contrary, confidential information shall not include, and
each Lender (and each employee, representative or other agent of any Lender) may
disclose to any and all Persons, without limitation of any kind, the U.S. "tax
treatment" and U.S. "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to such Lender relating to such tax treatment or tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning such tax treatment or tax structure
of the transactions contemplated hereby as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to such tax treatment or tax structure.

         9.12.    Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the Loans
provided for herein.

         9.13.    Disclosure. Each Lender hereby (i) acknowledges and agrees
that Bank One and/or its Affiliates from time to time may hold other investments
in, make other loans to or have other relationships with the Borrower, and (ii)
waives any liability of Bank One or such Affiliate to the Borrower or any
Lender, respectively, arising out of or resulting from such investments, loans
or relationships other than liabilities arising out of the gross negligence or
willful misconduct of Bank One or its Affiliates.

                                      - 38 -

<PAGE>

                                    ARTICLE X

                                    THE AGENT

         10.1.    Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Illinois Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.

         10.2.    Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.

         10.3.    General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.

         10.4.    No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made by any other Person in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness (other than its own due execution),
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower or

                                      - 39 -

<PAGE>

any guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the Borrower to
the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual capacity).

         10.5.    Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.

         10.6.    Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.

         10.7.    Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.

         10.8.    Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the

                                      - 40 -

<PAGE>

Lenders), or the enforcement of any of the terms of the Loan Documents or of any
such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Agent. The obligations of the Lenders
under this Section 10.8 shall survive payment of the Obligations and termination
of this Agreement.

         10.9.    Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.

         10.10.   Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.

         10.11.   Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger 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 decisions in taking or not taking action under this
Agreement and the other Loan Documents.

         10.12.   Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent

                                      - 41 -

<PAGE>

hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor Agent shall be
a commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.

         10.13.   Agent's and Arranger's Fees. The Borrower agrees to pay to the
Agent and the Arranger, for their own respective accounts, the fees agreed to
among the Borrower, the Agent and the Arranger, pursuant to that certain letter
agreement dated May 15, 2003, or as otherwise agreed from time to time.

         10.14.   Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.

         10.15.   Co-Agents, Documentation Agent, Syndication Agent, Managing
Agent, etc. Neither any of the Lenders identified in this Agreement as a
"co-agent" nor the Documentation Agent, the Syndication Agent or the Managing
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 such Lenders shall have or be deemed to have a
fiduciary relationship with any Lender. Each Lender hereby makes the same
acknowledgments with respect to such Lenders as it makes with respect to the
Agent in Section 10.11.

                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS

         11.1.    Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.

                                      - 42 -

<PAGE>

         11.2.    Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments received
pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Loans. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         12.1.    Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with
Section 12.3, and (iii) any transfer by Participation must be made in compliance
with Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3.2. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit (x) any pledge or assignment by any Lender of all or any portion of its
rights under this Agreement and any Note to a Federal Reserve Bank or (y) in the
case of a Lender which is a Fund, any pledge or assignment of all or any portion
of its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Agent may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Loan.

         12.2.    Participations.

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<PAGE>

                           12.2.1   Permitted Participants; Effect. Any Lender
                  may at any time sell to one or more banks or other entities
                  ("Participants") participating interests in any Loan owing to
                  such Lender, any Note held by such Lender, any Commitment of
                  such Lender or any other interest of such Lender under the
                  Loan Documents. In the event of any such sale by a Lender of
                  participating interests to a Participant, such Lender's
                  obligations under the Loan Documents shall remain unchanged,
                  such Lender shall remain solely responsible to the other
                  parties hereto for the performance of such obligations, such
                  Lender shall remain the owner of its Loans and the holder of
                  any Note issued to it in evidence thereof for all purposes
                  under the Loan Documents, all amounts payable by the Borrower
                  under this Agreement shall be determined as if such Lender had
                  not sold such participating interests, and the Borrower and
                  the Agent shall continue to deal solely and directly with such
                  Lender in connection with such Lender's rights and obligations
                  under the Loan Documents.

                           12.2.2.  Voting Rights. Each Lender shall retain the
                  sole right to approve, without the consent of any Participant,
                  any amendment, modification or waiver of any provision of the
                  Loan Documents other than any amendment, modification or
                  waiver with respect to any Loan or Commitment in which such
                  Participant has an interest which would require consent of all
                  of the Lenders pursuant to the terms of Section 8.2 or of any
                  other Loan Document.

                           12.2.3.  Benefit of Certain Provisions. The Borrower
                  agrees that each Participant shall be deemed to have the right
                  of setoff provided in Section 11.1 in respect of its
                  participating interest in amounts owing under the Loan
                  Documents to the same extent as if the amount of its
                  participating interest were owing directly to it as a Lender
                  under the Loan Documents, provided that each Lender shall
                  retain the right of setoff provided in Section 11.1 with
                  respect to the amount of participating interests sold to each
                  Participant. The Lenders agree to share with each Participant,
                  and each Participant, by exercising the right of setoff
                  provided in Section 11.1, agrees to share with each Lender,
                  any amount received pursuant to the exercise of its right of
                  setoff, such amounts to be shared in accordance with Section
                  11.2 as if each Participant were a Lender. The Borrower
                  further agrees that each Participant shall be entitled to the
                  benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent
                  as if it were a Lender and had acquired its interest by
                  assignment pursuant to Section 12.3, provided that (i) a
                  Participant shall not be entitled to receive any greater
                  payment under Section 3.1, 3.2, 3.4 or 3.5 than the Lender who
                  sold the participating interest to such Participant would have
                  received had it retained such interest for its own account,
                  unless the sale of such interest to such Participant is made
                  with the prior written consent of the Borrower, and (ii) such
                  Participant agrees to comply with the provisions of Section
                  3.5 to the same extent as if it were a Lender.

         12.3.    Assignments.

                           12.3.1.  Permitted Assignments. Any Lender may at any
                  time assign to one or more banks or other entities
                  ("Purchasers") all or any part of its rights and

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<PAGE>

                  obligations under the Loan Documents. Such assignment shall be
                  substantially in the form of Exhibit C or in such other form
                  as may be agreed to by the parties thereto. Each such
                  assignment with respect to a Purchaser which is not a Lender
                  or an Affiliate of a Lender or an Approved Fund shall either
                  be in an amount equal to the entire applicable Commitment and
                  Loans of the assigning Lender or (unless each of the Borrower
                  and the Agent otherwise consents) be in an aggregate amount
                  not less than $5,000,000. The amount of the assignment shall
                  be based on the Commitment or outstanding Loans (if the
                  Commitment has been terminated) subject to the assignment,
                  determined as of the date of such assignment or as of the
                  "Trade Date," if the "Trade Date" is specified in the
                  assignment.

                           12.3.2.  Consents. The written consent of the
                  Borrower shall be required prior to an assignment by any
                  Lender permitted by this Agreement becoming effective unless
                  the Purchaser is a Lender, an Affiliate of a Lender or an
                  Approved Fund, provided that the consent of the Borrower shall
                  not be required if a Default has occurred and is continuing.
                  The consent of the Agent shall be required prior to an
                  assignment becoming effective unless the Purchaser is a
                  Lender, an Affiliate of a Lender or an Approved Fund. Any
                  consent required under this Section 12.3.2 shall not be
                  unreasonably withheld or delayed.

                           12.3.3.  Effect; Effective Date. Upon (i) delivery to
                  the Agent of an assignment, together with any consents
                  required by Sections 12.3.1 and 12.3.2, and (ii) payment of a
                  $3,500 fee to the Agent for processing such assignment, such
                  assignment shall become effective on the effective date
                  specified in such assignment. The assignment shall contain a
                  representation by the Purchaser to the effect that none of the
                  consideration used to make the purchase of the Commitment and
                  Loans under the applicable assignment agreement constitutes
                  "plan assets" as defined under ERISA and that the rights and
                  interests of the Purchaser in and under the Loan Documents
                  will not be "plan assets" under ERISA. On and after the
                  effective date of such assignment, such Purchaser shall for
                  all purposes be a Lender party to this Agreement and any other
                  Loan Document executed by or on behalf of the Lenders and
                  shall have all the rights and obligations of a Lender under
                  the Loan Documents, to the same extent as if it were an
                  original party thereto, and the transferor Lender shall be
                  released with respect to the Commitment and Loans assigned to
                  such Purchaser without any further consent or action by the
                  Borrower, the Lenders or the Agent. In the case of an
                  assignment covering all of the assigning Lender's rights and
                  obligations under this Agreement, such Lender shall cease to
                  be a Lender hereunder but shall continue to be entitled to the
                  benefits of, and subject to, those provisions of this
                  Agreement and the other Loan Documents which survive payment
                  of the Obligations and termination of the applicable
                  agreement. Any assignment or transfer by a Lender of rights or
                  obligations under this Agreement that does not comply with
                  this Section 12.3 shall be treated for purposes of this
                  Agreement as a sale by such Lender of a participation in such
                  rights and obligations in accordance with Section 12.2. Upon
                  the consummation of any assignment to a Purchaser pursuant to
                  this Section 12.3.3, the transferor Lender, the Agent and the
                  Borrower

                                      - 45 -

<PAGE>

                  shall, if the transferor Lender or the Purchaser desires that
                  its Loans be evidenced by Notes, make appropriate arrangements
                  so that new Notes or, as appropriate, replacement Notes are
                  issued to such transferor Lender and new Notes or, as
                  appropriate, replacement Notes, are issued to such Purchaser,
                  in each case in principal amounts reflecting their respective
                  Commitments, as adjusted pursuant to such assignment.

                           12.3.4.  Register. The Agent, acting solely for this
                  purpose as an agent of the Borrower, shall maintain at one of
                  its offices in Chicago, Illinois a copy of each Assignment and
                  Assumption delivered to it and a register for the recordation
                  of the names and addresses of the Lenders, and the Commitments
                  of, and principal amounts of the Loans owing to, each Lender
                  pursuant to the terms hereof from time to time (the
                  "Register"). The entries in the Register shall be conclusive,
                  and the Borrower, the Agent and the Lenders may treat each
                  Person whose name is recorded in the Register pursuant to the
                  terms hereof as a Lender hereunder for all purposes of this
                  Agreement, notwithstanding notice to the contrary. The
                  Register shall be available for inspection by the Borrower and
                  any Lender, at any reasonable time and from time to time upon
                  reasonable prior notice.

         12.4.    Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any audit reports; provided that
each Transferee and prospective Transferee agrees to be bound by Section 9.11 of
this Agreement.

         12.5.    Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5.

                                  ARTICLE XIII

                                     NOTICES

         13.1.    Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth in its administrative questionnaire or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with

                                      - 46 -

<PAGE>

first class postage prepaid, addressed as aforesaid, or (iii) if given by any
other means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section; provided that notices to the
Agent under Article II shall not be effective until received.

         13.2.    Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.

                                   ARTICLE XIV

                                  COUNTERPARTS

         This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.

                                   ARTICLE XV

          CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

         15.1.    CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1
ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.

         15.2.    CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

                                      - 47 -

<PAGE>

         15.3.    WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.

         15.4.    Judgment Currency. If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due from the Borrower hereunder in
the currency expressed to be payable herein (the "specified currency") into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main Chicago office on the
Business Day preceding that on which final, non-appealable judgment is given.
The obligations of the Borrower in respect of any sum due to any Lender or the
Agent hereunder shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the Business Day
following receipt by such Lender or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Lender or the Agent (as the
case may be) may in accordance with normal, reasonable banking procedures
purchase the specified currency with such other currency. If the amount of the
specified currency so purchased is less than the sum originally due to such
Lender or the Agent, as the case may be, in the specified currency, the Borrower
agrees, to the fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to indemnify such Lender or
the Agent, as the case may be, against such loss, and if the amount of the
specified currency so purchased exceeds (a) the sum originally due to any Lender
or the Agent, as the case may be, in the specified currency and (b) any amounts
shared with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 11.2, such Lender or the
Agent, as the case may be, agrees to remit such excess to the Borrower.

                            [signature pages follow]

                                      - 48 -

<PAGE>

         IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.

                                      IPCRe LIMITED

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                      Address:   American International Building
                                                 29 Richmond Road
                                                 Pembroke, HMO8
                                                 Bermuda
                                                 Attn: John R. Weale

                                      Telephone: (441) 298-5100
                                      Facsimile: (441) 292-8085

                                      BANK ONE, NA, Individually and as Agent

                                      By: ______________________________________
                                      Name:  Thomas W. Doddridge
                                      Title: Director

                                      Address:   Mail Code IL1-0085
                                                 1 Bank One Plaza
                                                 Chicago, Illinois 60670

                                      Telephone: (312) 732-3881
                                      Facsimile: (312) 732-4033

                                      CITIBANK, NA, individually and as
                                        Syndication Agent

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

<PAGE>

                                      BARCLAYS BANK plc, individually and as
                                        Documentation Agent

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                      WACHOVIA BANK, NATIONAL
                                      ASSOCIATION, individually and as
                                        Documentation Agent

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                      ING BANK N.V., London Branch, individually
                                        and as Managing Agent

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                      ABN AMRO BANK, N.V., individually and as
                                        Managing Agent

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                      THE BANK OF BERMUDA, individually

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                       - 2 -

<PAGE>

                                      MELLON BANK, N.A., individually

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                      ROYAL BANK OF CANADA, individually

                                      By: ______________________________________
                                      Name: ____________________________________
                                      Title: ___________________________________

                                   Schedule I

                                   COMMITMENTS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
           Lender                                                                 Commitment
----------------------------------------------------------------------------------------------
<S>                                                                               <C>
Bank One, NA                                                                      $28,000,000
----------------------------------------------------------------------------------------------
Citibank, NA                                                                      $28,000,000
----------------------------------------------------------------------------------------------
Barclays Bank plc                                                                 $28,000,000
----------------------------------------------------------------------------------------------
Wachovia Bank, National Association                                               $28,000,000
----------------------------------------------------------------------------------------------
ING Bank N.V., London Branch                                                      $23,000,000
----------------------------------------------------------------------------------------------
ABN AMRO Bank, N.V.                                                               $20,000,000
----------------------------------------------------------------------------------------------
The Bank of Bermuda                                                               $15,000,000
----------------------------------------------------------------------------------------------
Mellon Bank, N.A.                                                                 $15,000,000
----------------------------------------------------------------------------------------------
Royal Bank of Canada                                                              $15,000,000
----------------------------------------------------------------------------------------------
         TOTAL:                                                                   $200,000,000
----------------------------------------------------------------------------------------------
</TABLE>

                                       - 3 -

<PAGE>

                            PRICING SCHEDULE

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
  APPLICABLE           LEVEL I       LEVEL II        LEVEL III      LEVEL IV
    MARGIN              STATUS        STATUS          STATUS         STATUS
----------------------------------------------------------------------------
<S>                    <C>           <C>             <C>            <C>
Eurodollar Rate         0.35%         0.375%           0.45%         0.575%
----------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
 APPLICABLE                LEVEL I       LEVEL II        LEVEL III      LEVEL IV
  FEE RATE                 STATUS         STATUS          STATUS         STATUS
--------------------------------------------------------------------------------
<S>                        <C>           <C>             <C>            <C>
Facility Fee                 0.10%        0.125%           0.15%          0.175%
--------------------------------------------------------------------------------
</TABLE>

         For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:

         "Level I Status" exists at any date if, on such date, the Borrower's
S&P Rating is AA- or better.

         "Level II Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower's S&P Rating is A+ or
better.

         "Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Borrower's S&P Rating is A or better.

         "Level IV Status" exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status or Level III Status.

         "S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the financial strength and counterparty credit of the
Borrower.

         "Status" means either Level I Status, Level II Status, Level III Status
or Level IV Status.

         The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as determined
from its then-current S&P Ratings. The credit rating in effect on any date for
the purposes of this Schedule is that in effect at the close of business on such
date. If at any time the Borrower has no S&P Rating, Level IV Status shall
exist. The Applicable Margin and the Applicable Fee Rate shall be adjusted upon
any change in the Borrower's S&P Rating.<PAGE>

                                                                  EXHIBIT 10(a)

                      FIRST AMENDMENT TO CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is made and
entered into as of July 25, 2003 by and among TITAN DISTRIBUTION, INC., TITAN
INTERNATIONAL, INC., TITAN INVESTMENT CORPORATION, TITAN TIRE CORPORATION, TITAN
TIRE CORPORATION OF NATCHEZ, TITAN TIRE CORPORATION OF TEXAS, TITAN WHEEL
CORPORATION OF ILLINOIS, TITAN WHEEL CORPORATION OF IOWA, TITAN WHEEL
CORPORATION OF SOUTH CAROLINA, and TITAN WHEEL CORPORATION OF VIRGINIA, (the
"Borrowers") and the Requisite Lenders.

                                    RECITALS

         A.       Borrowers, Credit Parties, General Electric Capital
Corporation, as Agent and Lender and the other Lenders are parties to that
certain Credit Agreement, dated as of December 21, 2001 (as amended from time to
time, the "Credit Agreement"). All capitalized terms used herein and not
otherwise defined shall have the meaning assigned to them in the Credit
Agreement.

         B.       Investment has entered into an agreement to sell the Polymer
Stock for $4,636,000 and the execution and delivery by Borrowers (or certain of
them) and Polymer Enterprises, Inc. ("Polymer") of a supply agreement in which
Polymer agrees to supply bladders to the Borrowers at a discount (such
transactions are sometimes herein referred to as the "Polymer Stock Sale", and
such agreement to supply bladders is sometimes herein referred to as the
"Polymer Supply Agreement").

         C.       Borrowers request that the Lenders amend the Credit Agreement
 as specifically set forth herein.

         D.       Lenders executing this Amendment constitute Requisite Lenders.

                                    AGREEMENT

         In consideration of the Recitals and of the mutual promises and
covenants contained herein, Lenders and Borrowers agree as follows:

         1.       Consent and Acknowledgment.

                  (a)     Polymer Stock. Requisite Lenders consent and
     acknowledge that the Polymer Stock Sale is permitted under Section 6.8(c)
     of the Credit Agreement, and direct Agent, in connection with the Polymer
     Stock Sale, to release all Liens held by Agent which have attached or
     otherwise encumber the Polymer Stock.

                  (b)     Consent to Revolving Credit Facility Amendment.
     Requisite Lenders hereby authorize the Agent to consent to the Revolving
     Credit Facility Amendment.

         2.       Amendment of Credit Agreement.  Subject to the satisfaction
     of the conditions precedent set forth in Section 3 below, the Credit
     Agreement is hereby amended as follows:

<PAGE>

                  (a)     Term Loan Payments.  Section 1.1(b)(ii) of the Credit
Agreement is deleted and replaced with the following:

                         "(ii) Borrowers shall pay the principal amount of the
                  Term Notes in thirteen (13) consecutive installments as
                  follows:
<TABLE>
<CAPTION>
                          Payment Date                         Installment Amount
                          ------------                         ------------------
<S>              <C>                                         <C>
                   April 1, 2002                                     $ 825,000*

                   July 1, 2002                                      $ 825,000*

                   October 1, 2002                                   $ 825,000*

                   January 1, 2003                                   $ 825,000*

                   April 1, 2003                                     $1,650,000*

                   July 1, 2003                                      $1,650,000*

                   October 1, 2003                                   $1,650,000

                   January 1, 2004                                   $1,650,000

                   April 1, 2004                                     $2,475,000

                   July 1, 2004                                      $2,475,000

                   October 1, 2004                                   $2,475,000

                   January 1, 2005                                   $2,475,000

                   January 14, 2005                                  $79,200,000
</TABLE>

     * The Requisite Lenders acknowledge that these principal payments have been
     paid."

                  (b)     Mandatory Prepayments-- Asset Disposition.  Section
     1.3(b)(ii) of the Credit Agreement is deleted and replaced with the
     following:

                          "(ii) Except as set forth in clauses (b)(v) and (vi)
                  below, immediately upon receipt by any Credit Party of
                  proceeds of any asset disposition (including condemnation
                  proceeds, but excluding proceeds of asset dispositions
                  permitted by Section 6.8(a) and (b)) or any sale of Stock of
                  any Subsidiary of any Credit Party, Borrowers shall prepay the
                  Loans in an amount equal to all such proceeds, net of (A)
                  commissions and other

                                       2

<PAGE>

                  reasonable and customary transaction costs, fees and
                  expenses properly attributable to such transaction and payable
                  by Borrowers in connection therewith (in each case, paid to
                  non-Affiliates), (B) transfer taxes, (C) amounts payable to
                  holders of senior Liens (to the extent such Liens constitute
                  Permitted Encumbrances hereunder), if any, and (D) an
                  appropriate reserve for income taxes in accordance with GAAP
                  in connection therewith (the "Net Proceeds). The Credit
                  Parties are not required to make any mandatory prepayment of
                  the Loans with respect to an asset disposition authorized by
                  Section 6.8(a). Any such prepayment shall be applied in
                  accordance with clause (c) below."

                  (c)     Mandatory Prepayments -- Polymer Stock Sale. The
     Credit Agreement is amended by adding a new Section 1.3(b)(vi) as follow:

                          "(vi) If the Polymer Stock Sale closes on or prior to
                  October 1, 2003, Borrowers shall prepay the Term Loan on the
                  date of such closing in a principal amount equal to $5,775,000
                  (which is equal to the principal installments due on the Term
                  Loan, pursuant to Section 1.1(b)(ii) above, on October 1,
                  2003, January 1, 2004 and April 1, 2004). Any such prepayment
                  shall be applied in accordance with clause (c) below."

                  (d)     Mandatory Prepayments. Section 1.3(c) of the Credit
     Agreement is deleted and replaced with the following:

                          "(c)     Application of Certain Mandatory
                  Prepayments. Any prepayments made by any Credit Party pursuant
                  to clauses (b)(ii), (b)(iii), (b)(iv) or (b)(v) above shall be
                  applied as follows: first, to Prepayment Fees, other Fees and
                  reimbursable expenses of Agent then due and payable pursuant
                  to any of the Loan Documents; second, to interest then due and
                  payable on the Term Loan; and last, to prepay the scheduled
                  installments of the Term Loan in inverse order of maturity
                  until such Loan shall have been prepaid in full.
                  Notwithstanding anything herein to the contrary, any
                  prepayment made by any Credit Party pursuant to clause (b)(vi)
                  above shall be applied to fully pay the quarterly principal
                  installments due October 1, 2003, January 1, 2004 and April 1,
                  2004 as set forth in Section 1.1(b)(ii) above."

                  (e)     Limitations on the Revolving Credit Facility. Section
     5.11 of the Credit Agreement is amended by adding the following sentence
     to the end of such Section:

                          "Notwithstanding the foregoing, Borrowers are
                  authorized to execute and deliver the Revolving Credit
                  Facility Amendment."

                  (f)     Indebtedness -- Prepayment/Redemption. Section 6.3(b)
     of the Credit Agreement is deleted and replaced with the following:

                                       3

<PAGE>

                          "(b) No Credit Party shall, directly or indirectly,
                  voluntarily purchase, redeem, defease or prepay any principal
                  of, premium, if any, interest or other amount payable in
                  respect of any Indebtedness, other than (i) the Obligations,
                  (ii) Indebtedness secured by a Permitted Encumbrance if the
                  asset securing such Indebtedness has been sold or otherwise
                  disposed of in accordance with Sections 6.8(b) or (c), (iii)
                  Permitted Subordinated Bond Payments provided that no Default
                  or Event of Default shall have occurred and be continuing or
                  would result after giving effect to any such Permitted
                  Subordinated Bond Payment, and (iv) other Indebtedness
                  (excluding Subordinated Debt) not in excess of $500,000."

                  (g)     Restricted Payments. Section 6.14 of the Credit
     Agreement is deleted and replaced with the following:

                          "6.14 Restricted Payments. No Credit Party shall make
                  any Restricted Payment, except (a) intercompany loans and
                  advances between Borrowers to the extent permitted by Section
                  6.3 above, (b) dividends and distributions by Subsidiaries of
                  any Borrower paid to such Borrower, (c) employee loans
                  permitted under Section 6.4(b) above, (d) scheduled payments
                  of interest with respect to the Subordinated Debt; (e) payment
                  of directors' fees and reimbursable expenses of directors
                  consistent with past practices; (f) payment of a cash dividend
                  in any calendar quarter of not more than $500,000 in the
                  aggregate with respect to International's common stock; (g)
                  Permitted Company Redemption on or after January 1, 2001, and
                  (h) Permitted Subordinated Bond Payments; provided that no
                  Default or Event of Default shall have occurred and be
                  continuing or would result after giving effect to any payment
                  pursuant to clause (d), (f), (g) or (h) above."

                  (h)     Definitions - Changes. The definitions of
     "Commitment Termination Date" and "Tangible Net Worth" in Annex A of the
     Credit Agreement are deleted and replaced with the following:

                          "Commitment Termination Date" shall mean the earliest
                  of (a) January 14, 2005, (b) the date of termination of
                  Lenders' obligations to permit existing Loans to remain
                  outstanding pursuant to Section 8.2(b), and (c) the date of
                  indefeasible prepayment in full by Borrowers of the Loans.

                          "Adjusted Tangible Net Worth" shall mean with respect
                  to any Person at any date, the Net Worth of such Person at
                  such date, (a) excluding, however, from the determination of
                  the total assets at such date, (i) all capitalized
                  organizational expenses, capitalized research and development
                  expenses, trademarks, trade names, copyrights, patents, patent
                  applications, licenses and rights in any thereof, and other
                  intangible items (with the exception that goodwill shall not
                  be excluded), (ii) all unamortized debt discount and expense,
                  and (iii) any write-up in the book

                                       4

<PAGE>

                  value of any asset resulting from a revaluation
                  thereof, (b) if such Person is International, adding back to
                  total assets at such date, an amount equal to the write-off
                  taken by International in the third quarter of 2002 to the
                  value of International's investment in Fabrica Uruguaya de
                  Neumaticos S.A., (c) excluding, however, from the
                  determination of total liabilities at such date that portion
                  of pension liabilities which such Person is required to
                  recognize as result of GAAP, (d) adding back to total assets
                  at such date an amount not to exceed $50,000,000 equal to the
                  sum of (i) the aggregate cumulative net loss incurred since
                  the Closing Date of TTC of Natchez, TTC of Texas and
                  Distribution, and (ii) the loss recognized in connection with
                  the Polymer Stock Sale, and (e) any cumulative translation
                  adjustment required by GAAP as a result of currency
                  fluctuations shall not be included in the calculation of
                  Adjusted Tangible Net Worth.

                  (i)     Definitions - New.  Annex A of the Credit Agreement
     is amended by adding to such Annex in alphabetical order the following
     terms:

                          "Amendment" shall mean that certain First Amendment
                  to Credit Agreement, dated as of July 25, 2003 by and between
                  Borrowers and Requisite Lenders.

                          "Intercreditor Agreement" shall mean that certain
                  Intercreditor Agreement, dated as of December 21, 2001 by and
                  between Agent and LaSalle Bank National Association as the
                  lender under the Revolving Credit Facility, as the same is
                  amended, modified, restated or renewed from time to time.

                          "Permitted Subordinated Bond Payments" shall mean
                  payments or redemptions by International of the Subordinated
                  Bonds which (i) do not exceed $1,500,000 in the aggregate,
                  (ii) are made on or prior to December 31, 2003, and (iii)
                  retire (or redeem) such Subordinated Bonds at a discount of no
                  less than 45%. Permitted Subordinated Bond Payments may be
                  made with proceeds from the Revolving Credit Facility."

                          "Polymer Stock Sale" shall have the meaning set forth
                  in the recitals to the Amendment.

                          "Polymer Supply Agreement" shall have the meaning set
                  forth in the recitals to the Amendment.

                          "Revolving Credit Facility Amendment" shall mean that
                  certain amendment to the loan agreement which evidences the
                  Revolving Credit Facility, dated as of July 25, 2003 and which
                  is substantially in the form attached to the Amendment as
                  Exhibit A.

                  (j)     Financial Covenants. Clause (a) of Annex G of the
     Credit Agreement is deleted and  replaced with the following:

                                       5

<PAGE>

                          "(a)  Minimum Adjusted Tangible Net Worth.  Borrowers
                  and their Subsidiaries on a consolidated basis shall maintain
                  at all times Adjusted Tangible Net Worth equal to or greater
                  than $150,000,000.00."

         3.       Conditions Precedent to Effectiveness of Amendment. Sections
1 and 2 of this Amendment shall not be effective unless and until each of the
following conditions shall have been satisfied in Agent's discretion (unless
Agent has received written notice of a determination by Requisite Lenders of
satisfaction or non-satisfaction of such conditions, in which case such
determination shall control):

                  (a)     Execution of Amendment.  Borrowers and the Requisite
     Lenders shall each have executed and delivered this Amendment.

                  (b)     Acknowledgment of Guarantors.  The Acknowledgment
     and Agreement of each of the Guarantors set forth at the end of this
     Amendment, shall be duly executed by each Guarantor.

                  (c)     Amendment of Revolving Credit Facility. Borrowers
     shall have delivered to Agent and each of the Lenders a fully executed copy
     of the Revolving Credit Facility Amendment, and all of the conditions
     precedent set forth therein shall have been satisfied.

                  (d)     Fee. Borrowers shall have paid to Agent an
     amendment fee in the amount of $200,000 payable to those Lenders signatory
     to this Amendment in an amount, with respect to each such Lender, equal to
     such Lender's Pro Rata Share, which fee shall be fully earned and payable
     in cash on the date hereof. Any portion of the fee which is not distributed
     to the Lenders pursuant to the Section 3(d) shall be returned to the
     Borrower Representative.

                  (e)     Polymer Supply Agreement.  Borrowers shall have
     delivered to Agent and each of the Lenders a fully executed copy of the
     Polymer Supply Agreement.

                  (f)     Proceeds of the Polymer Stock Sale.  Borrowers shall
     have delivered to Agent the mandatory prepayment required by Section
     1.3(b)(ii) of the Credit Agreement as a result of the Polymer Stock Sale.

         4.       Representations and Warranties. Borrowers hereby, jointly and
severally, represent and warrant to Agent and the Lenders as follows:

                  (a)     Recitals.  The Recitals in this Amendment are true
     and correct in all respects.

                  (b)     Incorporation of Representations. All
     representations and warranties of the Borrowers in the Credit Agreement are
     incorporated herein in full by this reference and, except with respect to
     representations and warranties that were made as of and limited to a
     specific date, are true and correct as of the date hereof.

                  (c)      Corporate Power; Authorization.  Borrowers have the
     corporate or organizational power, and have been duly authorized by all
     requisite action (corporate or otherwise), to execute and deliver this
     Amendment and to perform their obligations hereunder

                                       6

<PAGE>

     and thereunder. This Amendment has been duly executed and delivered by
     each of the Borrowers.

                  (d)     Enforceability. This Amendment is the legal, valid
     and binding obligation of Borrowers, enforceable against each Borrower in
     accordance with its terms.

                  (e)     No Violation. The execution, delivery and
     performance of this Amendment by each of the Borrowers does not and will
     not (i) violate any law, rule, regulation or court order to which any
     Borrower is subject; (ii) conflict with or result in a breach of any
     Borrower's Articles of Incorporation, Bylaws, or other organizational
     documents or any agreement or instrument to which any Borrower is party or
     by which it or its properties are bound, or (iii) result in the creation or
     imposition of any lien, security interest or encumbrance on any property of
     any Borrower, whether now owned or hereafter acquired, other than liens in
     favor of Agent.

                  (f)     Obligations Absolute. The obligation of Borrowers
     to repay the Loans, together with all interest accrued thereon, is absolute
     and unconditional, and there exists no right of set off or recoupment,
     counterclaim or defense of any nature whatsoever to payment of the Loans.

                  (g)     Default.  No Default or Event of Default exists under
     the Credit Agreement or the Loan Documents other than the Existing
     Defaults.

         5.       Effect and Construction of Amendment. Except as expressly
provided herein, the Loan Documents shall remain in full force and effect in
accordance with their respective terms, and this Amendment shall not be
construed to:

                  (a)     impair the validity, perfection or priority of any
     lien or security interest securing the Notes;

                  (b)     waive or impair any rights, powers or remedies of
     Agent under the Loan Documents;

                  (c)     constitute an election of remedies to the exclusion
     of any other remedies;

                  (d)     constitute an agreement by Agent or require Agent to
     waive any Defaults or extend the term of the Credit Agreement or the time
     for payment of any of the Loans; or

                  (e)     evidence the obligations of any Lender to make any
     further Loans or other extensions of credit to Borrowers.

         6.       Release of Claims and Waiver. Borrowers, hereby release,
remise, acquit and forever discharge Agent, Lenders, and Agent's and Lenders'
employees, agents, representatives, consultants, attorneys, fiduciaries,
servants, officers, directors, partners, predecessors, successors and assigns,
subsidiary corporations, parent corporations, and related corporate divisions
(all of the foregoing hereinafter called the "Released Parties"), from any and
all actions and causes of action, judgments, executions, suits, debts, claims,
demands, liabilities, obligations, damages and expenses of any and every
character, known or unknown, direct and/or indirect, at law or in equity, of

                                       7

<PAGE>

whatsoever kind or nature, whether heretofore or hereafter arising, for or
because of any matter or things done, omitted or suffered to be done by any of
the Released Parties prior to and including the date of execution hereof, and in
any way directly or indirectly arising out of or in any way connected to this
Amendment, the Credit Agreement and the Loan Documents, including but not
limited to, claims relating to any settlement negotiations (all of the foregoing
hereinafter called the "Released Matters"). Borrowers acknowledge that the
agreements in this paragraph are intended to be in full satisfaction of all or
any alleged injuries or damages arising in connection with the Released Matters.
Each Borrower represents and warrants to Agent and the Lenders that it has not
purported to transfer, assign or otherwise convey any right, title or interest
of such Borrower in any Released Matter to any other Person and that the
foregoing constitutes a full and complete release of all Released Matters.

         7.       Costs and Expenses. The Borrowers hereby reaffirm their
agreement under the Credit Agreement to pay or reimburse Agent on demand for all
costs and expenses incurred by Agent in connection with the Credit Agreement,
the Collateral Documents and all other documents contemplated thereby, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrowers specifically
agree to pay all fees and disbursements of counsel to Agent for the services
performed by such counsel in connection with the preparation of this Amendment
and the documents and instruments incidental hereto.

         8.       Miscellaneous.

                  (a)     Further Assurances. Borrowers agree to execute such
     other and further documents and instruments as Agent may reasonably request
     to implement the provisions of this Amendment and to perfect and protect
     the liens and security interests created by the Credit Agreement.

                  (b)     Benefit of Agreement. This Amendment shall be
     binding upon and inure to the benefit of and be enforceable by the parties
     hereto, their respective successors and assigns. No other person or entity
     shall be entitled to claim any right or benefit hereunder, including,
     without limitation, the status of a third-party beneficiary of this
     Amendment.

                  (c)     Entire Agreement. Except as expressly set forth
     herein, there are no agreements or understandings, written or oral, between
     Borrowers, Lenders or Agent relating to this Amendment, the Credit
     Agreement or the other Loan Documents that are not fully and completely set
     forth herein or therein.

                  (d)     Severability. The provisions of this Amendment are
     intended to be severable. If any provisions of this Amendment shall be held
     invalid or unenforceable in whole or in part in any jurisdiction, such
     provision shall, as to such jurisdiction, be ineffective to the extent of
     such invalidity or enforceability without in any manner affecting the
     validity or enforceability of such provision in any other jurisdiction or
     the remaining provisions of this Amendment in any jurisdiction.

                                       8

<PAGE>

                  (e)     Governing Law. This Amendment shall be governed by
     and construed in accordance with the internal substantive laws of the
     State of Illinois, without regard to the choice of law principles of
     such state.

                  (f)     Counterparts; Facsimile Signatures. This Amendment
     may be executed in any number of counterparts and by different parties to
     this Amendment on separate counterparts, each of which, when so executed,
     shall be deemed an original, but all such counterparts shall constitute one
     and the same agreement. Any signature delivered by a party by facsimile
     transmission shall be deemed to be an original signature hereto.

                  (g)     Notices. Any notices with respect to this Amendment
     shall be given in the manner provided for in the Credit Agreement.

                  (h)     Survival. The provisions set forth in Section 6 above
     shall survive the Termination Date.

                  (i)     Amendment. No amendment, modification, rescission,
     waiver or release of any provision of this Amendment shall be effective
     unless the same shall be in writing and signed by the parties hereto.

                  (j)     References. All references in the Credit Agreement
     shall be deemed to refer to the Credit Agreement as amended hereby; and any
     and all references in the Security Documents to the Credit Agreement shall
     be deemed to refer to the Credit Agreement as amended hereby.

                  (k)     No Other Waiver. The execution of this Amendment
     and acceptance of any documents related hereto shall not be deemed to be a
     waiver of any Default or Event of Default under the Credit Agreement or
     breach, default or event of default under any Loan Document or other
     document held by Agent, whether or not known to Agent and whether or not
     existing on the date of this Amendment.

                                       9

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