Document:

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                                                                   Exhibit 10.62

                        CONTINUING AGREEMENT OF GUARANTY

     This Continuing Agreement of Guaranty (this "Guaranty"), dated as of this
30th day of May, 2002, is given by ACE LIMITED, a company limited by shares
organized under the laws of the Cayman Islands (the "Guarantor"), in favor of
ABN AMRO Bank N.V., as agent for the Banks (the "Agent"), in connection with
that Credit Agreement, dated as of the date hereof, by and among ACE GUARANTY RE
INC., a Maryland corporation (the "Borrower"), the Banks now or hereafter party
thereto (the "Banks"), the Agent, and Commerzbank AG, New York and Grand Cayman
Branches, Fleet National Bank and Westdeutsche Landesbank Girozentrale, New York
Branch, as Co-Documentation Agents (as amended, restated, modified, or
supplemented from time to time hereafter, the "Credit Agreement"). Capitalized
terms not otherwise defined herein shall have the respective meanings ascribed
to them by the Credit Agreement.

1. Guarantied Obligations. To induce the Agent and the Banks to make loans and
grant other financial accommodations to the Borrower under the Credit Agreement,
Guarantor hereby unconditionally and irrevocably guaranties to the Agent and
each Bank the full and punctual payment and performance when due (whether on
demand, at stated maturity, by acceleration, or otherwise and including any
amounts which would become due but for the operation of an automatic stay under
the federal bankruptcy code of the United States or any similar laws of any
country or jurisdiction) of all Obligations, including all Obligations,
liabilities, and indebtedness from time to time of the Borrower to the Agent or
any of the Banks under or in connection with the Credit Agreement or any other
Loan Document, whether for principal, interest, fees, indemnities, expenses, or
otherwise, and all refinancings or refundings thereof, whether such obligations,
liabilities, or indebtedness are direct or indirect, secured or unsecured, joint
or several, absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (and including obligations,
liabilities, and indebtedness arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, or similar proceeding with respect to
the Borrower or which would have arisen or accrued but for the commencement of
such proceeding, even if the claim for such obligation, liability, or
indebtedness is not enforceable or allowable in such proceeding, and including
all obligations, liabilities, and indebtedness arising from any extensions of
credit under or in connection with the Loan Documents from time to time,
regardless whether any such extensions of credit are in excess of the amount
committed under or contemplated by the Loan Documents or are made in
circumstances in which any condition to an extension of credit is not satisfied)
(all of the foregoing obligations, liabilities and indebtedness are referred to
herein collectively as the "Guarantied Obligations" and each as a "Guarantied
Obligation"). Without limitation of the foregoing, any of the Guarantied
Obligations shall be and remain Guarantied Obligations entitled to the benefit
of this Guaranty if the Agent or any of the Banks (or any one or more assignees
or transferees thereof) from time to time assign or otherwise transfer all or
any portion of their respective rights and obligations under and pursuant to the
Loan Documents, or any other Guarantied Obligations, to any other Person. In
furtherance of the foregoing, Guarantor agrees as follows.

2. Guaranty. If Borrower at any time fails to fully and punctually pay or
perform any of the Guarantied Obligations when due, Guarantor hereby promises to
pay and perform all such Guarantied Obligations immediately upon demand of the
Agent and the Banks or any one or more of them. All payments made hereunder
shall be made by Guarantor in immediately available funds in United States
Dollars and shall be made without setoff, counterclaim, withholding, or other
deduction of any nature.

3. Obligations Absolute. The obligations of Guarantor hereunder shall not be
discharged or impaired or otherwise diminished by any failure, default,
omission, or delay, willful or otherwise, by any Bank, the Agent, or Borrower or
any other obligor on any of the Guarantied Obligations, or by any other act or
thingor omission or delay to do any other act or thing which may or might in any
manner or to any

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extent vary the risk of Guarantor or would otherwise operate as a discharge of
Guarantor as a matter of law or equity. Without limiting the generality of the
foregoing, Guarantor hereby consents to, at any time and from time to time, and
the obligations of Guarantor hereunder shall not be diminished, terminated, or
otherwise similarly affected by any of the following:

(a) Any lack of genuineness, legality, validity, enforceability or allowability
(in a bankruptcy, insolvency, reorganization or similar proceeding, or
otherwise), or any avoidance or subordination, in whole or in part, of any Loan
Document or any of the Guarantied Obligations and regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of the Guarantied Obligations, any of the terms of the Loan Documents, or any
rights of the Agent or the Banks or any other Person with respect thereto;

(b) Any increase, decrease, or change in the amount, nature, type or purpose of
any of the Guarantied Obligations (whether or not contemplated by the Loan
Documents as presently constituted); any change in the time, manner, method, or
place of payment or performance of, or in any other term of, any of the
Guarantied Obligations; any execution or delivery of any additional Loan
Documents; or any amendment, modification or supplement to, or refinancing or
refunding of, any Loan Document or any of the Guarantied Obligations;

(c) Any failure to assert any breach of or default under any Loan Document or
any of the Guarantied Obligations; any extensions of credit in excess of the
amount committed under or contemplated by the Loan Documents, or in
circumstances in which any condition to such extensions of credit has not been
satisfied; any other exercise or non-exercise, or any other failure, omission,
breach, default, delay, or wrongful action in connection with any exercise or
non-exercise, of any right or remedy against the Borrower or any other Person
under or in connection with any Loan Document or any of the Guarantied
Obligations; any refusal of payment or performance of any of the Guarantied
Obligations, whether or not with any reservation of rights against Guarantor or
any other guarantor; or any application of collections (including but not
limited to collections resulting from realization upon any direct or indirect
security for the Guarantied Obligations) to other obligations, if any, not
entitled to the benefits of this Guaranty, in preference to Guarantied
Obligations entitled to the benefits of this Guaranty, or if any collections are
applied to Guarantied Obligations, any application to particular Guarantied
Obligations;

(d) Any taking, exchange, amendment, modification, supplement, termination,
subordination, release, loss, or impairment of, or any failure to protect,
perfect, or preserve the value of, or any enforcement of, realization upon, or
exercise of rights, or remedies under or in connection with, or any failure,
omission, breach, default, delay, or wrongful action by the Agent or the Banks,
or any of them, or any other Person in connection with the enforcement of,
realization upon, or exercise of rights or remedies under or in connection with,
or any other action or inaction by the Agent or the Banks, or any of them, or
any other Person in respect of, any direct or indirect security for any of the
Guarantied Obligations. As used in this Guaranty, "direct or indirect security"
for the Guarantied Obligations, and similar phrases, includes any collateral
security, guaranty, suretyship, letter of credit, capital maintenance agreement,
put option, subordination agreement, or other right or arrangement of any nature
providing direct or indirect assurance of payment or performance of any of the
Guarantied Obligations, made by or on behalf of any Person;

(e) Any merger, consolidation, liquidation, dissolution, winding-up, charter
revocation, or forfeiture, or other change in, restructuring or termination of
the corporate structure or existence of, the Borrower or any other Person; any
bankruptcy, insolvency, reorganization or similar proceeding with respect to the
Borrower or any other Person; or any action taken or election made by the Agent
or the Banks, or any of

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them (including any election under Section 1111(b)(2) of the United States
Bankruptcy Code), the Borrower, or any other Person in connection with any such
proceeding;

(f) Any defense, setoff, or counterclaim which may at any time be available to
or be asserted by the Borrower or any other Person with respect to any Loan
Document or any of the Guarantied Obligations (other than indefeasible payment
and performance of the Guarantied Obligations in full); or any discharge by
operation of law or release of the Borrower or any other Person from the
performance or observance of any Loan Document or any of the Guarantied
Obligations;

(g) Any other event or circumstance, whether similar or dissimilar to the
foregoing, and whether known or unknown, which might otherwise constitute a
defense available to, or limit the liability of, a guarantor or a surety,
excepting only full, strict, and indefeasible payment and performance of the
Guarantied Obligations in full.

          Guarantor acknowledges, consents, and agrees that other guarantors may
guaranty all or any portion of the Guarantied Obligations pursuant to Section
10.18 of the Credit Agreement and Guarantor affirms that its obligations shall
continue hereunder undiminished.

4.  Waivers, etc. Guarantor hereby waives any defense to or limitation on its
obligations under this Guaranty arising out of or based on any event or
circumstance referred to in Section 3 hereof. Without limitation and to the
fullest extent permitted by applicable law, Guarantor waives each of the
following:

(a) All notices, disclosures and demands of any nature which otherwise might be
required from time to time to preserve intact any rights against Guarantor,
including the following: any notice of any event or circumstance described in
Section 3 hereof; any notice required by any law, regulation or order now or
hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Loan Document or any of the
Guarantied Obligations; any notice of the incurrence of any Guarantied
Obligation; any notice of any default or any failure on the part of the Borrower
or any other Person to comply with any Loan Document or any of the Guarantied
Obligations or any direct or indirect security for any of the Guarantied
Obligations; and any notice of any information pertaining to the business,
operations, condition (financial or otherwise) or prospects of the Borrower or
any other Person;

(b) Any right to any marshalling of assets, to the filing of any claim against
the Borrower or any other Person in the event of any bankruptcy, insolvency,
reorganization or similar proceeding, or to the exercise against the Borrower or
any other Person of any other right or remedy under or in connection with any
Loan Document or any of the Guarantied Obligations or any direct or indirect
security for any of the Guarantied Obligations; any requirement of promptness or
diligence on the part of the Agent or the Banks, or any of them, or any other
Person; any requirement to exhaust any remedies under or in connection with, or
to mitigate the damages resulting from default under, any Loan Document or any
of the Guarantied Obligations or any direct or indirect security for any of the
Guarantied Obligations; any benefit of any statute of limitations; and any
requirement of acceptance of this Guaranty or any other Loan Document, and any
requirement that Guarantor receive notice of any such acceptance;

(c) Any defense or other right arising by reason of any law now or hereafter in
effect in any jurisdiction pertaining to election of remedies (including
anti-deficiency laws, "one action" laws or the like), or by reason of any
election of remedies or other action or inaction by the Agent or the Banks, or
any of them (including commencement or completion of any judicial proceeding or
nonjudicial sale or other action in respect of collateral security for any of
the Guarantied Obligations), which results in denial or impairment of the right
of the Agent or the Banks, or any of them, to seek a deficiency against

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the Borrower or any other Person or which otherwise discharges or impairs any of
the Guarantied Obligations; and

(d) Any and all defenses it may now or hereafter have based on principles of
suretyship, impairment of collateral, or the like.

Notwithstanding any other term herein to the contrary, the Guarantied
Obligations shall exclude the amount of any increase in the aggregate principal
amount of the Commitments (together with the interest accrued on the amount of
such increased principal) over and above the aggregate principal amount of the
Commitments as set forth in the Credit Agreement as of the date of this Guaranty
(or over and above any increased aggregate principal amount of the Commitments
to which Guarantor has consented in accordance with the terms of this sentence)
unless the consent of Guarantor has been provided to the Agent at a time that is
substantially contemporaneous with or after the date of such increase; this
provision is limited solely to an increase in the aggregate principal amount of
the Commitments, as more fully set forth directly above, and to no other
circumstance. For the avoidance of doubt, it is not the intent of the waivers
set forth in this Section 4 to, and such waivers shall not, waive the necessity
for a demand to be made in accordance with the first sentence of Section 2
hereof.

5.  Representations and Warranties. Guarantor hereby makes the following
representations and warranties as of the date hereof:

(a) Guarantor is duly organized, validly existing, and in good standing under
the laws of the Cayman Islands; and, Guarantor is validly existing and in good
standing in all jurisdictions in which it is domiciled or doing business, except
where the failure to so qualify would not be reasonably likely to have a
material adverse effect on the business, properties, assets, financial
condition, results of operations, or prospects of Guarantor (a "Material Adverse
Effect"); and, this Guaranty constitutes the legal, valid, and binding
obligation of Guarantor, enforceable against Guarantor and its successors in
accordance with its terms; Guarantor has the requisite power and authority to
enter into, execute, deliver and carry out this Guaranty and to perform its
obligations hereunder and all such actions have been duly authorized by all
necessary proceedings;

(b) the execution and delivery of this Guaranty and the consummation of the
transactions herein contemplated and compliance with the terms and provisions
hereof by Guarantor will not conflict with, constitute a default under or result
in any breach of any material agreement or instrument to which Guarantor is
bound or any applicable Law material to the business or operations of Guarantor
or material to the validity or enforceability of this Guaranty;

(c) the information, financial statements and other financial data furnished by
Guarantor to the Agent are true and correct in all material respects and present
fairly the financial condition of Guarantor as of the date of such information,
statements, or other data; all other information given to the Agent by Guarantor
with respect to Guarantor is, as of the date of such information (or, if not
dated, as of the date of its delivery to the Agent), accurate and correct in all
material respects and is, as of the date of such information (or, if not dated,
as of the date of its delivery to the Agent), complete insofar as completeness
may be necessary to give the Agent true and accurate knowledge of the subject
matter thereof; and

(d) there are no actions, suits, proceedings, or governmental investigations
pending or, to the knowledge of Guarantor, threatened against Guarantor which
are reasonably likely to have a Material Adverse Effect.

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6.  Senior Debt Status. The obligations of Guarantor under this Guaranty rank
and will rank at least pari passu in priority of payment with all other senior
unsecured Indebtedness of Guarantor.

7.  Reinstatement. This Guaranty is a continuing obligation of Guarantor and
shall remain in full force and effect notwithstanding that no Guarantied
Obligations may be outstanding from time to time and notwithstanding any other
event or circumstance. Upon termination of all Commitments and indefeasible
payment in full of all Guarantied Obligations, this Guaranty shall terminate;
provided, however, that this Guaranty shall continue to be effective or be
reinstated, as the case may be, any time any payment of any of the Guarantied
Obligations is rescinded, recouped, avoided, or must otherwise be returned or
released by any Bank or the Agent upon or during the insolvency, bankruptcy, or
reorganization of, or any similar proceeding affecting, Borrower or for any
other reason whatsoever, all as though such payment had not been made and was
due and owing.

8.  Subrogation. Guarantor shall not exercise any rights against Borrower or any
other guarantor arising in connection with the Guarantied Obligations (including
rights of subrogation, contribution, and the like) until the Guarantied
Obligations have been indefeasibly paid in full and all Commitments have been
terminated. If, prior to the indefeasible payment in full of the Guarantied
Obligations and the termination of the Commitments, any amount shall be paid to
Guarantor by or on behalf of Borrower or any other guarantor by virtue of any
right of subrogation, contribution, or the like, such amount shall be deemed to
have been paid to Guarantor for the benefit of, and shall be held in trust for
the benefit of, the Agent and the Banks and shall forthwith be paid to the Agent
to be credited and applied upon the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement.

9.  No Stay. Without limitation of any other provision of this Guaranty, if any
declaration of default or acceleration or other exercise or condition to
exercise of rights or remedies under or with respect to any Guarantied
Obligation shall at any time be stayed, enjoined, or prevented for any reason
(including stay or injunction resulting from the pendency against the Borrower
or any other Person of a bankruptcy, insolvency, reorganization, or similar
proceeding), Guarantor agrees that, for the purposes of this Guaranty and its
obligations hereunder, the Guarantied Obligations shall be deemed to have been
declared in default or accelerated, and such other exercise or conditions to
exercise shall be deemed to have been taken or met.

10. Taxes.

(a) No Deductions. All payments made by Guarantor hereunder shall be made free
and clear of and without deduction for any present or future taxes, levies,
imposts, deductions, charges, or withholdings, and all liabilities with respect
thereto, excluding taxes imposed by the United States on the overall net income
of any Bank and taxes that are imposed on the overall net income (and franchise
taxes imposed in lieu thereof) of any Bank by the state or foreign jurisdiction
under the laws of which such Bank is organized or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "Taxes"). If
Guarantor shall be required by Law to deduct any Taxes from or in respect of any
sum payable under this Guaranty, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Subsection 10(a)) each Bank
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Guarantor shall make such deductions, and (iii)
Guarantor shall timely pay the full amount deducted to the relevant tax
authority or other authority in accordance with applicable Law.

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(b) Stamp Taxes. In addition, Guarantor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder or from the
execution, delivery, or registration of, or otherwise with respect to, this
Guaranty (hereinafter referred to as "Other Taxes").

(c) Indemnification for Taxes Paid by any Bank. Guarantor shall indemnify each
Bank for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Subsection) paid
by any Bank and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date Guarantor receives written demand therefor.

(d) Certificate. Within 30 days after the date of any payment of any Taxes by
Guarantor, Guarantor shall furnish to the applicable Bank, the original or a
certified copy of a receipt evidencing payment thereof.

(e) Banks to Obtain Relevant Exemptions. Any Bank as to which payments under
this Guaranty are subject to Taxes or Other Taxes and which is entitled to an
exemption from or reduction of such Taxes or Other Taxes pursuant the laws or
regulations of any relevant jurisdiction or any treaty shall deliver to the
Agent and Guarantor, no later than the latest time or times prescribed by
applicable law for the effectiveness thereof, two original copies of such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without payment of Taxes or Other Taxes or
at a reduced rate. If any Bank fails to timely deliver any such documentation,
Guarantor shall not be required to increase any amount payable to such Bank
pursuant to Subsection 10(a) hereof or to otherwise indemnify such Bank under
Subsection 10(c) hereof to the extent such increase or indemnity would not have
been required if such Bank had delivered such documentation; provided, however,
that should a Bank become subject to Taxes or Other Taxes because of its failure
to deliver a form required hereby, Guarantor shall take such steps as such Bank
shall reasonably request to assist such Bank to recover such Taxes or Other
Taxes.

(f) Survival. Without prejudice to the survival of any other agreement of
Guarantor hereunder, the agreements and obligations of Guarantor contained in
this Section 10 shall survive the payment in full of the Obligations and the
termination of all Commitments.

11. Judgment Currency.

(a) Currency Conversion Procedures for Judgments. If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in any currency (the "Original Currency") into another currency (the "Other
Currency"), Guarantor hereby agrees, to the fullest extent permitted by Law,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase the Original Currency with the Other
Currency after any premium and costs of exchange on the Business Day preceding
that on which final judgment is given.

(b) Indemnity in Certain Events. The obligation of Guarantor in respect of any
sum due from Guarantor to any Bank under this Guaranty shall, notwithstanding
any judgment in an Other Currency, whether pursuant to a judgment or otherwise,
be discharged only to the extent that, on the Business Day following receipt by
the Agent of any sum adjudged to be so due in such Other Currency, the Agent may
in accordance with normal banking procedures purchase the Original Currency with
such Other Currency. If the amount of the Original Currency so purchased is less
than the sum originally due in the

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Original Currency, Guarantor agrees, as a separate obligation and
notwithstanding any such judgment or payment, to indemnify the Agent and the
Banks against such loss.

12. Notices. Guarantor agrees that all notices, statements, requests, demands,
and other communications (subject, however, to Section 17 hereof) under this
Guaranty shall be given to Guarantor at the address set forth on a Schedule to
the Credit Agreement (or such other address as Guarantor may designate in
writing to the Agent) and in the manner provided in Section 10.6 of the Credit
Agreement.

13. Counterparts; Telecopy Signatures. This Guaranty may be executed in any
number of counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument. Guarantor acknowledges and agrees that a telecopy transmission to
the Agent or any Bank of signature pages hereof signed on behalf of Guarantor
shall constitute effective and binding execution and delivery hereof by
Guarantor.

14. Setoff, Default Payments by Borrower.

(a) In the event that at any time any obligation of Guarantor now or hereafter
existing under this Guaranty shall have become due and payable, the Agent and
the Banks, or any of them, shall have the right from time to time to set off
against and apply to such due and payable amount any obligation of any nature of
any Bank or the Agent, or any subsidiary or affiliate of any Bank or the Agent,
to Guarantor, including all deposits (whether time or demand, general or
special, provisionally credited or finally credited, however evidenced) now or
hereafter maintained by Guarantor with the Agent or any Bank or any subsidiary
or affiliate thereof. Such right shall be absolute and unconditional in all
circumstances and, without limitation, shall exist whether or not the Agent or
the Banks, or any of them, shall have given any notice or made any demand under
this Guaranty or under such obligation to Guarantor, whether such obligation to
Guarantor is absolute or contingent, matured or unmatured (it being agreed that
the Agent and the Banks, or any of them, may deem such obligation to be then due
and payable at the time of such setoff), and regardless of the existence or
adequacy of any collateral, guaranty, or other direct or indirect security or
right or remedy available to the Agent or any of the Banks. Each of the Banks
and the Agent which exercises any right of set-off against Guarantor hereunder
agrees promptly to notify Guarantor after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Agent and the Banks
under this Section are in addition to such other rights and remedies (including
other rights of setoff and banker's lien) which the Agent and the Banks, or any
of them, may have, and nothing in this Guaranty or in any other Loan Document
shall be deemed a waiver of or restriction on the right of setoff or banker's
lien of the Agent and the Banks, or any of them.

(b) Upon the occurrence and during the continuation of any Event of Default
under the Credit Agreement, if any amount shall be paid to Guarantor by or for
the account of Borrower, such amount shall be held in trust for the benefit of
each Bank and the Agent and shall forthwith be paid to the Agent to be credited
and applied to the Guarantied Obligations when due and payable.

15. Construction. The section and other headings contained in this Guaranty are
for reference purposes only and shall not affect interpretation of this Guaranty
in any respect.

16. Successors and Assigns. This Guaranty shall be binding upon Guarantor, its
successors and assigns, and shall inure to the benefit of and be enforceable by
the Agent and the Banks, or any of them, and their respective successors and
assigns as permitted by the Credit Agreement. Without limitation of the
foregoing, the Agent and the Banks, or any of them (and any successive assignee
or transferee), from time to time may assign or otherwise transfer all or any
portion of their respective rights or obligations

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under the Loan Documents (including all or any portion of any commitment to
extend credit), or any other Guarantied Obligations, to any other Person
permitted pursuant to the Credit Agreement, and such Guarantied Obligations
(including any Guarantied Obligations resulting from an extension of credit by
such other Person under or in connection with the Loan Documents) shall be and
remain Guarantied Obligations entitled to the benefit of this Guaranty, and to
the extent of its interest in such Guarantied Obligations such other Person
shall be vested with all the benefits in respect thereof granted to the Agent
and the Banks in this Guaranty or otherwise.

17. CONSENT TO FORUM; WAIVER OF JURY TRIAL.

          GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION
OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA
SITTING IN NEW YORK CITY, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT, AND GUARANTOR HEREBY IRREVOCABLY APPOINTS THE BORROWER TO BE ITS AGENT
TO RECEIVE ON BEHALF OF ITSELF AND ITS RESPECTIVE PROPERTY SERVICE OF COPIES OF
THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY
ACTION OR PROCEEDING AND HEREBY CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS
PROVIDED FOR BORROWER IN THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. GUARANTOR WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE.

          GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING,
OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT TO THE FULL EXTENT PERMITTED BY LAW.

18. Governing Law, Waiver of Sovereign Immunity. This Guaranty shall be
construed and enforced in accordance with, and the obligations and rights of the
parties shall be governed by, the laws of the State of New York applicable to
contracts made and to be performed in said State. To the extent that Guarantor
has or hereafter may acquire any immunity from the jurisdiction of any court or
from any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution, or otherwise) with respect
to itself or its property, Guarantor hereby irrevocably waives such immunity in
respect of its obligations under this Guaranty and any other Loan Document, and
Guarantor agrees that it will not raise or claim any such immunity at or in
respect of any such action or proceeding.

19. Severability; Modification to Conform to Law.

(a) It is the intention of the parties that this Guaranty be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder hereof. If any
provision in this Guaranty shall be held invalid or unenforceable in whole or in
part in any jurisdiction, this Guaranty shall, as to such jurisdiction, be
deemed amended to modify or delete, as necessary, the offending provision or
provisions and to alter the bounds thereof in order to render it or them valid
and enforceable to the maximum extent permitted by applicable law, without in
any matter affecting the

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validity or enforceability of such provision or provisions in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.

(b) Without limitation of the preceding subsection (a), to the extent that
applicable law (including applicable laws pertaining to fraudulent conveyance or
fraudulent or preferential transfer) otherwise would render the full amount of
Guarantor's obligations hereunder invalid, voidable, or unenforceable on account
of the amount of Guarantor's aggregate liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the
aggregate amount of Guarantor's liability shall, without any further action by
the Agent or any of the Banks or Guarantor or any other Person, be automatically
limited and reduced to the highest amount which is valid and enforceable as
determined in such action or proceeding.

(c) Notwithstanding anything to the contrary in this Section or elsewhere in
this Guaranty, this Guaranty shall be presumptively valid and enforceable to its
full extent in accordance with its terms, as if this Section (and references
elsewhere in this Guaranty to enforceability to the fullest extent permitted by
Law) were not a part of this Guaranty, and in any related litigation the burden
of proof shall be on the party asserting the invalidity or unenforceability of
any provision hereof or asserting any limitation on Guarantor's obligations
hereunder as to each element of such assertion.

20. Receipt of Credit Agreement, Other Loan Documents, Benefits.

(a) Guarantor hereby acknowledges that it has received a copy of the Credit
Agreement and the other Loan Documents and Guarantor certifies that the
representations and warranties made therein with respect to Guarantor are true
and correct. Further, Guarantor acknowledges and agrees to perform, comply with,
and be bound by all of the provisions of the Credit Agreement and the other Loan
Documents applicable to it.

(b) Guarantor hereby acknowledges, represents, and warrants that it is the
indirect owner of the Borrower and that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreement
and that such benefits, together with the rights of contribution, indemnity, and
subrogation that may arise in connection herewith, are a reasonably equivalent
exchange of value in return for providing this Guaranty.

21. Miscellaneous.

(a) Generality of Certain Terms. As used in this Guaranty, the terms "hereof,"
"herein," and terms of similar import refer to this Guaranty as a whole and not
to any particular term or provision; the term "including," as used herein, is
not a term of limitation and means "including without limitation."

(b) Amendments, Waivers. No amendment to or waiver of any provision of this
Guaranty, and no consent to any departure by Guarantor herefrom, shall in any
event be effective unless in a writing manually signed by or on behalf of the
Agent and the Required Banks (unless the Credit Agreement requires the consent
of all Banks) and, in the case of an amendment, Guarantor. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No delay or failure of the Agent or the Banks, or any
of them, in exercising any right or remedy under this Guaranty shall operate as
a waiver thereof; nor shall any single or partial exercise of any such right or
remedy preclude any other or further exercise thereof or the exercise of any
other right or remedy. The rights and remedies of the Agent and the Banks under
this Guaranty are cumulative and not exclusive of any other rights or remedies
available hereunder, under any other agreement or instrument, by Law, or
otherwise.

                                       -9-

<PAGE>

(c) Expenses. Guarantor unconditionally agrees to pay all reasonable costs and
expenses, including reasonable attorney's fees incurred by the Agent or any of
the Banks in enforcing this Guaranty against Guarantor and Guarantor shall pay
and indemnify each Bank and the Agent for, and hold it harmless from and
against, any and all obligations, liabilities, losses, damages, costs, expenses
(including disbursements and reasonable legal fees of counsel to any Bank or the
Agent), penalties, judgments, suits, actions, claims, and disbursements imposed
on, asserted against, or incurred by any Bank or the Agent (A) relating to the
enforcement of or collection under this Guaranty or any document, instrument, or
agreement relating to this Guaranty, including in any bankruptcy, insolvency, or
similar proceeding in any jurisdiction or political subdivision thereof; (B)
relating to any amendment, modification, waiver, or consent hereunder or
relating to any telecopy or telephonic transmission relating hereto purporting
to be by Guarantor or Borrower; (C) in any way relating to or arising out of
this Guaranty, or any document, instrument, or agreement relating to this
Guaranty, and including those arising directly or indirectly from the violation
or asserted violation of any Law (including those relating to environmental
protection, health, labor, importing, exporting, or safety) and regardless
whether asserted by any governmental entity or any other Person; provided,
however, that Guarantor shall not be obligated to indemnify or hold harmless any
Bank or the Agent to the extent that any such obligation, liability, loss,
damage, cost, expense, penalty, judgment, suit, actions, claim, or disbursement
of such Bank or the Agent arose from the gross negligence or willful misconduct
of such Bank or the Agent.

(d) Prior Understandings. This Guaranty and the Credit Agreement and the other
Loan Documents constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede any and all other prior and
contemporaneous understandings and agreements.

(e) Survival. All representations and warranties of Guarantor made in connection
with this Guaranty shall survive, and shall not be waived by, the execution and
delivery of this Guaranty, any investigation by or knowledge of the Agent and
the Banks, or any of them, any extension of credit, or any other event or
circumstance whatsoever.

                            [SIGNATURE PAGE FOLLOWS]

                                      -10-

<PAGE>

              [SIGNATURE PAGE OF CONTINUING AGREEMENT OF GUARANTY]

         IN WITNESS WHEREOF, Guarantor intending to be legally bound, has
executed this Guaranty as of the date first above written with the intention
that this Guaranty shall constitute a sealed instrument.

                                   ACE LIMITED
                                   The Common Seal of ACE Limited was
                                   hereunto affixed in the presence of:

                                   By:____________________________________(SEAL)
                                      Name:
                                      Title: General Counsel and Secretary

                                   By:____________________________________(SEAL)
                                      Name:
                                      Title: Chief Financial Officer<PAGE>

                                                                   Exhibit 10.63

                                                                  CONFORMED COPY

                                     EXHIBIT

                             DATED 19 NOVEMBER 1999

         (as (a) amended and restated pursuant to the First Restatement
     Agreement dated 17 November 2000, (b) amended pursuant to the Amendment
    Agreement dated 23 October 2001, (c) amended and restated pursuant to the
    Second Restatement Agreement dated 21 November 2001, and (d) amended and
  restated pursuant to the Third Restatement Agreement dated 19 November 2002)

                                   ACE LIMITED
                                as Account Party

                           ACE BERMUDA INSURANCE LTD.
                                  as Guarantor

                                 CITIBANK, N.A.
                                       and
                                BARCLAYS CAPITAL
                                as Lead Arrangers

                          ING BANK, N.V., LONDON BRANCH
                                 as Co-Arranger

                           CITIBANK INTERNATIONAL plc
                          as Agent and Security Trustee

                                       and

                                     OTHERS

        ______________________________________________________________

                               (pounds)380,000,000
                       LETTER OF CREDIT FACILITY AGREEMENT

        ______________________________________________________________

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
Clause                                                                               Page
<S>                                                                                  <C>
1.  Definitions And Interpretation .................................................    1

2.  The Facility ...................................................................   17

3.  Utilisation Of The Facility ....................................................   18

4.  Extension Of Letters Of Credit .................................................   20

5.  Substitution Of Letters Of Credit ..............................................   23

6.  Increase Of The Facility .......................................................   24

7.  Notification ...................................................................   26

8.  The Account Party's Liabilities In Relation To Letters Of Credit ...............   26

9.  Cancellation And Collateralisation .............................................   27

10. Taxes ..........................................................................   28

11. Tax Receipts ...................................................................   29

12. Increased Costs ................................................................   30

13. Illegality .....................................................................   31

14. Mitigation .....................................................................   31

15. Representations ................................................................   32

16. Covenants ......................................................................   36

17. Events Of Default ..............................................................   43

18. Commission And Fees ............................................................   47

19. Costs And Expenses .............................................................   48

20. Default Interest And Break Costs ...............................................   49

21. Indemnities ....................................................................   50

22. Currency Of Account And Payment ................................................   51

23. Payments .......................................................................   51

24. Set-Off ........................................................................   53

25. Sharing ........................................................................   53

26. The Agent, The Arrangers And The Banks .........................................   54

27. Assignments And Transfers ......................................................   62

28. Economic And Monetary Union ....................................................   65

29. Calculations And Evidence Of Debt ..............................................   65

30. Guarantee And Indemnity ........................................................   67

31. Remedies And Waivers, Partial Invalidity .......................................   69

32. Notices ........................................................................   69
</TABLE>

                                       -1-

<PAGE>

<TABLE>
<S>                                                                     <C>
33. Counterparts .....................................................  71

34. Amendments .......................................................  71

35. Governing Law ....................................................  72

36. Jurisdiction .....................................................  72

Schedule 1 The Banks .................................................  74

Schedule 2 Form Of Transfer Certificate ..............................  75

Schedule 3 Conditions Precedent ......................................  77

Schedule 4 Utilisation Request .......................................  78

Schedule 5 Form Of Extension Request .................................  80

Schedule 6 Form Of Letter Of Credit ..................................  83

Schedule 7 Mandatory Liquid Asset Costs Rate .........................  90

Schedule 8 Form Of Confidentiality Undertaking .......................  92

Schedule 9 Pricing Schedule ..........................................  95

Schedule 10 Existing Liens ...........................................  96

Schedule 11 Form Of Charge Agreement .................................  97

Schedule 12 Form Of Substitution Notice .............................. 119
</TABLE>

                                       -2-

<PAGE>

THIS AGREEMENT originally dated 19 November 1999, as (a) amended and restated
pursuant to the First Restatement Agreement dated 17 November 2000, (b) amended
by an Amendment Agreement dated 23 October 2001, (c) further amended and
restated pursuant to the Second Restatement Agreement dated 21 November 2001,
and (d) further amended and restated as of the Commencement Date referred to in
the Third Restatement Agreement dated 19 November 2002, is made between:

(1)     ACE LIMITED as account party (the "Account Party");

(2)     ACE BERMUDA INSURANCE LTD. as guarantor (the "Guarantor");

(3)     CITIBANK, N.A. and BARCLAYS CAPITAL (the investment banking division of
        Barclays Bank PLC) as lead arrangers of the Facility (the "Lead
        Arrangers");

(4)     ING BANK, N.V., LONDON BRANCH as co-arranger of the Facility (the
        "Co-Arranger");

(5)     CITIBANK INTERNATIONAL plc as agent and trustee for the banks (when
        acting in such capacities the "Agent" and the "Security Trustee"
        respectively); and

(6)     THE BANKS as defined below.

IT IS AGREED as follows.

1.      DEFINITIONS AND INTERPRETATION

1.1     Definitions
        In this Agreement:

        "ACE INA" means ACE INA Holdings Inc., a Delaware company and its
        successors.

        "ACE US" means ACE US Holdings, Inc., a Delaware company and its
        successors.

        "Adjusted Consolidated Debt" means, at any time, an amount equal to (a)
        the then outstanding Consolidated Debt of the Account Party and its
        Subsidiaries plus (b) to the extent exceeding an amount equal to 15 per
        cent. of Total Capitalisation, the then issued and outstanding amount of
        Preferred Securities (other than any Mandatorily Convertible Preferred
        Securities).

        "Affiliate" means, as to any Person, any other Person that, directly or
        indirectly, controls, is controlled by or is under common control with
        such Person or is a director or officer of such Person. For the purposes
        of this definition, the term "control" (including the terms
        "controlling", "controlled by" and "under common control with") of a
        Person means the possession, direct or indirect, of the power to vote 5
        per cent. or more of the Voting Interests of such Person or to direct or
        cause the direction of the management and policies of such Person,
        whether through the ownership of Voting Interests, by contract or
        otherwise.

        "Amendment Agreement" means the amendment agreement dated 23 October
        2001 which amends the First Restatement Agreement.

                                       -1-

<PAGE>

        "Applicant" means each of ACE Capital Limited, ACE Capital IV Limited,
        ACE Capital V Limited, ACE Capital VI Limited and ACE Capital VII
        Limited and their successors and substitutes within the Group from time
        to time.

        "Approved Credit Institution" means a credit institution within the
        meaning of the First Council Directive relating to the taking up and
        pursuit of the business of credit institutions (No. 2000/12 EC) which
        has been approved by the Council of Lloyd's for the purpose of providing
        guarantees and issuing or confirming letters of credit comprising a
        member's Funds at Lloyd's.

        "Approved Investment" means any Investment that was made by the Account
        Party or any of its Subsidiaries pursuant to investment guidelines set
        forth by the board of directors of the Account Party which guidelines
        are consistent with past practices.

        "Arrangers" means the Lead Arrangers and the Co-Arranger.

        "Authorised Signatory" means, in relation to an Obligor, any person who
        is duly authorised (in such manner as may be reasonably acceptable to
        the Agent) and in respect of whom the Agent has received a certificate
        signed by a director or another Authorised Signatory of such Obligor
        setting out the name and signature of such person and confirming such
        person's authority to act.

        "Available Commitment" means, in relation to a Bank at any time and save
        as otherwise provided herein its Commitment less its share of the
        Sterling Amount of Outstandings at such time provided that such amount
        shall not be less than zero.

        "Available Facility" means, at any time, the aggregate of the Available
        Commitments adjusted, in the case of a proposed utilisation pursuant to
        a Utilisation Request, so as to take into account:-

        (a)  any reduction in the Commitment of a Bank pursuant to the terms
             hereof; and

        (b)  any Letter of Credit which pursuant to any other Utilisation
             Request, is to be issued;

        on or before the proposed Utilisation Date relating to such utilisation.

        "Availability Period" means the period from the Commencement Date to the
        Commitment Termination Date (or such other date which Lloyd's may
        specify as the Funds Date for 2002) inclusive.

        "Bank" means any financial institution:

        (a)  named in Schedule 1 (The Banks); or

        (b)  which has become a party hereto in accordance with Clause 27.4
             (Assignments by Banks) or Clause 27.5 (Transfers by Banks),

        and which has not ceased to be a party hereto in accordance with the
        terms hereof.

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

                                       -2-

<PAGE>

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

        "Business Day" means a day (other than a Saturday or Sunday) on which
        banks generally are open for business in London and Bermuda and, in the
        case of payments to be made in dollars, New York.

        "Capitalised Leases" means all leases that have been or should be, in
        accordance with GAAP, recorded as capitalised leases.

        "Cash Collateral" means, in relation to any Bank's L/C Proportion of any
        Letter of Credit, a deposit in such interest-bearing account or accounts
        as such Bank or, as the case may be, the Agent may specify, such deposit
        and account to be secured in favour of, and on terms and conditions
        acceptable to, such Bank.

        "Charge Agreement" means the charge agreement dated on or about the date
        of the Second Restatement Agreement, in substantially the form set out
        in Schedule 11 (Form of Charge Agreement).

        "Charged Portfolio" has the meaning ascribed to it in the Charge
        Agreement.

        "Commencement Date" has the meaning given to it in the Third Restatement
        Agreement.

        "Commitment" means, in relation to a Bank at any time and save as
        otherwise provided herein, the amount set opposite its name under the
        heading "Commitment" in Schedule 1 (The Banks).

        "Commitment Termination Date" means 16 December 2002.

        "Consolidated" refers to the consolidation of accounts in accordance
        with GAAP.

        "Consolidated Debt" means at any date the Debt of the Account Party and
        its Consolidated Subsidiaries, determined on a Consolidated basis as of
        such date.

        "Consolidated Net Income" means, for any period, the net income of the
        Account Party and its Consolidated Subsidiaries, determined on a
        Consolidated basis for such period.

        "Consolidated Subsidiary" means at any date any Subsidiary or other
        entity the accounts of which would be consolidated with those of the
        Account Party in its consolidated financial statements if such
        statements were prepared as of such date.

        "Consolidated Net Worth" means at any date the Consolidated
        stockholder's equity of the Account Party and its Consolidated
        Subsidiaries determined as of such date, provided that such
        determination for the purposes of Clause 16.7 (Adjusted Consolidated
        Debt to Total Capitalisation Ratio), Clause 16.8 (Consolidated Net
        Worth) and Clause 16.9 (Liens) shall be made without giving effect to
        adjustments pursuant to Statement No. 115 of the Financial Accounting
        Standards Board of the United States of America.

                                       -3-

<PAGE>

        "Contingent Obligation" means, with respect to any Person, any
        obligation or arrangement of such Person to guarantee or indemnify or
        intended to guarantee or indemnify any Debt, leases, dividends or other
        payment obligations ("primary obligations") of any other Person (the
        "primary obligor") in any manner, whether directly or indirectly,
        including, without limitation:

        (a)  the direct or indirect guarantee, endorsement (other than for
             collection or deposit in the ordinary course of business),
             co-making, discounting with recourse or sale with recourse by
             such Person of the obligation of a primary obligor;

        (b)  the obligation to make take-or-pay or similar payments, if
             required, regardless of non-performance by any other party or
             parties to an agreement; or

        (c)  any obligation of such Person, whether or not contingent:

             (i)   to purchase any such primary obligation or any property
                   constituting direct or indirect security therefor;

             (ii)  to advance or supply funds (1) for the purchase or payment
                   of any such primary obligation or (2) to maintain working
                   capital or equity capital of the primary obligor or
                   otherwise to maintain the net worth or solvency of the
                   primary obligor;

             (iii) to purchase property, assets, securities or services
                   primarily for the purpose of assuring the owner of any such
                   primary obligation of the ability of the primary obligor to
                   make payment of such primary obligation; or

             (iv)  otherwise to assure or hold harmless the holder of such
                   primary obligation against loss in respect thereof,

        provided, however, that Contingent Obligations shall not include any
        obligations of any such Person arising under insurance contracts entered
        into in the ordinary course of business. 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 less, the maximum amount of such
        primary obligation for which such Person may be liable pursuant to the
        terms of the instrument evidencing such Contingent Obligation) 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.

        "Custodian" means (at the date of the Charge Agreement) State Street
        Bank and Trust Company, or such other entity or entities as may be
        agreed from time to time between the Account Party and the Security
        Trustee (each acting reasonably), provided that such other Custodian has
        entered into Security Documents in a form reasonably acceptable to the
        Security Trustee.

                                       -4-

<PAGE>

        "Custodian's Undertaking" means the undertaking delivered to the
        Security Trustee by the Custodian in respect of the Charged Portfolio as
        contemplated by the Charge Agreement.

        "Debenture" means debt securities issued by the Account Party or ACE INA
        to a Special Purpose Trust in exchange for proceeds of Preferred
        Securities and common securities of such Special Purpose Trust.

        "Debt" of any Person means, without duplication for purposes of
        calculating financial ratios:

        (a)   all indebtedness of such Person for borrowed money:

        (b)   all obligations of such Person for the deferred purchase price of
              property or services (other than trade payables incurred in the
              ordinary course of such Person's business);

        (c)   all obligations of such Person evidenced by notes, bonds,
              debentures or other similar instruments;

        (d)   all obligations of such Person created or arising under any
              conditional sale or other title retention agreement with respect
              to property acquired by such Person (even though the rights and
              remedies of the seller or lender under such agreement in the event
              of default are limited to repossession or sale of such property);

        (e)   all obligations of such Person as lessee under Capitalised Leases
              (excluding imputed interest);

        (f)   all obligations of such Person under acceptance, letter of credit
              or similar facilities;

        (g)   all obligations of such Person (except for Approved Investments)
              to purchase, redeem, retire, defease or otherwise make any payment
              in respect of any Equity Interests (except for obligations to pay
              for Equity Interests within customary settlement periods) in such
              Person or any other Person or any warrants, rights or options to
              acquire such capital stock (excluding payments under a contract
              for the forward sale of ordinary shares of such Person issued in a
              public offering), valued, in the case of Redeemable Preferred
              Interests, at the greater of its voluntary or involuntary
              liquidation preference plus accrued and unpaid dividends;

        (h)   all Contingent Obligations of such Person in respect of Debt (of
              the types described above) of any other Person; and

        (i)   all indebtedness and other payment obligations referred to in
              clauses (a) through (h) above of another Person secured by (or for
              which the holder of such Debt has an existing right, contingent or
              otherwise, to be secured by) any Lien on property (including,
              without limitation, accounts and contract rights) owned by

                                       -5-

<PAGE>

          such Person, even though such Person has not assumed or become liable
          for the payment of such indebtedness or other payment obligations;

        provided, however, that the amount of Debt of such Person under clause
        (i) above shall, if such Person has not assumed or otherwise become
        liable for any such Debt, be limited to the lesser of the principal
        amount of such Debt or the fair market value of all property of such
        Person securing such Debt; provided further that "Debt" shall not
        include obligations in respect of insurance or reinsurance contracts
        entered into in the ordinary course of business; provided further that,
        solely for the purposes of Clause 16.7 (Adjusted Consolidated Debt to
        Total Capitalisation Ratio) and Clause 16.8 (Consolidated Net Worth)
        and the definitions of "Adjusted Consolidated Debt" and "Total
        Capitalisation", "Debt" shall not include (x) any contingent
        obligations of any Person under or in connection with acceptance,
        letter of credit or similar facilities or (y) obligations of the
        Account Party or ACE INA under any Debentures or under any subordinated
        guarantee or any Preferred Securities or obligations of a Special
        Purpose Trust under any Preferred Securities.

        "Default" means an Event of Default or a Potential Event of Default.

        "Derivatives Obligations" of any Person means all obligations of such
        Person in respect of any rate swap transaction, basis swap, forward rate
        transaction, commodity swap, commodity option, equity or equity index
        swap, equity or equity index option, bond option, interest rate option,
        foreign exchange transaction, cap transaction, floor transaction, collar
        transaction, currency swap transaction, cross-currency rate swap
        transaction, currency option or other similar transaction (including any
        option with respect to any of the foregoing transactions) or any
        combination of the foregoing transactions.

        "Effective Date" means, in respect of each Letter of Credit, 22 November
        2002.

        "Equity Interests" means, with respect to any Person, shares of capital
        stock of (or other ownership or profit interests in) such Person,
        warrants, options or other rights for the purchase or other acquisition
        from such Person of shares of capital stock of (or other ownership or
        profit interests in) such Person, securities convertible into or
        exchangeable for shares of capital stock of (or other ownership or
        profit interests in) such Person or warrants, rights or options for the
        purchase or other acquisition from such Person of such shares (or such
        other interests), and other ownership or profit interests in such Person
        (including, without limitation, partnership, member or trust interests
        therein), whether voting or nonvoting, and whether or not such shares,
        warrants, options, rights or other interests are authorised or otherwise
        existing on any date of determination.

        "Event of Default" means any circumstance described as such in Clause 17
        (Events of Default).

        "Expiry Date" means, in relation to any Letter of Credit, the date on
        which that Letter of Credit terminates or will terminate (as the context
        requires) and the maximum aggregate liability thereunder is to be
        reduced to zero.

                                       -6-

<PAGE>

        "Facility" means the sterling and dollar letter of credit facility
        granted to the Account Party in this Agreement.

        "Facility Office" means, in relation to the Agent, the office identified
        with its signature below or such other office as it may select by notice
        and, in relation to any Bank, the office notified by it to the Agent in
        writing prior to the date hereof (or, in the case of a Transferee, at
        the end of the Transfer Certificate to which it is a party as
        Transferee) or such other office as it may from time to time select by
        notice to the Agent.

        "Finance Documents" means this Agreement and each Security Document and
        any other document or documents as may be agreed by the Agent and the
        Account Party.

        "Finance Parties" means the Agent, the Security Trustee, the Arrangers
        and the Banks.

        "First Restatement Agreement" means the amendment and restatement
        agreement dated 17 November 2000 made between (amongst others) the
        Account Party, the Guarantor, the Agent and the Banks named therein.

        "Funds at Lloyd's" has the meaning given to it in paragraph 4 of the
        Membership Bylaw (No. 17 of 1993).

        "Funds at Lloyd's Requirements" means, in respect of any member, the
        amount required to be maintained by that member as Funds at Lloyd's.

        "Funds Date" means, in relation to any year, the date notified by
        Lloyd's as being the latest date in that year by which Funds at Lloyd's
        can be placed with Lloyd's in order to satisfy Funds at Lloyd's
        Requirements in respect of the year of account next following that date,
        such date notified by Lloyd's in respect of the 2003 year of account
        being 22 November 2002.

        "GAAP" has the meaning specified in Clause 1.7 (Accounting Terms and
        Determinations).

        "Group" means the Account Party and its Subsidiaries for the time being.

        "Hedge Agreements" means interest rate swap, cap or collar agreements,
        interest rate future or option contracts, currency swap agreements,
        currency future or option contracts and other hedging agreements.

        "Internal Revenue Code" means the Internal Revenue Code of 1986 of the
        United States of America, as amended, or any successor statute, and
        includes regulation promulgated and rulings issued thereunder.

        "Investment" in any Person means any loan or advance to such Person, any
        purchase or other acquisition of any Equity Interests or Debt or the
        assets comprising a division or business unit or a substantial part or
        all of the business of such Person, any capital contribution to such
        Person or any other direct or indirect investment in such Person,
        including, without limitation, any acquisition by way of a merger or
        consolidation and any arrangement pursuant to which the investor incurs
        Debt of the types referred to in clause (h) or (i) of the definition of
        "Debt" in respect of such Person; provided, however, that any purchase
        by any US Facility Agreement Loan Party or any Subsidiary

                                       -7-

<PAGE>

        of any catastrophe-linked instruments which are (x) issued for the
        purpose of transferring traditional reinsurance risk to the capital
        markets and (y) purchased by such US Facility Agreement Loan Party or
        any Subsidiary in accordance with its customary reinsurance underwriting
        procedures, or the entry by any US Facility Agreement Loan Party or any
        Subsidiary into swap transactions relating to such instruments in
        accordance with such procedures, shall be deemed to be the entry by such
        Person into a reinsurance contract and shall not be deemed to be an
        Investment by such Person.

        "L/C Commission Rate" means the rate per annum determined in accordance
        with Clause 18.1 (Letter of Credit Commission) or Schedule 9 (Pricing
        Schedule), as the case may be.

        "L/C Proportion" means, in relation to a Bank in respect of any Letter
        of Credit and save as otherwise provided herein, the proportion
        (expressed as a percentage) borne by such Bank's Available Commitment to
        the Available Facility immediately prior to the issue of such Letter of
        Credit.

        "L/C Valuation Date" means the first Business Day which falls six months
        after the Commencement Date and each day falling at six monthly
        intervals thereafter.

        "Letter of Credit" means a letter of credit issued or to be issued
        pursuant to Clause 3 (Utilisation of the Facility) substantially in the
        form set out in Schedule 6 (Form of Letter of Credit) or in such other
        form requested by the Account Party which is approved by the Banks (such
        approval not to be unreasonably withheld or delayed).

        "Letter of Credit Commission" means the letter of credit commission
        described in Clause 18.1 (Letter of Credit Commission).

        "LIBOR" means, in relation to any Unpaid Sum on which interest for a
        given period is to accrue, the percentage rate per annum equal to the
        offered quotation which appears on the page of the Telerate Screen which
        displays an average British Bankers Association Interest Settlement Rate
        for the currency of the relevant amount (being currently "3740" or, as
        the case may be, "3750") for such period as of 11.00 a.m. London time on
        the Quotation Date for such period or, if such page or such service
        shall cease to be available, such other page or such other service for
        the purpose of displaying an average British Bankers Association
        Interest Settlement Rate for such currency as the Agent, after
        consultation with the Banks and the Account Party, shall select, acting
        reasonably.

        "Lien" means, with respect to any asset, any mortgage, lien, pledge,
        charge, security interest or other charge or encumbrance of any kind, or
        any other type of preferential arrangement that has the practical effect
        of creating a security interest, in respect of such asset. For the
        purposes of this Agreement, the Account Party shall be deemed to own
        subject to a Lien any asset which it has acquired or holds subject to
        the interest of a vendor or lessor under any conditional sale agreement,
        capital lease or other title retention agreement relating to such asset.

        "Lloyd's" means the Society incorporated by Lloyd's Act 1871 by the name
        of Lloyd's.

        "Mandatorily Convertible Preferred Securities" means units comprised of
        (i) Preferred Securities or preferred shares of the Account Party and
        (ii) a contract for the

                                       -8-

<PAGE>

        sale of ordinary shares of the Account Party (including "Feline
        Prides(TM)", "Rhinos(TM)" or any substantially similar securities).

        "Mandatory Liquid Asset Costs Rate" in relation to any Unpaid Sum shall
        bear the meaning given to it in Schedule 7 (Mandatory Liquid Asset Costs
        Rate).

        "Majority Banks" means, save as otherwise provided herein:

        (a)  whilst there are no Outstandings, a Bank or Banks whose
             Commitments amount (or, if each Bank's Commitment has been
             reduced to zero, did immediately before such reduction to zero,
             amount) in aggregate to sixty-six and two thirds per cent. or
             more (or for the purposes of Clause 17.18 (Acceleration and
             Cancellation) to more than fifty per cent.) of the Total
             Commitments; and

        (b)  whilst there are Outstandings a Bank or Banks to whom in aggregate
             more than sixty-six and two thirds per cent. (or for the purposes
             of Clause 17.18 (Acceleration and Cancellation) more than fifty
             per cent.) of the Outstandings is owed,

        provided that, in respect of a Letter of Credit issued by a Declining
        Bank pursuant to sub-clause 4.7.2 of Clause 4.7 (Replacement Letters of
        Credit), an amount equal to the amount of its Outstandings in respect
        thereof multiplied by the Reduction Percentage applicable at that time
        shall be excluded in determining the amount of Outstandings owed to such
        Bank for the purposes of this definition only.

        "Material Debt" means Debt of the Account Party and/or one or more of
        its Subsidiaries, arising in one or more related or unrelated
        transactions, in an aggregate principal or face amount exceeding
        US$25,000,000.

        "Material Financial Obligations" means a principal amount of Debt and/or
        current payment obligations in respect of Derivatives Obligations of the
        Account Party and/or one or more of its Subsidiaries, arising in one or
        more related or unrelated transactions, exceeding in the aggregate
        US$25,000,000.

        "Material Subsidiary" means any Subsidiary having:

        (a)  assets (after inter company eliminations) in excess of 10 per cent.
             of the total assets of the Account Party and its Subsidiaries
             determined on a Consolidated basis; or

        (b)  annual net income constituting 10 per cent. or more of the total
             annual net income of the Account Party and its Subsidiaries on a
             Consolidated basis,

        in each case determined as of the end of the most recently ended fiscal
        year, and in any event ACE UK Limited and ACE Tempest Reinsurance Ltd.
        shall be construed as Material Subsidiaries.

        "Notice of Charge" means the notice of charge of the Charged Portfolio
        to be delivered by the Obligors to the Custodian pursuant to the terms
        of the Charge Agreement.

        "Obligors" means the Account Party and the Guarantor.

                                       -9-

<PAGE>

        "Original Agreement" means this Agreement as:

        (a)  amended and restated pursuant to the First Restatement Agreement,

        (b)  amended by the Amendment Agreement; and

        (c)  amended and restated pursuant to the Second Restatement Agreement,

        but prior to its amendment and restatement on the Commencement Date.

        "Original Letters of Credit" means the letters of credit issued under
        the Original Agreement.

        "Original Sterling Amount" means:

        (a)  in relation to a Letter of Credit denominated in sterling, the
             amount specified as the amount of the Letter of Credit in the
             Utilisation Request relating thereto; and

        (b)  in relation to a Letter of Credit denominated in dollars, the
             amount of sterling which could be purchased with the dollar amount
             of such Letter of Credit at the spot rate of exchange quoted by the
             Agent at or about 11.00 a.m. London time on the day falling three
             Business Days before the Utilisation Date for the purchase of
             sterling with dollars for delivery two Business Days thereafter.

        "Outstandings" means, at any time, the aggregate of the Sterling Amounts
        of the maximum actual and contingent liabilities of the Banks in respect
        of each outstanding Letter of Credit.

        "Permitted Liens" means such of the following as to which no
        enforcement, collection, execution, levy or foreclosure proceeding shall
        have been commenced or which are being contested in good faith by
        appropriate proceedings:

        (a)  Liens for taxes, assessments and governmental charges or levies not
             yet due and payable;

        (b)  Liens imposed by law, such as materialsmen's, mechanics',
             carriers', workmen's and repairmen's Liens and other similar Liens
             arising in the ordinary course of business securing obligations
             that are not overdue for a period of more than 90 days;

        (c)  pledges or deposits to secure obligations under workers'
             compensation laws or similar legislation or to secure public or
             statutory obligations; and

        (d)  easements, rights of way and other encumbrances on title to real
             property that do not render title to the property encumbered
             thereby unmarketable or materially adversely affect the use of such
             property for its present purposes.

        "Person" means an individual, a company, a corporation, a partnership,
        an association, a trust or any other entity or organisation, including a
        government or political subdivision or an agency or instrumentality
        thereof.

                                       -10-

<PAGE>

        "Potential Event of Default" means any event which would reasonably be
        expected to become (with the passage of time, the giving of notice, the
        making of any determination hereunder or any combination thereof) an
        Event of Default.

        "Preferred Interests" means, with respect to any Person, Equity
        Interests issued by such Person that are entitled to a preference or
        priority over any other Equity Interests issued by such Person upon any
        distribution of such Person's property and assets, whether by dividend
        or upon liquidation.

        "Preferred Securities" means:

        (a)   preferred securities issued by the Special Purpose Trust which
              shall provide, among other things, that dividends shall be payable
              only out of proceeds of interest payments on the Debentures; or

        (b)   other instruments that may be treated in whole or in part as
              equity for rating agency purposes while being treated as debt for
              tax purposes.

        "Proportion" means, in relation to a Bank the proportion borne by its
        Commitment to the Total Commitments (or, if the Total Commitments are
        then zero, by its Commitment to the Total Commitments immediately prior
        to their reduction to zero).

        "Qualifying Bank" means an institution which is a bank as defined for
        the purposes of Section 349 of the Income and Corporation Taxes Act 1988
        and such bank is within the charge to United Kingdom corporation tax as
        respects to interest which is (or which, if it were a Bank, would be)
        payable to it hereunder.

        "Quotation Date" means, in relation to any period for which an interest
        rate is to be determined hereunder, the day on which quotations would
        ordinarily be given by prime banks in the London interbank market for
        deposits in the currency in relation to which such rate is to be
        determined for delivery on the first day of that period, provided that,
        if, for any such period, quotations would ordinarily be given on more
        than one date, the Quotation Date for that period shall be the last of
        those dates.

        "Redeemable" means, with respect to any Equity Interest, any Debt or any
        other right or obligation, any such Equity Interest, Debt, right or
        obligation that:

        (a)   the issuer has undertaken to redeem at a fixed or determinable
              date or dates, whether by operation of a sinking fund or
              otherwise, or upon the occurrence of a condition not solely within
              the control of the issuer; or

        (b)   is redeemable at the option of the holder.

        "Reduction Percentage" means 20 per cent. x (5 - a); where "a" equals
        the remaining number of years (and for such purposes any incomplete year
        shall be treated as one year) for which the relevant Letter of Credit is
        currently valid.

        "Representations" means each of the representations set out in Clause 15
        (Representations).

        "Required Value" has the meaning ascribed to it in the Charge Agreement.

                                      -11-

<PAGE>

        "Second Restatement Agreement" means the agreement dated 21 November
        2001 which amends and restates the Original Agreement.

        "Securitisation Transaction" means any sale, assignment or other
        transfer by the Account Party or any Subsidiary of any accounts
        receivable, premium finance loan receivables, lease receivables or other
        payment obligations owing to the Account Party or such Subsidiary or any
        interest in any of the foregoing, together in each case with any
        collections and other proceeds thereof, any collection or deposit
        accounts related thereto, and any collateral, guarantees or other
        property or claims in favour of the Account Party or such Subsidiary
        supporting or securing payment by the obligor thereon of, or otherwise
        related to, any such receivables.

        "Security" means any security granted over the Charged Portfolio by the
        Obligors in favour of the Security Trustee pursuant to the Charge
        Agreement.

        "Security Documents" means the Charge Agreement, the Custodian's
        Undertaking and the Notice of Charge.

        "Special Purpose Trust" means a special purpose business trust
        established by the Account Party or ACE INA of which the Account Party
        or ACE INA will hold all the common securities, which will be the issuer
        of Preferred Securities, and which will loan to the Account Party or ACE
        INA (such loan being evidenced by the Debentures) the net proceeds of
        the issuance and sale of the Preferred Securities and common securities
        of such Special Purpose Trust.

        "Spot Rate" means the spot rate of exchange quoted by the Agent at or
        about 11.00 a.m. London time on the day on which the relevant
        calculation is to be made for the purchase of sterling with dollars or
        any other relevant currency for delivery two business days thereafter.

        "Sterling Amount" means:

        (a)    in relation to a Letter of Credit at any time:

               (i)  if such Letter of Credit is denominated in sterling, the
                    maximum actual and contingent liability of the Banks
                    thereunder or in respect thereof at such time; and

               (ii) if such Letter of Credit is denominated in dollars, the
                    equivalent in sterling of the maximum actual and contingent
                    liability of the Banks thereunder at such time, calculated
                    as at the later of the date which falls (1) two Business
                    Days before its Utilisation Date or (2) the most recent L/C
                    Valuation Date; and

        (b)    in relation to the Outstandings, the aggregate of the Sterling
               Amounts of each outstanding Letter of Credit.

        "Subsidiary" means, as to any Person, any corporation or other entity of
        which securities or other ownership interests having ordinary voting
        power to elect a majority of the board of directors or other persons
        performing similar functions are at the time directly

                                      -12-

<PAGE>

        or indirectly owned by such Person and, unless otherwise specified,
        "Subsidiary" means a Subsidiary of the Account Party.

        "Substitution Date" means the date on which a new Letter of Credit will
        be substituted for an existing Letter of Credit under Clause 5
        (Substitution of Letters of Credit), as specified in the relevant
        Substitution Request.

        "Substitution Period" means the period from the Commencement Date to the
        date falling 48 months prior to the then-applicable Termination Date.

        "Substitution Request" means a request substantially in the form set out
        in Schedule 12 (Form of Substitution Request).

        "Term" means, save as otherwise provided herein:

        (a)   in relation to any Letter of Credit, the period from its Effective
              Date until its Expiry Date; and

        (b)   in relation to an Unpaid Sum, any of those periods mentioned in
              Clause 20 (Default Interest and Break Costs).

        "Termination Date" means (subject to any extension of the Termination
        Date of a Letter of Credit under Clause 4 (Extension of Letters of
        Credit)) 30 September 2007 (unless the Account Party specifies an
        earlier date for the termination of any Letter of Credit in the
        Utilisation Request therefor, in which case the Termination Date of that
        Letter of Credit shall be that earlier date).

        "Termination Notice" has the meaning specified in Clause 3.8
        (Termination Notice).

        "Third Restatement Agreement" means the agreement dated 19 November 2002
        which amends and restates the Original Agreement.

        "Total Capitalisation" means, at any time, an amount (without
        duplication) equal to:

        (a)   the then outstanding Consolidated Debt of the Account Party and
              its Subsidiaries

        plus

        (b)   Consolidated stockholders' equity of the Account Party and its
              Subsidiaries

        plus (without duplication)

        (c)   the then issued and outstanding amount of Preferred Securities
              (including Mandatorily Convertible Preferred Securities) and
              (without duplication) Debentures.

        "Total Commitments" means, at any time, the aggregate of the Banks'
        Commitments.

                                      -13-

<PAGE>

        "Transfer Certificate" means a certificate substantially in the form set
        out in Schedule 2 (Form of Transfer Certificate) signed by a Bank and a
        Transferee under which:

        (a)   such Bank seeks to procure the transfer to such Transferee of all
              or a part of such Bank's rights, benefits and obligations under
              the Finance Documents upon and subject to the terms and conditions
              set out in Clause 27.3 (Assignments and Transfers by Banks); and

        (b)   such Transferee undertakes to perform the obligations it will
              assume as a result of delivery of such certificate to the Agent as
              contemplated in Clause 27.5 (Transfers by Banks).

        "Transfer Date" means, in relation to any Transfer Certificate, the date
        for the making of the transfer as specified in such Transfer
        Certificate.

        "Transferee" means a person to which a Bank seeks to transfer by
        novation all or part of such Bank's rights, benefits and obligations
        under the Finance Documents.

        "Unpaid Sum" means the unpaid balance of any of the sums referred to in
        Clause 20.1 (Default Interest).

        "US Facility Agreements" means each of:

        (a)   the US$800,000,000 364 day revolving credit facility agreement
              originally entered into on 11 June 1999 (as amended and restated
              on (i) 8 May 2000 and (ii) 6 April 2001) and made between, inter
              alia, ACE Limited and ACE INA as borrowers, the financial
              institutions named therein and others; and

        (b)   the US$250,000,000 revolving credit facility agreement originally
              entered into on 11 June 1999 (as amended and restated on 8 May
              2000) and made between, inter alia, ACE Limited and ACE INA as
              borrowers, the financial institutions named therein and others
              (the "Five Year US Facility"),

        in each case as the same may be further amended or restated from time to
        time.

        "US Facility Agreement Loan Parties" means, at any time, any or all of
        the Account Party, ACE INA, ACE Financial Services Inc., ACE Guaranty Re
        Inc., ACE Bermuda Insurance Ltd. and ACE Tempest Reinsurance Ltd.

        "US Fee Letter" means the fee letter dated 5 March 2001 and made
        between, inter alia, the Account Party, the arrangers of the US Facility
        Agreements, JP Morgan Securities Inc. and others.

        "US Letter of Credit Agreements" means any and all letter of credit
        agreements entered into by any borrower pursuant to the Five Year US
        Facility.

        "US Loan Documents" means:

        (a)   each US Facility Agreement;

        (b)   the US Notes;

                                      -14-

<PAGE>

        (c)  the US Fee Letter; and

        (d)  each US Letter of Credit Agreement.

        "US Notes" means each promissory note issued or to be issued pursuant to
        the terms of the US Facility Agreements.

        "Utilisation Date" means the date on which a Letter of Credit is to be
        issued.

        "Utilisation Request" means a notice substantially in the form set out
        in Schedule 4 (Form of Utilisation Request).

        "Voting Interests" means shares of capital stock issued by a
        corporation, or equivalent Equity Interest in any other Person, the
        holders of which are ordinarily, in the absence of contingencies,
        entitled to vote for the election of directors (or persons performing
        similar functions) of such Person, even if the right so to vote has been
        suspended by the happening of such a contingency.

        "Wholly-Owned Consolidated Subsidiary" means any Consolidated Subsidiary
        all of the shares of capital stock or other ownership interests of which
        (except directors' qualifying shares) are at the time directly or
        indirectly owned by the Account Party.

1.2     Interpretation
        Any reference in this Agreement to:

        the "Agent", "Security Trustee" or any "Bank" shall be construed so as
        to include its and any subsequent successors and permitted transferees
        in accordance with their respective interests;

        "continuing", in the context of an Event of Default shall be construed
        as a reference to an Event of Default which has not been remedied or
        waived in accordance with the terms hereof and in relation to a
        Potential Event of Default, one which has not been remedied within the
        relevant grace period or waived in accordance with the terms hereof.

        the "euro" means the single currency of participating member states of
        the European Union;

        a "holding company" of a company or corporation shall be construed as a
        reference to any company or corporation of which the first-mentioned
        company or corporation is a Subsidiary;

        a "law" shall be construed as any law (including common or customary
        law), statute, constitution, decree, judgment, treaty, regulation,
        directive, bye-law, order or any other legislative measure of any
        government, supranational, local government, statutory or regulatory
        body or court;

        a "member" shall be construed (as the context may require) as a
        reference to an underwriting member of Lloyd's;

        a "month" is a reference to a period starting on one day in a calendar
        month and ending on the numerically corresponding day in the next
        succeeding calendar month save that,

                                       -15-

<PAGE>

        where any such period would otherwise end on a day which is not a
        Business Day, it shall end on the next succeeding Business Day, unless
        that day falls in the calendar month succeeding that in which it would
        otherwise have ended, in which case it shall end on the immediately
        preceding Business Day, provided that, if a period starts on the last
        Business Day in a calendar month or if there is no numerically
        corresponding day in the month in which that period ends, that period
        shall end on the last Business Day in that later month (and references
        to "months" shall be construed accordingly);

        a "participating member state" is a reference to a member of the
        European Communities that adopts or has adopted the euro as its lawful
        currency in accordance with legislation of the European Union relating
        to European Monetary Union;

        a Bank's "participation", in relation to a Letter of Credit, shall be
        construed as a reference to the rights and obligations of such Bank in
        relation to such Letter of Credit as are expressly set out in this
        Agreement;

        a "successor" shall be construed so as to include an assignee or
        successor in title of such party and any person who under the laws of
        its jurisdiction of incorporation or domicile has assumed the rights and
        obligations of such party under this Agreement or to which, under such
        laws, such rights and obligations have been transferred;

        "tax" shall be construed so as to include any tax, levy, impost, duty or
        other charge of a similar nature (including any penalty or interest
        payable in connection with any failure to pay or any delay in paying any
        of the same);

        "VAT" shall be construed as a reference to value added tax including any
        similar tax which may be imposed in place thereof from time to time; and

        the "winding-up", "dissolution" or "administration" of a company or
        corporation shall be construed so as to include any equivalent or
        analogous proceedings under the law of the jurisdiction in which such
        company or corporation is incorporated or any jurisdiction in which such
        company or corporation carries on business including the seeking of
        liquidation, winding-up, reorganisation, dissolution, administration,
        arrangement, adjustment, protection or relief of debtors.

1.3     Currency Symbols
        1.3.1   "(Pounds)" and "sterling" denote lawful currency of the United
                Kingdom for the time being.

        1.3.2   "US$" and "dollars" denote lawful currency of the United States
                of America for the time being.

1.4     Agreements and Statutes
        Any reference in this Agreement to:

        1.4.1   this Agreement or any other agreement or document shall be
                construed as a reference to this Agreement or, as the case may
                be, such other agreement or document as the same may have been,
                or may from time to time be, amended, varied, novated or
                supplemented;

                                      -16-

<PAGE>

     1.4.2  a statute or treaty shall be construed as a reference to such
            statute or treaty as the same may have been, or may from time to
            time be, amended or, in the case of a statute, re-enacted; and

     1.4.3  a bylaw shall be construed as a reference to a bylaw made under
            Lloyd's Acts 1871 to 1982 as the same may have been, or may from
            time to time be, amended or replaced.

1.5  Headings
     Clause and Schedule headings are for ease of reference only.

1.6  Time
     Any reference in this Agreement to a time of day shall, unless a contrary
     indication appears, be a reference to London time.

1.7  Accounting Terms and Determinations
     Unless otherwise specified herein, all accounting terms used herein shall
     be interpreted, all accounting determinations hereunder shall be made, and
     all financial statements required to be delivered hereunder shall be
     prepared in accordance with generally accepted accounting principles as in
     effect from time to time ("GAAP"), applied on a basis consistent (except
     for changes concurred in by the Account Party's independent public
     accountants) with the most recent audited consolidated financial statements
     of the Account Party and its Consolidated Subsidiaries delivered to the
     Banks; provided that, if the Account Party notifies the Agent that the
     Account Party wishes to amend any covenant in Clause 16 (Covenants) to
     eliminate the effect of any change in generally accepted accounting
     principles on the operation of such covenant (or if the Agent notifies the
     Account Party that the Majority Banks wish to amend Clause 16 (Covenants)
     for such purpose), then the Account Party's compliance with such covenant
     shall be determined on the basis of generally accepted accounting
     principles in effect immediately before the relevant change in generally
     accepted account principals became effective, until either such notice is
     withdrawn or such covenant is amended in a manner satisfactory to the
     Account Party and the Majority Banks.

1.8  Third party rights
     A person who is not a party to this Agreement has no right under the
     Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
     Agreement.

2.   THE FACILITY

2.1  Grant of the Facility
     The Banks, upon the terms and subject to the conditions hereof, grant to
     the Account Party a dual currency letter of credit facility in an aggregate
     amount of (pound)380,000,000.

2.2  Purpose and Application
     The Facility is intended to support Funds at Lloyd's, and, accordingly, the
     Account Party shall apply all Letters of Credit issued hereunder in or
     towards satisfaction of such purpose and none of the Finance Parties shall
     be obliged to concern themselves with such application.

                                      -17-

<PAGE>

2.3  Conditions Precedent
     Save as the Banks may otherwise agree, the Account Party may not deliver
     any Utilisation Request unless the Agent has confirmed to the Account Party
     and the Banks that it has received all of the documents and other evidence
     listed in Schedule 3 (Conditions Precedent) and that each is, in form and
     substance, satisfactory to the Agent.

2.4  Several Obligations
     The obligations of each Bank are several and the failure by a Bank to
     perform its obligations hereunder and/or under any Letter of Credit issued
     hereunder shall not affect the obligations of either Obligor towards any
     other party hereto nor shall any other party be liable for the failure by
     such Bank to perform its obligations hereunder and/or under such Letter of
     Credit.

2.5  Several Rights
     The rights of each Finance Party are several and any debt arising hereunder
     at any time from an Obligor to any Finance Party shall be a separate and
     independent debt. Each such party shall be entitled to protect and enforce
     its individual rights arising out of this Agreement independently of any
     other party (so that it shall not be necessary for any party hereto to be
     joined as an additional party in any proceedings for this purpose).

2.6  Cancellation of Original Letters of Credit
     On and with effect from the Effective Date, all outstanding Original
     Letters of Credit shall be cancelled and replaced by the Letters of Credit
     issued after the Commencement Date.

3.   UTILISATION OF THE FACILITY

3.1  Utilisation Conditions for the Facility
     Save as otherwise provided herein, a Letter of Credit will be issued at the
     request of the Account Party on behalf of an Applicant if:

     3.1.1  no later than 10.00 a.m. two Business Days before the proposed
            Utilisation Date, the Agent has received a duly completed
            Utilisation Request from the Account Party;

     3.1.2  the proposed Utilisation Date is a Business Day falling within the
            Availability Period;

     3.1.3  the proposed Original Sterling Amount of such Letter of Credit is
            less than or equal to the Available Facility;

     3.1.4  the proposed Term of the Letter of Credit is a period ending on or
            before the Termination Date;

     3.1.5  the Letter of Credit is substantially in the form set out in
            Schedule 6 (Form of Letter of Credit) or in such other form
            requested by the Account Party which is approved by the Banks (such
            approval not to be unreasonably withheld or delayed);

     3.1.6  the beneficiary of such Letter of Credit is Lloyd's;

                                      -18-

<PAGE>

     3.1.7  on and as of the proposed Utilisation Date:

            (a)  no Event of Default or Potential Event of Default has occurred
                 and is continuing; and

            (b)  the Representations are true in all material respects; and

     3.1.8  the Agent has received evidence acceptable to it that the Charged
            Portfolio has been delivered to the Custodian and the amount of the
            Charged Portfolio is at least equal to the Required Value.

3.2  Request for Letters of Credit
     A single Utilisation Request may be issued in respect of more than one
     Letter of Credit.

3.3  Completion of Letters of Credit
     The Agent is authorised to arrange for the issue of any Letter of Credit
     pursuant to Clause 3.1 (Utilisation Conditions for the Facility) by:

     3.3.1  completing the Effective Date of such Letter of Credit;

     3.3.2  completing the schedule to such Letter of Credit with the percentage
            participation of each Bank as allocated pursuant to the terms
            hereof; and

     3.3.3  executing such Letter of Credit on behalf of each Bank and following
            such execution delivering such Letter of Credit to Lloyd's on the
            Utilisation Date,

     provided that the Agent shall not deliver any such Letter of Credit to
     Lloyd's unless the Agent is satisfied that:

            (a)  Lloyd's has cancelled (or will upon such delivery cancel) the
                 Original Letters of Credit; and

            (b)  all amounts outstanding in respect of the Original Letters of
                 Credit have been paid in full.

3.4  Dollar Option
     The Account Party may, in a Utilisation Request, request that such Letter
     of Credit be denominated in dollars in which event such Letter of Credit
     shall be denominated in dollars.

3.5  Amounts of Letters of Credit
     The amount of a Letter of Credit shall be:

     3.5.1  the Original Sterling Amount of such Letter of Credit, if such
            Letter of Credit is to be denominated in sterling; and

     3.5.2  if such Letter of Credit is to be denominated in dollars, the amount
            specified in the Utilisation Request relating thereto.

                                      -19-

<PAGE>

3.6  Each Bank's Participation in Letters of Credit
     Save as otherwise provided herein, each Bank will participate in each
     Letter of Credit issued pursuant to this Clause 3 in the proportion borne
     by its Available Commitment to the Available Facility immediately prior to
     the issue of such Letter of Credit.

3.7  Cancellation of Commitments
     On the expiry of the Availability Period the Available Facility and each
     Bank's Available Commitment shall be reduced to zero.

3.8  Termination Notice
     Subject to Clause 4.2 (Request for Extension), no later than the date
     falling 48 months prior to the then-applicable Termination Date of each
     Letter of Credit, the Agent shall give notice to Lloyd's, in the manner
     described in that Letter of Credit, terminating that Letter of Credit on
     that Termination Date (such notice, a "Termination Notice"). The Agent
     shall promptly send a copy of any Termination Notice to the Account Party
     and each Bank.

4.   EXTENSION OF LETTERS OF CREDIT

4.1  Right to Request Extension
     Each Bank acknowledges that the Account Party may request one or more
     extensions of a Letter of Credit hereunder, in accordance with this Clause
     4.

4.2  Request for Extension
     If the Account Party wishes, in any year, to request the extension of a
     Letter of Credit, the Account Party shall give the Agent notice, by way of
     a Letter of Credit extension request in the form of Schedule 5 (Form of
     Extension Request), before the date which falls eight weeks prior to 30
     September in that year, specifying that the then-applicable Termination
     Date of that Letter of Credit is to be extended to 30 September of the year
     immediately succeeding the year in which that Termination Date falls (such
     notice being a "Notice of Extension"). A single Notice of Extension may be
     delivered in respect of more than one Letter of Credit.

4.3  Non-Delivery of Notice of Extension
     If the Account Party does not deliver a Notice of Extension in respect of
     one or more Letters of Credit in accordance with the provisions of Clause
     4.2 (Request for Extension), the Agent shall give a Termination Notice
     under Clause 3.8 (Termination Notice) to terminate those Letters of Credit
     on the then-applicable Termination Date.

4.4  Notification to Banks
     Upon receipt of a Notice of Extension in any year, the Agent shall promptly
     notify each Bank of the contents thereof and of the amount of such Bank's
     participation in the relevant Letter of Credit, together with notice of the
     applicable Funds Date for such year. Each Bank undertakes to notify the
     Agent in writing as soon as reasonably practicable after it has determined
     that it will not agree to an extension requested in any year, and in any
     event by no later than close of business on the date which falls four weeks
     prior to 30 September in that year, and the Agent shall give notice thereof
     to the Account Party within two Business Days of notification from such
     Bank. Unless notice is given to the

                                      -20-

<PAGE>

     Agent as aforesaid, each Bank will be deemed automatically to have agreed
     to such extension.

4.5  Extension of a Letter of Credit
     4.5.1  If all of the Banks agree (or are deemed to have agreed) to the
            extension of the Letter of Credit in accordance with Clause 4.4
            (Notification to Banks), the Agent shall notify the Account Party
            and the Banks thereof and, subject to the provisions of Clause 4.8
            (Extension Conditions Precedent), the Letter of Credit shall be
            automatically extended in accordance with the terms thereof.

     4.5.2  If a Bank gives notice in accordance with the provisions of Clause
            4.4 (Notification to Banks) that it does not agree to a requested
            extension of any Letter of Credit, the Agent shall notify the
            Account Party and Lloyd's accordingly within two Business Days
            thereafter, and the succeeding provisions of this Clause 4 shall
            apply.

4.6  Substitute Bank
     4.6.1  If any Bank (a "Declining Bank") gives notice in accordance with the
            provisions of Clause 4.4 (Notification to Banks) that it does not
            agree to an extension in any year, then the Account Party may
            designate, by the date which falls three weeks prior to 30 September
            in that year, an Approved Credit Institution (the "Substitute Bank")
            which is willing to assume all of the rights and obligations of the
            Declining Bank in respect of its participation in the relevant
            Letter of Credit (the "Old Letter of Credit").

     4.6.2  If the Account Party has designated a Substitute Bank, it shall
            promptly notify the Agent and the Declining Bank thereof and shall
            procure the release by Lloyd's of the Old Letter of Credit from the
            Funds at Lloyd's of the relevant Applicant.

     4.6.3  The Declining Bank shall, with effect from 30 September in that
            year, transfer its rights and obligations hereunder to the
            Substitute Bank in accordance with the provisions of Clause 27.5
            (Transfers by Banks).

     4.6.4  The Substitute Bank shall pay to the Declining Bank all amounts then
            due and owing (and all fees accrued to but excluding the date of
            such transfer) to the Declining Bank in respect of its participation
            in the Old Letter of Credit.

4.7  Replacement Letters of Credit
     4.7.1  If a Substitute Bank has become party hereto pursuant to Clause 4.6
            (Substitute Bank), then, subject to the provisions of Clause 4.8
            (Extension Conditions Precedent), the Banks who have agreed to the
            extension of the Old Letter of Credit in any year (the "Extending
            Banks") shall, together with the Substitute Bank, issue, with effect
            from 30 September in that year, and participate in, a new Letter of
            Credit (the "New Letter of Credit") which shall:

            (a) replace the Old Letter of Credit,

            (b) be in an amount equal to the Old Letter of Credit; and

                                      -21-

<PAGE>

            (c)  have a Termination Date which corresponds with the Termination
                 Date specified in the Notice of Extension.

     4.7.2  If a Substitute Bank has not been designated, then:

            (a)  the Account Party shall procure the release by Lloyd's of the
                 Old Letter of Credit from the Funds at Lloyd's of the relevant
                 Applicant,

            (b)  subject to the provisions of Clause 4.8 (Extension Conditions
                 Precedent), the Extending Banks shall issue, with effect from
                 30 September in that year, and participate in, a new Letter of
                 Credit (the "Reduced Letter of Credit") which shall:

                 (i)   replace their participation in the Old Letter of Credit;

                 (ii)  be in an amount equal to the Old Letter of Credit less
                       the amount of the Declining Bank's participation therein;
                       and

                 (iii) have a Termination Date which corresponds with the
                       Termination Date specified in the Notice of Extension;
                       and

            (c)  the Declining Bank shall issue, with effect from 30 September
                 in that year, and participate in, a separate Letter of Credit
                 (a "Bilateral Letter of Credit") which shall:

                 (i)   replace its participation in the Old Letter of Credit;

                 (ii)  be in an amount equal to the Declining Bank's
                       participation in the Old Letter of Credit; and

                 (iii) have a Termination Date which is the same as the
                       Termination Date of the Old Letter of Credit (as the same
                       may have been extended from time to time with the
                       agreement of the Declining Bank).

4.8  Extension Conditions Precedent
     4.8.1  On or prior to close of business on 30 September in the year
            immediately following the delivery of any Notice of Extension, the
            Account Party shall promptly notify the Agent if:

            (a)  an Event of Default or Potential Event of Default occurs which
                 is continuing;

            (b)  any of the representations and warranties of either or both of
                 the Obligors contained in this Agreement or in the Charge
                 Agreement cease to be correct in all material respects, or
                 become misleading in any material respect; or

            (c)  the Letter of Credit which is the subject of such Notice of
                 Extension ceases solely to be used to support the relevant
                 Applicant's underwriting business at Lloyd's which has been
                 provided in accordance with the requirements of Lloyd's
                 applicable to it.

                                      -22-

<PAGE>

        4.8.2  Subject to due notification to Lloyd's in accordance with the
               provisions of the relevant Letter of Credit, the Banks shall not
               be obliged to agree to any extension requested if the Account
               Party fails to comply with its obligations under Clause 4
               (Extension of Letters of Credit) or if any of the events
               specified in sub-clause 4.8.1 above occurs.

4.9     Cancellation of Bilateral Letters of Credit
        At any time after the issue of a Bilateral Letter of Credit by a
        Declining Bank the Account Party may give the Agent and the Declining
        Bank not less than fourteen days' prior written notice of its intention
        to procure that the liability of the Declining Bank under such Letter of
        Credit is reduced to zero (whereupon it shall do so).

4.10    Mandatory Collateralisation
        If a Letter of Credit is extended in accordance with this Clause 4 and,
        on or prior to the time of such extension, the Account Party had failed
        to comply with its obligations under Clause 4 (Extension of Letters of
        Credit) or any of the events specified in sub-clause 4.8.1 of Clause 4.8
        (Extension Conditions Precedent) had occurred, the Agent may (and, if so
        instructed by the Majority Banks participating in such Letter of Credit,
        shall) require the Account Party to procure that the liabilities of each
        of the Banks under such Letter of Credit are reduced to zero and/or
        provide Cash Collateral for each Bank's L/C Proportion under such Letter
        of Credit.

4.11    Revised Letters of Credit
        In the event that the Funds at Lloyd's Requirements of an Applicant
        change at or around the time of any given Funds Date in terms of amount
        and/or the identity of the Applicant, then, subject to the approval of
        Lloyd's and subject to each Bank's Outstandings under the Letters of
        Credit issued hereunder not being increased other than in accordance
        with Clause 6 (Increase of the Facility), the Banks shall co-operate
        with the Account Party to ensure to the extent reasonably possible that
        the Letters of Credit provide for the revised Funds at Lloyd's
        Requirements of the Applicants.

5.      SUBSTITUTION OF LETTERS OF CREDIT

5.1     Request For Substitution
        At any time prior to the end of the Substitution Period, the Account
        Party may request the cancellation of any existing Letter(s) of Credit
        and the substitution therefor of one or more new Letters of Credit in
        accordance with this Clause 5.

5.2     Substitution Request
        If the Account Party wishes to substitute one or more new Letters of
        Credit under Clause 5.1 (Request For Substitution), the Account Party
        shall give the Agent notice, by way of a duly signed and completed
        Substitution Request, no later than the date falling 30 Business Days
        prior to the proposed Substitution Date.

5.3     Substitution of a Letter of Credit
        5.3.1  Upon receipt of a Substitution Request, the Agent shall promptly
               notify each Bank of the contents thereof and of the amount of
               such Bank's participation in the proposed substitute Letter(s) of
               Credit and, subject to the provisions of Clause 5.4 (Substitution
               Conditions Precedent) and to the acceptance of the

                                      -23-

<PAGE>

             proposed substitution by Lloyd's, there shall be substituted for
             the existing Letter(s) of Credit the subject of the relevant
             Substitution Request new Letter(s) of Credit in accordance with
             the terms of this Clause 5.

     5.3.2   If a new Letter of Credit (the "Substitute Letter of Credit") is to
             be substituted for one or more existing Letters of Credit (the
             "Existing Letters of Credit") pursuant to sub-clause 5.3.1 above,
             the Banks shall issue, with effect from the Substitution Date, and
             participate in, a Substitute Letter of Credit which shall:

             (a)  replace the Existing Letter(s) of Credit;

             (b)  be in an amount equal to or less than the aggregate of all the
                  Existing Letters of Credit; and

             (c)  have the same Termination Date as the Existing Letters of
                  Credit.

5.4  Substitution Conditions Precedent
     5.4.1   On or prior to close of business on the Substitution Date
             immediately following the delivery of any Substitution Request, the
             Account Party shall promptly notify the Agent if:

             (a)  an Event of Default or Potential Event of Default occurs which
                  is continuing;

             (b)  any of the representations and warranties of either or both of
                  the Obligors contained in this Agreement or in the Charge
                  Agreement cease to be correct in all material respects, or
                  become misleading in any material respect; or

             (c)  the Letter of Credit which is the subject of such Substitution
                  Request ceases solely to be used to support the relevant
                  Applicant's underwriting business at Lloyd's which has been
                  provided in accordance with the requirements of Lloyd's
                  applicable to it.

     5.4.2   The Banks shall not be obliged to agree to any substitution
             requested if the Account Party fails to comply with its obligations
             under this Clause 5 (Substitution of Letters of Credit) or if any
             of the events specified in sub-clause 5.4.1 above occurs.

6.   INCREASE OF THE FACILITY

6.1  Request for Increase
     In the event that the Funds at Lloyd's Requirements of an Applicant
     increases at or around the time of any given Funds Date and, as a result of
     such increase, the aggregate amount of the Funds at Lloyd's Requirements of
     the Applicants on such Funds Date would exceed the aggregate amount of the
     Banks' Outstandings under the Letters of Credit, the Account Party shall be
     entitled to request an increase of the amount of the Letter of Credit of
     such Applicant by giving notice to the Agent no later than eight weeks
     prior to the Funds Date for such year (the "Increase Request"). The
     Increase Request shall be made in writing and shall be unconditional and
     irrevocable and shall specify:

                                      -24-

<PAGE>

     6.1.1  which Letters of Credit and Applicants the Increase Request relates
            to;

     6.1.2  the additional amount of commitments required by the Account Party
            from the Banks; and

     6.1.3  any other information relevant to the Increase Request.

6.2  Notification of Increase Request
     The Agent shall forward a copy of the Increase Request to the Banks as soon
     as practicable, and in any event no later than two Business Days after
     receipt thereof, together with notification of the amount of such Banks'
     pro rata participation in any such increased Letter of Credit.

6.3  Response to Increase Request
     If a Bank, in its sole discretion, agrees to the increase requested by the
     Account Party pursuant to the Increase Request, it shall give notice to the
     Agent (a "Notice of Increase") accordingly not less than three weeks prior
     to the Increase Date. If a Bank does not give such Notice of Increase by
     such date, then such Bank shall be deemed to have refused such increase.
     Nothing shall oblige a Bank to agree to the Increase Request.

6.4  Notification of Response to Increase Request
     The Agent shall notify the Account Party in writing of each Bank's decision
     in relation to the Increase Request (specifying which Banks have given a
     Notice of Increase, which Banks have actually refused the Increase Request
     and which Banks are deemed to have refused the Increase Request) no less
     than two weeks prior to the Increase Date.

6.5  Increase
     6.5.1   If one or more of the Banks does not give a Notice of Increase
             (hereinafter referred to as "Refusing Banks"), then the Refusing
             Banks shall not participate in any increase pursuant to the
             Increase Request but shall continue to participate in the Letters
             of Credit to the extent of their existing participation.

     6.5.2   If one or more Banks agree to the Increase Request, such Banks'
             participation in the relevant Letter(s) of Credit shall, subject to
             satisfaction of any conditions precedent which may be specified in
             connection therewith, be increased in accordance with the terms of
             the Increase Request.

     6.5.3   The Account Party shall co-operate with the Agent, the Banks and
             Lloyd's with respect to the replacement of any Letters of Credit
             required as a result of an Increase Request, and all parties hereto
             shall agree on any necessary replacement Letters of Credit in the
             context of any replacement Letters of Credit required in accordance
             with Clause 4.7 (Replacement Letters of Credit).

     6.5.4   The Facility, save as amended pursuant to the Increase Request,
             shall continue to operate in accordance with its terms.

                                      -25-

<PAGE>

7.   NOTIFICATION

7.1  Letters of Credit
     On or before each Utilisation Date, the Agent shall notify each Bank of the
     Letter of Credit that is to be issued by the Agent on behalf of the Banks,
     the name of the Applicant in respect of whom the Letter of Credit is being
     issued, the proposed length of the relevant Term and the aggregate
     principal amount of the relevant Letter of Credit allocated to such Bank
     pursuant to this Agreement.

7.2  Demands under Letters of Credit
     If a demand is made by Lloyd's under a Letter of Credit, the Agent shall
     promptly make demand upon the Account Party in accordance with this
     Agreement and notify the Banks accordingly.

8.   THE ACCOUNT PARTY'S LIABILITIES IN RELATION TO LETTERS OF CREDIT

8.1  The Account Party's Indemnity to Banks
     The Account Party shall irrevocably and unconditionally, as a primary
     obligation, indemnify (on demand by the Agent) each Bank against:

     8.1.1   any sum paid or due and payable by such Bank in accordance with the
             terms of any Letter of Credit requested by the Account Party; and

     8.1.2   all liabilities, costs (including, without limitation, any costs
             incurred in funding any amount which falls due from such Bank in
             connection with such Letter of Credit), claims, losses and expenses
             which such Bank may at any time properly incur or sustain in
             connection with any Letter of Credit.

8.2  Preservation of Rights
     Neither the obligations of the Account Party set out in this Clause 8 nor
     the rights, powers and remedies conferred on any Bank by this Agreement or
     by law shall be discharged, impaired or otherwise affected by:

     8.2.1   the winding-up, dissolution, administration or re-organisation of
             any Bank or any other person or any change in its status, function,
             control or ownership;

     8.2.2   any of the obligations of any Bank or any other person hereunder or
             under any Letter of Credit or under any other security taken in
             respect of the Account Party's obligations hereunder or otherwise
             in connection with any Letter of Credit being or becoming illegal,
             invalid, unenforceable or ineffective in any respect;

     8.2.3   time or other indulgence being granted or agreed to be granted to
             any Bank or any other person in respect of its obligations
             hereunder or under or in connection with any Letter of Credit or
             under any such other security;

     8.2.4   any amendment to, or any variation, waiver or release of, any
             obligation of any Bank or any other person under any Letter of
             Credit or this Agreement; or

     8.2.5   any other act, event or omission which, but for this Clause 8,
             might operate to discharge, impair or otherwise affect any of the
             obligations of the Account Party

                                      -26-

<PAGE>

          set out in this Clause 8 or any of the rights, powers or remedies
          conferred upon any Bank by this Agreement or by law.

     The obligations of the Account Party set out in this Clause 8 shall be in
     addition to and independent of every other security which any Bank may at
     any time hold in respect of the Account Party's obligations hereunder.

8.3  Settlement Conditional
     Any settlement or discharge between the Account Party and a Bank shall be
     conditional upon no security or payment to such Bank by the Account Party
     or any other person on behalf of the Account Party, being avoided or
     reduced by virtue of any laws relating to bankruptcy, insolvency,
     liquidation or similar laws of general application and, if any such
     security or payment is so avoided or reduced, such Bank shall be entitled
     to recover the value or amount of such security or payment from the Account
     Party subsequently as if such settlement or discharge had not occurred.

8.4  Right to make Payments under Letters of Credit
     Each Bank shall be entitled to make any payment in accordance with the
     terms of the relevant Letter of Credit without any reference to or further
     authority from the Account Party or any other investigation or enquiry. The
     Account Party irrevocably authorises each Bank to comply with any demand
     under a Letter of Credit which is valid on its face.

8.5  Revaluation of Outstandings
     On each L/C Valuation Date, the Agent shall calculate the amount of the
     Outstandings (having regard to changes in the Sterling Amounts of the
     Letters of Credit which may arise as a result of currency fluctuations),
     and the Agent shall notify the Account Party of the amount, if any (the
     "Excess Amount"), by which the Outstandings exceed 105 per cent. of the
     aggregate Commitments of the Banks on such date, and the Account Party
     shall secure such Excess Amount by providing Cash Collateral in an amount
     not less than the Excess Amount, provided that if the Account Party
     provides Cash Collateral as aforesaid and, on any succeeding L/C Valuation
     Date, the Excess Amount as determined on such date (the "New Excess
     Amount") is:

     8.5.1   less than the amount of the Cash Collateral provided at such time,
             the Agent shall deliver to the Account Party an amount equal to the
             difference between the amount of such Cash Collateral and the New
             Excess Amount; or

     8.5.2   greater than the amount of Cash Collateral provided at such time,
             the Account Party shall deliver to the Agent an amount equal to the
             amount by which the New Excess Amount exceeds the amount of such
             Cash Collateral.

9.   CANCELLATION and COLLATERALISATION

9.1  Cancellation/Cash Collateralisation of Letters of Credit
     The Account Party may give the Agent not less than fourteen days' prior
     notice of its intention to procure that the liability of each Bank under a
     Letter of Credit requested by it is reduced to zero (whereupon it shall do
     so) or provide Cash Collateral for each Bank's L/C Proportion under such
     Letter of Credit (whereupon it shall do so).

                                      -27-

<PAGE>

9.2    Notice of Cancellation or Collateralisation
       Any notice of cancellation or collateralisation given by the Account
       Party pursuant to this Clause 9 shall be irrevocable, shall specify the
       date upon which such cancellation or collateralisation is to be made and
       the amount of such cancellation or collateralisation and shall oblige the
       Account Party to procure such cancellation or collateralisation on such
       date.

9.3    Notice of Removal of a Bank
       If:

       9.3.1  any sum payable to any Bank by the Account Party is required to
              be increased pursuant to Clause 10.1 (Tax Gross-up); or

       9.3.2  any Bank claims indemnification from the Account Party under
              Clause 10.2 (Tax Indemnity) or Clause 12.1 (Increased Costs),

       the Account Party may, whilst such circumstance continues, give the Agent
       at least ten Business Days' notice (which notice shall be irrevocable) of
       its intention to cancel, and/or provide Cash Collateral in respect of the
       Commitment of such Bank.

9.4    Removal of a Bank
       On the day the notice referred to in Clause 9.3 (Notice of Removal of a
       Bank) expires, the Account Party shall procure either that such Bank's
       L/C Proportion of each relevant Letter of Credit be reduced to zero (by
       reduction of the amount of such Letter of Credit in an amount equal to
       such Bank's L/C Proportion) or that Cash Collateral be provided in an
       amount equal to such Bank's L/C Proportion of such Letter of Credit.

9.5    No Further Availability
       A Bank for whose account a repayment is to be made under Clause 9.3
       (Notice of Removal of a Bank) shall not be obliged to participate in the
       making of any Letter of Credit on or after the date upon which the Agent
       receives the Account Party's notice of its intention to procure the
       repayment of such Bank's share of the Outstandings, and such Bank's
       Available Commitment shall be reduced to zero.

9.6    No Other Repayments or Cancellation
       The Account Party shall not repay or cancel all or any part of the
       Outstandings except at the times and in the manner expressly provided for
       in this Agreement.

10.    TAXES

10.1   Tax Gross-up
       All payments to be made by an Obligor to any Finance Party hereunder
       shall be made free and clear of and without deduction for or on account
       of tax unless such Obligor is required to make such a payment subject to
       the deduction or withholding of tax, in which case the sum payable by
       such Obligor (in respect of which such deduction or withholding is
       required to be made) shall be increased to the extent necessary to ensure
       that such Finance Party receives a sum net of any deduction or
       withholding equal to the sum which it would have received had no such
       deduction or withholding been made or required to be made.

                                      -28-

<PAGE>

10.2   Tax Indemnity
       Without prejudice to Clause 10.1 (Tax Gross-up), if any Finance Party is
       required to make any payment of or on account of tax on or in relation to
       any sum received or receivable hereunder (including any sum deemed for
       purposes of tax to be received or receivable by such Finance Party
       whether or not actually received or receivable) or if any liability in
       respect of any such payment is asserted, imposed, levied or assessed
       against any Finance Party, the Account Party shall, upon demand of the
       Agent, promptly indemnify the Finance Party which suffers a loss or
       liability as a result against such payment or liability, together with
       any interest, penalties, costs and expenses payable or incurred in
       connection therewith, provided that this Clause 10.2 shall not apply to:

       10.2.1  any tax imposed on and calculated by reference to the net income
               actually received or receivable by such Finance Party by the
               jurisdiction in which such Finance Party is incorporated; or

       10.2.2  any tax imposed on and calculated by reference to the net income
               of the Facility Office of such Finance Party actually received or
               receivable by such Finance Party by the jurisdiction in which its
               Facility Office is located.

10.3   Claims by Banks
       A Bank intending to make a claim pursuant to Clause 10.2 (Tax Indemnity)
       shall notify the Agent of the event giving rise to the claim, whereupon
       the Agent shall notify the Account Party thereof.

11.    TAX RECEIPTS

11.1   Notification of Requirement to Deduct Tax
       If, at any time, an Obligor is required by law to make any deduction or
       withholding from any sum payable by it hereunder (or if thereafter there
       is any change in the rates at which or the manner in which such
       deductions or withholdings are calculated), such Obligor shall promptly,
       upon becoming aware of the same, notify the Agent.

11.2   Evidence of Payment of Tax
       If an Obligor makes any payment hereunder in respect of which it is
       required to make any deduction or withholding, it shall pay the full
       amount required to be deducted or withheld to the relevant taxation or
       other authority within the time allowed for such payment under applicable
       law and shall deliver to the Agent for each Bank, within thirty days
       after it has made such payment to the applicable authority, an original
       receipt (or a certified copy thereof) issued by such authority evidencing
       the payment to such authority of all amounts so required to be deducted
       or withheld in respect of that Bank's share of such payment.

11.3   Tax Credit Payment
       If an additional payment is made under Clause 10 (Taxes) by an Obligor
       for the benefit of any Finance Party and such Finance Party, in its sole
       discretion, determines that it has obtained (and has derived full use and
       benefit from) a credit against, a relief or remission for, or repayment
       of, any tax, then, if and to the extent that such Finance Party, in its
       sole opinion, determines that:

                                      -29-

<PAGE>

       11.3.1  such credit, relief, remission or repayment is in respect of or
               calculated with reference to the additional payment made pursuant
               to Clause 10 (Taxes); and

       11.3.2  its tax affairs for its tax year in respect of which such credit,
               relief, remission or repayment was obtained have been finally
               settled,

       such Finance Party shall, to the extent that it can do so without
       prejudice to the retention of the amount of such credit, relief,
       remission or repayment, pay to such Obligor such amount as such Finance
       Party shall, in its sole opinion, determine to be the amount which will
       leave such Finance Party (after such payment) in no worse after-tax
       position than it would have been in had the additional payment in
       question not been required to be made by such Obligor.

11.4   Tax Credit Clawback
       If any Finance Party makes any payment to an Obligor pursuant to Clause
       11.3 (Tax Credit Payment) and such Finance Party subsequently determines,
       in its sole opinion, that the credit, relief, remission or repayment in
       respect of which such payment was made was not available or has been
       withdrawn or that it was unable to use such credit, relief, remission or
       repayment in full, the Obligor shall reimburse such Finance Party such
       amount as such Finance Party determines, in its sole opinion, is
       necessary to place it in the same after-tax position as it would have
       been in if such credit, relief, remission or repayment had been obtained
       and fully used and retained by such Finance Party.

11.5   Tax and Other Affairs
       No provision of this Agreement shall interfere with the right of any
       Finance Party to arrange its tax or any other affairs in whatever manner
       it thinks fit, oblige any Finance Party to claim any credit, relief,
       remission or repayment in respect of any payment under Clause 10.1 (Tax
       Gross-up) in priority to any other credit, relief, remission or repayment
       available to it nor oblige any Finance Party to disclose any information
       relating to its tax or other affairs or any computations in respect
       thereof.

12.    INCREASED COSTS

12.1   Increased Costs

       If, by reason of (a) any change in law or in its interpretation or
       administration and/or (b) compliance with any request or requirement
       relating to the maintenance of capital or any other request from or
       requirement of any central bank or other fiscal, monetary or other
       authority (being a request or requirement with which banks are accustomed
       to comply) and/or (c) the introduction of, changeover to or operation of
       the euro in any participating member state:

       12.1.1  a Bank or any holding company of such Bank is unable to obtain
               the rate of return on its capital which it would have been able
               to obtain but for such Bank's entering into or assuming or
               maintaining a commitment, issuing or performing its obligations
               under this Agreement or any Letter of Credit;

       12.1.2  a Bank or any holding company of such Bank incurs a cost as a
               result of such Bank's entering into or assuming or maintaining a
               commitment, issuing or performing its obligations under this
               Agreement or any Letter of Credit; or

                                      -30-

<PAGE>

       12.1.3  there is any increase in the cost to a Bank or any holding
               company of such Bank of funding or maintaining such Bank's share
               of any Unpaid Sum or any Letter of Credit,

       then the Account Party shall, from time to time on demand of the Agent,
       promptly pay to the Agent for the account of that Bank amounts sufficient
       to indemnify that Bank or to enable that Bank to indemnify its holding
       company from and against, as the case may be, (a) such reduction in the
       rate of return of capital, (b) such cost or (c) such increased cost.

12.2   Increased Costs Claims
       A Bank intending to make a claim pursuant to Clause 12.1 (Increased
       Costs) shall notify the Agent of the event giving rise to such claim and
       the amount of such claim and the basis for calculation of such amount in
       reasonable detail whereupon the Agent shall notify the Account Party
       thereof.

12.3   Exclusions
       Notwithstanding the foregoing provisions of this Clause 12, no Bank shall
       be entitled to make any claim under this Clause 12 in respect of:

       12.3.1  any cost, increased cost or liability as referred to in Clause
               12.1 (Increased Costs) to the extent the same is compensated by
               the Mandatory Liquid Asset Costs Rate; or

       12.3.2  any cost, increased cost or liability compensated by Clause 10
               (Taxes).

13.    ILLEGALITY
       If, at any time, it is or will become unlawful or prohibited pursuant to
       any request from or requirement of any central bank or other fiscal,
       monetary or other authority (being a request or requirement with which
       banks are accustomed to comply) for a Bank to fund, issue, participate in
       or allow to remain outstanding all or part of its share of the Letters of
       Credit, then that Bank shall, promptly after becoming aware of the same,
       deliver to the Account Party through the Agent a notice to that effect
       and:

       13.1.1  such Bank shall not thereafter be obliged to participate in any
               Letter of Credit or issue any Letter of Credit (whichever shall
               be so affected) and the amount of its Available Commitment shall
               be immediately reduced to zero; and

       13.1.2  if the Agent on behalf of such Bank so requires, the Account
               Party shall on such date as the Agent shall have specified ensure
               that the liabilities of such Bank under or in respect of each
               affected Letter of Credit are reduced to zero or otherwise
               secured by providing Cash Collateral in an amount equal to such
               Bank's L/C Proportion of such Letters of Credit or such Bank's
               maximum actual or contingent liabilities under such Letter of
               Credit.

14.    MITIGATION

       If, in respect of any Bank, circumstances arise which would or would upon
       the giving of notice result in:

                                      -31-

<PAGE>

       14.1.1  an increase in any sum payable to it or for its account pursuant
               to Clause 10.1 (Tax Gross-up);

       14.1.2  a claim for indemnification pursuant to Clause 10.2 (Tax
               Indemnity) or Clause 12.1 (Increased Costs); or

       14.1.3  the reduction of its Available Commitment to zero or any
               repayment to be made pursuant to Clause 13 (Illegality),

       then, without in any way limiting, reducing or otherwise qualifying the
       rights of such Bank or the obligations of the Obligors under any of the
       Clauses referred to in sub-clauses 14.1.1, 14.1.2 and 14.1.3 such Bank
       shall promptly upon becoming aware of such circumstances notify the Agent
       thereof and, in consultation with the Agent and the Account Party and to
       the extent that it can do so lawfully and without prejudice to its own
       position, take reasonable steps (including a change of location of its
       Facility Office or the transfer of its rights, benefits and obligations
       hereunder to another financial institution which is an Approved Credit
       Institution and which is acceptable to the Account Party and willing to
       participate in the Facility) to mitigate the effects of such
       circumstances, provided that such Bank shall be under no obligation to
       take any such action if, in the opinion of such Bank, to do so might have
       any adverse effect upon its business, operations or financial condition
       (other than any minor costs and expenses of an administrative nature).

15.    REPRESENTATIONS

       The Obligors jointly and severally represent and warrant on the
       Commencement Date that:

15.1   Corporate Existence and Power
       The Account Party is a company limited by shares, and the Guarantor is a
       limited liability company, and in each case, is duly incorporated and
       validly existing under the laws of its jurisdiction of incorporation and
       the Account Party is in good standing under the laws of the Cayman
       Islands. Each of the Obligors has all corporate powers and all material
       governmental licenses, authorisations, consents and approvals required to
       carry on its respective business as now conducted. The Guarantor is a
       Wholly-Owned Consolidated Subsidiary of the Account Party.

15.2   Corporate and Governmental Authorisation; No Contravention
       The execution, delivery and performance by each Obligor of this Agreement
       and the other Finance Documents to which it is a party are within its
       corporate powers, have been duly authorised by all necessary corporate
       action, require no action by or in respect of, or filing with, any
       governmental body, agency or official and do not contravene, or
       constitute a default under, any provision of applicable law or regulation
       or of the memorandum of association, articles of association or bye-laws
       (or any comparable document) of any Obligor or of any agreement,
       judgment, injunction, order, decree or other instrument binding upon any
       Obligor or any of their respective Subsidiaries or result in the creation
       or imposition of any Lien (excluding the provision of Security pursuant
       to this Agreement) on any asset of any Obligor or any of their respective
       Subsidiaries.

                                      -32-

<PAGE>

15.3   Binding Effect
       Each of this Agreement and the other Finance Documents to which any
       Obligor is a party constitutes a valid and binding agreement of each
       Obligor enforceable in accordance with its terms, subject to bankruptcy,
       insolvency or other laws of general application affecting the enforcement
       of creditors rights, the application of equitable principles and the
       non-availability of the equitable remedies of specific performance or
       injunctive relief.

15.4   Financial Information
       15.4.1  The consolidated balance sheet of the Account Party and its
               Consolidated Subsidiaries as of 31 December 2001, and the related
               consolidated statements of operations and of cash flows for the
               fiscal year then ended, reported on by PricewaterhouseCoopers
               LLP, copies of which have been delivered to each of the Banks
               prior to the Commencement Date, fairly present, in all material
               respects, in conformity with GAAP, the consolidated financial
               position of the Account Party and its Consolidated Subsidiaries
               as of such date and their consolidated results of operations and
               cash flows for such fiscal year.

       15.4.2  The unaudited consolidated balance sheet of the Account Party and
               its Consolidated Subsidiaries as of 30 June 2002, and the related
               unaudited consolidated statements of operations and of cash flows
               for the six months then ended, copies of which have been
               delivered to each of the Banks prior to the Commencement Date,
               fairly present, in all material respects, in conformity with GAAP
               (except for the absence of footnotes) applied on a basis
               consistent with the financial statements referred to in
               sub-clause 15.4.1, the consolidated financial position of the
               Account Party and its Consolidated Subsidiaries as of such date
               and their consolidated results of operations and cash flows for
               such six month period (subject to normal year-end adjustments).

       15.4.3  Since 30 June 2002, there has been no material adverse change in
               the business, financial position or results of operations of the
               Account Party and its Consolidated Subsidiaries, considered as a
               whole.

       15.4.4  The consolidated balance sheet of the Guarantor and its
               Consolidated Subsidiaries as of 31 December 2001, and the related
               consolidated statements of operations and retained earnings and
               of cash flows for the fiscal year then ended, all reported on by
               PricewaterhouseCoopers LLP, copies of which have been delivered
               to each of the Banks prior to the Commencement Date, fairly
               present, in all material respects in conformity with GAAP, the
               consolidated financial position of the Guarantor and its
               Consolidated Subsidiaries as of such date and their consolidated
               results of operations and retained earnings and cash flows for
               such fiscal year.

       15.4.5  Since 31 December 2001, there has been no material adverse change
               in the business, financial position or results of operations of
               the Guarantor and its Consolidated Subsidiaries, considered as a
               whole.

                                      -33-

<PAGE>

15.5   Litigation
       Except as disclosed in the notes to the financial statements referred to
       in sub-clause 15.4.1 of Clause 15.4 (Financial Information), and except
       for insurance claims made in the context of the ordinary course of
       business of the Group, there is no action, suit or proceeding pending
       against, or to the knowledge of the Account Party threatened against or
       affecting, the Account Party or any of its Subsidiaries before any court
       or arbitrator or any governmental body, agency or official in which there
       is a reasonable likelihood of an adverse decision which could materially
       adversely affect the business, consolidated financial position or
       consolidated results of operations of the Account Party and its
       Consolidated Subsidiaries, considered as a whole, or which in any manner
       draws into question the validity or enforceability of this Agreement or
       any other Finance Document.

15.6   Taxes
       The Account Party and its Subsidiaries have filed all material income tax
       returns and all other material tax returns which are required to be filed
       by them and have paid all taxes due pursuant to such returns or pursuant
       to any assessment received by the Account Party or any Subsidiary. The
       charges, accruals and reserves on the books of the Account Party and its
       Subsidiaries in respect of taxes or other governmental charges are, in
       the opinion of the Account Party, adequate.

15.7   Written Information
       All written information supplied by any member of the Group which is
       factual, is true, complete and accurate in all material respects as at
       the date it was given and is not misleading in any material respect and
       all financial projections so supplied have been prepared on the basis of
       recent historical information and on the basis of reasonable assumptions.

15.8   Compliance with Laws
       The Account Party and each Subsidiary are in compliance, in all material
       respects, with all applicable laws, ordinances, rules, regulations,
       guidelines and other requirements of governmental authorities except
       where the necessity of compliance therewith is contested in good faith by
       appropriate proceedings and any reserves required under generally
       accepted accounting principles with respect thereto have been established
       and except where any such failure could not reasonably be expected to
       materially adversely affect the business, consolidated financial position
       or consolidated results of operations of the Account Party and its
       Consolidated Subsidiaries, considered as a whole.

15.9   Lien
       15.9.1  Each Obligor has good and marketable title in and to its portion
               of the Security free and clear of all Liens (except the Lien
               created under the Finance Documents and subject to the interest
               of the Custodian under the Finance Documents and to "Permitted
               Liens" as defined in the Charge Agreement).

       15.9.2  The Charge Agreement creates in favour of the Security Trustee,
               for the benefit of the Banks, a valid and enforceable first
               priority Lien on all of the Security, subject to the interest of
               the Custodian under the Finance Documents.

       15.9.3  Neither Obligor has outstanding, nor is any Obligor contractually
               bound to create, any Lien on or with respect to any of the
               Security, subject to the interest

                                      -34-

<PAGE>

                of the Custodian under the Finance Documents and to "Permitted
                Liens" as defined in the Charge Agreement.

       15.9.4   Neither Obligor is subject to any agreement, judgment,
                injunction, order, decree or other instrument or any law or
                regulation which would prevent or otherwise interfere with such
                Obligor's obligations to deliver Security in the amounts, at the
                times and as otherwise provided in the Charge Agreement, subject
                to the interest of the Custodian under the Finance Documents.

       The representations contained in this Clause 15.9 shall only be made on
       the date hereof and shall only be repeated on each day commencing on the
       date on which the Pricing Level is Level V.

15.10  Validity and Admissibility in Evidence
       All acts, conditions and things required to be done, fulfilled and
       performed in order:

       15.10.1  to enable each Obligor lawfully to enter into, exercise its
                rights under and perform and comply with the obligations
                expressed to be assumed by it in the Finance Documents to which
                it is a party,

       15.10.2  to ensure that the obligations expressed to be assumed by it in
                the Finance Documents to which it is a party are legal, valid,
                binding and enforceable; and

       15.10.3  to make the Finance Documents to which it is a party admissible
                in evidence in its jurisdiction of incorporation,

       have been done, fulfilled and performed (subject to any exception
       contained in the legal opinions provided as conditions precedent).

15.11  Claims Pari Passu
       Under the laws of its jurisdiction of incorporation in force at the date
       of this Agreement, the claims of the Finance Parties against each Obligor
       under this Agreement will rank at least pari passu with the claims of all
       its other unsecured and unsubordinated creditors save those claims which
       are preferred solely by any bankruptcy, insolvency, liquidation or other
       similar laws of general application or are mandatorily preferred by law
       applying to insurance companies generally.

15.12  No Filing or Stamp Taxes
       Under the laws of the jurisdiction of incorporation of each Obligor in
       force at the date of this Agreement, it is not necessary that the Finance
       Documents to which it is party be filed, recorded or enrolled with any
       court or other authority in such jurisdiction or that any stamp,
       registration or similar tax be paid on or in relation to the Finance
       Documents to which it is party.

15.13  No Winding-up
       No Obligor or Material Subsidiary has taken any corporate action nor have
       any other steps been taken or legal proceedings been started or (to the
       best of its knowledge and belief) threatened against any Obligor or
       Material Subsidiary for its winding-up, dissolution, administration or
       re-organisation (whether by voluntary arrangement, scheme of arrangement
       or otherwise) or for the appointment of a receiver, administrator,

                                      -35-

<PAGE>

       administrative receiver, conservator, custodian, trustee or similar
       officer of it or of any or all of its assets or revenues.

15.14  No Default
       No Default has occurred and is continuing.

16.    COVENANTS

       The Account Party agrees that, so long as any Original Letter of Credit
       or any Letter of Credit is in effect or any Outstandings remain unpaid:

16.1   Information
       The Account Party will deliver to the Agent in sufficient copies for the
       Banks:

       16.1.1    as soon as available and in any event within 90 days after the
                 end of each fiscal year of the Account Party, a consolidated
                 balance sheet of the Account Party and its Consolidated
                 Subsidiaries as of the end of such fiscal year and the related
                 consolidated statements of operations and of cash flows for
                 such fiscal year, setting forth in each case in comparative
                 form the figures for the previous fiscal year, all reported on
                 in a manner acceptable to the Securities and Exchange
                 Commission of the United States of America or otherwise
                 reasonably acceptable to the Majority Banks by
                 PricewaterhouseCoopers LLP or other independent public
                 accountants of internationally recognised standing;

       16.1.2    as soon as available and in any event within 45 days after the
                 end of each of the first three quarters of each fiscal year of
                 the Account Party, a consolidated balance sheet of the Account
                 Party and its Consolidated Subsidiaries as of the end of such
                 quarter and the related consolidated statements of operations
                 and of cash flows for such quarter and for the portion of the
                 Account Party's fiscal year ended at the end of such quarter,
                 setting forth in the case of such statements of operations and
                 cash flows in comparative form the figures for the
                 corresponding quarter and the corresponding portion of the
                 Account Party's previous fiscal year, all certified (subject to
                 normal year-end adjustments) as to fairness of presentation,
                 generally accepted accounting principles and consistency by the
                 chief financial officer or the chief accounting officer of the
                 Account Party;

       16.1.3    simultaneously with the delivery of each set of financial
                 statements referred to in sub-clauses 16.1.1 and 16.1.2, a
                 certificate of the chief financial officer or the chief
                 accounting officer of the Account Party (a) setting forth in
                 reasonable detail the calculations required to establish
                 whether the Account Party was in compliance with the
                 requirements of Clauses 16.7 (Adjusted Consolidated Debt to
                 Total Capitalisation Ratio) to 16.9 (Liens), inclusive, on the
                 date of such financial statements and (b) stating whether any
                 Default exists on the date of such certificate and, if any
                 Default then exists, setting forth the details thereof and the
                 action which the Account Party is taking or proposes to take
                 with respect thereto;

       16.1.4    within five days after any executive officer of the Account
                 Party obtains knowledge of any Default, if such Default is then
                 continuing, a certificate of the chief financial officer or the
                 chief accounting officer of the Account Party

                                      -36-

<PAGE>

                 setting forth the details thereof and the action which the
                 Account Party is taking or proposes to take with respect
                 thereto;

       16.1.5    promptly upon the mailing thereof to the shareholders of the
                 Account Party generally, copies of all financial statements,
                 reports and proxy statements so mailed;

       16.1.6    promptly upon the filing thereof, copies of all registration
                 statements (other than the exhibits thereto and any
                 registration statements on Form S-8 or its equivalent) and
                 reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
                 which the Account Party shall have filed with the Securities
                 and Exchange Commission of the United States of America;

       16.1.7    as soon as available and in any event within 20 days after
                 submission, each statutory statement of the Guarantor in the
                 form submitted to The Insurance Division of the Office of
                 Registrar of Companies of Bermuda;

       16.1.8    as soon as available and in any event within 120 days after the
                 end of each fiscal year of the Guarantor, a consolidated
                 balance sheet of the Guarantor and its Consolidated
                 Subsidiaries as of the end of such fiscal year and the related
                 statements of income and changes in financial position for such
                 fiscal year, setting forth in each case in comparative form the
                 figures for the previous fiscal year, all reported on by the
                 independent public accountants which reported on the financial
                 statements referred to in sub-clause 16.1.1;

       16.1.9    promptly after any executive officer of the Account Party
                 obtains knowledge thereof:

                 (a)    a copy of any notice from the Supervisor of Insurance or
                        the Registrar of Companies or any other Person of the
                        revocation, the suspension or the placing of any
                        restriction or condition on the registration as an
                        insurer of the Guarantor under the Bermuda Insurance Law
                        or of the institution of any proceeding or investigation
                        which could result in any such revocation, suspension or
                        placing of such a restriction or condition;

                 (b)    copies of any correspondence by, to or concerning the
                        Guarantor relating to an investigation conducted by the
                        Minister of Finance, whether pursuant to Section 132 of
                        the Bermuda Companies Law or otherwise; and

                 (c)    a copy of any notice of or requesting or otherwise
                        relating to the winding up or any similar proceeding of
                        or with respect to the Guarantor; and

       16.1.10   from time to time such additional information regarding the
                 financial position, results of operations or business of the
                 Account Party or any of its Subsidiaries as the Agent, at the
                 request of any Bank, may reasonably request from time to time.

                                      -37-

<PAGE>

16.2  Payment of Obligations
      The Account Party will pay and discharge, and will cause each Subsidiary
      to pay and discharge, at or before maturity, all their respective material
      obligations and liabilities, including, without limitation, tax
      liabilities, except where the same may be contested in good faith by
      appropriate proceedings, and will maintain, and will cause each Subsidiary
      to maintain, in accordance with generally accepted accounting principles,
      appropriate reserves for the accrual of any of the same.

16.3  Maintenance of Property; Insurance.

      16.3.1  The Account Party will keep, and will cause each Subsidiary to
              keep, all property useful and necessary in its business in good
              working order and condition, ordinary wear and tear excepted.

      16.3.2  The Account Party will maintain, and will cause each Subsidiary to
              maintain, insurance with responsible and reputable insurance
              companies or associations in such amounts and covering such risks
              as is usually carried by companies engaged in similar businesses
              and owning similar properties in the same general areas in which
              the Account Party or such Subsidiary operates (it being understood
              that the foregoing shall not apply to maintenance of reinsurance
              or similar matters which shall be solely within the reasonable
              business judgement of the Account Party and its Subsidiaries). The
              Account Party will deliver to the Banks upon request of any Bank
              through the Agent from time to time, full information as to the
              insurance carried.

16.4  Conduct of Business and Maintenance of Existence
      The Account Party will continue, and will cause each Subsidiary to
      continue, to engage in business of the same general type as now conducted
      by the Account Party and its Subsidiaries, and will preserve, renew and
      keep in full force and effect, and will cause each Subsidiary to preserve,
      renew and keep in full force and effect, their respective existence and
      their respective rights, privileges and franchises necessary or desirable
      in the normal conduct of business; provided that nothing in this Clause
      16.4 shall prohibit:

      16.4.1  the merger of a Subsidiary (other than the Guarantor) into the
              Account Party or the merger or consolidation of a Subsidiary
              (other than the Guarantor) with or into another Person if the
              corporation surviving such consolidation or merger is a Subsidiary
              and if, in each case, after giving effect thereto, no Default
              shall have occurred and be continuing;

      16.4.2  any merger of any Obligor permitted by Clause 16.10
              (Consolidations, Mergers and Sale of Assets); or

      16.4.3  the termination of:

              (a)  the corporate existence; or

              (b)  any rights, privileges and franchises of any Subsidiary
                   (other than the Guarantor),

                                      -38-

<PAGE>

              if, in each case, the Account Party in good faith determines that
              such termination is in the best interest of the Account Party and
              is not materially disadvantageous to the Banks.

16.5  Compliance with Laws
      The Account Party will comply, and cause each Subsidiary to comply, in all
      material respects with all applicable laws, ordinances, rules,
      regulations, guidelines and other requirements of governmental authorities
      except where the necessity of compliance therewith is contested in good
      faith by appropriate proceedings and any reserves required under generally
      accepted accounting principles with respect thereto have been established
      and except where any such failure to comply could not reasonably be
      expected to materially adversely affect the business, consolidated
      financial position or consolidated results of operations of the Account
      Party and its Consolidated Subsidiaries, considered as a whole.

16.6  Inspection of Property, Books and Records
      The Account Party will keep, and will cause each Subsidiary to keep,
      proper books of records and account in accordance with generally accepted
      accounting principles in which full, true and correct entries shall be
      made of all dealings and transactions in relation to its business and
      activities; and will permit, and will cause each Subsidiary to permit,
      representatives of any Bank at such Bank's expense to visit and inspect
      any of their respective properties, to examine and make abstracts from any
      of their respective books and records and to discuss their respective
      affairs, finances and accounts with their respective officers, employees
      and independent public accountants, all at such reasonable times on
      reasonable notice and as often as may reasonably be desired.

16.7  Adjusted Consolidated Debt to Total Capitalisation Ratio
      The Account Party shall maintain at all times a ratio of Adjusted
      Consolidated Debt to Total Capitalisation of not more than 0.35 to 1.

16.8  Consolidated Net Worth
      The Account Party shall maintain at all times Consolidated Net Worth in an
      amount at least equal to the sum of:

      16.8.1  US$3,600,000,000,

      plus

      16.8.2  25 per cent. of Consolidated Net Income for each fiscal quarter of
              the Account Party ending on and after 31 March 2000 for which such
              Consolidated Net Income is positive.

16.9  Liens
      Neither the Account Party nor any Subsidiary will create, incur, assume or
      suffer to exist, or permit any of its Subsidiaries to create, incur,
      assume or suffer to exist, any Lien on or with respect to any of its
      properties of any character (including, without limitation, accounts)
      whether now owned or hereafter acquired, or assign, or permit any of its
      Subsidiaries to assign, any accounts or other right to receive income,
      except:

      16.9.1  Liens created under the US Loan Documents;

                                      -39-

<PAGE>

      16.9.2  Permitted Liens;

      16.9.3  Liens described in Schedule 10 (Existing Liens);

      16.9.4  purchase money Liens upon or in real property or equipment
              acquired or held by the Account Party or any of its Subsidiaries
              in the ordinary course of business to secure the purchase price of
              such property or equipment or to secure Debt incurred solely for
              the purpose of financing the acquisition, construction or
              improvement of any such property or equipment to be subject to
              such Liens, or Liens existing on any such property or equipment at
              the time of acquisition or within 180 days following such
              acquisition (other than any such Liens created in contemplation of
              such acquisition that do not secure the purchase price), or
              extensions, renewals or replacements or any of the foregoing for
              the same or a lesser amount, provided, however, that no such Lien
              shall extend to or cover any property other than the property or
              equipment being acquired, constructed or improved, and no such
              extension, renewal or replacement shall extend to or cover any
              property not theretofore subject to the Lien being extended,
              renewed or replaced;

      16.9.5  Liens arising in connection with Capitalised Leases, provided that
              no such Lien shall extend to or cover any assets other than the
              assets subject to such Capitalised Leases;

      16.9.6  (a) any Lien existing on any asset of any Person at the time such
              Person becomes a Subsidiary and not created in contemplation of
              such event, (b) any Lien on any asset of any Person existing at
              the time such Person is merged or consolidated with or into the
              Account Party or any of its Subsidiaries in accordance with Clause
              16.10 (Consolidations, Mergers and Sales of Assets) and not
              created in contemplation of such event and (c) any Lien existing
              on any asset prior to the acquisition thereof by the Account Party
              or any of its Subsidiaries and not created in contemplation of
              such acquisition;

      16.9.7  Liens securing obligations under credit default swap transactions
              determined by reference to, or Contingent Obligations in respect
              of, Debt issued by the Account Party or one of its Subsidiaries;
              such Debt not to exceed an aggregate principal amount of
              US$550,000,000;

      16.9.8  Liens arising in the ordinary course of its business which:

              (a)  do not secure Debt; and

              (b)  do not in the aggregate materially detract from the value of
                   its assets or materially impair the use thereof in the
                   operation of its business;

      16.9.9  Liens on cash and Approved Investments securing Hedge Agreements
              arising in the ordinary course of business;

      16.9.10 other Liens securing Debt or other obligations outstanding in an
              aggregate principal or face amount not to exceed at any time 5 per
              cent. of Consolidated Net Worth;

                                      -40-

<PAGE>

      16.9.11 Liens consisting of deposits made by the Account Party or any
              insurance Subsidiary with any insurance regulatory authority or
              other statutory Liens or Liens or claims imposed or required by
              applicable insurance law or regulation against the assets of the
              Account Party or any insurance Subsidiary, in each case in favour
              of policyholders of the Account Party or such insurance Subsidiary
              or an insurance regulatory authority and in the ordinary course of
              the Account Party's or such insurance Subsidiary's business;

      16.9.12 Liens on Investments and cash balances of the Account Party or any
              insurance Subsidiary (other than capital stock of any Subsidiary)
              securing obligations of the Account Party or any insurance
              Subsidiary in respect of:

              (a)  letters of credit obtained in the ordinary course of
                   business; and/or

              (b)  trust arrangements formed in the ordinary course of business
                   for the benefit of cedents to secure reinsurance or insurance
                   obligations owed to them by the Account Party or any
                   insurance Subsidiary;

      16.9.13 the replacement, extension or renewal of any Lien permitted by
              sub-clause 16.9.2 or 16.9.5 of this Clause 16.9 upon or in the
              same property theretofore subject thereto or the replacement,
              extension or renewal (without increase in the amount (other than
              in respect of fees, expenses and premiums, if any) or change in
              any direct or contingent obligor) of the Debt secured thereby;

      16.9.14 Liens securing obligations owed by the Account Party to any
              Subsidiary or by any Subsidiary to the Account Party or any other
              Subsidiary;

      16.9.15 Liens incurred in the ordinary course of business in favour of
              financial intermediaries and clearing agents pending clearance of
              payments for investment or in the nature of set-off, banker's lien
              or similar rights as to deposit accounts or other funds;

      16.9.16 judgement or judicial attachment Liens, provided that the
              enforcement of such Liens is effectively stayed;

      16.9.17 Liens on any assets of the Obligors created pursuant to the
              Finance Documents;

      16.9.18 Liens arising in connection with certain equity proceeds received
              on or about 12 September 2000 (plus interest accrued thereon)
              placed in a segregated account in support of (or pledged as
              collateral for) the Account Party's guarantee of the
              US$412,372,000 principal amount of Auction Rate Reset Subordinated
              Notes Series A issued by ACE INA to ACE RHINOS Trust on 30 June
              1999;

      16.9.19 Liens arising in connection with Securitisation Transactions,
              provided that the aggregate principal amount of the investment or
              claim held at any time by all purchasers, assignees or other
              transferees of (or of interests in) receivables and other rights
              to payment in all Securitisation Transactions shall not exceed
              US$250,000,000;

                                      -41-

<PAGE>

      16.9.20 Liens on securities arising out of repurchase agreements with a
              term of not more than three months entered into with "Lenders"
              (as such term is defined in the Five Year US Facility) or their
              Affiliates or with securities dealers of recognised standing;
              provided that (but without prejudice to sub-clause 16.9.10) the
              aggregate amount of all assets of the Account Party and its
              Subsidiaries subject to such agreements shall not at any time
              exceed US$800,000,000; and

      16.9.21 Liens securing up to an aggregate amount of US$200,000,000 of
              obligations of ACE Tempest Reinsurance Ltd, the Account Party or
              any wholly owned subsidiary, arising out of catastrophe bond
              financing.

16.10 Consolidations, Mergers and Sales of Assets

      16.10.1 No Obligor will consolidate with or merge into any other Person,
              provided that if both immediately before and after giving effect
              thereto no Default shall have occurred and be continuing, then:

              (a)  the Guarantor may merge or consolidate with any other Person
                   so long as the surviving entity is the Guarantor or a
                   Wholly-Owned Consolidated Subsidiary of the Account Party
                   and, if the Guarantor is not the surviving entity, such
                   surviving entity shall have assumed the obligations of the
                   Guarantor hereunder pursuant to an instrument in form and
                   substance reasonably satisfactory to the Majority Banks and
                   shall have delivered such opinions of counsel with respect
                   thereto as the Agent may reasonably request; and

              (b)  the Account Party may merge with another Person so long as
                   the Account Party is the surviving entity.

      16.10.2 No Obligor will sell, lease or otherwise transfer, directly or
              indirectly, all or any substantial part of its assets to any other
              Person (excluding sales of investment securities in the ordinary
              course of business).

16.11 No Amendments
      The Account Party shall not amend or waive, or utilise or rely on any
      waiver of, any provision of any Security Document that may be entered into
      without the written consent of the Agent, the Security Trustee and the
      Majority Banks.

16.12 Maintenance of Legal Validity
      Each Obligor shall obtain, comply with the terms of and do all that is
      necessary to maintain in full force and effect all authorisations,
      approvals, licences and consents required in or by the laws of its
      jurisdiction of incorporation to enable it lawfully to enter into and
      perform its obligations under the Finance Documents to which it is a party
      and to ensure the legality, validity, enforceability or admissibility in
      evidence in its jurisdiction of incorporation of the Finance Documents to
      which it is a party.

16.13 Claims Pari Passu
      Each Obligor shall ensure that at all times the claims of the Finance
      Parties against it under this Agreement ranks at least pari passu with the
      claims of all its other unsecured and unsubordinated creditors save those
      claims which are preferred by any bankruptcy,

                                      -42-

<PAGE>

      insolvency, liquidation or other similar laws of general application or
      are mandatorily preferred by law applying to insurance companies
      generally.

17.   EVENTS OF DEFAULT

      Each of Clause 17.1 (Failure to Pay) to Clause 17.17 (Custodian's
      Undertaking) describes circumstances which constitute an Event of Default
      for the purposes of this Agreement.

17.1  Failure to Pay
      The Account Party shall fail to reimburse any drawing under any Letter of
      Credit when required hereunder or shall fail to pay within five Business
      Days of the due date thereof any interest or fees or other amounts payable
      hereunder or under any other Finance Document or the Guarantor shall fail
      to pay when due any such reimbursement obligations, interest, fees or
      other amounts payable hereunder provided that, for the purposes of this
      Clause 17.1, no such payment default by the Account Party shall be
      continuing if the Guarantor pays the amount thereof at the time and
      otherwise in the manner provided in Clause 30 (Guarantee and Indemnity).

17.2  Specific Covenants
      The Account Party shall fail to observe or perform any covenant (a)
      contained in Clauses 16.7 (Adjusted Consolidated Debt to Total
      Capitalisation Ratio) to Clause 16.10 (Consolidations, Mergers and Sale of
      Assets) inclusive or (b) contained in Clause 18.1 (Letter of Credit
      Commission).

17.3  Other Obligations
      Any Obligor shall fail to observe or perform any covenant or agreement
      contained in this Agreement or in any other Finance Document (other than
      those covered by Clause 17.1 (Failure to Pay) or Clause 17.2 (Specific
      Covenants)) and such failure, if, in the reasonable opinion of the
      Majority Banks, it is capable of remedy, is not remedied within 30 days
      after notice thereof has been given to the Account Party by the Agent at
      the request of any Bank.

17.4  Misrepresentation
      Any representation, warranty, certification or statement made by any
      Obligor in this Agreement or in any other Finance Document or in any
      certificate, financial statement or other document delivered pursuant to
      this Agreement or any other Finance Document shall prove to have been
      incorrect in any material respect when made (or deemed made).

17.5  Cross-default
      The Account Party or any Subsidiary shall fail to make any payment in
      respect of any Material Financial Obligations when due or within any
      applicable grace period.

17.6  Cross-Acceleration
      Any event or condition shall occur which results in the acceleration of
      the maturity of any Material Debt or enables (or, with the giving of
      notice or lapse of time or both, would enable) the holder of such Material
      Debt or any Person acting on such holder's behalf to accelerate the
      maturity thereof.

                                      -43-

<PAGE>

17.7  Winding-up of the Account Party or the Guarantor

      17.7.1  A resolution or other similar action is passed authorising the
              voluntary winding up of the Account Party or any other similar
              action with respect to the Account Party or a petition is filed
              for the winding up of the Account Party or the taking of any other
              similar action with respect to the Account Party in the Grand
              Court of the Cayman Islands (except in the case of any frivolous
              or vexatious steps or proceedings started by any Person who is not
              a member of the Group where such steps or proceedings are
              dismissed within 30 days); or

      17.7.2  any corporate action is taken authorising the winding up, the
              liquidation, any arrangement or the taking of any other similar
              action of or with respect to the Guarantor or authorising any
              corporate action to be taken to facilitate any such winding up,
              liquidation, arrangement or other similar action or any petition
              shall be filed seeking the winding up, the liquidation, any
              arrangement or the taking of any other similar action of or with
              respect to the Guarantor by the Registrar of Companies in Bermuda,
              one or more holders of insurance policies or reinsurance
              certificates issued by the Guarantor or by any other Person or
              Persons or any petition shall be presented for the winding up of
              the Guarantor to a court of Bermuda as provided under the Bermuda
              Companies Law and in either such case such petition shall remain
              undismissed and unstayed for a period of 60 days or any creditors'
              or members' voluntary winding up of the Guarantor as provided
              under the Bermuda Companies Law shall be commenced or any receiver
              shall be appointed by a creditor of the Guarantor or by a court of
              Bermuda on the application of a creditor of the Guarantor as
              provided under any instrument giving rights for the appointment of
              a receiver.

17.8  Execution or Distress
      A proceeding shall be commenced by any Person seeking execution or
      distress over or possession of the assets of either Obligor or any
      substantial part thereof or any similar remedy and such proceedings shall
      remain undismissed and unstayed for a period of 60 days.

17.9  Insolvency and Rescheduling
      An Obligor or Material Subsidiary shall commence a voluntary case or other
      proceeding seeking liquidation, reorganisation or other relief with
      respect to itself or its debts under any bankruptcy, insolvency or other
      similar law now or hereafter in effect or seeking the appointment of a
      trustee, receiver, liquidator, custodian or other similar official of it
      or any substantial part of its property, or shall consent to any such
      relief or to the appointment of or taking possession by any such official
      in an involuntary case or other proceeding commenced against it or shall
      make a general assignment for the benefit of creditors, or shall fail
      generally to pay its debts as they become due, or shall take any corporate
      action to authorise any of the foregoing; or an involuntary case or other
      proceeding shall be commenced against an Obligor or Material Subsidiary
      seeking liquidation, reorganisation or other relief with respect to it or
      its debts under any bankruptcy, insolvency or other similar law now or
      hereafter in effect or seeking the appointment of a trustee, receiver,
      liquidator, custodian or other similar official of it or any substantial
      part of its property, and such involuntary case or other proceeding shall
      remain undismissed and unstayed for a period of 60 days; or an order for
      relief shall be

                                      -44-

<PAGE>

      entered against an Obligor or Material Subsidiary under the United States
      federal bankruptcy laws as now or hereafter in effect.

17.10 Analogous Proceedings
      There occurs, in relation to an Obligor or Material Subsidiary in any
      country or territory in which any of them carries on business or in any
      jurisdiction where any part of their assets is subject, any event which
      corresponds in that country or territory with any of those mentioned in
      Clause 17.7 (Winding-up of the Account Party or the Guarantor) to Clause
      17.9 (Insolvency and Rescheduling) above.

17.11 Failure to comply with Judgment
      A final judgment or order for the payment of money in excess of
      US$100,000,000 shall be rendered against an Obligor or Material Subsidiary
      and such judgment or order shall continue unsatisfied and unstayed for a
      period of 30 days.

17.12 Ownership of the Account Party and the Guarantor

      17.12.1 Any Person or two or more Persons acting in concert shall have
              acquired beneficial ownership (within the meaning of Rule 13d-3 of
              the Securities and Exchange Commission under the Securities
              Exchange Act of 1934 of the United States of America, as amended),
              directly or indirectly, of Voting Interests of the Account Party
              (or other securities convertible into such Voting Interests)
              representing 30 per cent. or more of the combined voting power of
              all Voting Interests of the Account Party; or

      17.12.2 during any period of 12 consecutive calendar months, individuals
              who were directors of the Account Party on the first day of such
              period shall cease to constitute a majority of the board of
              directors of the Account Party; or

      17.12.3 any Person or two or more Persons acting in concert shall have
              acquired, by contract or otherwise, or shall have entered into a
              contract or arrangement that results in its or their acquisition
              of the power to exercise, directly or indirectly, a controlling
              influence over the management or policies of the Account Party; or

      17.12.4 the Guarantor ceases to be a Wholly-Owned Consolidated Subsidiary
              of the Account Party.

17.13 Illegality
      At any time it is or becomes unlawful for either Obligor to perform or
      comply with any or all of its obligations hereunder or under any of the
      Finance Documents or any court or arbitrator or any governmental body,
      agency or official which has jurisdiction in the matter shall decide, rule
      or order that any provision of any of the Finance Documents is invalid or
      unenforceable in any material respect, or either Obligor shall so assert
      in writing.

17.14 Revocation of Registration
      The registration of the Guarantor as an insurer shall be revoked,
      suspended or otherwise have restrictions or conditions placed upon it
      unless, in the case of the placing of any such restrictions or conditions,
      such restrictions or conditions could not have a material adverse effect
      on the interests of the Finance Parties under the Finance Documents.

                                      -45-

<PAGE>

17.15 Security
      If the Obligors are required to grant security pursuant to sub-clause
      18.1.2 of Clause 18.1 (Letter of Credit Commission) and they fail to
      deliver Security at the times, in the amounts or as otherwise specified in
      the Finance Documents or the Lien created pursuant thereto on the Security
      shall at any time or for any reason cease to be a valid, enforceable and
      first priority Lien on any of the Security or either Obligor shall fail to
      observe or perform any covenant relating to the delivery of the Security
      and the perfection of the first priority charge and security interest
      created therein contained in any other Finance Document, provided that if
      the market value of the Charged Portfolio falls below the Required Value
      or the Charged Portfolio fails to satisfy the Security Trustee's
      Requirements (as defined in the Charge Agreement), such circumstances
      shall not constitute an Event of Default if the market value of the
      Charged Portfolio is restored to the Required Value and/or, as the case
      may be, the Security Trustee's Requirements are satisfied in each case
      within five Business Days of notification by the Security Trustee on
      behalf of the Banks of the breach of clause 4 of the Charge Agreement or,
      if earlier, within five Business Days of either Obligor becoming aware of
      such breach.

17.16 Finance Documents
      Any provision of any Finance Document is repudiated, terminated, amended
      or waived by any party thereto without the written consent of the Agent,
      the Security Trustee and the Majority Banks.

17.17 Custodian's Undertaking
      In the event that the Obligors are required to grant Security pursuant to
      sub-clause 18.1.2 of Clause 18.1 (Letter of Credit Commission), the
      Custodian fails to observe or perform any material provision of the
      Custodian's Undertaking and such failure, if in the reasonable opinion of
      the Majority Banks it is capable of remedy, is not remedied within 30 days
      after notice thereof has been given to the Custodian by the Account Party
      or by the Agent at the request of any Bank.

17.18 Acceleration and Cancellation
      Upon the occurrence of an Event of Default at any time thereafter while
      that Event of Default is continuing, the Agent may (and, if so instructed
      by the Majority Banks, shall) by notice to the Account Party:

      17.18.1 require the Account Party to procure that the liabilities of each
              of the Banks under each Letter of Credit are promptly reduced to
              zero and/or provide Cash Collateral for each Letter of Credit in
              an amount specified by the Agent (whereupon the Account Party
              shall do so); and/or

      17.18.2 declare that any unutilised portion of the Facility shall be
              cancelled, whereupon the same shall be cancelled and the Available
              Commitment of each Bank shall be reduced to zero; and

      17.18.3 (in the event that the Obligors have granted Security pursuant to
              sub-clause 18.1.2 of Clause 18.1 (Letter of Credit Commission),
              direct the Security Trustee to exercise all rights and remedies of
              a mortgagee or a secured party at such time including, without
              limitation, the right to take possession of any or all of the
              assets subject to the Security Documents and the books and records
              relating

                                      -46-

<PAGE>

              thereto, with or without judicial process. For the purposes of the
              preceding sentence, the Security Trustee may enter upon any or all
              of the premises where any of the assets subject to the Security
              Documents, such other security or books or records may be situated
              and take possession and remove the same therefrom.

18.   COMMISSION and FEES

18.1  Letter of Credit Commission

      18.1.1  The Account Party shall, in respect of each Letter of Credit
              requested by it, pay to the Agent for the account of each Bank
              (for distribution in proportion to each Bank's L/C Proportion of
              such Letter of Credit) a letter of credit commission in sterling
              at the L/C Commission Rate on the maximum actual and contingent
              liabilities of the Banks under the relevant Letter of Credit. Such
              Letter of Credit Commission shall be paid quarterly in arrear in
              respect of each successive period of three months (or such shorter
              period as shall end on the Termination Date of the relevant Letter
              of Credit) which begins during the Term of the relevant Letter of
              Credit, commencing from the Effective Date of such Letter of
              Credit, and payable on the first day of each such period
              thereafter.

      18.1.2  If the Pricing Level reaches Level V (each as defined in Schedule
              9 (Pricing Schedule)), the Required Value (for the avoidance of
              doubt, the Obligors will not each be required to grant Security to
              the Required Value) shall (subject to Section 25.21.3) be
              increased to an amount equal to the aggregate amount of the
              Letters of Credit issued hereunder, and each Obligor shall
              promptly (and in any event within five Business Days) perform its
              obligations under clause 4 of the Charge Agreement. Upon the
              Security Trustee being satisfied that each Obligor has performed
              its obligations under clause 4 of the Charge Agreement, and having
              received legal opinions in form and substance satisfactory to the
              Security Trustee (acting reasonably) opining that the Charge
              Agreement creates in favour of the Security Trustee on behalf of
              the Banks a valid and enforceable first priority Lien on all of
              the Security (subject to such qualifications and assumptions as
              are customarily made by leading firms of solicitors in giving
              legal opinions of that nature), the L/C Commission Rate shall
              become 0.15 per cent. and the Security Trustee shall notify all
              parties hereto accordingly.

      18.1.3  Any change to the L/C Commission Rate shall take effect on the day
              on which the event giving rise to such change occurs (whether
              pursuant to Schedule 9 (Pricing Schedule) or pursuant to
              sub-clause 18.1.2).

      18.1.4  Any unpaid Letter of Credit Commission payable in respect of each
              Original Letter of Credit shall be paid in full by the Account
              Party by no later than the Effective Date.

18.2  Arrangement Fees
      The Account Party shall pay to the Lead Arranger the fees specified in the
      letter dated 14 October 2002 from the Lead Arrangers to the Account Party
      at the times, and in the amounts, specified in such letter.

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<PAGE>

18.3   Agency Fee
       The Account Party shall pay to the Agent for its own account the agency
       fees specified in the letter dated 14 October 2002 from the Agent to the
       Account Party at the times, and in the amounts, specified in such letter.

18.4   Participation Fees
       The Account Party shall pay to the Lead Arrangers the participation fees
       specified in the letter dated 14 October 2002 from the Lead Arrangers to
       the Account Party at the times, and in the amounts, specified in such
       letter. These fees shall be distributed by the Lead Arrangers among
       certain of the Banks in accordance with the arrangements agreed by the
       Lead Arrangers with such Banks prior to the Commencement Date.

19.    COSTS and EXPENSES

19.1   Transaction Expenses
       The Account Party shall, from time to time within thirty days of demand
       of the Agent, reimburse the Agent and the Arrangers for all reasonable
       costs and expenses (including legal fees) together with any VAT thereon
       incurred by them in connection with the negotiation, preparation and
       execution of the Finance Documents, any other document referred to in the
       Finance Documents and the completion of the transactions therein
       contemplated.

19.2   Preservation and Enforcement of Rights
       19.2.1   The Account Party shall, from time to time on demand of the
                Agent, reimburse the Finance Parties for all costs and expenses
                (including legal fees) properly incurred on a full indemnity
                basis together with any VAT thereon incurred in or in connection
                with the preservation and/or enforcement of any of the rights of
                the Finance Parties under the Finance Documents and any document
                referred to in the Finance Documents (including, without
                limitation, any costs and expenses relating to any investigation
                as to whether or not an Event of Default might have occurred or
                is likely to occur or any steps necessary or desirable in
                connection with any proposal for remedying or otherwise
                resolving a Default).

       19.2.2   In the event that the Obligors have granted Security pursuant to
                sub-clause 18.1.2 of Clause 18.1 (Letter of Credit Commission)
                and if, by reason of a subsequent breach of clause 4 of the
                Charge Agreement by either Obligor, any Bank incurs a capital
                cost or is unable to continue to obtain the rate of return
                obtained by it hereunder at the date the Security is granted or
                at the date it becomes party hereto as a Bank, the Obligors
                shall on demand of the Agent, promptly pay to the Agent for the
                account of the Bank amounts sufficient to indemnify that Bank
                from and against such cost or loss in return.

19.3   Stamp Taxes
       The Account Party shall pay all stamp, registration and other taxes to
       which the Finance Documents, any other document referred to in the
       Finance Documents or any judgment given in connection therewith is or at
       any time may be subject and to which it is a party and shall, from time
       to time on demand of the Agent, indemnify the Finance Parties against any
       liabilities, costs, claims and expenses resulting from any failure to pay
       or any delay in paying any such tax.

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<PAGE>

19.4   Amendment Costs
       If an Obligor requests any amendment, waiver or consent to any Finance
       Document then the Account Party shall, within thirty days of demand by
       the Agent, reimburse the Finance Parties for all reasonable costs and
       expenses (including legal fees) together with any VAT thereon incurred by
       such persons in responding to or complying with such request.

19.5   Banks' Liabilities for Costs
       If the Account Party fails to perform any of its obligations under this
       Clause 19 each Bank shall, in its Proportion, indemnify each of the Agent
       and the Arrangers against any loss incurred by any of them as a result of
       such failure.

20.    DEFAULT INTEREST and BREAK COSTS

20.1   Default Interest
       If any sum due and payable by an Obligor hereunder is not paid on the due
       date therefor in accordance with Clause 23 (Payments) or if any sum due
       and payable by an Obligor under any judgment of any court in connection
       herewith is not paid on the date of such judgment, the period beginning
       on such due date or, as the case may be, the date of such judgment and
       ending on the date upon which the obligation of such Obligor to pay such
       sum is discharged shall be divided into successive periods, each of which
       (other than the first) shall start on the last day of the preceding such
       period and the duration of each of which shall (except as otherwise
       provided in this Clause 20) be selected by the Agent.

20.2   Default Interest Rate
       An Unpaid Sum shall bear interest during each Term in respect thereof at
       the rate per annum which is the sum from time to time of two per cent.
       and LIBOR on the Quotation Date therefor.

20.3   Payment of Default Interest
       Any interest which shall have accrued under Clause 20.1 (Default
       Interest) in respect of an Unpaid Sum shall be due and payable and shall
       be paid by the relevant Obligor, together with any Mandatory Liquid Asset
       Costs Rate in respect thereof on the last day of each Term in respect
       thereof or on such other dates as the Agent may specify by notice to the
       relevant Obligor.

20.4   Break Costs
       If any Bank or the Agent on its behalf receives or recovers all or any
       part of an Unpaid Sum otherwise than on the last day of a Term relating
       thereto, the Account Party shall pay to the Agent on demand for the
       account of such Bank an amount equal to the amount (if any) by which:

       20.4.1   the additional interest which would have been payable on the
                amount so received or recovered had it been received or
                recovered on the last day of that Term

       exceeds

       20.4.2   the amount of interest which in the opinion of the Agent (acting
                reasonably) would have been payable to the Agent on the last day
                of that Term in respect of

                                      -49-

<PAGE>

          a deposit in the currency of the amount so received or recovered equal
          to the amount so received or recovered placed by it with a prime bank
          in London for a period starting on the first Business Day following
          the date of such receipt or recovery and ending on the last day of
          that Term.

21.    INDEMNITIES

21.1   Company's Indemnity
       The Account Party undertakes to indemnify:

       21.1.1  each Finance Party against any reasonable cost, claim, loss,
               expense (including legal fees) or liability together with any VAT
               thereon, whether or not reasonably foreseeable, which it may
               sustain or incur as a consequence of the occurrence of any Event
               of Default or any default by an Obligor in the performance of any
               of the obligations expressed to be assumed by it in the Finance
               Documents;

       21.1.2  the Agent against any reasonable cost or loss it may suffer or
               incur as a result of its entering into, or performing, any
               foreign exchange contract for the purposes of Clause 23
               (Payments);

       21.1.3  each Bank against any reasonable cost or loss it may suffer under
               Clause 19.5 (Banks' Liabilities for Costs) or Clause 26.5
               (Indemnification); and

       21.1.4  each Bank against any reasonable cost or loss it may suffer or
               incur as a result of its issuing or making arrangements to issue
               a Letter of Credit requested by the Account Party hereunder but
               not issued by reason of the operation of any one or more of the
               provisions hereof.

21.2   Currency Indemnity
       If any sum (a "Sum") due from an Obligor under the Finance Documents or
       any order or judgment given or made in relation thereto has to be
       converted from the currency (the "First Currency") in which such Sum is
       payable into another currency (the "Second Currency") for the purpose of:

       21.2.1  making or filing a claim or proof against such Obligor;

       21.2.2  obtaining an order or judgment in any court or other tribunal; or

       21.2.3  enforcing any order or judgment given or made in relation
               thereto,

       the Account Party shall indemnify each person to whom such Sum is due
       from and against any loss suffered or incurred as a result of any
       discrepancy between (a) the rate of exchange used for such purpose to
       convert such Sum from the First Currency into the Second Currency and (b)
       the rate or rates of exchange available to such person at its prevailing
       spot rate at the time of receipt of such Sum.

                                      -50-

<PAGE>

22.    CURRENCY OF ACCOUNT AND PAYMENT

22.1   Currency of Account
       Sterling is the currency of account and payment for each and every sum at
       any time due from an Obligor hereunder, provided that:

       22.1.1  each sum falling due by an Obligor hereunder in relation to any
               demand made under a Letter of Credit or in relation to any
               reimbursement of the Banks pursuant to a demand made under a
               Letter of Credit shall be made in the currency of the demand;

       22.1.2  each payment of interest shall be made in the currency in which
               the sum in respect of which such interest is payable is
               denominated;

       22.1.3  each payment in respect of costs and expenses shall be made in
               the currency in which the same were incurred;

       22.1.4  each payment pursuant to Clause 10.2 (Tax Indemnity) or Clause
               12.1 (Increased Costs) shall be made in the currency specified by
               the party claiming thereunder; and

       22.1.5  any amount expressed to be payable in a currency other than
               sterling shall be paid in that other currency.

23.    PAYMENTS

23.1   Payments to the Agent
       On each date on which this Agreement requires an amount to be paid by an
       Obligor, such Obligor shall make the same available to the Agent for
       value on the due date at such time and in such funds and to such account
       with such bank as the Agent shall specify from time to time upon
       reasonable advance notice to such Obligor.

23.2   Payments by the Agent
       Save as otherwise provided herein, each payment received by the Agent
       pursuant to Clause 23.1 (Payments to the Agent) shall be made available
       by the Agent to the person entitled to receive such payment in accordance
       with this Agreement (in the case of a Bank, for the account of its
       Facility Office) for value the same day by transfer to such account of
       such person with such bank in the principal financial center of the
       country of the currency of such payment as such person shall have
       previously notified to the Agent.

23.3   No Set-off
       All payments required to be made by an Obligor hereunder shall be
       calculated without reference to any set-off or counterclaim and shall be
       made free and clear of and without any deduction for or on account of any
       set-off or counterclaim.

23.4   Clawback
       Where a sum is to be paid hereunder to the Agent for the account of
       another person, the Agent shall not be obliged to make the same available
       to that other person or to enter into or perform any exchange contract in
       connection therewith until it has been able to establish to its
       satisfaction that it has actually received such sum, but if it does so
       and it proves to be the case that it had not actually received such sum,
       then the person to whom

                                      -51-

<PAGE>

       such sum or the proceeds of such exchange contract was so made available
       shall on request refund the same to the Agent together with an amount
       sufficient to indemnify the Agent against any cost or loss it may have
       suffered or incurred by reason of its having paid out such sum or the
       proceeds of such exchange contract prior to its having received such sum.

23.5   Partial Payments
       If and whenever a payment is made by an Obligor hereunder and the Agent
       receives an amount less than the due amount of such payment the Agent may
       apply the amount received towards the obligations of the Obligors under
       this Agreement in the following order:

       23.5.1  first, in or towards payment of any unpaid costs and expenses of
               each of the Agent and the Arrangers;

       23.5.2  second, in or towards payment pro rata of any accrued interest,
               Letter of Credit Commission or fees payable to any Bank hereunder
               due but unpaid;

       23.5.3  third, in or towards payment pro rata of any Outstandings due but
               unpaid; and

       23.5.4  fourth, in or towards payment pro rata of any other sum due but
               unpaid.

23.6   Variation of Partial Payments
       The order of partial payments set out in Clause 23.5 (Partial Payments)
       shall override any appropriation made by the Obligors to which the
       partial payment relates but the order set out in sub-clauses 23.5.2,
       23.5.3 and 23.5.4 of Clause 23.5 (Partial Payments) may be varied if
       agreed by all the Banks.

23.7   Appropriations of proceeds of enforcement of Security
       If the Agent recovers any moneys from the enforcement of any Finance
       Document in its capacity as Agent or Security Trustee thereunder, it
       shall apply the money recovered in the following order:

       23.7.1  first, in payment of all costs, charges, expenses and liabilities
               (and all interest thereon as provided in the Finance Documents)
               incurred by or on behalf of the Agent and the Security Trustee
               and any receiver, attorney or agent in connection with the due
               performance of its duties and exercise of its powers and
               discretions under the Finance Documents and the remuneration of
               the Agent, the Security Trustee and every receiver under the
               Finance Documents;

       23.7.2  secondly, in or towards payment pro rata of any due but unpaid
               costs and expenses of the Agent, the Arrangers and the Banks
               under the Finance Documents;

       23.7.3  thirdly, in or towards payment pro rata of any accrued interest,
               Letter of Credit Commission or fees due but unpaid under this
               Agreement;

       23.7.4  fourthly, in or towards payment pro rata of any Outstandings due
               but unpaid under this Agreement;

                                      -52-

<PAGE>

       23.7.5  fifthly, in or towards payment pro rata of any other sum due but
               unpaid under the Finance Documents; and

       23.7.6  sixthly, in payment of the surplus (if any) to the Account Party
               or any other person entitled thereto.

       The order of application of money recovered in this Clause may only be
       varied with the consent of all the Banks.

24.    SET-OFF

24.1   Contractual Set-off
       Each Obligor authorises each Bank at any time after an Event of Default
       has occurred which is continuing to apply any credit balance to which
       such Obligor is entitled on any account of such Obligor with such Bank in
       satisfaction of any sum due and payable from such Obligor to such Bank
       hereunder (whether by way of collateralisation or otherwise) but unpaid.
       For this purpose, each Bank is authorised to purchase with the moneys
       standing to the credit of any such account such other currencies as may
       be necessary to effect such application.

24.2   Set-off not Mandatory
       No Bank shall be obliged to exercise any right given to it by Clause 24.1
       (Contractual Set-off).

25.    SHARING

25.1   Payments to Banks
       If a Bank (a "Recovering Bank") applies any receipt or recovery from an
       Obligor to a payment due under this Agreement and such amount is received
       or recovered other than in accordance with Clause 23 (Payments), then
       such Recovering Bank shall:

       25.1.1  notify the Agent of such receipt or recovery;

       25.1.2  at the request of the Agent, promptly pay to the Agent an amount
               (the "Sharing Payment") equal to such receipt or recovery less
               any amount which the Agent determines may be retained by such
               Recovering Bank as its share of any payment to be made in
               accordance with Clause 23.5 (Partial Payments).

25.2   Redistribution of Payments
       The Agent shall treat the Sharing Payment as if it had been paid by the
       relevant Obligor and distribute it between the Finance Parties (other
       than the Recovering Bank) in accordance with Clause 23.5 (Partial
       Payments).

25.3   Recovering Bank's Rights
       The Recovering Bank will be subrogated to the rights of the parties which
       have shared in a redistribution pursuant to Clause 25.2 (Redistribution
       of Payments) in respect of the Sharing Payment (and the relevant Obligor
       shall be liable to the Recovering Bank in an amount equal to the Sharing
       Payment) in place of any corresponding liability to the parties which
       have shared in the redistribution.

                                      -53-

<PAGE>

25.4   Repayable Recoveries
       If any part of the Sharing Payment received or recovered by a Recovering
       Bank becomes repayable and is repaid by such Recovering Bank, then:

       25.4.1  each party which has received a share of such Sharing Payment
               pursuant to Clause 25.2 (Redistribution of Payments) shall, upon
               request of the Agent, pay to the Agent for account of such
               Recovering Bank an amount equal to its share of such Sharing
               Payment; and

       25.4.2  such Recovering Bank's rights of subrogation in respect of any
               reimbursement shall be cancelled and the relevant Obligor will be
               liable to the reimbursing party for the amount so reimbursed.

25.5   Exception
       This Clause 25 shall not apply if the Recovering Bank would not, after
       making any payment pursuant hereto, have a valid and enforceable claim
       against the relevant Obligor.

25.6   Recoveries Through Legal Proceedings
       If any Bank intends to commence any action in any court it shall give
       prior notice to the Agent and the other Banks. If any Bank shall commence
       any action in any court to enforce its rights hereunder and, as a result
       thereof or in connection therewith, receives any amount, then such Bank
       shall not be required to share any portion of such amount with any Bank
       which has the legal right to, but does not, join in such action or
       commence and diligently prosecute a separate action to enforce its rights
       in another court.

26.    THE AGENT, THE ARRANGERS AND THE BANKS

26.1   Appointment of the Agent
       The Arrangers and each of the Banks hereby appoints the Agent to act as
       its agent in connection herewith and authorises the Agent to exercise
       such rights, powers, authorities and discretions as are specifically
       delegated to the Agent by the terms hereof together with all such rights,
       powers, authorities and discretions as are reasonably incidental thereto.

26.2   Agent's Discretions
       The Agent may:

       26.2.1  assume, unless it has, in its capacity as agent for the Banks,
               received notice to the contrary from any other party hereto, that
               (a) any representation made or deemed to be made by an Obligor in
               connection with the Finance Documents is true, (b) no Event of
               Default or Potential Event of Default has occurred, (c) no
               Obligor is in breach of or default under its obligations under
               the Finance Documents and (d) any right, power, authority or
               discretion vested therein upon the Majority Banks, the Banks or
               any other person or group of persons has not been exercised;

       26.2.2  assume that the Facility Office of each Bank is that notified to
               it by such Bank in writing prior to the date hereof (or, in the
               case of a Transferee, at the end of

                                      -54-

<PAGE>

               the Transfer Certificate to which it is a party as Transferee)
               until it has received from such Bank a notice designating some
               other office of such Bank to replace its Facility Office and act
               upon any such notice until the same is superseded by a further
               such notice;

       26.2.3  engage and pay for the advice or services of any lawyers,
               accountants, surveyors or other experts whose advice or services
               may to it seem necessary, expedient or desirable and rely upon
               any advice so obtained;

       26.2.4  rely as to any matters of fact which might reasonably be expected
               to be within the knowledge of an Obligor upon a certificate
               signed by or on behalf of such Obligor;

       26.2.5  rely upon any communication or document believed by it to be
               genuine;

       26.2.6  refrain from exercising any right, power or discretion vested in
               it as agent hereunder unless and until instructed by the Majority
               Banks as to whether or not such right, power or discretion is to
               be exercised and, if it is to be exercised, as to the manner in
               which it should be exercised;

       26.2.7  refrain from acting in accordance with any instructions of the
               Majority Banks to begin any legal action or proceeding arising
               out of or in connection with the Finance Documents until it shall
               have received such security as it may require (whether by way of
               payment in advance or otherwise) for all costs, claims, losses,
               expenses (including legal fees) and liabilities together with any
               VAT thereon which it will or may expend or incur in complying
               with such instructions; and

       26.2.8  assume (unless it has specific notice to the contrary) that any
               notice or request made by the Account Party is made on behalf of
               both Obligors.

26.3   Agent's Obligations
       The Agent shall:

       26.3.1  promptly inform each Bank of the contents of any notice or
               document received by it in its capacity as Agent from an Obligor
               under the Finance Documents and shall promptly deliver to each
               Bank a copy of each Letter of Credit delivered to Lloyd's
               pursuant to Clause 3.3 (Completion of Letters of Credit);

       26.3.2  promptly notify each Bank of the occurrence of any Event of
               Default or any default by an Obligor in the due performance of or
               compliance with its obligations under the Finance Documents of
               which the Agent has notice from any other party hereto;

       26.3.3  save as otherwise provided herein, act as agent under the Finance
               Documents in accordance with any instructions given to it by an
               Majority Banks, which instructions shall be binding on the
               Arrangers and the Banks; and

       26.3.4  if so instructed by the Majority Banks, refrain from exercising
               any right, power or discretion vested in it as agent under the
               Finance Documents.

                                      -55-

<PAGE>

       The Agent's duties under the Finance Documents are solely mechanical and
       administrative in nature.

26.4   Excluded Obligations
       Notwithstanding anything to the contrary expressed or implied herein,
       neither the Agent nor the Arrangers shall:

       26.4.1  be bound to enquire as to (a) whether or not any representation
               made or deemed to be made by an Obligor in connection with the
               Finance Documents is true, (b) the occurrence or otherwise of any
               Default, (c) the performance by an Obligor of its obligations
               under the Finance Documents or (d) any breach of or default by an
               Obligor of or under its obligations under the Finance Documents;

       26.4.2  be bound to account to any Bank for any sum or the profit element
               of any sum received by it for its own account;

       26.4.3  be bound to disclose to any other person any information relating
               to any member of the Group if (a) such person, on providing such
               information, expressly stated to the Agent or, as the case may
               be, the Arrangers, that such information was confidential or (b)
               such disclosure would or might in its opinion constitute a breach
               of any law or be otherwise actionable at the suit of any person;

       26.4.4  be under any obligations other than those for which express
               provision is made herein; or

       26.4.5  be or be deemed to be a fiduciary for any other party hereto.

26.5   Indemnification
       Each Bank shall, in its Proportion, from time to time on demand by the
       Agent, indemnify the Agent against any and all costs, claims, losses,
       expenses (including legal fees) and liabilities together with any VAT
       thereon which the Agent may incur, otherwise than by reason of its own
       gross negligence or wilful misconduct, in acting in its capacity as agent
       hereunder (other than any which have been reimbursed by the Account Party
       pursuant to Clause 21.1 Company's Indemnity).

26.6   Exclusion of Liabilities
       Except in the case of gross negligence or wilful default, neither the
       Agent nor the Arrangers accepts any responsibility:

       26.6.1  for the adequacy, accuracy and/or completeness of any information
               supplied by the Agent or the Arrangers, by an Obligor or by any
               other person in connection with the Finance Documents or any
               other agreement, arrangement or document entered into, made or
               executed in anticipation of, pursuant to or in connection with
               the Finance Documents;

       26.6.2  for the legality, validity, effectiveness, adequacy or
               enforceability of the Finance Documents or any other agreement,
               arrangement or document entered into, made or executed in
               anticipation of, pursuant to or in connection with the Finance
               Documents; or

                                      -56-

<PAGE>

       26.6.3  for the exercise of, or the failure to exercise, any judgement,
               discretion or power given to any of them by or in connection with
               the Finance Documents or any other agreement, arrangement or
               document entered into, made or executed in anticipation of,
               pursuant to or in connection with the Finance Documents.

       Accordingly, neither the Agent nor the Arrangers shall be under any
       liability (whether in negligence or otherwise) in respect of such
       matters, save in the case of gross negligence or wilful misconduct.

26.7   No Actions
       Each of the Banks agree that it will not assert or seek to assert against
       any director, officer or employee of the Agent or the Arrangers any claim
       it might have against any of them in respect of the matters referred to
       in Clause 26.6 (Exclusion of Liabilities).

26.8   Business with the Group
       The Agent and the Arrangers may accept deposits from, lend money to and
       generally engage in any kind of banking or other business with any member
       of the Group.

26.9   Resignation
       The Agent may resign its appointment hereunder at any time without
       assigning any reason therefor by giving not less than thirty days' prior
       notice to that effect to each of the other parties hereto, provided that
       no such resignation shall be effective until a successor for the Agent is
       appointed in accordance with the succeeding provisions of this Clause 26.

26.10  Removal of Agent
       The Majority Banks may remove the Agent from its role as agent hereunder
       after consultation with the Account Party by giving notice to that effect
       to each of the other parties hereto. Such removal shall take effect only
       when a successor to the Agent is appointed in accordance with the terms
       hereof.

26.11  Successor Agent
       If the Agent gives notice of its resignation pursuant to Clause 26.9
       (Resignation) or it is removed pursuant to Clause 26.10 (Removal of
       Agent) then any reputable and experienced bank or other financial
       institution may be appointed as a successor to the Agent by the Majority
       Banks (after consultation with the Account Party if the successor is a
       Bank or otherwise with the Account Party's prior written consent) during
       the period of such notice (with the co-operation of the Agent), subject
       to such entity executing and delivering a confidentiality undertaking
       substantially in the form set out in Schedule 8 (Form of Confidentiality
       Undertaking) but, if no such successor is so appointed, the Agent may
       appoint such a successor itself.

26.12  Rights and Obligations
       If a successor to the Agent is appointed under the provisions of Clause
       26.11 (Successor Agent), then (a) the retiring Agent shall be discharged
       from any further obligation hereunder but shall remain entitled to the
       benefit of the provisions of this Clause 26 and (b) its successor and
       each of the other parties hereto shall have the same rights and
       obligations amongst themselves as they would have had if such successor
       had been a party hereto.

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<PAGE>

26.13   Own Responsibility
        It is understood and agreed by each Bank that at all times it has itself
        been, and will continue to be, solely responsible for making its own
        independent appraisal of and investigation into all risks arising under
        or in connection with this Agreement including, but not limited to:

        26.13.1  the financial condition, creditworthiness, condition, affairs,
                 status and nature of each member of the Group;

        26.13.2  the legality, validity, effectiveness, adequacy and
                 enforceability of the Finance Documents and any other
                 agreement, arrangement or document entered into, made or
                 executed in anticipation of, pursuant to or in connection with
                 the Finance Documents;

        26.13.3  whether such Bank has recourse, and the nature and extent of
                 that recourse, against an Obligor or any other person or any of
                 its assets under or in connection with the Finance Documents,
                 the transactions therein contemplated or any other agreement,
                 arrangement or document entered into, made or executed in
                 anticipation of, pursuant to or in connection with the Finance
                 Documents; and

        26.13.4  the adequacy, accuracy and/or completeness of any information
                 provided by the Agent or the Arrangers, an Obligor or by any
                 other person in connection with the Finance Documents, the
                 transactions contemplated therein or any other agreement,
                 arrangement or document entered into, made or executed in
                 anticipation of, pursuant to or in connection with the Finance
                 Documents.

        Accordingly, each Bank acknowledges to the Agent and the Arrangers that
        it has not relied on and will not hereafter rely on the Agent and the
        Arrangers or either of them in respect of any of these matters.

26.14   Agency Division Separate
        In acting as agent hereunder for the Banks, the Agent shall be regarded
        as acting through its agency division which shall be treated as a
        separate entity from any other of its divisions or departments and,
        notwithstanding the foregoing provisions of this Clause 26, any
        information received by some other division or department of the Agent
        may be treated as confidential and shall not be regarded as having been
        given to the Agent's agency division.

26.15   Declaration of Agent as Security Trustee
        The Agent hereby declares that it shall hold:

        26.15.1  all rights, titles and interests that may hereafter be
                 mortgaged, charged, assigned or otherwise secured in favour of
                 the Agent by or pursuant to the Finance Documents;

        26.15.2  the benefit of all representations, covenants, guarantees,
                 indemnities and other contractual provisions given in favour of
                 the Agent (other than any such benefits given to the Agent
                 solely for its own benefit) by or pursuant to the Finance
                 Documents (other than this Agreement); and

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<PAGE>

        26.15.3  all proceeds of the security referred to in sub-clause 26.15.1
                 above and of the enforcement of the benefits referred to in
                 26.15.2 above,

        on trust for itself and the other Finance Parties from time to time.

        Such declaration shall remain valid notwithstanding that the Agent may
        on the date hereof or at any other time be the sole Finance Party; for
        the avoidance of doubt, however, such declaration shall, in such case,
        be deemed repeated on each date on which the Agent ceases to be the sole
        Finance Party.

        Each of the parties hereto agrees that the obligations, rights and
        benefits vested or to be vested in the Agent as trustee as aforesaid
        by the Finance Documents or any document entered into pursuant thereto
        shall (as well before as after enforcement) be performed and (as the
        case may be) exercised by the Agent in accordance with the provisions
        of this Clause 26.

26.16   Powers and Discretions
        The Agent shall have all the powers and discretions conferred upon
        trustees by the Trustee Act 1925 (to the extent not inconsistent
        herewith) and by way of supplement it is expressly declared as follows:

        26.16.1  the Agent shall be at liberty to place any of the Finance
                 Documents and any other instruments, documents or deeds
                 delivered to it pursuant thereto or in connection therewith for
                 the time being in its possession in any safe deposit, safe or
                 receptacle selected by the Agent or with any bank, any company
                 whose business includes undertaking the safe custody of
                 documents or any firm of lawyers of good repute;

        26.16.2  the Agent may, whenever it thinks fit, delegate by power of
                 attorney or otherwise to any person or persons or fluctuating
                 body of persons all or any of the rights, trusts, powers,
                 authorities and discretions vested in it by any of the Finance
                 Documents and such delegation may be made upon such terms and
                 subject to such conditions (including the power to
                 sub-delegate) and subject to such regulations as the Agent may
                 think fit and the Agent shall not be bound to supervise, or be
                 in any way responsible for any loss incurred by reason of any
                 misconduct or default on the part of, any such delegate (or
                 sub-delegate);

        26.16.3  notwithstanding anything else herein contained, the Agent may
                 refrain from doing anything which would or might in its opinion
                 be contrary to any law of any jurisdiction or any directive or
                 regulation of any agency of any state or which would or might
                 otherwise render it liable to any person and may do anything
                 which is, in its opinion, necessary to comply with any such
                 law, directive or regulation;

        26.16.4  save in the case of gross negligence or wilful misconduct, the
                 Agent and every attorney, agent, delegate, sub-delegate and any
                 other person appointed by any of them under any of the Finance
                 Documents may indemnify itself or himself out of the security
                 held by the Agent against all liabilities, costs, fees,
                 charges, losses and expenses incurred by any of them in
                 relation to or arising out of the

                                      -59-

<PAGE>

                 taking or holding of any of the security constituted by, or
                 any of the benefits provided by, any of the Finance Documents,
                 in the exercise or purported exercise of the rights, trusts,
                 powers and discretions vested in any of them or in respect of
                 any other matter or thing done or omitted to be done in any
                 way relating to any of the Finance Documents or pursuant to
                 any law or regulation; and

        26.16.5  without prejudice to the provisions of any of the Finance
                 Documents, the Agent shall not be under any obligation to
                 insure any property or to require any other person to maintain
                 any such insurance and shall not be responsible for any loss
                 which may be suffered by any person as a result of the lack of
                 or inadequacy or insufficiency of any such insurance.

26.17   Liability
        The Agent shall not be liable for any failure:

        26.17.1  to require the deposit with it of any deed or document
                 certifying, representing or constituting the title of the
                 Account Party to any of the property mortgaged, charged,
                 assigned or otherwise encumbered by or pursuant to any of the
                 Finance Documents;

        26.17.2  to obtain any licence, consent or other authority for the
                 execution, delivery, validity, legality, adequacy, performance,
                 enforceability or admissibility in evidence of any of the
                 Finance Documents;

        26.17.3  to register or notify any deed or document mentioned at
                 sub-clause 26.17.1 in accordance with the provisions of any of
                 the documents of title of the Account Party;

        26.17.4  to effect or procure registration of or otherwise protect any
                 of the security created by any of the Finance Documents by
                 registering the same under any applicable registration laws in
                 any territory or otherwise by registering any notice, caution
                 or other entry prescribed by or pursuant to the provisions of
                 the said Act or laws;

        26.17.5  to take or to require the Account Party to take any steps to
                 render the security without limitation, any floating charge)
                 created or purported to be created by or pursuant to any of the
                 Finance Documents effective or to secure the creation of any
                 ancillary charge under the laws of any jurisdiction; or

        26.17.6  to require any further assurances in relation to any of the
                 Finance Documents.

26.18   Title to Security etc.
        The Agent may accept without enquiry, requisition or objection such
        right and title as the Account Party may have to the property belonging
        (or purportedly belonging) to it (or any part thereof) which is the
        subject matter of any of the Finance Documents and shall not be bound or
        concerned to investigate or make any enquiry into the right or title of
        the Account Party to such property (or any part thereof) or, without
        prejudice to the foregoing, to require the Account Party to remedy any
        defect in the Account Party's right or title as aforesaid.

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26.19   New Security Trustee
        The Agent may at any time appoint any person (whether or not a trust
        corporation) to act either as a separate trustee or as a co-trustee
        jointly with the Agent:

        26.19.1  if the Agent considers such appointment to be in the interests
                 of the Banks; or

        26.19.2  for the purposes of conforming to any legal requirements,
                 restrictions or conditions which the Agent deems relevant for
                 the purposes of the Finance Documents and the Agent shall give
                 prior notice to the Account Party and the Banks of any such
                 appointment.

        Any person so appointed shall (subject to the provisions of the Finance
        Documents) have such powers, authorities and discretions and such duties
        and obligations as shall be conferred or imposed or such person by the
        instrument of appointment and shall have the same benefits under this
        Clause 26 as the Agent.

        The Agent shall have power in like manner to remove any person so
        appointed.

        Such reasonable remuneration as the Agent may pay to any person so
        appointed, and any costs, charges and expenses incurred by such person
        in performing its functions pursuant to such appointment, shall for the
        purposes hereof be treated as costs, charges and expenses incurred by
        the Agent under the Finance Documents.

26.20   Perpetuity Period
        The perpetuity period under the rule against perpetuities if applicable
        to the trusts constituted in this Clause 26 and the other Finance
        Documents shall be the period of eighty years from the date of this
        Agreement and, subject thereto, if the Agent determines that all of the
        obligations of the Account Party under any of the Finance Documents have
        been fully and unconditionally discharged, such trusts shall be wound
        up.

26.21   Security
        26.21.1  In the event that the Required Value is greater than US$100
                 pursuant to sub-clause 18.1.2 of Clause 18.1 (Letter of Credit
                 Commission), as soon as reasonably practicable after each
                 delivery to the Security Trustee of the statement(s) of the
                 Charged Portfolio by the Custodian pursuant to paragraph 3 of
                 the Custodian's Undertaking and in any event within seven
                 Business Days of such delivery, the Security Trustee and the
                 Obligors shall adjust the Required Value to the extent
                 necessary to ensure that the Required Value of the Charged
                 Portfolio is an amount equal to the aggregate of:

                 A + (A x Y per cent.) + B + (B x Y per cent.) +C + (C x Y per
                 cent.)

                 where:

                 A    represents the amount of the Charged Portfolio denominated
                      in sterling

                 B    represents the amount of the Charged Portfolio denominated
                      in dollars (converted into sterling at the Spot Rate)

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<PAGE>

                 C     represents the amount of the Charged Portfolio
                       denominated in any currency other than sterling or
                       dollars (converted into sterling at the Spot Rate)

                  Y per cent. means:

                 (a)  10 per cent. in respect of any portion of the Charged
                      Portfolio denominated in sterling;

                 (b)  10 per cent. in respect of any portion of the Charged
                      Portfolio denominated in dollars; and

                 (c)  15 per cent. in respect of any portion of the Charged
                      Portfolio denominated in any currency other than dollars
                      or sterling

                 and shall notify the Custodian of any such adjustments.

        26.21.2  The Security Trustee shall not amend the Security Trustee's
                 Requirements without the consent of the Banks.

        26.21.3  In the event that the Pricing Level reverts from Level V to
                 level IV or above (each as defined in Schedule 9 (Pricing
                 Schedule), the Required Value will revert to US$100. For the
                 avoidance of doubt, if, following any such reduction in the
                 Required Value, the Pricing Level again reaches Level V, the
                 Required Value shall be increased to the extent required
                 pursuant to sub-clause 18.1.2 of Clause 18.1 (Letter of Credit
                 Commission).

26.22   Bank Representations
        Each Bank represents to the Agent on the date of issue of each Letter of
        Credit that:

        26.22.1  the execution and delivery of each Letter of Credit by the
                 Agent on the Bank's behalf has been duly authorised by all
                 necessary action on the part of the Bank; and

        26.22.2  the obligations of the Bank under each Letter of Credit
                 constitute its legal, valid and binding obligations.

26.23   Letters of Credit
        Each Bank shall in its Proportion, indemnify the Agent against any and
        all liabilities, costs and expenses which the Agent may incur (in its
        capacity as Agent) as a result of the execution and delivery of any
        Letter of Credit and any documents executed and delivered by the Agent
        in connection therewith.

27.     ASSIGNMENTS and TRANSFERS

27.1    Binding Agreement
        The Finance Documents shall be binding upon and enure to the benefit of
        each party hereto and its or any subsequent successors and Transferees.

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<PAGE>

27.2    No Assignments and Transfers by the Obligors
        No Obligor shall be entitled to assign or transfer all or any of its
        rights, benefits and obligations under the Finance Documents without the
        prior written consent of all the Banks.

27.3    Assignments and Transfers by Banks
        Subject to obtaining the prior written consent of the Account Party
        (such consent not to be unreasonably withheld or delayed), any Bank may,
        at any time, assign all or any of its rights and benefits under the
        Finance Documents or transfer in accordance with Clause 27.5 (Transfers
        by Banks) all or any of its rights, benefits and obligations under the
        Finance Documents to a bank or financial institution, provided that:

        27.3.1   no such assignment or transfer of the whole or any part of the
                 Commitment may be made unless it is to an Approved Credit
                 Institution; and

        27.3.2   the Account Party's consent is not required if such assignment
                 or transfer is:

                 (a)  to any subsidiary or holding company, or to any subsidiary
                      of any holding company, of such Bank; or

                 (b)  to any other Bank.

27.4    Assignments by Banks
        If any Bank assigns all or any of its rights and benefits under the
        Finance Documents in accordance with Clause 27.3 (Assignments and
        Transfers by Banks), then, unless and until the assignee has delivered a
        notice to the Agent confirming in favour of the Agent, the Arrangers and
        the Banks that it shall be under the same obligations towards each of
        them as it would have been under if it had been an original party hereto
        as a Bank (whereupon such assignee shall become a party hereto as a
        "Bank"), the Agent, the Arrangers, and the Banks shall not be obliged to
        recognise such assignee as having the rights against each of them which
        it would have had if it had been such a party hereto.

27.5    Transfers by Banks
        If any Bank wishes to transfer all or any of its rights, benefits and/or
        obligations under the Finance Documents as contemplated in Clause 27.3
        (Assignments and Transfers by Banks), then such transfer may be effected
        by the delivery to the Agent of a duly completed Transfer Certificate
        executed by such Bank and the relevant Transferee in which event, on the
        later of the Transfer Date specified in such Transfer Certificate and
        the fifth Business Day after (or such earlier Business Day endorsed by
        the Agent on such Transfer Certificate falling on or after) the date of
        delivery of such Transfer Certificate to the Agent:

        27.5.1   to the extent that in such Transfer Certificate the Bank party
                 thereto seeks to transfer by novation its rights, benefits and
                 obligations under the Finance Documents, each of the Obligors
                 and such Bank shall be released from further obligations
                 towards one another under the Finance Documents and their
                 respective rights against one another shall be cancelled (such
                 rights and obligations being referred to in this Clause 27.5 as
                 "discharged rights and obligations");

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        27.5.2   each of the Obligors and the Transferee party thereto shall
                 assume obligations towards one another and/or acquire rights
                 against one another which differ from such discharged rights
                 and obligations only insofar as such Obligor and such
                 Transferee have assumed and/or acquired the same in place of
                 such Obligor and such Bank;

        27.5.3   the Agent, the Arrangers, the Security Trustee, such Transferee
                 and the other Banks shall acquire the same rights and benefits
                 and assume the same obligations between themselves as they
                 would have acquired and assumed had such Transferee been an
                 original party hereto as a Bank with the rights, benefits
                 and/or obligations acquired or assumed by it as a result of
                 such transfer and to that extent the Agent, the Arrangers and
                 the relevant Bank shall each be released from further
                 obligations to each other under the Finance Documents; and

        27.5.4   such Transferee shall become a party hereto as a "Bank".

27.6    Replacement of Letter of Credit
        On any transfer pursuant to Clause 27.5 (Transfers by Banks) other than
        such a transfer upon the designation of a Substitute Bank in accordance
        with the provisions of sub-clause 4.6.1 of Clause 4.6 (Substitute Bank)
        the Bank transferring all or any of its rights, benefits and/or
        obligations under the Finance Documents shall ensure that the Account
        Party will procure the release by Lloyd's of each Letter of Credit (an
        "Old Letter of Credit") with respect to which the transfer is to have
        effect and its replacement by a new Letter of Credit to be issued by the
        Transferee and all the other Banks in an amount equal to that of the Old
        Letter of Credit and having a Termination Date which corresponds with
        the Termination Date thereof.

27.7    Transfer Fees
        On the date upon which a transfer takes effect pursuant to Clause 27.5
        (Transfers by Banks) the relevant Transferee shall pay to the Agent for
        its own account a fee of (Pounds)1,000.

27.8    Disclosure of Information
        Any Bank may disclose to any person:

        27.8.1   to (or through) whom such Bank assigns or transfers (or may
                 potentially assign or transfer) all or any of its rights,
                 benefits and obligations under the Finance Documents;

        27.8.2   with (or through) whom such Bank enters into (or may
                 potentially enter into) any sub-participation in relation to,
                 or any other transaction under which payments are to be made by
                 reference to, this Agreement or any Obligor; or

        27.8.3   to whom information may be required to be disclosed by any
                 applicable law,

        such information about any Obligor or the Group and the Finance
        Documents as such Bank shall consider appropriate and in the case of
        sub-clause 27.8.1 and 27.8.2, subject to requiring and receiving a
        confidentiality undertaking substantially in the form set out in
        Schedule 8 (Form of Confidentiality Agreement).

                                      -64-

<PAGE>

27.9    Partial Transfers/Assignments

        Any assignment or transfer by a Bank of part of its Commitment or
        Outstandings shall be in a minimum amount of (Pounds)10,000,000.

28.     ECONOMIC AND MONETARY UNION

28.1    Alternative Currencies during Transition Period
        On and from the date on which the United Kingdom becomes a Participating
        Member State, if and to the extent that any EMU Legislation provides
        that an amount denominated either in the euro or in sterling and payable
        within that Participating Member State by crediting an account of the
        creditor can be paid by the debtor either in the euro unit or in
        sterling, the Borrower shall be entitled to pay or repay any such amount
        payable hereunder either in the euro unit or in sterling.

28.2    Business Days
        With effect on and from the date on which the United Kingdom becomes a
        Participating Member State, the definition of Business Day in Clause 1.1
        (Definitions) shall be amended by the addition thereto (at the end) of
        the following:

                  "and if such reference relates to a date for the payment or
                  purchase of a sum denominated in the euro or in sterling, a
                  day (other than a Saturday or Sunday) on which (a) such
                  clearing or settlement system as is determined by the Agent to
                  be suitable for clearing or settlement of the euro is open for
                  business and (b) banks are generally open for business in
                  London.".

28.3    Rounding and Other Consequential Changes
        With effect on and from the date on which the United Kingdom becomes a
        Participating Member State:

        28.3.1   without prejudice and in addition to any method of conversion
                 or rounding prescribed by any EMU Legislation, each reference
                 in this Agreement to a fixed amount or fixed amounts in a
                 national currency unit to be paid to or by the Agent shall be
                 replaced by a reference to such comparable and convenient fixed
                 amount or fixed amounts in the euro unit as the Agent may from
                 time to time specify; and

        28.3.2   save as expressly provided in this Clause 28, the Finance
                 Documents shall be subject to such changes of construction or
                 interpretation as the Agent and the Security Trustee may from
                 time to time specify to be necessary to reflect the changeover
                 to the euro in the United Kingdom and to put the parties in the
                 same position, so far as possible, that they would have been in
                 if no change in currency had occurred.

29.     CALCULATIONS AND EVIDENCE OF DEBT

29.1    Basis of Accrual
        Interest and Letter of Credit Commission shall accrue from day to day
        and shall be calculated on the basis of a year of 365 days (or in the
        case of any such amounts denominated in dollars, 360 days) and the
        actual number of days elapsed.

                                      -65-

<PAGE>

29.2    Proportionate Reductions
        Any collateralisation of Outstandings denominated in dollars shall
        reduce the amount of such Outstandings by the amount of dollars
        collateralised and shall reduce the Sterling Amount of such Outstandings
        proportionately.

29.3    Evidence of Debt
        Each Bank shall maintain in accordance with its usual practice accounts
        evidencing the face amount of its participations in Letters of Credit
        and the amounts from time to time owing to it hereunder.

29.4    Control Accounts
        The Agent shall maintain on its books a control account or accounts in
        which shall be recorded (a) the amount of any Unpaid Sum and the face
        amount of any Letter of Credit issued and each Bank's share therein, (b)
        the amount of all fees, interest and other sums due or to become due
        from an Obligor and each Bank's share therein and (c) the amount of any
        sum received or recovered by the Agent hereunder and each Bank's share
        therein.

29.5    Prima Facie Evidence
        In any legal action or proceeding arising out of or in connection with
        this Agreement, the entries made in the accounts maintained pursuant to
        Clause 29.3 (Evidence of Debt) and Clause 29.4 (Control Accounts) shall
        be prima facie evidence of the existence and amounts of the specified
        obligations of the Obligors.

29.6    Certificates of Banks
        A certificate of a Bank as to:

        29.6.1   the amount by which a sum payable to it hereunder is to be
                 increased under Clause 10.1 (Tax Gross-up);

        29.6.2   the amount for the time being required to indemnify it against
                 any such cost, payment or liability as is mentioned in Clause
                 10.2 (Tax Indemnity) or Clause 12.1 (Increased Costs); or

        29.6.3   the amount of any credit, relief, remission or repayment as is
                 mentioned in Clause 11.3 (Tax Credit Payment) or Clause 11.4
                 (Tax Credit Clawback),

        shall, in the absence of manifest error, be prima facie evidence of the
        existence and amounts of the specified obligations of the Obligors.

29.7    Agent's Certificates
        A certificate of the Agent as to the amount at any time due from the
        Account Party hereunder or the amount which, but for any of the
        obligations of the Account Party hereunder being or becoming void,
        voidable, unenforceable or ineffective, at any time would have been due
        from the Account Party hereunder shall, in the absence of manifest
        error, be conclusive for the purposes of Clause 30 (Guarantee and
        Indemnity).

29.8    Letters of Credit
        A certificate of a Bank as to the amount paid out by such Bank in
        respect of any Letter of Credit shall, save for manifest error, be prima
        facie evidence of the payment of such amounts in any legal action or
        proceedings arising in connection therewith.

                                      -66-

<PAGE>

30.   GUARANTEE and INDEMNITY

30.1  Guarantee and Indemnity

      The Guarantor irrevocably and unconditionally:

      30.1.1   guarantees to each Finance Party the due and punctual observance
               and performance of all the terms, conditions and covenants on the
               part of the Account Party contained in the Finance Documents and
               agrees to pay from time to time on demand any and every sum or
               sums of money which the Account Party is at any time liable to
               pay to any Finance Party under or pursuant to the Finance
               Documents and which has become due and payable but has not been
               paid at the time such demand is made; and

      30.1.2   agrees as a primary obligation to indemnify each Finance Party
               from time to time on demand from and against any loss incurred by
               any Finance Party as a result of any of the obligations of the
               Account Party under or pursuant to the Finance Documents being or
               becoming void, voidable, unenforceable or ineffective as against
               the Account Party for any reason whatsoever, whether or not known
               to any Finance Party or any other person, the amount of such loss
               being the amount which the person or persons suffering it would
               otherwise have been entitled to recover from the Account Party.

30.2  Additional Security
      The obligations of the Guarantor herein contained shall be in addition to
      and independent of every other security which any Finance Party may at any
      time hold in respect of any of the Account Party's obligations under the
      Finance Documents.

30.3  Continuing Obligations
      The obligations of the Guarantor herein contained shall constitute and be
      continuing obligations notwithstanding any settlement of account or other
      matter or thing whatsoever and shall not be considered satisfied by any
      intermediate payment or satisfaction of all or any of the obligations of
      the Account Party under the Finance Documents and shall continue in full
      force and effect until final payment in full of all amounts owing by the
      Account Party under the Finance Documents and total satisfaction of all
      the Account Party's actual and contingent obligations under the Finance
      Documents.

30.4  Obligations not Discharged
      Neither the obligations of the Guarantor herein contained nor the rights,
      powers and remedies conferred in respect of the Guarantor upon any Finance
      Party by the Finance Documents or by law shall be discharged, impaired or
      otherwise affected by:

      30.4.1   the winding-up, dissolution, administration or re-organisation of
               the Account Party or any other person or any change in its
               status, function, control or ownership;

      30.4.2   any of the obligations of the Account Party or any other person
               under the Finance Documents or under any other security taken in
               respect of any of its obligations under the Finance Documents
               being or becoming illegal, invalid, unenforceable or ineffective
               in any respect;

                                      -67-

<PAGE>

      30.4.3   time or other indulgence being granted or agreed to be granted to
               the Account Party in respect of its obligations under the Finance
               Documents or under any such other security;

      30.4.4   any amendment to, or any variation, waiver or release of, any
               obligation of the Account Party under the Finance Documents or
               under any such other security;

      30.4.5   any failure to take, or fully to take, any security contemplated
               hereby or otherwise agreed to be taken in respect of the Account
               Party's obligations under the Finance Documents;

      30.4.6   any failure to realise or fully to realise the value of, or any
               release, discharge, exchange or substitution of, any security
               taken in respect of the Account Party's obligations under the
               Finance Documents; or

      30.4.7   any other act, event or omission which, but for this Clause 30.4,
               might operate to discharge, impair or otherwise affect any of the
               obligations of the Guarantor herein contained or any of the
               rights, powers or remedies conferred upon any of the Finance
               Parties by the Finance Documents or by law.

30.5  Settlement Conditional
      Any settlement or discharge between the Account Party and any of the
      Finance Parties shall be conditional upon no security or payment to any
      Finance Party by the Account Party or any other person on behalf of the
      Account Party being avoided or reduced by virtue of any laws relating to
      bankruptcy, insolvency, liquidation or similar laws of general application
      and, if any such security or payment is so avoided or reduced, each
      Finance Party shall be entitled to recover the value or amount of such
      security or payment from the Account Party subsequently as if such
      settlement or discharge had not occurred.

30.6  Exercise of Rights
      No Finance Party shall be obliged before exercising any of the rights,
      powers or remedies conferred upon them in respect of the Guarantor by the
      Finance Documents or by law to:

      30.6.1   make any demand of the Account Party;

      30.6.2   take any action or obtain judgment in any court against the
               Account Party;

      30.6.3   make or file any claim or proof in a winding-up or dissolution of
               the Account Party; or

      30.6.4   enforce or seek to enforce any other security taken in respect of
               any of the obligations of the Account Party under the Finance
               Documents.

30.7  Deferral of Guarantor's Rights
      The Guarantor agrees that, so long as any amounts are or may be owed by
      the Account Party under the Finance Documents or the Account Party is
      under any actual or contingent obligations under the Finance Documents, it
      shall not exercise any rights which it may at any time have by reason of
      performance by it of its obligations under the Finance Documents:

                                      -68-

<PAGE>

      30.7.1   to be indemnified by the Account Party; and/or

      30.7.2   to claim any contribution from any other guarantor of the Account
               Party's obligations under the Finance Documents; and/or

      30.7.3   to take the benefit (in whole or in part and whether by way of
               subrogation or otherwise) of any rights of the Finance Parties
               under the Finance Documents or of any other security taken
               pursuant to, or in connection with, the Finance Documents by all
               or any of the Finance Parties.

30.8  Suspense Accounts
      All moneys received, recovered or realised by a Bank by virtue of Clause
      30.1 (Guarantee and Indemnity) may, in that Bank's discretion, be credited
      to an interest bearing suspense or impersonal account and may be held in
      such account for so long as such Bank thinks fit pending the application
      from time to time (as such Bank may think fit) of such moneys in or
      towards the payment and discharge of any amounts owing by the Account
      Party to such Bank under the Finance Documents.

31.   REMEDIES and WAIVERS, PARTIAL INVALIDITY

31.1  Remedies and Waivers
      No failure to exercise, nor any delay in exercising, on the part of any
      Finance Party, any right or remedy hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of any right or remedy
      prevent any further or other exercise thereof or the exercise of any other
      right or remedy. The rights and remedies herein provided are cumulative
      and not exclusive of any rights or remedies provided by law.

31.2  Partial Invalidity
      If, at any time, any provision of the Finance Documents is or becomes
      illegal, invalid or unenforceable in any respect under the law of any
      jurisdiction, neither the legality, validity or enforceability of the
      remaining provisions thereof nor the legality, validity or enforceability
      of such provision under the law of any other jurisdiction shall in any way
      be affected or impaired thereby.

32.   NOTICES

32.1  Communications in writing
      32.1.1   Any communication to be made under or in connection with the
               Finance Documents shall be made in writing and, unless otherwise
               stated, may be made by fax, letter or telex or (to the extent
               that the relevant party hereto has specified such address
               pursuant to Clause 32.2 (Addresses)) by e-mail.

      32.1.2   The Agent may additionally (if the parties hereto agree and the
               Account Party has specifically approved in writing), in the case
               of any document to be forwarded by the Agent pursuant to this
               Agreement where such document has been supplied to such Agent
               pursuant to Clause 16.1 (Information), refer the relevant party
               or parties hereto (by fax, letter, telex or (if so specified)
               e-mail) to a web site considered by the Account Party as secure
               and confidential and to the location of the relevant information
               on such web site in discharge of such notification or delivery
               obligation.

                                      -69-

<PAGE>

32.2  Addresses
      The address, fax number, e-mail address, telex number and, where
      appropriate, web site (and the department or officer, if any, for whose
      attention the communication is to be made) of each party hereto for any
      communication or document to be made or delivered under or in connection
      with the Finance Documents is:

      32.2.1   in the case of an Obligor, that identified with its name below;

      32.2.2   in the case of each Bank, that notified in writing to the Agent
               on or prior to the date on which it becomes a party hereto; and

      32.2.3   in the case of the Agent, that identified with its name below,

      or any substitute address, fax number, e-mail address, telex number, web
      site, department or officer as the party hereto may notify to the Agent
      (or the Agent may notify to the other parties hereto, if a change is made
      by the Agent or a web site carrying relevant information has been set up
      by the Agent) by not less than five Business Days' notice.

32.3  Delivery
      32.3.1   Any communication or document made or delivered by one person to
               another under or in connection with the Finance Documents will
               only be effective:

               (a)  if by way of fax, when received in legible form; or

               (b)  if by way of letter, when it has been left at the relevant
                    address or five Business Days after being deposited in the
                    post postage prepaid in an envelope addressed to it at that
                    address; or

               (c)  if by way of telex, when dispatched, but only if, at the
                    time of transmission, the correct answerback appears at the
                    start and at the end of the sender's copy of the notice; or

               (d)  if by way of e-mail, when sent in legible form, but only if,
                    following transmission, the sender does not receive a
                    non-delivery message; or

               (e)  where reference in such communication is to a web site, when
                    the delivery of the letter, fax, telex or, as the case may
                    be, e-mail referring the addressee to such web site is
                    effective,

               and, if a particular department or officer is specified as part
               of its address details provided under Clause 32.2 (Addresses), if
               addressed to that department or officer.

      32.3.2   Any communication or document to be made or delivered to the
               Agent will be effective only when actually received by the Agent
               and then only if it is expressly marked for the attention of the
               department or officer identified with the Agent's signature below
               (or any substitute department or officer as the agent shall
               specify for this purpose).

      32.3.3   All notices from or to any Obligor shall be sent through the
               Agent.

                                      -70-

<PAGE>

32.4  Notification of address, fax number and telex number Promptly upon receipt
      of notification of an address, fax number, telex number or e-mail address
      or change of such pursuant to Clause 32.2 (Addresses) or changing its own
      address, fax number, telex number or e-mail address, the Agent shall
      notify the other parties hereto.

32.5  English language
      32.5.1   Any notice given under or in connection with any Finance Document
               must be in English.

      32.5.2   All other documents provided under or in connection with any
               Finance Document must be:

               (a)  in English; or

               (b)  if not in English, accompanied by an English translation
                    thereof certified (by an officer of the person making or
                    delivering the same) as being a true and accurate
                    translation thereof.

32.6  Deemed receipt by the Obligors
      Any communication or document made or delivered to the Account Party in
      accordance with Clause 32.3 (Delivery) shall be deemed to have been made
      or delivered to both Obligors.

33.   COUNTERPARTS

      This Agreement may be executed in any number of counterparts, all of which
      taken together shall constitute one and the same instrument.

34.   AMENDMENTS

34.1  Amendments
      The Agent, if it has the prior consent of the Majority Banks, and the
      Obligors may from time to time agree in writing to amend this Agreement or
      to waive, prospectively or retrospectively, any of the requirements of
      this Agreement and any amendments or waivers so agreed shall be binding on
      all the Finance Parties, provided that no such waiver or amendment shall
      subject any Finance Party hereto to any new or additional obligations
      without the consent of such Finance Party.

34.2  Amendments Requiring the Consent of all the Banks
      An amendment or waiver which relates to:

      34.2.1   Clause 4 (Extension of Letters of Credit), Clause 5 (Substitution
               of Letters of Credit), Clause 6 (Increase of the Facility),
               Clause 25 (Sharing) or this Clause 34;

      34.2.2   a change in the currency or amount of any Letter of Credit;

      34.2.3   a reduction in the Letter of Credit Commission, or the amount or
               currency of any payment of interest, fees or any other amount
               payable hereunder to any Finance Party or deferral of the date
               for payment thereof;

                                      -71-

<PAGE>

      34.2.4   a release of the Guarantor from any of its obligations set out in
               Clause 30 (Guarantee and Indemnity);

      34.2.5   Clause 16.7 (Adjusted Consolidated Debt to Total Capitalisation
               Ratio) and Clause 16.8 (Consolidated Net Worth);

      34.2.6   the definition of Majority Banks;

      34.2.7   any provision which contemplates the need for the consent or
               approval of all the Banks; or

      34.2.8   the Security Documents (if any),

      shall not be made without the prior consent of all the Banks.

34.3  Exceptions

      Notwithstanding any other provisions hereof, the Agent shall not be
      obliged to agree to any such amendment or waiver if the same would:

      34.3.1   amend or waive this Clause 34, Clause 19 (Costs and Expenses) or
               Clause 26 (The Agent, the Arrangers and the Banks); or

      34.3.2   otherwise amend or waive any of the Agent's rights hereunder or
               subject the Agent or the Arrangers to any additional obligations
               hereunder.

35.   GOVERNING LAW

      This Agreement is governed by English law.

36.   JURISDICTION

36.1  English Courts
      Each of the parties hereto irrevocably agrees for the benefit of each of
      the Agent, the Arrangers and the Banks that the courts of England shall
      have jurisdiction to hear and determine any suit, action or proceeding,
      and to settle any disputes, which may arise out of or in connection with
      this Agreement and the other Finance Documents and, for such purposes,
      irrevocably submits to the jurisdiction of such courts.

36.2  Convenient Forum
      The Obligors irrevocably waive any objection which either of them might
      now or hereafter have to the courts referred to in Clause 36.1 being
      nominated as the forum to hear and determine any suit, action or
      proceeding, and to settle any disputes, which may arise out of or in
      connection with this Agreement and agree not to claim that any such court
      is not a convenient or appropriate forum.

36.3  Service of Process
      Each Obligor agrees that the process by which any suit, action or
      proceeding is begun may be served on it by being delivered in connection
      with any suit, action or proceeding in England, to ACE UK Limited at
      Crosby Court, 38 Bishopsgate, London EC2N 4AJ or its other principal place
      of business for the time being.

                                      -72-

<PAGE>

36.4  Non-Exclusive Jurisdiction
      The submission to the jurisdiction of the courts referred to in Clause
      36.1 shall not (and shall not be construed so as to) limit the right of
      the Agent, the Arrangers and the Banks or any of them to take proceedings
      against the Account Party in any other court of competent jurisdiction nor
      shall the taking of proceedings in any one or more jurisdictions preclude
      the taking of proceedings in any other jurisdiction, whether concurrently
      or not.

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.

                                      -73-

<PAGE>

                                   SCHEDULE 1
                                    The Banks

Bank                                                          Commitment(Pounds)
Citibank, N.A.                                                  81,330,000.00
Barclays Bank PLC                                               81,330,000.00
ING Bank N.V., London Branch                                    74,850,000.00
Credit Lyonnais New York Branch                                 43,180,000.00
National Westminster Bank PLC                                   43,180,000.00
Lloyds TSB Bank plc                                             30,230,000.00
ABN AMRO Bank N.V., London Branch                               25,900,000.00
                                                             ------------------

Total                                                          380,000,000.00

                                                             ------------------

                                      -74-

<PAGE>

                                   SCHEDULE 2
                          Form of Transfer Certificate

To:  Citibank International plc

                              TRANSFER CERTIFICATE

relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Credit Agreement") originally dated 19 November 1999 whereby
following the First Restatement Agreement, the Amendment Agreement, the Second
Restatement Agreement and the Third Restatement Agreement a (Pounds)380,000,000
letter of credit facility was made available to ACE Limited by a group of banks
on whose behalf Citibank International plc acted as agent in connection
therewith.

1.   Terms defined in the Credit Agreement shall, subject to any contrary
     indication, have the same meanings herein. The terms Bank, Transferee and
     Portion Transferred are defined in the schedule hereto.

2.   The Bank (a) confirms that the details in the schedule hereto under the
     heading "Letters of Credit" accurately summarises its participation in the
     Credit Agreement and the Term of any existing Letters of Credit and (b)
     requests the Transferee to accept and procure the transfer by novation to
     the Transferee of the Portion Transferred (specified in the schedule
     hereto) of its Commitment and/or its participation in such Letters of
     Credit by counter-signing and delivering this Transfer Certificate to the
     Agent at its address for the service of notices specified in the Credit
     Agreement.

3.   The Transferee hereby requests the Agent to accept this Transfer
     Certificate as being delivered to the Agent pursuant to and for the
     purposes of Clause 27.5 (Transfers by Banks) of the Credit Agreement so as
     to take effect in accordance with the terms thereof on the Transfer Date or
     on such later date as may be determined in accordance with the terms
     thereof.

4.   The Transferee confirms that it has received a copy of the Credit Agreement
     together with such other information as it has required in connection with
     this transaction and that it has not relied and will not hereafter rely on
     the Bank to check or enquire on its behalf into the legality, validity,
     effectiveness, adequacy, accuracy or completeness of any such information
     and further agrees that it has not relied and will not rely on the Bank to
     assess or keep under review on its behalf the financial condition,
     creditworthiness, condition, affairs, status or nature of the Obligors.

5.   The Transferee hereby undertakes with the Bank and each of the other
     parties to the Credit Agreement that it will perform in accordance with
     their terms all those obligations which by the terms of the Finance
     Documents will be assumed by it after delivery of this Transfer Certificate
     to the Agent and satisfaction of the conditions (if any) subject to which
     this Transfer Certificate is expressed to take effect.

6.   The Bank makes no representation or warranty and assumes no responsibility
     with respect to the legality, validity, effectiveness, adequacy or
     enforceability of the Finance Documents or any document relating thereto
     and assumes no responsibility for the

                                      -75-

<PAGE>

     financial condition of the Obligors or for the performance and observance
     by the Obligors of any of their respective obligations under the Finance
     Documents or any document relating thereto and any and all such conditions
     and warranties, whether express or implied by law or otherwise, are hereby
     excluded.

7.   The Bank hereby gives notice that nothing herein or in the Finance
     Documents (or any document relating thereto) shall oblige the Bank to (a)
     accept a re-transfer from the Transferee of the whole or any part of its
     rights, benefits and/or obligations under the Finance Documents transferred
     pursuant hereto or (b) support any losses directly or indirectly sustained
     or incurred by the Transferee for any reason whatsoever including the
     non-performance by an Obligor or any other party to the Finance Documents
     (or any document relating thereto) of its obligations under any such
     document. The Transferee hereby acknowledges the absence of any such
     obligation as is referred to in (a) or (b) above.

8.   This Transfer Certificate and the rights, benefits and obligations of the
     parties hereunder shall be governed by and construed in accordance with
     English law.

                                  THE SCHEDULE

9.   Bank:

10.  Transferee:

11.  Transfer Date:

12.  Bank's Commitment                               Portion Transferred

13.  Letter(s) of Credit          Term and           Portion Transferred
     Bank's L/C Participation     Termination Date

     [Transferor Bank]            [Transferee Bank]

By:                               By:

Date:                             Date:

________________________________________________________________________________

                      ADMINISTRATIVE DETAILS OF TRANSFEREE

Address
Contact Name:

Account for Payments
in sterling:

Fax:
Telephone:

                                      -76-

<PAGE>

                                   SCHEDULE 3
                              Conditions Precedent

1.   In relation to each Obligor:

     (i)    confirmation by an Authorised Signatory of such Obligor that there
            have been no changes to the constitutional documents of such Obligor
            since 19 November 1999;

     (ii)   a copy, certified as at the date of the Second Restatement Agreement
            a true and up-to-date copy by an Authorised Signatory of such
            Obligor, of a board resolution of such Obligor approving the
            execution, delivery and performance of the Second Restatement
            Agreement, the Charge Agreement and the Notice of Charge and the
            terms and conditions thereof and authorising a named person or
            persons to sign the Second Restatement Agreement, the Charge
            Agreement and Notice of Charge and any documents to be delivered by
            such Obligor pursuant thereto;

     (iii)  a certificate of an Authorised Signatory of such Obligor setting out
            the names and signatures of the persons authorised to sign, on
            behalf of such Obligor, Second Restatement Agreement, the Charge
            Agreement and the Notice of Charge and any documents to be delivered
            by such Obligor pursuant thereto.

2.   Opinion of Clifford Chance, solicitors to the Agent.

3.   An opinion of Maples and Calder, Cayman Islands counsel to the Account
     Party addressed to the Finance Parties.

4.   An opinion of Conyers, Dill and Pearman, Bermudian counsel to the Account
     Party addressed to the Finance Parties.

5.   A copy, certified a true copy by an Authorised Signatory of the Account
     Party, of the financial statements of the Account Party referred to in
     sub-clauses 15.4.1 and 15.4.2 of Clause 15.4 (Financial Information).

6.   Evidence satisfactory to the Agent that Lloyd's agrees to accept deeds of
     substitution in respect of transfers by Banks.

7.   Evidence satisfactory to the Agent that all Original Letters of Credit will
     be cancelled by Lloyd's upon the issue of the Letters of Credit issued
     hereunder on and after the Commencement Date.

8.   Evidence that ACE UK Limited of Crosby Court, 38 Bishopsgate, London EC2N
     4AJ has agreed to act as the agent of each Obligor for the service of
     process in England in respect of the Amended Agreement.

                                      -77-

<PAGE>

                                   SCHEDULE 4
                               Utilisation Request

From:  ACE Limited
To:    Citibank International plc
Dated:

Dear Sirs,

1.   We refer to the (pound)380,000,000 letter of credit agreement originally
     dated 19 November 1999 (as (a) amended and restated pursuant to the First
     Restatement Agreement, (b) amended pursuant to the Amendment Agreement, (c)
     amended and restated pursuant to the Second Restatement Agreement and (d)
     amended and restated pursuant to the Third Restatement Agreement (the
     "Credit Agreement")) and made between inter alia, ACE Limited as account
     party, Citibank International plc as agent and the financial institutions
     named therein as Banks. Terms defined in the Credit Agreement shall have
     the same meaning in this notice. This notice is irrevocable.

2.   We hereby give you notice that, pursuant to the Credit Agreement we wish
     the Banks to issue the following Letters of Credit:

<TABLE>
<CAPTION>
=========================================================================================================
Amount             Effective Date           Termination Date         Beneficiary             Applicant
---------------------------------------------------------------------------------------------------------
<S>                <C>                      <C>                      <C>                     <C>
(Pounds)/US$/1/    22 November 2001         30 September 2007        Society of Lloyd's
---------------------------------------------------------------------------------------------------------
(Pounds)/US$/1/    22 November 2001         30 September 2007        Society of Lloyd's
---------------------------------------------------------------------------------------------------------
(Pounds)/US$/1/    22 November 2001         30 September 2007        Society of Lloyd's
---------------------------------------------------------------------------------------------------------
(Pounds)/US$/1/    22 November 2001         30 September 2007        Society of Lloyd's
---------------------------------------------------------------------------------------------------------
(Pounds)/US$/1/    22 November 2001         30 September 2007        Society of Lloyd's
---------------------------------------------------------------------------------------------------------
(Pounds)/US$/1/    22 November 2001         30 September 2007        Society of Lloyd's
---------------------------------------------------------------------------------------------------------
(Pounds)/US$/1/    22 November 2001         30 September 2007        Society of Lloyd's
=========================================================================================================
</TABLE>

3.   Utilisation Date: [      ].

4.   We confirm that, at the date hereof, the Representations are true in all
     material respects and no Default is continuing, or would result from the
     issue of such Letters of Credit.

The Letters of Credit should be issued in the form attached and delivered to the
recipient at [address of recipient]. The purpose of their issue is to support
Funds at Lloyd's in respect of the Applicants.

/1/ Delete where appropriate.

                                      -78-

<PAGE>

Yours faithfully

-----------------

Authorised Signatory

for and on behalf of

ACE LIMITED

                                      -79-

<PAGE>

                                   SCHEDULE 5
                            Form of Extension Request

From:    ACE Limited

To:      Citibank International plc

Dated:

Re:      [Applicant 1]
         [Applicant 2]

Dear Sirs

We refer to the (pound)380,000,000 letter of credit agreement originally dated
19 November 1999, (as (a) amended and restated pursuant to the First Restatement
Agreement, (b) amended pursuant to the Amendment Agreement, (c) amended and
restated pursuant to the Second Restated Agreement and (d) amended and restated
pursuant to the Third Restatement Agreement (the "Agreement")) between, inter
alia, ACE Limited (the "Account Party"), the financial institutions named
therein as Banks and Citibank International plc as Agent.

Terms defined in the Agreement shall have the same meanings in this Extension
Request.

1.   Pursuant to Clause 4 (Extension of Letters of Credit) of the Agreement, the
     Account Party, on behalf of [   ] (the "Applicant[s]"), hereby requests
     that the Banks extend the Letter[s] of Credit in accordance with the
     information annexed hereto as Annex A.

2.   The Account Party hereby certifies that on the date hereof and on the date
     of extension set forth in Annex A, in each case both before and after
     giving effect to the extension requested hereby:

     (i)    no Event of Default or Potential Event of Default has occurred and
            is continuing;

     (ii)   each of the representations and warranties of the Account Party
            contained in the Agreement and each other Finance Document is
            correct in all material respects on the date hereof, except
            representations and warranties which expressly refer to an earlier
            date in which case the same shall be true on and as of such earlier
            date;

     (iii)  after giving effect to the extension requested hereby, the aggregate
            Sterling Amount of the Outstandings will not exceed the Total
            Commitments; and

     (iv)   the Letter[s] of Credit requested hereby [is/are] being extended
            solely as security to support the underwriting business of the
            Applicant[s] at Lloyd's which has been provided in accordance with
            the requirements of Lloyd's applicable to [it/them].

                                      -80-

<PAGE>

IN WITNESS WHEREOF, the Account Party has caused this Certificate to be executed
by its duly authorised officer as of the date and year first written above.

ACE LIMITED

By:____________________

Name:__________________

Title:_________________

                                      -81-

<PAGE>

                                     Annex A

                         Letter of Credit Information/2/

1.   Name of Beneficiary:

     ________________________________

2.   Letter of Credit Number:

     ________________________________

3.   Maximum amount available under Letter of Credit:           (Pounds)/US$____

4.   New Termination Date:                                  30 September ____/3/

--------------------------------------------------------------------------------

/2/  A Separate "Letter of Credit Information" should be completed for each
     Letter of Credit covered by the Extension Request.

/3/  Insert immediately succeeding year in which the then-applicable current
     Termination Date falls.

                                      -82-

<PAGE>

                                   SCHEDULE 6
                            Form of Letter of Credit

        Letter of Credit to be issued by the Agent on behalf of the Banks

To:  The Society and Council of Lloyd's
     c/o General Manager, Members' Financial Services
     Gun Wharf
     Dock Road
     Chatham
     Kent ME4 4TU

Dear Sirs

Irrevocable Standby Letter of Credit No. [           ]
Re: [name of Corporate Member of Lloyd's] (the "Applicant")

This Clean Irrevocable Standby Letter of Credit (the "Credit") is issued by the
banks whose names are set out in Appendix 1 hereto (the "Issuing Banks", and
each an "Issuing Bank") in favour of the Society of Lloyd's ("Lloyd's") on the
following terms:

1.   Subject to the terms hereof, the Issuing Banks shall make payments within
     two business days of demand on Citibank International plc (the "Agent") in
     accordance with paragraph 4 below.

2.   Upon a demand being made by Lloyd's pursuant to paragraph 4 below each
     Issuing Bank shall pay that proportion of the amount demanded which is
     equal to the proportion which its Commitment set out in Appendix 1 hereto
     bears to the aggregate Commitments of all the Issuing Banks set out in
     Appendix 1 hereto, provided that the obligations of the Issuing Banks under
     this Credit shall be several and no Issuing Bank shall be required to pay
     an amount exceeding its Commitment set out in Appendix 1 hereto and the
     Issuing Banks shall not be obliged to make payments hereunder in aggregate
     exceeding a maximum amount of [amount in approved currency]. Any payment by
     an Issuing Bank hereunder shall be made in [approved currency] to Lloyd's
     account specified in the demand made by Lloyd's pursuant to paragraph 4
     below.

3.   This Credit is effective from 22 November 2002 (the "Commencement Date")
     and will expire on the Final Expiration Date. This Credit shall remain in
     force until we give you not less than four years' notice in writing
     terminating the same on the fourth anniversary of the Commencement Date or
     on any date subsequent thereto as specified in such notice (the "Final
     Expiration Date"), our notice to be sent by registered mail for the
     attention of the General Manager, Members' Financial Services, at the above
     address.

4.   Subject to paragraph 3 above, the Issuing Banks shall pay to Lloyd's under
     this Credit upon presentation of a demand by Lloyd's on Citibank
     International plc at Citigroup Centre, Canada Square, Canary Wharf, London
     E14 5LB marked for the attention of [Cliff Posner, Loans Agency] (and, in
     copy, at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB
     marked for the attention of Jon Pasquill, Global Cash and

                                      -83-

<PAGE>

     Trade) in the form set out in Appendix 2 or Appendix 3 (as appropriate)
     hereto the amount specified therein (which amount shall not, when
     aggregated with all other amounts paid by the Issuing Banks to Lloyd's
     under this Credit, exceed the maximum amount referred to in paragraph 2
     above).

5.   The Agent has signed this Credit as agent for disclosed principals and
     accordingly shall be under no obligation to Lloyd's hereunder.

6.   All charges are for the Applicant's account.

7.   Subject to any contrary indication herein, this Credit is subject to the
     International Standby Practices - ISP98 (1998 publication) - International
     Chamber of Commerce Publication No. 590.

8.   This Credit shall be governed by and interpreted in accordance with English
     law and the Issuing Banks hereby irrevocably submit to the jurisdiction of
     the High Court of Justice in England.

9.   Each of the Issuing Banks engages with Lloyd's that demands made under and
     in compliance with the terms and conditions of this Credit shall be duly
     honoured on presentation.

Yours faithfully

CITIBANK INTERNATIONAL plc

for and on behalf of

[Names of all Issuing Banks]

                                      -84-

<PAGE>

                                   APPENDIX 1

                           Issuing Banks' Commitments

--------------------------------------------------------------------------------
Name and Address of Issuing Bank            Commitment

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Total value:

--------------------------------------------------------------------------------

                                      -85-

<PAGE>

                                   APPENDIX 2

                            Form of Demand (Sterling)

                             [on Lloyd's letterhead]

Dear Sir/Madam

THE SOCIETY OF LLOYD'S
TRUSTEE OF
LETTER OF CREDIT NO.

With reference to the above, we enclose for your attention a Bill of Exchange,
together with the respective Credit. Payment should be made by way of CHAPS. The
account details are as follows:-

National Westminster Bank Plc            Sort Code 60-00-01
City of London Office                    Account 13637444
P.O. Box 12258
1 Princes Street
London EC2R 8AP

Please quote Member Code:

Yours faithfully

for Manager
Members' Funds Department
Members' Services Unit

                                      -86-

<PAGE>

Your ref:
Our ref: MEM/  /  /  /C911f
Extn:

BILL OF EXCHANGE
The Society of Lloyd's

Trustee of
Letter of Credit No.

Please pay in accordance with the terms of the Credit to our order the amount of
(Pounds)      .
                                                            For and on behalf of

                                                            Authorised Signatory
                                                           Membership Department

TO:     Citibank International plc
        as Agent

                                      -87-

<PAGE>

                                   APPENDIX 3

                       Form of Demand (Approved Currency)

                             [on Lloyd's letterhead]

Dear Sir/Madam
THE SOCIETY OF LLOYD'S
TRUSTEE OF
LETTER OF CREDIT NO.

With reference to the above, we enclose for your attention a Bill of Exchange,
together with the respective Credit. Payment should be made by way of SWIFT. The
account details are as follows:-

National Westminster Bank Plc                Sort Code 60-00-01
City of London Office                        Account 13637444
P.O. Box 12258
1 Princes Street                             SWIFT Code NWBK GB21
London EC2R 8AP                              SWIFT Code Intermediary CHA SUS33

Please quote Member Code:

Yours faithfully

for Manager
Members' Funds Department
Members' Services Unit

                                      -88-

<PAGE>

Your ref:
Our ref: MEM/  /  /  /C911f
Extn:

BILL OF EXCHANGE
The Society of Lloyd's

Trustee of
Letter of Credit No.

Please pay in accordance with the terms of the Credit to our order the amount of
$           .
                                                            For and on behalf of

                                                            Authorised Signatory
                                                           Membership Department

TO:    Citibank International plc
       as Agent

                                      -89-

<PAGE>

                                   SCHEDULE 7

                        Mandatory Liquid Asset Costs Rate

1.   For the purposes of this Agreement, the cost of compliance with existing
     requirements of the Bank of England and/or the Financial Services Authority
     will be calculated by the Agent in relation to each Unpaid Sum on the basis
     of rates supplied by the Agent (or such Bank(s) as it may from time to time
     determine) by reference to the circumstances existing on the first day of
     each Term in respect of such Unpaid Sum and, if any such Term of such
     Unpaid Sum exceeds three months, at three calendar monthly intervals from
     the first day of such Term during its duration in accordance with the
     following formula:

     (a)  in relation to Unpaid Sums denominated in Sterling:

                            AB + C(B - D) + E x 0.01      per cent. per annum
                            ------------------------
                                  100 - (A + C)

     (b)  in relation to Unpaid Sums denominated in dollars:

                                    E x 0.01              per cent. per annum
                                    --------
                                       300

Where:

          A    is the percentage of eligible liabilities (assuming these to be
               in excess of any stated minimum) which the Agent (or such Bank as
               it may determine) is from time to time required to maintain as an
               interest free cash ratio deposit with the Bank of England to
               comply with cash ratio requirements.

          B    is the percentage rate per annum at which sterling deposits are
               offered by the Agent (or such Bank as it may determine) in
               accordance with its normal practice, for a period equal to (a)
               the relevant Term (or, as the case may be, remainder of such
               Term) in respect of the relevant Unpaid Sum or (b) three months,
               whichever is the shorter, to a leading bank in the London
               Interbank Market as of 11.00 a.m. in a sum approximately equal to
               the amount of such Unpaid Sum.

          C    is the percentage of eligible liabilities which the Agent (or
               such Bank as it may determine) is required from time to time to
               maintain as interest bearing special deposits with the Bank of
               England.

          D    is the percentage rate per annum payable by the Bank of England
               to the Agent (or such Bank as it may determine) on interest
               bearing special deposits.

          E    is the rate payable by the Agent (or such Bank as it may
               determine) to the Financial Services Authority pursuant to the
               Fees Regulations (but, for this purpose, ignoring any minimum fee
               required pursuant to the

                                      -90-

<PAGE>

               Fees Regulations) and expressed in Pounds per (Pounds)1,000,000
               of the Fee Base of the Agent (or such Bank as it may determine).

2.   For the purposes of this Schedule:

     (i)   "eligible liabilities" and "special deposits" shall bear the meanings
           ascribed to them from time to time under or pursuant to the Bank of
           England Act 1998 or (as may be appropriate) by the Bank of England;

     (ii)  "Fee Regulations" means the Banking Supervision (Fees) Regulations
           2001 or such other regulation as may be in force from time to time in
           respect of the payment of fees for banking supervision; and

     (iii) "Fee Base" shall bear the meaning ascribed to it, and shall be
           calculated in accordance with, the Fees Regulations.

3.   The percentages used in A and C above shall be those required to be
     maintained on the first day of the relevant period as determined in
     accordance with B above.

4.   In application of the above formula, A, B, C and D will be included in the
     formula as figures and not as percentages e.g. if A is 0.5 per cent. and B
     is 12 per cent., AB will be calculated as 0.5 x 12 and not as 0.5 per cent.
     x 12 per cent.

5.   Calculations will be made on the basis of a 365 day year (or, if market
     practice differs, in accordance with market practice).

6.   A negative result obtained by subtracting D from B shall be taken as zero.

7.   The resulting figures shall be rounded to four decimal places.

8.   Additional amounts calculated in accordance with this Schedule are payable
     on the last day of the Term to which they relate.

9.   The determination of the Mandatory Liquid Asset Costs Rate by the Agent in
     relation to any period shall, in the absence of manifest error, be
     conclusive and binding on all of the parties hereto.

10.  The Agent may from time to time, after consultation with the Account Party
     and the Banks, determine and notify to all parties any amendments or
     variations which are required to be made to the formula set out above in
     order to comply with any requirements from time to time imposed by the Bank
     of England or the Financial Services Authority in relation to any Unpaid
     Sum and any such determination shall, in the absence of manifest error, be
     conclusive and binding on all the parties hereto.

                                      -91-

<PAGE>

                                   SCHEDULE 8

                       Form of Confidentiality Undertaking

                           [Letterhead of Transferor]

[Date]

To:     [Transferee]

Dear Sirs,

ACE Limited - (Pounds)380,000,000 Letter of Credit Facility Agreement originally
dated 19 November 1999 (as (a) amended and restated pursuant to a First
Amendment Agreement dated 17 November 2000, (b) an Amendment Agreement dated 23
October 2001, (c) a Second Restatement Agreement dated 21 November 2001 and (d)
a Third Restatement Agreement dated 19 November 2002)

Confidentiality Agreement

In connection with your possible interest in becoming a bank in the
above-captioned facility (the "Transaction") for ACE Limited (the "Company"), we
will be providing you with information that is not in the public domain but that
is confidential or proprietary in nature. Such information and any other
information concerning the Company or the Transaction furnished to you by
[Transferor], or by or on behalf of the Company (whether before, on or after the
date of this Agreement), together with analyses, compilations or other materials
prepared by you or your directors, officers, employees or advisors
(collectively, "Representatives") which contain or otherwise reflect such
information, are hereinafter collectively referred to as the "Information". In
consideration of your receipt of the Information, you agree that:

1.   Except as otherwise expressly provided herein, you will not (a) use the
     Information except in connection with the Transaction or (b) disclose to
     any person any terms or conditions of the Transaction or any portion of the
     Information.

2.   Notwithstanding the foregoing, you may disclose the Information: (a) to
     your Representatives who need to know the Information for purposes of
     evaluating the Transaction and who are informed by you of the confidential
     nature of the Information and who agree to be bound by the terms of this
     Agreement; (b) as may be required by applicable law or at the request of
     any regulatory or supervisory authority having jurisdiction over you or at
     the request of any rating agency for purposes of establishing or
     maintaining your debt ratings, provided that you request confidential
     treatment thereof to the extent permitted by law; or (c) with the prior
     written consent of the Company and [Transferor].

3.   The reference to the term "Information" contained in paragraphs 1 and 2
     shall not include such portions thereof which (a) are or become available
     to the public through no fault or action by you or your Representatives or
     (b) are or hereafter become available to you on a non-confidential basis
     from a source other than the Company, [Transferor] or their respective
     Representatives, which source, to the best of your knowledge, is not
     prohibited from disclosing such Information to you by a contractual, legal
     or fiduciary obligation to the Company or [Transferor].

                                      -92-

<PAGE>

4.   In the event that you or any of your Representatives becomes legally
     compelled to disclose any of the Information or the existence of the
     Transaction, you will, to the extent permitted by law provide the Company
     and [Transferor] with prompt notice so that they may seek a protective
     order or other appropriate remedy. In the event that such protective order
     or remedy is not obtained, you shall furnish only that portion of the
     Information that is legally required and shall disclose such Information in
     a manner reasonably designed to preserve its confidential nature.

5.   In the event that discussions with you concerning the Transaction are
     discontinued or your participation in the Transaction is otherwise
     terminated, you shall redeliver to [Transferor] any Information that was
     furnished to you by or on behalf of the Company or the Transferor or shall
     certify to the Company and [Transferor] that you have destroyed all such
     Information.

6.   You agree to be responsible for any breach of this Agreement by you or your
     Representatives.

7.   You acknowledge that money damages and other remedies at law may be
     inadequate to protect against breach of this Agreement and you hereby agree
     to the granting of injunctive or other equitable relief without proof of
     actual damages.

8.   It is further understood and agreed that no failure or delay by the Company
     or [Transferor] in exercising any right, power or privilege hereunder shall
     operate as a waiver thereof, nor shall any single or partial exercise
     thereof preclude any other or further exercise thereof.

9.   This Agreement shall be governed by and construed in accordance with the
     laws of England and Wales.

If you are prepared to accept the Information on the foregoing terms, please
countersign this Agreement in the space provided below and deliver it via
telecopier (with the executed original to follow by next-day courier) to:

          [Transferor]

          [address]

          Attention:

          Telecopier:

Your acceptance of this Agreement shall be effective upon our receipt of such
fax from you.

Yours faithfully,

[TRANSFEROR]

                                      -93-

<PAGE>

By:      [       ]             [ACCEPTED AND AGREED]
Title:   [                     ]          As at the date hereof

                                          [Name of Transferee]

                                          By:      [          ]

                                          Title:   [          ]

                                      -94-

<PAGE>

                                   SCHEDULE 9

                                Pricing Schedule

"L/C Commission Rate" means, for any date, the rates set forth below in the row
opposite such term and in the column corresponding to the Pricing Level that
applies at such date:

<TABLE>
<CAPTION>
======================================================================================================
                               Level I        Level II       Level III      Level IV       Level V
------------------------------------------------------------------------------------------------------
<S>                            <C>            <C>            <C>            <C>            <C>
L/C Commission Rate            0.55 per       0.60 per       0.65 per       0.675 per      0.70 per
                               cent.          cent.          cent.          cent.          cent.
======================================================================================================
</TABLE>

For purposes of this Schedule 9, the following Pricing Levels have the following
meanings:

"Level I" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated AA- or higher by S&P.

"Level II" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated A+ by S&P.

"Level III" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated A by S&P.

"Level IV" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated A- by S&P.

"Level V" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated BBB+ or less by S&P.

"Financial Strength Rating" means the financial strength rating of a company
determined by the method used by S&P.

"Pricing Level" refers to the determination of which of Level I, Level II, Level
III, Level IV or Level V applies at any date.

"S&P" means Standard & Poor's Rating Services (a division of The McGraw-Hill
Companies, Inc.).

The credit ratings to be utilised for the purposes of this Schedule 9 are those
ratings assigned to the Financial Strength Rating of the Guarantor. The rating
in effect at any date is that in effect at the close of business on such date.

                                      -95-

<PAGE>

                                   SCHEDULE 10

                                 Existing Liens

1.   Liens securing letters of credit issued by Citibank, N.A. for the account
     of Cigna Europe in an aggregate stated amount not exceeding US$16,000,000
     (subject to currency fluctuations).

2.   Liens securing letters of credit issued by Citibank, N.A. for the account
     of INA (UK) in an aggregate stated amount not exceeding US$8,000,000.

3.   US$70,000,000 of Cigna Overseas Insurance Company investments are pledged
     to Domestic Pool companies under a Regulation 114 trust.

4.   Lien arising under a Subordination Agreement dated as of 27 October 1998
     among ACE US Holdings, Inc., ACE Limited and The Chase Manhattan Bank
     encumbering ACE US Holdings, Inc.'s rights under the Subordinated Loan
     Agreement dated as of 27 October 1998 among ACE US Holdings, Inc., ACE
     Bermuda Insurance Ltd. and United States Trust Company of New York, as
     trustee under the Indenture dated 17 October 1998 of ACE US Holdings, Inc.

                                      -96-

<PAGE>

                                   SCHEDULE 11

                            Form of Charge Agreement

--------------------------------------------------------------------------------
Name of each Chargor and the address of its registered or principal office:

(1)   ACE Limited
      ACE Global Headquarters
      17 Woodbourne Avenue
      Hamilton  HM08
      Bermuda

Facsimile no:  +441 296 0087

(2)   ACE Bermuda Insurance Ltd.
      ACE Global Headquarters
      17 Woodbourne Avenue
      Hamilton  HM08
      Bermuda

Facsimile no: +441 296 0087

((1) and (2) together the "Chargors" and each a "Chargor")

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Name of Custodian and address of its registered or principal office:

[     ]

Facsimile no:    [    ] (the "Custodian")

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Date:   [Date]

--------------------------------------------------------------------------------

To:   CITIBANK INTERNATIONAL plc (the "Security Trustee")
      336 Strand
      London WC2R 1HB

      The terms used in this Charge Agreement are defined in Clause 23
      (Payments).

                                      -97-

<PAGE>

     It is a condition precedent to the obligations of the Banks under the
     Agreement that the Chargors shall have granted the security interests and
     undertaken the obligations contemplated by this Charge Agreement.

     NOW, THEREFORE, in consideration of the premises and in order to induce the
     Banks to issue Letters of Credit under the Agreement and for other good and
     valuable consideration, the receipt and adequacy of which are hereby
     acknowledged, each Chargor hereby agrees with the Security Trustee as
     follows:

1.   PAYMENT AND DISCHARGE

     We shall pay and discharge in full all of the Obligations at the times and
     in the manner provided for in the Agreements.

2.   CHARGE

2.1  Each Chargor hereby pledges and assigns to the Security Trustee, and hereby
     grants to the Security Trustee a security interest in, its portion of the
     Charged Portfolio as collateral security for the prompt payment or
     performance in full when due, whether at stated maturity, by required
     prepayment, declaration, acceleration, demand or otherwise (including the
     payment of amounts that would become due but for the operation of the
     automatic stay under Section 362(a) of the United States Bankruptcy Code,
     11 U.S.C. 362(a)), of all Obligations.

2.2  Notwithstanding any provision of the Agreement to the contrary, the
     Security Trustee's entitlement and recourse against the Charged Portfolio
     under this Charge Agreement shall not in any circumstances exceed an amount
     equal to the Required Value.

2.3  Each Chargor shall deposit all of its portion of the Charged Portfolio in
     the accounts comprising the Charged Portfolio and held with the Custodian.

3.   CUSTODIAN'S UNDERTAKING

     We undertake to deliver (or procure the delivery of) the Custodian's
     Undertaking to you forthwith upon the execution of this Charge Agreement.

4.   REQUIRED VALUE

     We undertake to ensure that with effect from the date of this Charge
     Agreement and at all times thereafter until the Obligations are discharged
     in full:

4.1  the market value of the Charged Portfolio (including the accounts and
     securities of both Chargors) shall not be less than the Required Value and
     without limitation from time to time to pay or transfer to the Custodian
     (by way of increment to the Charged Portfolio) money and/or securities so
     that the market value of each Chargor's portion of the Charged Portfolio
     (including the accounts and securities of both Chargors) shall not be less
     than the Required Value; and

4.2  each component part of the Charged Portfolio shall satisfy the Security
     Trustee's Requirements applicable thereto.

                                      -98-

<PAGE>

5.   FURTHER ASSURANCE

     Each Chargor agrees that from time to time, at the expense of such Chargor,
     such Chargor shall promptly execute and deliver all further instruments and
     documents, and take all further action, that may be necessary or desirable,
     or that the Security Trustee may reasonably request, in order to perfect
     and protect any security interest granted or purported to be granted hereby
     or to enable the Security Trustee or the Custodian to exercise and enforce
     its rights and remedies hereunder or under the Custodian's Undertaking with
     respect to any part of such Chargor's portion of the Charged Portfolio.
     Without limiting the generality of the foregoing, each Chargor shall: (a)
     execute and file such assignments, financing or continuation statements, or
     amendments thereto, and such other instruments or notices, as may
     reasonably be necessary or desirable, or as the Security Trustee may
     request, in order to perfect and preserve the security interests granted or
     purported to be granted hereby, and (b) at the Security Trustee's request,
     appear in and defend any action or proceeding that may affect such
     Chargor's title to or the Security Trustee's security interest in all or
     any part of such Chargor's portion of the Charged Portfolio.

6.   REPRESENTATIONS AND WARRANTIES

     Each Chargor hereby represents and warrants to you and undertakes that:

6.1  it is (or at the time of transfer thereof to the Custodian will be) the
     beneficial owner of its portion of the Charged Portfolio from time to time
     transferred by it to the Custodian, as agent for the Security Trustee, free
     and clear of any lien other than Permitted Liens in accordance with the
     undertaking contained in Clause 7 (Negative Pledge) hereof, except for the
     security interest created by this Charge Agreement. The pledge and
     assignment of the Charged Portfolio pursuant to this Charge Agreement and
     the Custodian's Undertaking creates a valid security interest in its
     portion of the Charged Portfolio securing the payment of the Obligations.
     Assuming execution and due performance of the Custodian's Undertaking by
     the Custodian, the security interest in the Charged Portfolio is or will be
     perfected and senior in priority to any other lien therein;

6.2  subject to paragraph 11 of the Custodian's Undertaking, it has not sold or
     agreed to sell or otherwise disposed of or agreed to dispose of the benefit
     of its portion of the Charged Portfolio or any part thereof;

6.3  it has and will at all times have the necessary power to enable it to enter
     into and perform the obligations expressed to be assumed by it under this
     Charge Agreement;

6.4  this Charge Agreement constitutes its legal, valid, binding and enforceable
     obligation (subject to bankruptcy, insolvency or other laws of general
     application affecting the enforcement of creditors' rights, the application
     of equitable principles and the non-availability of the equitable remedies
     of specific performance or injunctive relief) and is a security over its
     portion of the Charged Portfolio and every part thereof effective in
     accordance with its terms; and

6.5  all necessary authorisations to enable or entitle it to enter into this
     Charge Agreement have been obtained and are in full force and effect and
     will remain in full force and effect

                                      -99-

<PAGE>

     at all times during the subsistence of the security hereby constituted and
     no authorisation, approval or other action by, and no notice to or filing
     with, any governmental authority or regulatory body is required for either
     (a) the grant by it of the security interest granted hereby, (b) the
     execution, delivery or performance of this Charge Agreement or the
     Custodian's Undertaking by it, or (c) the perfection of or the exercise by
     Security Trustee or the Custodian of its rights and remedies hereunder or
     under the Custodian's Undertaking.

6.6  All information heretofore, herein or hereafter supplied to the Security
     Trustee or the Custodian by or on behalf of it with respect to its portion
     of the Charged Portfolio is accurate and complete in all material respects.

7.   NEGATIVE PLEDGE

     Each Chargor undertakes with you that at no time during the subsistence of
     the security interest granted hereby will it, otherwise than:

7.1  in your favour, or

7.2  with your prior written consent and in accordance with and subject to any
     conditions which you may attach to such consent,

     create, grant, extend or permit to subsist any lien, security interest or
     other encumbrance on or over its portion of the Charged Portfolio or any
     part thereof, other than Permitted Liens. The foregoing prohibition shall
     apply not only to any lien, security interest or other encumbrance which
     rank or purport to rank in point of security in priority to the security
     hereby constituted but also to any lien, security interest or other
     encumbrance which rank or purport to rank pari passu therewith or
     thereafter.

8.   POWER OF SALE

8.1  Upon the occurrence of an Event of Default which is continuing and has not
     been remedied or waived under the Agreement, the Security Trustee may
     instruct the Custodian to (a) sell or redeem any of the Charged Portfolio,
     (b) transfer any or all of the Charged Portfolio constituting cash to any
     account designated by the Security Trustee, including an account or
     accounts established in the Security Trustee's name (whether with the
     Security Trustee or the Custodian or otherwise), (c) register title to all
     or any portion of the Charged Portfolio in any name specified by the
     Security Trustee, including the name of the Security Trustee or any of its
     nominees or agents, without reference to any interest of the Chargors, or
     (d) otherwise deal with the Charged Portfolio as directed by the Security
     Trustee.

8.2  Upon the occurrence of an Event of Default which is continuing and has not
     been remedied or waived under the Agreement, the Security Trustee may
     exercise in respect of the Charged Portfolio, in addition to all other
     rights and remedies provided for herein or otherwise available to it, all
     the rights and remedies of a secured party on default under the Uniform
     Commercial Code as in effect in any relevant jurisdiction (the "UCC")
     (whether or not the UCC applies to the affected Charged Portfolio), and the
     Security Trustee may also in its sole discretion sell the Charged Portfolio
     or any part thereof in one or more parcels at public or private sale, at
     any exchange or broker's board

                                      -100-

<PAGE>

     or at any of the Security Trustee's offices or elsewhere, for cash, on
     credit or for future delivery, at such time or times and at such price or
     prices and upon such other terms as the Security Trustee may deem
     commercially reasonable, irrespective of the impact of any such sales on
     the market price of the Charged Portfolio. Each purchaser at any such sale
     shall hold the property sold absolutely free from any claim or right on the
     part of the Chargors, and each Chargor hereby waives (to the extent
     permitted by applicable law) all rights of redemption, stay or appraisal
     which it now has or may at any time in the future have under any rule of
     law or statute now existing or hereafter enacted. The Security Trustee
     shall not be obligated to make any sale of Charged Portfolio regardless of
     notice of sale having been given. The Security Trustee may adjourn any
     public or private sale from time to time by announcement at the time and
     place fixed therefor, and such sale may, without further notice, be made at
     the time and place to which it was so adjourned.

8.3  Each Chargor hereby agrees that the property included in the Charged
     Portfolio is of a type customarily sold on recognized markets and,
     accordingly, that no notice to any person is required before any sale of
     any of the Charged Portfolio pursuant to the terms of this Charge
     Agreement; provided that, without prejudice to the foregoing, each Chargor
     agrees that, to the extent notice of any such sale shall be required by
     law, at least ten days' notice to it of the time and place of any public
     sale or the time after which any private sale is to be made shall
     constitute reasonable notification.

8.4  If the proceeds of any sale or other disposition of the Charged Portfolio
     are insufficient to pay all the Obligations, the Chargors shall be liable
     for the deficiency and the fees of any attorneys employed by the Security
     Trustee to collect such deficiency.

8.5  Anything contained herein to the contrary notwithstanding, any of the
     Charged Portfolio consisting of a deposit or an other obligation of the
     Security Trustee, whether credited to the Charged Portfolio or otherwise,
     shall be subject to the Security Trustee's rights of set-off.

9.   POWER OF ATTORNEY

9.1  Each Chargor hereby irrevocably appoints the Security Trustee as its
     attorney-in-fact, with full authority in the place and stead of such
     Chargor and in the name of such Chargor, the Security Trustee or otherwise,
     from time to time in the Security Trustee's discretion upon the occurrence
     of an Event of Default which is continuing and has not been remedied or
     waived under the Agreement, to take any action and execute and deliver, any
     instrument that the Security Trustee may reasonably deem necessary or
     advisable to accomplish the purposes of this Charge Agreement or the
     Custodian's Undertaking, including, without limitation, executing
     instruments of transfer (or completing partially completed instruments
     executed by us), assignments or notices, or exercising any of the rights
     and powers from time to time attaching to any part of such Chargor's
     portion of the Charged Portfolio. Each Chargor hereby undertakes to ratify
     and confirm all things done and documents executed by the Security Trustee
     in the exercise of the power of attorney conferred by this Clause.

9.2  If the Chargor fails to perform any agreement contained herein, the
     Security Trustee may itself perform, or cause performance of, such
     agreement, and the expenses of the Security

                                      -101-

<PAGE>

      Trustee incurred in connection therewith shall be payable by the Chargor
      under Clause 14 (Exculpation, Costs, Charges and Expenses).

10.   EFFECTIVENESS OF SECURITY

10.1  This Charge Agreement shall be in addition to and shall be independent of
      every other security which you may at any time hold for any of the
      Obligations. No prior security held by you over the whole or any part of
      the Charged Portfolio shall merge in the security hereby constituted.

10.2  Nothing contained in this Charge Agreement is intended to, or shall
      operate so as to, prejudice or affect any bill, note, guarantee, mortgage,
      pledge, charge or other security of any kind whatsoever which you may have
      for the Obligations or any of them or any right, remedy or privilege of
      yours thereunder.

11.   REMEDIES, TIME OR INDULGENCE

11.1  The rights, powers and remedies provided by this Charge Agreement are
      cumulative and are not, nor are they to be construed as, exclusive of any
      right of set-off or other rights, powers and remedies provided by law.

11.2  No failure on your part to exercise, or delay on your part in exercising,
      any of the rights, powers and remedies provided by this Charge Agreement
      or by law (each a "Security Trustee Right") shall operate as a waiver
      thereof, nor shall any single or partial waiver of a Security Trustee
      Right preclude any further or other exercise of that Security Trustee
      Right or the exercise of any other Security Trustee Right.

11.3  You may in your discretion grant time or other indulgence or make any
      other arrangement, variation or release with any person(s) not party
      hereto (irrespective of whether such person(s) is/are jointly liable with
      us) in respect of the Obligations or in any way affecting or concerning
      them or any of them or in respect of any security for the Obligations or
      any of them, without in any such case prejudicing, affecting or impairing
      the security hereby constituted, or any Security Trustee Right or the
      exercise of the same, or any indebtedness or other liability owed by
      either of us to you.

12.   ACCOUNTS

      All monies received, recovered or realised by you under this Charge
      Agreement (including the proceeds of any conversion of currency) may in
      your discretion be credited to any suspense or impersonal account and may
      be held in such account for so long as you shall think fit (with interest
      accruing thereon at such rate, if any, as you may deem fit) pending their
      application from time to time (as you shall be entitled to do in your
      discretion) in or towards the discharge of any of the Obligations.

13.   CURRENCY

13.1  For the purpose of or pending the discharge of any of the Obligations you
      may convert any monies received, recovered or realised or subject to
      application by you under this Charge Agreement (including the proceeds of
      any previous conversion under this Clause) from their existing currency of
      denomination into the currency of denomination

                                      -102-

<PAGE>

      of such Obligations as you may think fit, and any such conversion shall be
      effected at your then prevailing spot rate of exchange for obtaining such
      other currency with the existing currency.

13.2  References herein to any currency extend to any funds of that currency and
      for the avoidance of doubt funds of one currency may be converted into
      different funds of the same currency.

14.   EXCULPATION, COSTS, CHARGES AND EXPENSES

14.1  The powers conferred on the Security Trustee hereunder are solely to
      protect its interest in the Charged Portfolio and shall not impose any
      duty upon it to exercise any such powers. Except for the exercise of
      reasonable care in the custody of any portion of the Charged Portfolio in
      its possession and the accounting for moneys actually received by it
      hereunder, the Security Trustee shall have no duty as to any Charged
      Portfolio, it being understood that the Security Trustee shall have no
      responsibility for (a) ascertaining or taking action with respect to
      calls, conversions, exchanges, maturities, tenders or other matters
      relating to any Charged Portfolio, whether or not the Security Trustee has
      or is deemed to have knowledge of such matters, (b) taking any necessary
      steps (other than steps taken in accordance with the standard of care set
      forth above to maintain possession of the Charged Portfolio) to preserve
      rights against any parties with respect to any Charged Portfolio, (c)
      taking any necessary steps to collect or realise upon the Obligations or
      any guarantee therefor, or any part thereof, or any of the Charged
      Portfolio, (d) initiating any action to protect the Charged Portfolio
      against the possibility of a decline in market value, (e) any loss
      resulting from investments made, held or sold, or (f) determining (i) the
      correctness of any statement or calculation made by a Chargor in any
      written instructions or (ii) whether any transfer to or from the Charged
      Portfolio is proper. The Security Trustee shall be deemed to have
      exercised reasonable care in the custody and preservation of Charged
      Portfolio in its possession if such Charged Portfolio is accorded
      treatment substantially equal to that which the Security Trustee accords
      its own property of like kind. In addition to the foregoing and without
      limiting the generality thereof, the Security Trustee shall not be
      responsible for any actions or omissions of Custodian.

14.2  Each Chargor agrees to indemnify the Security Trustee from and against any
      and all claims, losses and liabilities in any way relating to, growing out
      of or resulting from this Charge Agreement and the transactions
      contemplated hereby (including enforcement of this Charge Agreement),
      except to the extent such claims, losses or liabilities result from the
      Security Trustee's gross negligence or wilful misconduct as finally
      determined by a court of competent jurisdiction.

14.3  Each Chargor shall pay to the Security Trustee upon demand the amount of
      any and all costs and expenses, including the reasonable fees and expenses
      of its counsel and of any experts and agents, that the Securities Trustee
      may incur in connection with (a) the administration of this Charge
      Agreement, (b) the custody, preservation, use or operation of, or the sale
      of, collection from, or other realisation upon, any of the Charged
      Portfolio, (c) the exercise or enforcement of any of the rights of the
      Security Trustee hereunder, or (d) the failure by a Chargor to perform or
      observe any of the provisions hereof on a full

                                      -103-

<PAGE>

      indemnity basis together with interest from the date of the same having
      been incurred (or from the date of demand if such demand is made after
      unreasonable delay) to the date of payment at such rate or rates as you
      may determine in relation to the currency involved.

15.   CONTINUING SECURITY INTEREST

      This Charge Agreement shall create a continuing security interest in the
      Charged Portfolio and shall (a) remain in full force and effect until the
      indefeasible payment in full of the Obligations and the cancellation or
      expiration of all outstanding Letters of Credit, (b) be binding upon each
      Chargor, its successors and assigns, and (c) inure, together with the
      rights and remedies of the Security Trustee hereunder, to the benefit of
      Security Trustee and the Banks and their respective successors,
      transferees and assigns. Upon the indefeasible payment in full of all
      Obligations and the cancellation or expiration of all outstanding Letters
      of Credit, the security interest granted hereby shall terminate and all
      rights to the Charged Portfolio shall revert to the respective Chargor so
      long as the Custodian's fees, expenses, and advancements have first been
      paid or reimbursed in full. Upon any such termination the Security Trustee
      shall, at the Chargors' expense, execute and deliver to the Chargors such
      documents as the Chargors shall reasonably request to evidence such
      termination and each Chargor shall be entitled to the return, upon its
      request and at its expense, against receipt and without recourse to the
      Security Trustee, of such of its Charged Portfolio as shall not have been
      sold or otherwise applied pursuant to the terms hereof.

16.   AMENDMENTS

      No amendment or waiver of any provision of this Charge Agreement, or
      consent to any departure by a Chargor herefrom, shall in any event be
      effective unless the same shall be in writing and signed by the Security
      Trustee, and then such waiver or consent shall be effective only in the
      specific instance and for the specific purpose for which it was given.

17.   LAW AND JURISDICTION

17.1  THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
      IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
      REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC
      PROVIDES THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
      HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL
      ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
      YORK.

17.2  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE CHARGORS ARISING OUT OF OR
      RELATING TO THIS CHARGE AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL
      COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK,
      AND BY EXECUTION AND DELIVERY OF THIS CHARGE AGREEMENT EACH CHARGOR
      ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
      UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
      WAIVES ANY DEFENSE

                                      -104-

<PAGE>

      OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
      RENDERED THEREBY IN CONNECTION WITH THIS CHARGE AGREEMENT. Each Chargor
      hereby agrees that service of all process in any such proceeding in any
      such court may be made by registered or certified mail, return receipt
      requested, to such Chargor at its address as provided pursuant to Clause
      19 (Notices), such service being hereby acknowledged by each Chargor to be
      sufficient for personal jurisdiction in any action against such Chargor in
      any such court and to be otherwise effective and binding service in every
      respect. Nothing herein shall affect the right to serve process in any
      other manner permitted by law or shall limit the right of the Security
      Trustee to bring proceedings against a Chargor in the courts of any other
      jurisdiction.

17.3  EACH CHARGOR AND THE SECURITY TRUSTEE HEREBY AGREE TO WAIVE THEIR
      RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
      UPON OR ARISING OUT OF THIS CHARGE AGREEMENT OR THE CUSTODIAN'S
      UNDERTAKING. The scope of this waiver is intended to be all-encompassing
      of any and all disputes that may be filed in any court and that relate to
      the subject matter of this transaction, including contract claims, tort
      claims, breach of duty claims, and all other common law and statutory
      claims. Each Chargor and the Security Trustee acknowledge that this waiver
      is a material inducement for such Chargor and the Security Trustee to
      enter into a business relationship, that each Chargor and the Security
      Trustee have already relied on this waiver in entering into this Charge
      Agreement and that each will continue to rely on this waiver in their
      related future dealings. Each Chargor and the Security Trustee further
      warrant and represents that it has reviewed this waiver with its legal
      counsel, and that it knowingly and voluntarily waives its jury trial
      rights following consultation with legal counsel. THIS WAIVER IS
      IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
      WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
      RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS CHARGE AGREEMENT OR THE
      CUSTODIAN'S UNDERTAKING. In the event of litigation, this Charge Agreement
      may be filed as a written consent to a trial by the court.

18.   PROVISIONS SEVERABLE

      Each of the provisions contained in this Charge Agreement shall be
      severable and distinct from one another and if at any time any one or more
      of such provisions is or becomes invalid, illegal or unenforceable, the
      validity, legality and enforceability of each of the remaining provisions
      of this Charge Agreement shall not in any way be affected, prejudiced or
      impaired thereby.

19.   NOTICES

      All notices, requests and demands to or upon the Security Trustee or
      either Chargor hereunder shall be effected in the manner provided for in
      Clause 31 (Remedies and Waivers, Partial Invalidity) of the Agreement.

                                      -105-

<PAGE>

20.   THE SECURITY TRUSTEE'S DISCRETIONS

      Any liberty or power which may be exercised or any determination which may
      be made hereunder by you may be exercised or made in your absolute and
      unfettered discretion and you shall not be under any obligation to give
      reasons therefor, provided that the Security Trustee will so act in good
      faith and in accordance with Clause 26 (The Agent, The Arrangers and The
      Banks) of the Agreement).

21.   ASSIGNMENT

      You shall have a full and unfettered right to assign the whole or any part
      of the benefit of this Charge Agreement to any Person who is appointed as
      your successor pursuant to Clause 25 (The Agent, The Arrangers and The
      Banks) of the Agreement and the words "you" and "your" and the expression
      "the Security Trustee" wherever used herein shall be deemed to include
      your assignees and other successors, whether immediate or derivative, who
      shall be entitled to enforce and proceed upon this Charge Agreement in the
      same manner as if named herein. You shall be entitled to impart any
      information concerning us to any such assignee or other successor or any
      participant or proposed assignee, successor or participant subject to such
      person executing and delivering a confidentiality undertaking
      substantially in the form set out in Schedule 8 (Form of Confidentiality
      Undertaking) of the Agreement.

22.   COUNTERPARTS

      This Charge Agreement may be executed in one or more counterparts and by
      different parties hereto in separate counterparts, each of which when so
      executed and delivered shall be deemed an original, but all such
      counterparts together shall constitute but one and the same instrument;
      signature pages may be detached from multiple separate counterparts and
      attached to a single counterpart so that all signature pages are
      physically attached to the same document.

23.   INTERPRETATION

23.1  Terms not otherwise defined herein shall bear the meaning ascribed to them
      in the Agreement.

      In this Charge Agreement:

      "Agreement" means the (Pounds)380,000,000 letter of credit facility
      agreement originally dated 19 November 1999 (as (a) amended and restated
      pursuant to the First Restatement Agreement, (b) amended pursuant to the
      Amendment Agreement and (c) amended and restated pursuant to the Second
      Restatement Agreement) and made between ACE Limited as account party, ACE
      Bermuda Insurance Ltd. as guarantor, Citibank, N.A. as lead arranger,
      Barclays Bank PLC as arranger, ING Bank, N.V., London Branch as
      co-arranger, Citibank International plc as agent and security trustee and
      the financial institutions defined therein as banks;

      "Charged Portfolio" means at any time all of each Chargor's right, title
      and interest in any and all assets (to include without limitation any and
      all securities) now or hereafter carried in or credited to or held for the
      benefit of:

                                      -106-

<PAGE>

     (a)  the account (designated, at the date hereof, with account number [  ])
          maintained by the Custodian in the name of ACE Limited; and

     (b)  the account (designated, at the date hereof, with account number [  ])
          maintained by the Custodian in the name of ACE Bermuda Insurance Ltd.

     "Custodian" means the above-mentioned Custodian or such other person as the
     Chargors and the Security Trustee may agree to in writing from time to
     time;

     "Custodian's Undertaking" means an undertaking in the form set out in the
     Second Schedule duly executed by the Custodian as the same may be amended
     or substituted with the prior written consent of the Security Trustee from
     time to time;

     "Obligations" means any and all of the present or future, actual or
     contingent, obligations of the Chargors to the Finance Parties hereunder or
     under the Agreement;

     "Permitted Lien" means any Lien described in clause (a) of the definition
     of "Permitted Lien" in the Agreement or in sub-clause 15.9.16 of clause
     15.9 (Lien) of the Agreement;

     "Required Value" means US$100 or, if Pricing Level V applies, such other
     amount as is determined in accordance with the Agreement and notified from
     time to time by the Security Trustee to the Custodian; and

     "Security Trustee's Requirements" means the Security Trustee's requirements
     in respect of the component parts of the Charged Portfolio all as set forth
     in Part B of the Schedule to the Custodian's Undertaking or as may be
     agreed from time to time by the Security Trustee and ACE Limited on behalf
     of the Chargors and notified to the Custodian (provided that the Security
     Trustee's Requirements may be adjusted by the Security Trustee without the
     agreement of the Chargors (but after consultation in good faith with ACE
     Limited on behalf of the Chargors) where an adjustment is necessary to
     ensure that the Banks continue to receive the same regulatory treatment in
     respect of their Outstandings as they receive at the date hereof and
     Provided further that, in the event that the "financial strength rating" of
     either or both of the Chargors as determined by Standard and Poor's Rating
     Services reaches BBB+ or less, the Security Trustee's Requirements shall be
     amended without the prior agreement of the Chargors by the additional
     requirement that any fixed income securities comprising the Charged
     Portfolio issued by or fully and explicitly guaranteed by the central
     government of an OECD (Organisation for Economic Co-operation and
     Development) country shall only satisfy the Security Trustee's Requirements
     if such country is rated AA or better by Standard and Poor's Rating
     Services or AA equivalent or better by any other recognised rating
     service).

23.2 Any reference in this Charge Agreement to:-

     a "business day" shall be construed as a reference to a day (other than a
     Saturday or Sunday) on which banks are generally open for business in
     London, Bermuda, and the jurisdiction in which the Custodian's principal or
     head office is located;

     a "clearance system" means Clearstream, the Euro-Clear System, the First
     Chicago Clearing Centre, The Depository Trust Company and such other
     clearance system as may

                                      -107-

<PAGE>

     from time to time be used in connection with transactions relating to any
     securities, and any depository for any of the foregoing;

     a "Clause" is, unless otherwise stated, a reference to a Clause hereof;

     a "person" shall be construed as a reference to any person, firm, company,
     corporation, government, state or agency of a state or any association or
     partnership (whether or not having separate legal personality) of two or
     more of the foregoing;

     a "Schedule" is, unless otherwise stated, a reference to a schedule hereto;
     and

     "securities" shall be construed as a reference to bonds, debentures, notes,
     stocks, shares or other securities and all moneys, rights or property which
     may at any time accrue or be offered (whether by way of bonus, redemption,
     preference, option or otherwise) in respect of any of the foregoing (and
     without limitation, shall include any of the foregoing not constituted,
     evidenced or represented by a certificate or other document but by an entry
     in the books or other permanent records of the issuer, a trustee or other
     fiduciary thereof, or a clearance system).

23.3 The obligations of the Chargors hereunder shall be joint and several.

23.4 Any reference in this Charge Agreement to another agreement, arrangement or
     undertaking shall be construed as a reference to such other agreement,
     arrangement or undertaking as the same may have been, or may from time to
     time be, amended, varied, novated or supplemented.

23.5 Clause and Schedule headings are for ease of reference only.

The COMMON or CORPORATE SEAL of

ACE LIMITED was hereto affixed

to this DEED in the presence of:

Director

Secretary/Director

THE COMMON or CORPORATE SEAL of

ACE BERMUDA INSURANCE LTD was hereto affixed

to this DEED in the presence of:

Director

                                      -108-

<PAGE>

Secretary/Director

ACKNOWLEDGED AND AGREED:

CITIBANK INTERNATIONAL PLC
As Security Trustee

By:

Title:

                                      -109-

<PAGE>

                               THE FIRST SCHEDULE

                      NOTICE OF CHARGE OF CHARGED PORTFOLIO

To:   [     ]

    * _____________________________

(*Contact name at the Custodian)

We refer to (i) the Charge Agreement (the "Charge Agreement") dated [       ]
entered into by us in favour of Citibank International plc of 336 Strand, London
WC2R 1HB (the "Security Trustee"), a copy of which is annexed hereto and (ii)
the Custodian's Undertaking in the form of the Second Schedule to the Charge
Agreement. Terms defined in the Charge Agreement shall have the same meanings
herein.

Notice is hereby given by us to you that, by and pursuant to the Charge
Agreement, we have charged in favour of the Security Trustee all of the Charged
Portfolio.

We hereby:

(a)  confirm that references to the "Charged Portfolio" are to all the
     securities and proceeds received from time to time in respect of such
     securities, which are credited to (i) the account (designated with account
     number [_]) in the name of ACE Limited and (ii) the account (designated
     with account number [_]) in the name of ACE Bermuda Insurance Ltd.,
     maintained by you in accordance with the terms of our custodian arrangement
     with you;

(b)  request that you execute the attached Custodian's Undertaking in favour of
     the Security Trustee and comply with any entitlement orders and
     instructions, received by you from the Security Trustee, to deliver,
     transfer or assign the securities and monies (together with all
     certificates and other instruments evidencing title thereto) in the Charged
     Portfolio [and any entitlement orders or other instructions that you
     receive from the Security Trustee with respect to the Charged Portfolio
     shall constitute "Proper Instructions" for the purposes of the Custodian
     Agreement between us]*;

(c)       confirm that you shall not be liable to us for any action taken or
          omitted to be taken by you in connection with the Custodian's
          Undertaking save in the case of wilful misconduct or gross negligence
          (and, to the maximum extent permitted by law, shall under no
          circumstances be liable for indirect, special, punitive or
          consequential damages);

(d)       indemnify you against any liabilities, costs, claims and expenses
          (including reasonable legal fees (whether incurred with external or
          internal legal advisors)) arising from or in connection with the
          Custodian's Undertaking or the Charged Portfolio, provided that
          nothing contained herein shall require that you be indemnified for
          your wilful misconduct or gross negligence;

[(e)/(f)] [notwithstanding the terms of Section IX of the Custodian Agreement
          dated June 7, 2001, you shall be entitled to debit any of our accounts
          maintained by you, other than the account (designated with account
          number []) in the name of ACE Limited and the account (designated with
          account number [ ]) in the name of ACE Bermuda Insurance Ltd.
          (hereinafter the "Charged Accounts") if we require you, your
          affiliates, subsidiaries or agents to advance cash or investments to,
          for or on behalf of the Charged Portfolio, for any purpose (including
          but not limited to securities settlements, foreign exchange contracts
          and assumed settlement) or in the event that you, your subcustodians
          or their respective nominees shall incur or be assessed any taxes
          (except your income taxes or those of any of your subcustodians),
          charges, expenses, assessment, claims or liabilities in connection
          with the performance of the Custodian's Undertaking except as may
          arise from your or your subcustodians' or their respective nominees'
          own gross negligent action, gross negligent failure to act or wilful
          misconduct. Any of our property at any time held by you (other than
          the Charged Portfolio) shall be security therefore and should we fail
          to repay you promptly, upon ten (10) days' written notice to us, you
          (save as otherwise provided above) shall be entitled to utilise
          available cash in any of our accounts (other than the Charged
          Accounts) maintained by you and to dispose of assets of any of our
          accounts (other than the Charged Accounts) maintained by you to the
          extent necessary to obtain reimbursement.]*

[(f)/(g)] confirm that (except as may raise from your own gross negligence, bad
          faith, or wilful misconduct or the gross negligence, bad faith, or
          wilful misconduct of a subcustodian or agent) you shall be without
          liability to us for any loss, liability, claim or expense resulting
          from or caused by events or circumstances beyond your reasonable
          control, including, without limitation, the interruption, suspension
          or restriction of trading on or the closure of any securities markets,
          power or other mechanical or technological failures or interruptions
          not within your reasonable control, or computer viruses or
          communications disruptions, work stoppages, natural disasters, or
          other similar events or acts.

This notice shall be governed by and construed in accordance with the laws of
the State of New York.

Yours faithfully,

________________________________________________________________________________

* To be inserted if State Bank and Trust Company are appointed Custodian.

                                      -110-

<PAGE>

For and on behalf of
ACE Limited
_____________________________                      Dated _______________________

For and on behalf of
ACE Bermuda Insurance Ltd.                  Dated _______________________

                                      -111-

<PAGE>

                               THE SECOND SCHEDULE

                             Custodian's Undertaking

--------------------------------------------------------------------------------
Name of Custodian and address of its registered or principal office:

[   ]

Attn:  [   ]

Facsimile no:   [   ]   (the "Custodian")

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Name of each Chargor and the address of its registered or principal office:

ACE Limited
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM08
Bermuda

Facsimile no: +441 296 0087

ACE Bermuda Insurance Ltd.
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM08
Bermuda

Facsimile no: +441 296 0087
((1) and (2) together the "Chargors" and each a "Chargor" )

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Name of Security Trustee and address of its registered or principal office:

Citibank International plc
336 Strand
London WC2R 1HB

Attn: Loans Agency

Facsimile no: +44 20 7500 4482 (the "Security Trustee")

--------------------------------------------------------------------------------
Date of Charge Agreement:  [Date]

--------------------------------------------------------------------------------

                                      -112-

<PAGE>

To:  the Security Trustee

We, the Custodian, refer to the afore-mentioned Charge Agreement (the "Charge
Agreement") between the Chargors and the Security Trustee. Save where the
context otherwise requires, terms defined in the Charge Agreement shall have the
same meanings herein.

In consideration of the Security Trustee and the other Finance Parties entering
into the Agreement and issuing Letters of Credit thereunder and pursuant to
instructions received by the Custodian from the Chargors, the Custodian hereby
represents and irrevocably undertakes and agrees to and with the Security
Trustee as follows:

1.   The Custodian acknowledges the security interest granted by each Chargor in
     favor of Security Trustee in the Charged Portfolio.

2.   Anything contained herein to the contrary notwithstanding, the Custodian
     will, without further consent by any Chargor (a) comply with Entitlement
     Orders originated by the Security Trustee with respect to the Charged
     Portfolio and any Security Entitlements carried therein, (b) transfer, sell
     or redeem any of the Charged Portfolio as directed by the Security Trustee,
     (c) transfer any or all of the Charged Portfolio to any account or accounts
     designated by the Security Trustee, including an account established in the
     Security Trustee's name (whether at the Security Trustee or the Custodian
     or otherwise), (d) register title to any of the Charged Portfolio in any
     name specified by the Security Trustee, including the name of the Security
     Trustee or any of its nominees or agents, without reference to any interest
     of either Chargor, or (e) otherwise deal with the Charged Portfolio as
     directed by the Security Trustee.

3.   The Custodian hereby further acknowledges that it holds the Charged
     Portfolio, all Security Entitlements carried therein, and all other
     collateral held by the Custodian under this Custodian's Undertaking or the
     Charge Agreement, as custodian for the benefit of, and subject to the
     control of, the Security Trustee. The Custodian shall, by book entry or
     otherwise, indicate that the Charged Portfolio, and all Security
     Entitlements carried therein, are subject to the control of the Security
     Trustee as provided in Section 2.

4.   The Custodian hereby represents and warrants (a) that the records of
     Custodian show that each Chargor is the sole owner of such Chargor's
     portion of the Charged Portfolio, (b) that the Custodian has not been
     served with any notice of levy or received any notice of any security
     interest in or other claim to the Charged Portfolio, or any portion of the
     Charged Portfolio, other than Security Trustee's claim pursuant to the
     Charge Agreement, (c) that the Custodian is not presently obliged to accept
     any entitlement order from any person with respect to the Charged
     Portfolio, except for entitlement orders that the Custodian is obligated to
     accept from the Security Trustee under this undertaking and entitlement
     orders that the Custodian, subject to the provisions of Section 10 below,
     is obligated to accept from the Chargors, (d) that the Custodian has all
     necessary corporate power and authority to enter into and perform this
     undertaking, (e) that the execution, delivery and performance of this
     undertaking by the Custodian have been duly authorized by all necessary
     corporate action on the part of the Custodian, (f) that the Custodian is a
     "securities intermediary" (as that term is defined in Section 8-102(a)(14)
     of the Uniform Commercial Code as in effect in the state of New York (the
     "Code")) and is acting in such capacity with respect to the Charged
     Portfolio and (g) that the Custodian

                                      -113-

<PAGE>

     is not a "clearing corporation" (as that term is defined in Section
     8-102(a)(5) of the Code).

5.   Without the prior written consent of the Security Trustee, the Custodian
     will not enter into any agreement by which the Custodian agrees to comply
     with any entitlement order of any person other than the Security Trustee
     or, subject to the provisions of Section 10 below, the Chargors, with
     respect to any portion or all of the Charged Portfolio. The Custodian (a)
     shall promptly notify the Security Trustee if any person requests the
     Custodian to enter into any such agreement or otherwise assert or seeks to
     assert a lien, encumbrance or adverse claim against any portion or all of
     the Charged Portfolio and (b) will not acknowledge any limitation on the
     right of Security Trustee to originate "entitlement orders" (as such term
     is defined in Section 8-102(8) of the Code, "Entitlement Orders") with
     respect to or direct the transfer of the Charged Portfolio or any portion
     thereof.

6.   The Custodian hereby agrees that: (a) each account comprising the Charged
     Portfolio established by the Custodian (each, a "Charged Account") is and
     will be maintained as a "securities account" (within the meaning of Section
     8-501 of the Code); (b) any credit balances or other property, other than
     cash, credited to, or held for the credit of, any such Charged Account
     shall be treated as "financial assets" (within the meaning of Section
     8-102(a)(9) of the Code, "Financial Assets") and (c) each Chargor is an
     "entitlement holder" (within the meaning of Section 8-102(a)(7) of the
     Code) in respect of the Financial Assets credited to such Charged Account
     and with respect to such Charged Account and Custodian shall so note in its
     records pertaining to such Financial Assets and each Charged Account; and
     (d) all Financial Assets in registered form or payable to or to the order
     of and credited to any such Charged Account shall be registered in the name
     of, payable to or to the order of, or specially endorsed to, the Custodian
     or in blank, or credited to another securities account maintained in the
     name of the Custodian, and in no case will any Financial Asset credited to
     any such Charged Account be registered in the name of, payable to or to the
     order of, or endorsed to, either Chargor except to the extent the foregoing
     have been subsequently endorsed by such Chargor to the Custodian or in
     blank.

7.   The Custodian will deliver to the Security Trustee within three business
     days of the Security Trustee's request therefor an up-to-date statement or
     statements of the Charged Portfolio, each component thereof and the
     aggregate value thereof.

8.   The Custodian will in any event deliver to the Security Trustee not later
     than the tenth business day of each calendar month a statement or
     statements, made up as at the close of business on the last business day of
     the preceding calendar month, of the Charged Portfolio, each component
     thereof and the aggregate value thereof.

9.   If trades of, or any transactions relating to, a component part of the
     Charged Portfolio are processed by the Custodian on any Business Day, the
     Custodian shall notify the Security Trustee as soon as possible (and in any
     event within three Business Days of such day) of the trades and
     transactions processed.

10.  The Custodian acknowledges that the Security Trustee has the right, by
     delivery of written notice (a "Prohibition Notice") to the Custodian, to
     prohibit each Chargor from

                                      -114-

<PAGE>

     effecting any withdrawals, sales, trades, transfers or exchanges of any of
     the Charged Portfolio and the Custodian agrees that upon delivery of a
     Prohibition Notice, the Custodian will cease to honor instructions from
     either of the Chargors with respect to the Charged Portfolio and will
     comply with any and all written instructions delivered by the Security
     Trustee to the Custodian and has no obligation to and will not, investigate
     the reason for any action taken by the Security Trustee, the amount of any
     obligations of any Chargor to the Security Trustee, the validity of any of
     the Security Trustee's claims against or agreements with either Chargor,
     the existence of any defaults under such agreements, or any other matter.

11.  The Custodian acknowledges that, unless it receives written instructions
     from the Security Trustee to the contrary, it shall be entitled to process
     trades as it may be directed to do so under the terms of its custodial
     agreement with the [Chargors/each Chargor respectively] only to the extent
     such trades comprise a disposal to a third party in the market of a
     component part of the Charged Portfolio and the substitution therefor with
     the proceeds of such disposition or other securities, save that transfers
     can be made (a) to the Security Trustee in accordance with the terms of
     this undertaking or (b) to any person with the Security Trustee's prior
     written consent or (c) in respect of any part of the Charged Portfolio
     representing an excess over the Required Value, to the relevant Chargor or
     as it may direct, which excess will be determined by the Security Trustee
     and specified in written notice from the Security Trustee to the Custodian
     on the date of the request from the Chargors.

12.  After delivery of a Prohibition Notice, the Custodian shall deliver,
     transfer or assign to the Security Trustee on the Security Trustee's first
     written demand securities and monies in the Charged Portfolio as directed
     by the Security Trustee and all certificates and other instruments
     evidencing title thereto or necessary or desirable in order for the
     Security Trustee to acquire good and marketable title thereto. The Security
     Trustee shall indicate the identity of the securities and monies it wishes
     to receive and the Custodian shall have no discretion in this matter and
     shall be fully protected in relying upon any direction received from the
     Security Trustee.

13.  The Custodian agrees that it will not attempt to assert control, and does
     not claim and will not accept any security or other interest in any part of
     the Charged Portfolio, and will not exercise, enforce or attempt to enforce
     any claim, right of set-off, banker's lien, clearing lien, counterclaim or
     similar right against the Charged Portfolio or any portion thereof, or
     otherwise charge or deduct from the Charged Portfolio any amount
     whatsoever, except as provided below. All rights and interests of the
     Custodian in or towards the Charged Portfolio or any part thereof are and
     shall be subordinated and postponed to the Security Trustee's rights and
     interests therein under and pursuant to the Charge Agreement, save that the
     Custodian shall be entitled to debit any account of the relevant Chargor
     maintained with the Custodian with any reasonable fees or commissions due
     and owing by such Chargor to the Custodian in respect of the Charged
     Portfolio or part thereof or to settle any reasonable bank charges due and
     owing by such Chargor to the Custodian and incurred in the ordinary course
     of business for the purchase of securities and/or foreign exchange or
     contracts for foreign exchange.

                                      -115-

<PAGE>

14.  Any notice, demand or other communication required to be:

     (a)  served on us by you hereunder, may be served by letter properly
          addressed and deposited with a recognised air express courier or
          transmitted by facsimile if (a) a telephone call is placed to the
          officer noted for address purposes on page 1 of this Custodian's
          Undertaking notifying such officer of the facsimile transmission and
          (b) the original is properly addressed and mailed. Any notice, demand
          or other communication shall be deemed to have been served on us on
          the third business day following if sent by recognised air express
          courier and when dispatched if sent in accordance with the facsimile
          procedures;

     (b)  made by us to you hereunder, may be transmitted by facsimile to the
          facsimile number and for the attention of the officer noted on page 1
          of this Custodian's Undertaking, or to any substitute facsimile number
          or officer as you may notify to us.

15.  The Custodian shall not amend, supplement or otherwise modify its
     agreements with the Chargors or the Security Trustee governing the
     establishment and maintenance of the Charged Accounts (including, without
     limitation the choice of law provision and provisions providing for
     treatment of property held in any Charged Account as a financial asset) in
     any respect without the Security Trustee's prior written consent.

16.  This agreement shall remain in full force and effect until the Custodian
     receives written notice of its termination given by the Security Trustee
     and the Custodian shall not terminate the Charged Accounts, and shall not
     permit either Chargor to terminate the Charged Accounts, without the
     Security Trustee's prior written consent.

17.  The Custodian hereby acknowledges that in the event any dispute arises
     between one or both Chargors, on the one hand, and the Security Trustee, on
     the other hand, with respect to the payment, ownership or right to
     possession of the Charged Portfolio or any portion thereof, the Custodian
     shall take such actions and shall refrain from taking such actions with
     respect thereto as may be directed by the Security Trustee.

18.  THE CUSTODIAN AGREES that THIS UNDERTAKING shall be governed under and in
     accordance with the laws of the State of NEW YORK, without regard to
     conflict of laws principles AND FURTHER AGREES THAT ALL JUDICIAL
     PROCEEDINGS BROUGHT AGAINST THE CUSTODIAN ARISING OUT OF OR RELATING TO
     THIS AGREEMENT MAY BE BROUGHT IN THE ENGLISH COURTS OR ANY STATE OR FEDERAL
     COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.
     for purposes of this undertaking, the State of New York shall be deemed to
     be the Custodian's jurisdiction.

19.  Save as expressly provided herein, the Custodian shall have no further
     obligations or liabilities to the Security Trustee in relation to the
     Charged Portfolio and specifically shall have no liability or
     responsibility for monitoring or determining the compliance by any party
     with any other agreement including, without limitation, the Charge
     Agreement.

                                      -116-

<PAGE>

____________________________________________
(Authorised Signatory)
for and on behalf of the Custodian

[Date]

                                      -117-

<PAGE>

                                  THE SCHEDULE

                                     PART A

The Required Value is at the date hereof:-

US$100 (One hundred United States dollars)

or such other amount as may be agreed between the Security Trustee and the
Chargors and notified to the Custodian by the Security Trustee from time to
time.

                                     PART B

The initial Security Trustee's Requirements are:-

To the extent of an aggregate amount not less than the Required Value, the
Charged Portfolio shall at all times be comprised of the following: (a) cash,
(b) fixed income securities issued by or fully and explicitly guaranteed by the
central government of an OECD (Organisation for Economic Co-Operation and
Development) country, and (c) fixed income securities issued by US government
agencies (whose debt obligations are fully and explicitly guaranteed as to the
timely payment of principal and interest by the full faith and credit of the US
Government) as used in Appendix A, Section III (C), Category I to Regulation H
as promulgated by the Board of Governors of the Federal Reserve System and the
same are either (a) uncertificated and governed by the provisions of 31 C.F.R.
Part 357 or such similar provisions of the Code of Federal Regulations,
applicable to United States agency securities as are acceptable to the Security
Trustee; or (b) certificated.

                                       -118-

<PAGE>

                                   SCHEDULE 12
                           Form of Substitution Notice

From:   ACE Limited

To:     Citibank International plc

Dated:

Re:     [Applicant 1]
        [Applicant 2]

Dear Sirs

We refer to the (Pounds)380,000,000 letter of credit agreement originally dated
19 November 1999, (as (a) amended and restated pursuant to the First Restatement
Agreement, (b) amended pursuant to the Amendment Agreement, (c) amended and
restated pursuant to the Second Restatement Agreement and (d) amended and
restated pursuant to the Third Restatement Agreement (the "Agreement")) between,
inter alia, ACE Limited (the "Account Party"), the financial institutions named
therein as Banks and Citibank International plc as Agent.

Terms defined in the Agreement shall have the same meanings in this Substitution
Request.

1.   Pursuant to Clause 5 (Substitution of Letters of Credit) of the Agreement,
     the Account Party, on behalf of [   ] (the "Applicant[s]"), hereby requests
     that the Banks substitute for the existing Letter[s] of Credit new Letters
     of Credit, in each case in accordance with the information annexed hereto
     as Annex A.

2.   The Account Party hereby certifies that on the date hereof and on the
     Substitution Date set forth in Annex A, both before and after giving effect
     to the substitution requested hereby:

     (i)   no Event of Default or Potential Event of Default has occurred and is
           continuing;

     (ii)  each of the representations and warranties of the Account Party
           contained in the Agreement and each other Finance Document is correct
           in all material respects on the date hereof, except representations
           and warranties which expressly refer to an earlier date in which case
           the same shall be true on and as of such earlier date;

     (iii) after giving effect to the substitution requested hereby, the
           aggregate Sterling Amount of the Outstandings will not exceed the
           Total Commitments; and

     (iv)  the Letter[s] of Credit requested hereby [is/are] being extended
           solely as security to support the underwriting business of the
           Applicant[s] at Lloyd's which has been provided in accordance with
           the requirements of Lloyd's applicable to [it/them].

                                      -119-

<PAGE>

IN WITNESS WHEREOF, the Account Party has caused this Certificate to be executed
by its duly authorised officer as of the date and year first written above.

ACE LIMITED

By:___________________________

Name:_________________________

Title:________________________

                                      -120-

<PAGE>

                                     Annex A

                         Letter of Credit Information/4/

1. Name of Beneficiary:_____________________________________

2. Existing Letter of Credit Number:________________________

3. Substitution Date                                                  [  ]/5/

4. Amount of new Letter of Credit:                            (poundS)/US$ /6/

________________________________________________________________________________

/4/  A separate "Letter of Credit Information" should be completed for each
     Letter of Credit covered by the Substitution Request.

/5/  The Substitution Date must be a Business Day within the Substitution
     Period, and be not less than [30] Business Days after the date of the
     Substitution Request.

/6/  This amount must not exceed the maximum amount available under the existing
     Letter of Credit to be substituted.

                                      -121-

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