Document:

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                                                                  Exhibit 10.1

                                ACE LIMITED
                         (a Cayman Islands company)

                          6,000,000 FELINE PRIDES
                          initially consisting of
                          6,000,000 Income PRIDES

                           UNDERWRITING AGREEMENT

                            Dated: April 6, 2000

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                             TABLE OF CONTENTS

Section 1.      Representations and Warranties................................3

       (a)     Representations and Warranties by the Company..................3
               (1)    Compliance with Registration Requirements...............3
               (2)    Incorporated Documents..................................4
               (3)    Independent Accountants.................................5
               (4)    Financial Statements....................................5
               (5)    No Material Adverse Change in Business..................5
               (6)    Good Standing of the Company............................6
               (7)    Good Standing of Corporate Subsidiaries.................6
               (8)    Good Standing of Partnership Subsidiaries...............7
               (9)    Capitalization..........................................7
               (10)   Authorization of the Purchase Contract Agreement........7
               (11)   Authorization of the Pledge Agreement...................8
               (12)   Authorization of FELINE PRIDES..........................8
               (13)   Authorization of Preferred Shares.......................8
               (14)   Authorization of the Ordinary Shares....................8
               (15)   Authorization of this Agreement, the Pricing
                        Agreement and the Remarketing Agreement...............8
               (16)   Descriptions of the Securities and the Operative
                        Agreements............................................9
               (17)   Non-Taxation of Current Payments........................9
               (18)   Reserves...............................................10
               (19)   Absence of Defaults and Conflicts......................10
               (20)   Absence of Proceedings.................................11
               (21)   Accuracy of Exhibits...................................11
               (22)   Absence of Further Requirements........................11
               (23)   Possession of Licenses and Permits.....................11
               (24)   Insurance Laws.........................................12
               (25)   Governmental Authorization.............................12
               (26)   Commodity Exchange Act.................................12
               (27)   Investment Company Act.................................12

       (b)   Officers' Certificates..........................................13

 Section 2.    Sale and Delivery to Underwriters; Closing....................13

        (a)   Initial Securities.............................................13
        (b)   Option Securities..............................................13
        (c)   Pledge of Securities...........................................13
        (d)   Payment........................................................13
        (e)   Compensation...................................................14
        (e)   Denominations; Registration....................................14

  Section 3.   Covenants of the Company......................................14

         (a)   Compliance with Securities Regulations and Commission
               Requests......................................................14
         (b)   Filing of Amendments..........................................15
         (c)   Delivery of Registration Statements...........................15
         (d)   Delivery of Prospectuses......................................15
         (e)   Continued Compliance with Securities Laws.....................15
         (f)   Blue Sky Qualifications.......................................16
         (g)   Earnings Statement............................................16
         (h)   Use of Proceeds...............................................16
         (i)   Restriction on Sale of Securities.............................16
         (j)   Reporting Requirements........................................17
         (k)   Documentary, Stamp or Similar Issue Taxes.....................17
         (l)   Reserve of Ordinary Shares....................................17

 Section 4.     Payment of Expenses..........................................17

        (a)    Expenses......................................................17
        (b)    Termination of Agreement......................................18

                                    iv
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Section 5       Conditions of Underwriters' Obligations......................18

       (a)     Effectiveness of Registration Statement.......................18
       (b)     Opinions of Counsel for the Company...........................18
       (c)     Opinion of Counsel for Purchase Contract Agent................19
       (d)     Opinion of Counsel for Underwriters...........................19
       (e)     Officers' Certificate.........................................19
       (f)     Accountant's Comfort Letters..................................20
       (g)     Bring-down Comfort Letters....................................20
       (h)     Ratings.......................................................21
       (i)     Conditions to Purchase of Option Securities...................21
       (j)     Additional Documents..........................................22
       (k)     Termination of Agreement......................................22

Section 6.      Indemnification..............................................23

       (a)     Indemnification of  Underwriters..............................23
       (b)     Indemnification of the Company, Directors and Officers........23
       (c)     Actions against Parties; Notification.........................24
       (d)     Settlement without Consent if Failure to Reimburse............24

Section 7.      Contribution.................................................24

Section 8.     Representations, Warranties and Agreements to Survive
                 Delivery....................................................26

Section 9.     Termination...................................................26

       (a)     Underwriting Agreement........................................26
       (b)     Liabilities...................................................27

Section 10.    Default by One or More of the Underwriters....................27

Section 11.    Notices.......................................................27

Section 12.    Parties.......................................................28

Section 13.    Consent to Jurisdiction; Miscellaneous........................28

Section 14.    Waiver of Immunities..........................................28

Section 15.    Judgment Currency.............................................29

Section 16.    GOVERNING LAW AND TIME........................................29

Section 17.    Effect of Headings............................................29

                                     v

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SCHEDULE A
SCHEDULE B

EXHIBIT A           Form of Opinion of Maples and Calder, the Company's Cayman
                    Islands Counsel, to be Delivered Pursuant to Section 5(b)

EXHIBIT B           Form of Opinion of Conyers, Dill & Pearman, the Company's
                    Bermuda Counsel, to be Delivered Pursuant to Section 5(b)

EXHIBIT C           Form of Opinion of Peter N. Mear, Esq., General Counsel of
                    the Company, to be Delivered Pursuant to Section 5(b)

EXHIBIT D           Form of Opinion of Mayer, Brown & Platt, United States
                    Counsel for the Company, to be Delivered Pursuant to
                    Section 5(b)

                                     vi

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                                ACE LIMITED
                         (a Cayman Islands Company)

                          6,000,000 FELINE PRIDES

                               consisting of

                          6,000,000 Income PRIDES

                           UNDERWRITING AGREEMENT

                                                      April 6, 2000

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
                 INCORPORATED
BANC OF AMERICA SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
         c/o Merrill Lynch & Co.,
         Merrill Lynch Pierce, Fenner & Smith
                           Incorporated
         World Financial Center
         North Tower
         New York, New York 10281-1209

Ladies and Gentlemen:

         ACE Limited, a Cayman Islands company (the "Company"), confirms
its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Banc of America Securities LLC and
Donaldson, Lufkin & Jenrette Securities Corporation (collectively, the
"Underwriters," which term shall also include any underwriter substituted
as provided in Section 10 hereof), with respect to the issue and sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of 6,000,000 FELINE PRIDESSM or the "Initial Securities" which
will initially consist of units (referred to as "Income PRIDESSM") with a
Stated Amount of $50 comprised of (a) a stock purchase contract (the
"Purchase Contract") under which the holder will purchase from the Company
on May 16, 2003 a number of ordinary shares, $0.041666667 par value per
share, of the Company (the "Ordinary Shares") equal to the Settlement Rate
as set forth in the Purchase Contract Agreement (as defined below), and (b)
beneficial ownership of one 8.25% Cumulative Redeemable Preferred Share,
Series A, of the Company, having a liquidation preference of $50 (the
"Preferred Shares") and with respect to the grant by the Company to the
Underwriters, acting severally and not jointly, of an option to purchase up
to an additional 900,000 FELINE PRIDES (the "Option Securities" and,
together with the Initial Securities, being referred to herein as the
"Securities"). In accordance with the terms of the Purchase Contract
Agreement, to be dated as of April 12, 2000, between the Company and The
Bank of New York, as purchase contract agent (the "Purchase Contract
Agent"), the Preferred Shares will be pledged by the Purchase Contract
Agent, on behalf of the holders of the Securities, to The Bank of New York,
as collateral agent (the "Collateral Agent"), pursuant to the Pledge
Agreement, to be dated as of April 12, 2000 (the "Pledge Agreement"), among
the Company, the Purchase Contract Agent and the Collateral Agent, to
secure such holders' obligation to purchase Ordinary Shares under the
Purchase Contracts. Under the terms of the Purchase Contract Agreement and
Pledge Agreement, holders of Income PRIDES are permitted to substitute
certain treasury securities ("Treasury Securities") for the Preferred
Shares as collateral in order to create "Growth PRIDESSM" ("Growth
PRIDES"). Growth PRIDES will consist of a unit with a Stated Amount of $50
comprised of (a) a Purchase Contract and (b) a 1/20th undivided beneficial
interest in a zero-coupon U.S. Treasury Security maturing on May 16, 2003.
The rights and obligations of (i) a holder of Income PRIDES in respect of
Preferred Shares, subject to the pledge thereof, and Purchase Contracts,
(ii) a holder of Growth PRIDES in respect of a beneficial interest in the
Treasury Securities, subject to the pledge thereof, and Purchase Contracts
and (iii) a holder of separately trading Preferred Shares resulting from
the creation of Growth PRIDES ("Separate Preferred Shares") will, in each
case, be evidenced by Security Certificates (the "Security Certificates").

         Pursuant to a remarketing agreement (the "Remarketing Agreement")
to be dated as of April 12, 2000, among the Company, the Purchase Contract
Agent and a nationally recognized investment banking firm chosen by the
Company, certain Preferred Shares may be remarketed, subject to certain
terms and conditions.

<PAGE>

         The Company and certain other entities affiliated therewith have
filed with the Securities and Exchange Commission (the "Commission") a
joint registration statement on Form S-3 (No. 333-78841) and pre-effective
amendments nos. 1 and 2 thereto, for the registration of the Securities and
certain other securities described therein under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement has been declared effective by the Commission. Such
registration statement, in the form in which it became effective, is
referred to herein as the "Registration Statement"; and the final
prospectus and the final prospectus supplement relating to the offering of
the Securities, in the form first furnished to the Underwriters by the
Company for use in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus"; provided, however,
that all references to the "Registration Statement" and the "Prospectus"
shall also be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the time the applicable final prospectus and the
final prospectus supplement were first furnished to the Underwriters by the
Company; provided, further, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration Statement"), then, after such
filing, all references to "Registration Statement" shall also be deemed to
include the Rule 462 Registration Statement. A "preliminary prospectus"
shall be deemed to refer to any prospectus relating to the offering of the
Securities that omitted information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933
Act Regulations and was used after the Registration Statement became
effective and prior to the execution and delivery of this Underwriting
Agreement. For purposes of this Underwriting Agreement, all references to
the Registration Statement, Prospectus or preliminary prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to include
any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").

         All references in this Underwriting Agreement to financial
statements and schedules and other information which is "contained,"
"included" or "stated" (or other references of like import) in the
Registration Statement, Prospectus or preliminary prospectus shall be
deemed to mean and include all such financial statements and schedules and
other information which is incorporated by reference in the Registration
Statement, Prospectus or preliminary prospectus, as the case may be, prior
to the execution of this Underwriting Agreement; and all references in this
Underwriting Agreement to amendments or supplements to the Registration
Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include the filing of any document under the 1934 Act which is incorporated
by reference in the Registration Statement, Prospectus or preliminary
prospectus, as the case may be, after the execution of this Underwriting
Agreement.

         The Remarketing Agreement, the Purchase Contract Agreement, the
Pledge Agreement and this Agreement are referred to collectively as the
"Operative Agreements."

         The Company understands that the Underwriters propose to make a
public offering of the Securities as soon as the Underwriters deem
advisable after this Agreement has been executed and delivered.

     Section 1.     Representations and Warranties.

     (a)  Representations and Warranties by the Company. The Company represents
and warrants to the Underwriters as of the date hereof, as of the Closing
Time and, if applicable, as of each Date of Delivery (as defined below) (in
each case, a "Representation Date"), as follows:

          (1)  Compliance with Registration Requirements. The Company meets
     the requirements for use of Form S-3 under the 1933 Act. The
     Registration Statement (including any Rule 462(b) Registration
     Statement) has become effective under the 1933 Act and no stop order
     suspending the effectiveness of the Registration Statement (or such
     Rule 462(b) Registration Statement) has been issued under the 1933 Act
     and no proceedings for that purpose have been instituted or are
     pending or, to the knowledge of the Company, are contemplated by the
     Commission, and any request on the part of the Commission for
     additional information with respect to the Registration Statement (or
     any document incorporated therein by reference pursuant to the 1934
     Act) has been complied with.

                                     2
<PAGE>

          At the respective times the Registration Statement (including any
     Rule 462(b) Registration Statement) and any post-effective amendments
     thereto (including the filing of the Company's Annual Report on Form 10-K
     for the year ended December 31, 1999 with the Commission (the "Annual
     Report on Form 10-K")) became effective and at each Representation Date,
     the Registration Statement (including any Rule 462(b) Registration
     Statement) and any amendments thereto complied and will comply in all
     material respects with the requirements of the 1933 Act and the 1933 Act
     Regulations and did not and will not contain an untrue statement
     of a material fact or omit to state a material fact required to be
     stated therein or necessary to make the statements therein not
     misleading. At the date of the Prospectus, at the Closing Time and
     at each Date of Delivery, if any, neither the Prospectus nor any
     amendments and supplements thereto included or will include an
     untrue statement of a material fact or omitted or will omit to
     state a material fact necessary in order to make the statements
     therein, in the light of the circumstances under which they were
     made, not misleading. Notwithstanding the foregoing, the
     representations and warranties in this subsection shall not apply
     to statements in or omissions from the Registration Statement (or
     any amendment thereto) or the Prospectus made in reliance upon and
     in conformity with information furnished to the Company in writing
     by any Underwriter expressly for use in the Registration Statement
     (or any amendment thereto) or the Prospectus (or any amendment or
     supplement thereto).

          Each preliminary prospectus and prospectus filed as part
     of the Registration Statement as originally filed or as part of
     any amendment thereto, or filed pursuant to Rule 424 under the
     1933 Act, complied when so filed in all material respects with the
     1933 Act Regulations and each preliminary prospectus and the
     Prospectus delivered to the Underwriters for use in connection
     with the offering of the Securities will, at the time of such
     delivery, be identical to any electronically transmitted copies
     thereof filed with the Commission pursuant to EDGAR, except to the
     extent permitted by Regulation S-T.

          (2)  Incorporated Documents. The documents incorporated or deemed
     to be incorporated by reference in the Registration Statement and the
     Prospectus, at the time they were or hereafter are filed with the
     Commission, complied and will comply in all material respects with
     the requirements of the 1934 Act and the rules and regulations of
     the Commission thereunder (the "1934 Act Regulations") and, when
     read together with the other information in the Prospectus, at the
     date of the Prospectus, at the Closing Time and at each Date of
     Delivery, if any, did not and will not include an untrue statement
     of a material fact or omit to state a material fact necessary in
     order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading.

          (3)  Independent Accountants. The accountants who certified or shall
     certify the financial statements and any supporting schedules thereto of
     the Company included in the Registration Statement and the Prospectus are
     independent public accountants with respect to the Company and its
     subsidiaries as required by the 1933 Act and the 1933 Act Regulations.

          (4)  Financial Statements. The financial statements of the Company
     included in the Registration Statement and the Prospectus,
     together with the related schedules and notes, as well as those
     financial statements, schedules and notes of any other entity
     included therein, present fairly the financial position of the
     Company and its consolidated subsidiaries, or such other entity,
     as the case may be, at the dates indicated and the statement of
     operations, stockholders' equity and cash flows of the Company and
     its consolidated subsidiaries, or such other entity, as the case
     may be, for the periods specified. Such financial statements have
     been prepared in conformity with United States generally accepted
     accounting principles ("GAAP") applied on a consistent basis
     throughout the periods involved, except as indicated therein or in
     the notes thereto. The supporting schedules, if any, included in
     the Registration Statement and the Prospectus present fairly in
     accordance with GAAP the information required to be stated
     therein. The selected financial data and the summary financial
     information, if any, included in the Prospectus present fairly the
     information shown therein and have been compiled on a basis
     consistent with that of the related audited financial statements
     included in the Registration Statement and the Prospectus. The pro

                                     3
<PAGE>

     forma financial statements of the Company and its subsidiaries and
     the related notes thereto included in the Registration Statement
     and the Prospectus present fairly the information shown therein,
     have been prepared in accordance with the Commission's rules and
     guidelines with respect to pro forma financial statements and have
     been properly compiled on the basis described therein, and the
     assumptions used in the preparation thereof are reasonable and the
     adjustments used therein are appropriate to give effect to the
     transactions and circumstances referred to therein.

          (5)  No Material Adverse Change in Business. Since the respective
     dates as of which information is given in the Registration Statement and
     the Prospectus, except as otherwise stated therein (i) neither the
     Company nor any of its subsidiaries has sustained any material
     loss or material interference with its business from any action,
     notice, order or decree from an insurance regulatory authority and
     (ii) there has been (A) no material adverse change in case
     reserves or losses or loss expense of the Company and its
     consolidated subsidiaries and (B) no material adverse change, nor
     any development or event involving a prospective material adverse
     change, in the financial condition, business, or results of
     operations of the Company and its subsidiaries considered as one
     enterprise, in either case whether or not arising in the ordinary
     course of business (a "Material Adverse Change").

          (6)  Good Standing of the Company. The Company has been duly
     organized and is subsisting and in good standing under the laws of the
     Cayman Islands, with corporate power and authority to own, lease
     and operate its properties and to conduct its business as
     described in the Prospectus and to enter into and perform its
     obligations under, or as contemplated under, the Operative
     Agreements to which it is a party. The Company is duly qualified
     to transact business as a foreign corporation and is in good
     standing in all other jurisdictions in which its ownership or
     lease of property or the conduct of its business requires such
     qualification, except where the failure to so qualify or be in
     good standing would not reasonably be expected to result in a
     Material Adverse Change.

          (7)  Good Standing of Corporate Subsidiaries. Each subsidiary of the
     Company, other than such subsidiaries as would not, individually
     or in the aggregate, constitute a "significant subsidiary" as such
     term is defined in Rule 1-02 of Regulation S-X promulgated under
     the 1933 Act (each, a "Significant Subsidiary") which is a
     corporation has been duly incorporated or organized and is an
     existing corporation in good standing (with respect to
     jurisdictions which recognize such concept) under the laws of the
     jurisdiction of its incorporation, with corporate power and
     authority to own, lease and operate its properties and to conduct
     its business as described in the Prospectus; and each such
     Significant Subsidiary of the Company is duly qualified to
     transact business as a foreign corporation and is in good standing
     (with respect to jurisdictions which recognize such concept) in
     all other jurisdictions in which its ownership or lease of
     property or the conduct of its business requires such
     qualification, except where the failure to so qualify or be in
     good standing would not reasonably be expected to result in a
     Material Adverse Change; all of the issued and outstanding capital
     stock of each such Significant Subsidiary of the Company has been
     duly authorized and validly issued and is fully paid and
     nonassessable; and all of the issued and outstanding capital stock
     of each such Significant Subsidiary is owned by the Company,
     directly or through subsidiaries, except for de minimis
     shareholdings as required to comply with applicable law, and such
     capital stock is owned free and clear of any security interest,
     mortgage, pledge, lien, encumbrance, claim or equity (except for
     restrictions on transferability of the shares of insurance
     subsidiaries under applicable law).

                                     4

<PAGE>

          (8)  Good Standing of Partnership Subsidiaries. Each Significant
     Subsidiary of the Company which is a partnership has been duly
     formed and is an existing partnership in good standing (with
     respect to jurisdictions which recognize such concept) under the
     laws of the jurisdiction of its formation, with power and
     authority to own, lease and operate its properties and to conduct
     its business as described in the Prospectus; and each such
     Significant Subsidiary of the Company is duly qualified to
     transact business and is in good standing (with respect to
     jurisdictions which recognize such concept) in all other
     jurisdictions in which its ownership or lease of property or the
     conduct of its business requires such qualification, except where
     the failure to so qualify or be in good standing would not
     reasonably be expected to result in a Material Adverse Change; all
     of the outstanding equity interests of each such Significant
     Subsidiary of the Company have been duly authorized and validly
     issued; and all of the equity interests of each such Significant
     Subsidiary are owned by the Company, directly or through
     subsidiaries, free and clear of any security interest, mortgage,
     pledge, lien, encumbrance, claim or equity (other than immaterial
     amounts necessary to comply with applicable law).

          (9)  Capitalization. The authorized, issued and outstanding shares of
     capital stock of the Company set forth in the Prospectus in the
     column entitled "Actual" under the caption "Capitalization"
     (except for subsequent issuances thereof, if any, pursuant to
     reservations, agreements or employee benefit plans or pursuant to
     the exercise of convertible securities or options). Such shares of
     capital stock have been duly authorized and validly issued by the
     Company and are fully paid and non-assessable, and none of such
     shares of capital stock was issued in violation of preemptive or
     other similar rights of any securityholder of the Company.

          (10)  Authorization of the Purchase Contract Agreement. The Purchase
     Contract Agreement has been duly authorized by the Company and,
     when validly executed and delivered by the Company and assuming
     due authorization, execution and delivery of the Purchase Contract
     Agreement by the Purchase Contract Agent, the Purchase Contract
     Agreement will constitute a valid and binding agreement of the
     Company, enforceable against the Company in accordance with its
     terms, except as the enforcement thereof may be limited by
     bankruptcy, insolvency (including, without limitation, all laws
     relating to fraudulent transfers), reorganization, moratorium or
     other similar laws affecting the enforcement of creditors' rights
     generally or by general equitable principles (regardless of
     whether enforcement is considered in a proceeding at law or in
     equity).

          (11)  Authorization of the Pledge Agreement. The Pledge Agreement
     has been duly authorized by the Company and, when validly executed and
     delivered by the Company and assuming due authorization, execution
     and delivery of the Pledge Agreement by the Collateral Agent and
     the Purchase Contract Agent, the Pledge Agreement will constitute
     a valid and binding agreement of the Company, enforceable against
     the Company in accordance with its terms, except as the
     enforcement thereof may be limited by bankruptcy, insolvency
     (including, without limitation, all laws relating to fraudulent
     transfers), reorganization, moratorium or other similar laws
     affecting the enforcement of creditors' rights generally or by
     general equitable principles (regardless of whether enforcement is
     considered in a proceeding at law or in equity).

          (12)  Authorization of the FELINE PRIDES. The FELINE PRIDES have
     been duly authorized for issuance and sale to the Underwriters and,
     when issued and delivered against payment therefor as provided
     herein, will be validly issued and fully paid and non-assessable.
     The issuance of the FELINE PRIDES is not subject to preemptive or
     other similar rights. All corporate action required to be taken
     for the authorization, issuance and delivery of the FELINE PRIDES
     have been validly taken.

                                     5
<PAGE>

          (13)  Authorization of Preferred Shares. The Preferred Shares have
     been duly authorized for issuance by the company and, when issued and
     delivered against payment therefor as provided herein, will be
     validly issued and fully paid and non-assessable. The issuance of
     the Preferred Shares will not be subject to preemptive or other
     similar rights. All corporate action required to be taken for the
     authorization, issuance and delivery of the Preferred Shares has
     been validly taken.

          (14)  Authorization of the Ordinary Shares. The Ordinary Shares have
     been duly authorized and validly reserved for issuance by the Company
     and, when issued and delivered in accordance with the provisions of
     the Purchase Contract Agreement and the Pledge Agreement, will be
     validly issued and fully paid and non-assessable. The issuance of the
     Ordinary Shares will not be subject to preemptive or other similar
     rights. All corporate action required to be taken for the
     authorization, issuance and delivery of the Ordinary Shares has been
     validly taken.

          (15)  Authorization of this Agreement and the Remarketing Agreement.
     This Agreement and Remarketing Agreement have been duly authorized,
     executed and delivered by the Company.

          (16)   Descriptions of the Securities and the Operative Agreements.
     The Securities and the Operative Agreements, as of each Representation
     Date, will conform in all material respects to the statements
     relating thereto contained in the Prospectus and will be in
     substantially the form filed or incorporated by reference, as the
     case may be, as an exhibit to the Registration Statement.

          (17)   Non-Taxation of Current Payments. Except as disclosed in the
     Prospectus, under current laws and regulations of the Cayman Islands and
     Bermuda and any political subdivision thereof, all current payments in
     respect of Income PRIDES or Growth PRIDES may be paid by the Company to
     the holders thereof in United States dollars and freely transferred out of
     the Cayman Islands or Bermuda and all such payments made to holders
     thereof or therein who are non-residents of the Cayman Islands or Bermuda
     will not be subject to income, withholding or other taxes under laws and
     regulations of the Cayman Islands or Bermuda or any political
     subdivision or taxing authority thereof or therein and will
     otherwise be free and clear of any other tax, duty, withholding or
     deduction in the Cayman Islands or Bermuda or any political
     subdivision or taxing authority thereof or therein and without the
     necessity of obtaining any governmental authorization in the
     Cayman Islands or Bermuda or any political subdivision or taxing
     authority thereof or therein.

          (18)  Reserves. The description of the Company's reserves and
     reserving methodology and assumptions described in the Prospectus is
     accurate and fairly presents the information set forth therein in
     all material respects and, since the date of the latest financial
     statements included in the Prospectus, no loss experience has
     developed which would require or make it appropriate for the
     Company to alter or modify such methodology.

                                     6
<PAGE>

          (19)  Absence of Defaults and Conflicts. None of the Company or any
     subsidiary thereof is in violation of its charter or by-laws,
     partnership agreement or other constitutive documents or in default in
     the performance or observance of any obligation, agreement, covenant
     or condition contained in any contract, indenture, mortgage, deed of
     trust, loan or credit agreement, note, lease or other agreement or
     instrument to which the Company or any subsidiary thereof is a party
     or by which it or any of them may be bound, or to which any of the
     assets, properties or operations of the Company or any subsidiary
     thereof is subject (collectively, "Agreements and Instruments"),
     except for such defaults that would not reasonably be expected to
     result in a Material Adverse Change. The entry by the Company into the
     Purchase Contacts underlying the Income PRIDES, the offer of the
     Securities as contemplated herein and in the Prospectus, the issuance
     of the Ordinary Shares and the sale of the Ordinary Shares pursuant to
     the Purchase Contracts, the execution, delivery and performance by the
     Company of each of the Operative Agreements and any other agreement or
     instrument entered into or issued or to be entered into or issued by
     the Company in connection with the transactions contemplated hereby or
     thereby or in the Registration Statement and the Prospectus, and the
     consummation of the transactions contemplated herein and in the
     Registration Statement and the Prospectus (including, without
     limitation, the issuance and sale of the Securities, and the use of
     the proceeds from the sale of the Securities as described under the
     caption "Use of Proceeds") and compliance by the Company with its
     obligations hereunder and thereunder do not and will not, whether with
     or without the giving of notice or passage of time or both, conflict
     with or constitute a breach of, or default or Repayment Event (as
     defined below) under, or result in the creation or imposition of any
     lien, charge or encumbrance upon any assets, properties or operations
     of the Company or any subsidiary thereof pursuant to, any Agreements
     and Instruments (except for such conflicts, breaches, defaults or
     Repayment Events or liens, charges or encumbrances that would not
     reasonably be expected to result in a Material Adverse Change), nor
     will such action result in any violation of the provisions of the
     charter or by-laws, partnership agreement or other constitutive
     documents of the Company or any subsidiary thereof or, to the best
     knowledge of the Company, any applicable law, statute, rule,
     regulation, judgment, order, writ or decree of any government,
     government instrumentality or court, domestic or foreign, having
     jurisdiction over the Company or any subsidiary thereof or over any of
     their assets, properties or operations, except for such violations
     under any applicable law, statute, rule, regulation, judgement, order,
     writ or decree as would not reasonably be expected to result in a
     Material Adverse Change. As used herein, a "Repayment Event" means any
     event or condition which gives the holder of any note, debenture or
     other evidence of indebtedness (or any person acting on such holder's
     behalf) the right to require the repurchase, redemption or repayment
     of all or a portion of such indebtedness by the Company or any
     subsidiary thereof.

          (20)  Absence of Proceedings. There is no action, suit, proceeding,
     inquiry or investigation before or brought by any court or governmental
     agency or body, domestic or foreign, now pending or, to the knowledge of
     the Company, threatened, against or affecting the Company or any
     subsidiary thereof which is required to be disclosed in the Registration
     Statement and the Prospectus (other than as disclosed therein), or which
     would reasonably be expected to result in a Material Adverse Change, or
     which would reasonably be expected to materially and adversely affect the
     ability of the Company to perform its obligations any of the Operative
     Agreements to which it is a party.

                                     7

<PAGE>

          (21)  Accuracy of Exhibits. There are no contracts or documents which
     are required to be described in the Registration Statement, the
     Prospectus or the documents incorporated by reference therein or
     to be filed as exhibits thereto which have not been so described
     and filed as required.

          (22)  Absence of Further Requirements. No consent, approval,
     authorization, or order of, or filing with, any governmental
     agency or body or any court, domestic or foreign, is required for
     the entry into the Purchase Contracts underlying the Income PRIDES
     or in connection with the issuance, offering and sale of the
     Securities and the issuance and sale of the Ordinary Shares by the
     Company pursuant to such Purchase Contracts, for the due
     authorization, execution or delivery by the Company of the
     Operative Agreements or for the performance by the Company of its
     obligations under any of the Operative Agreements, except such as
     have been obtained or made prior to the Closing Date, such as have
     been obtained and made under the 1933 Act, such filing of the
     Prospectus as has been made with the Bermuda Registrar of
     Companies under the Companies Act 1981 of Bermuda and such as may
     be required under state securities laws.

          (23)  Possession of Licenses and Permits. The Company and its
     subsidiaries possess such permits, licenses, approvals, consents
     and other authorizations (collectively, "Governmental Licenses")
     issued by the appropriate federal, state, local or foreign
     regulatory agencies or bodies necessary to conduct the business
     now operated by them, except where the failure to so possess any
     such Governmental Licenses would not, singly or in aggregate,
     reasonably be expected to result in a Material Adverse Change. The
     Company and its subsidiaries are in compliance with the terms and
     conditions of all such Governmental Licenses, except where the
     failure so to comply would not, singly or in the aggregate,
     reasonably be expected to result in a Material Adverse Change.
     Neither the Company nor any of its subsidiaries has received any
     notice of proceedings relating to the revocation or modification
     of any such Governmental Licenses which, singly or in the
     aggregate, if the subject of an unfavorable decision, ruling or
     finding, would reasonably be expected to result in a Material
     Adverse Change.

          (24)   Insurance Laws. Each of the Company and its insurance
     subsidiaries (including insurance holding companies) is duly registered,
     licensed or admitted as an insurer or an insurance holding company
     (as applicable) in each jurisdiction where it is required to be so
     licensed or admitted to conduct its business as presently
     conducted, except where the failure to be so registered, licensed
     or admitted would not reasonably be expected to result in a
     Material Adverse Change; each of the Company and its insurance
     subsidiaries (including insurance holding companies) is in
     compliance with all applicable insurance statutes and regulations
     and has filed all reports, documents or other information required
     to be filed under such statutes and regulations, except where the
     failure to comply or file would not reasonably be expected to
     result in a Material Adverse Change.

          (25)  Governmental Authorization. Except as set forth in the
     Registration Statement and the Prospectus, no authorization,
     approval or consent of any governmental authority or agency is
     required (other than any license as an insurer or insurance
     holding company and other than those which have already been
     obtained) under the laws of any jurisdiction in which the Company
     or any of its subsidiaries conduct their respective businesses in
     connection with the ownership, directly or indirectly, by the
     Company of equity interests in any subsidiary or the repatriation
     of any amount from or to the Company or any of its subsidiaries,
     except to the extent that the failure to obtain such
     authorization, approval or consent would not reasonably be
     expected to result in a Material Adverse Change.

                                     8
<PAGE>

          (26)  Commodity Exchange Act. The Securities, upon issuance, will be
     excluded or exempted under, or beyond the purview of, the Commodity
     Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
     and regulations of the Commodity Futures Trading Commission under the
     Commodity Exchange Act (the "Commodity Exchange Act Regulations").

          (27)  Investment Company Act. The Company is not, and upon the
     issuance and sale of the Securities as herein contemplated and the
     application of the net proceeds therefrom as described in the
     Prospectus will not be, an "investment company" within the meaning
     of the Investment Company Act of 1940, as amended (the "1940
     Act").

     (b)  Officers' Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to the Underwriters or to
counsel for the Underwriters in connection with the offering of the
Securities shall be deemed a representation and warranty by the Company or
such subsidiary, as the case may be, to each Underwriter as to the matters
covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.

     Section 2.  Sale and Delivery to Underwriters; Closing.

     (a)  Initial Securities. On the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and
not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per security set forth in Schedule
B, the number of Initial Securities set forth in Schedule A hereto opposite
the name of such Underwriter, plus any additional number of Initial
Securities that such Underwriter may become obligated to purchase pursuant
to the provisions of Section 10 hereof.

     (b)  Option Securities. On the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters,
severally and not jointly, to purchase at their election up to an
additional 900,000 FELINE PRIDES, consisting solely of Income PRIDES, at
the price per Security set forth in Schedule B. The option will expire
automatically at the close of business on the 30th calendar day after the
date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities upon notice by
the Underwriters to the Company setting forth the aggregate number of
additional Option Securities as to which the several Underwriters are then
exercising the option and the time, date and place of payment and delivery
for such Option Securities. Any such time and date of payment and delivery
(a "Date of Delivery") shall be determined by the Underwriters and the
Company, but shall not be later than seven full business days after the
exercise of said options, nor in any event prior to the Closing Time,
unless otherwise agreed upon by the Underwriters and the Company. If the
option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased
which the number of Initial Securities each such Underwriter has severally
agreed to purchase bears to the total number of Initial Securities, subject
to such adjustments as the Underwriters in their discretion shall make to
eliminate any sales or purchases of a fractional number of Option
Securities.

                                    9
<PAGE>

     (c)  Pledge of Securities. The Preferred Shares will be pledged with the
Collateral Agent to secure the obligations of holders of the Income PRIDES
to purchase Ordinary Shares under the Purchase Contracts. Such pledge shall
be effected by the transfer to the Collateral Agent of the Preferred
Securities at the Closing Time and appropriate Date of Delivery, if any, in
accordance with the Pledge Agreement.

     (d)  Payment. Payment of the purchase price for, and delivery of, the
Initial Securities shall be made at the offices of Brown & Wood LLP, One
World Trade Center, New York, New York, or at such other place as shall be
agreed upon by the Underwriters and the Trust, at 9:00 A.M. (Eastern time)
on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time)
on any given day) business day after the date of this Underwriting
Agreement (unless postponed in accordance with the provisions of Section 10
hereof), or such other time not later than ten business days after such
date as shall be agreed upon by the Underwriters and the Company (such time
and date of payment and delivery being herein called "Closing Time"). In
addition, in the event that the Underwriters have exercised their option to
purchase any or all of the Option Securities, payment of the purchase price
for, and delivery of such Option Securities, shall be made at the
above-mentioned offices of Brown & Wood LLP, or at such other place as
shall be agreed upon by the Underwriters and the Company, on the relevant
Date of Delivery as specified in the notice from the Underwriters to the
Company.

     Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company,
against delivery to the Underwriters for the respective accounts of the
Underwriters of the Securities to be purchased by them. It is understood
that each Underwriter has authorized Merrill Lynch, for its account, to
accept delivery of, receipt for, and make payment of the purchase price
for, the Securities which it has severally agreed to purchase. Merrill
Lynch, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.

     (e)  Denominations; Registration. The Securities and certificates for the
Securities shall be in such denominations and registered in such names as
the Underwriters may request in writing at least one full business day
prior to the Closing Time or the relevant Date of Delivery, as the case may
be. The Securities and certificates for the Securities will be made
available for examination and packaging by the Underwriters in The City of
New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.

     Section 3.  Covenants of the Company.  The Company covenants with each
Underwriter as follows:

     (a)  Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will notify the Underwriters immediately,
and confirm the notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
supplement or amendment to the Prospectus, (ii) the receipt of any comments
from the Commission, (iii) any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424 and
will take such steps as they deem necessary to ascertain promptly whether
the Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, they will
promptly file the Prospectus. The Company will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.

                                    10
<PAGE>

     (b)  Filing of Amendments. The Company will give the Underwriters notice
of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b) of the 1933 Act
Regulations) or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the Underwriters with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will give the Underwriters a reasonable opportunity
to comment on any such document prior to such proposed filing or use, as
the case may be.

     (c)  Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Underwriters, without
charge, a conformed copy of the Registration Statement as originally filed
and of each amendment thereto (without exhibits) for each of the
Underwriters. The Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.

     (d)  Delivery of Prospectuses. The Company will deliver to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectus as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished
to the Underwriters will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.

     (e)  Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Underwriting Agreement and in the
Registration Statement and the Prospectus. If at any time when the
Prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the Underwriters or for the Company, to amend the Registration
Statement in order that the Registration Statement will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters, without
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.

                                    11
<PAGE>

     (f)  Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Underwriters may designate and
to maintain such qualifications in effect for a period of not less than one
year from the date of this Underwriting Agreement; provided, however, that
the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which they are not so qualified or to
subject themselves to taxation in respect of doing business in any
jurisdiction in which they are not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of
not less than one year from the date of this Underwriting Agreement.

     (g)  Earnings Statement. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.

     (h)  Use of Proceeds.  The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".

     (i)  Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (A) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option for the sale of, or otherwise
transfer or dispose of any Securities, Purchase Contracts, preferred
shares, ordinary shares or any security of the Company similar to the
Securities, Preferred Shares, Purchase Contracts or Ordinary Shares or any
security convertible into or exercisable or exchangeable for or repayable
with Securities, Purchase Contracts, Preferred Shares or Ordinary Shares or
any equity securities substantially similar to the Securities, Purchase
Contracts, Preferred Shares or Ordinary Shares; or (B) directly or
indirectly, enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, the economic equivalent of ownership
of the Securities, Purchase Contracts, Preferred Shares or Ordinary Shares,
any security convertible into or exercisable or exchangeable for or
repayable with the Securities, Purchase Contracts, Preferred Shares or
Ordinary Shares or equity securities substantially similar to the
Securities, Purchase Contracts, Preferred Shares or Ordinary Shares whether
any such swap or transaction is to be settled by delivery of Securities,
Purchase Contracts, Preferred Shares or Ordinary Shares or other
securities, in cash or otherwise. The foregoing sentence shall not affect
the ability of the Company to take any such action (i) in connection with
any employee benefit, dividend reinvestment and stock option or stock
purchase plans of the Company or its subsidiaries; (ii) in connection with
the offering of the Securities issued pursuant to this Agreement; (iii) in
connection with any securities issued pursuant to or sold in connection
with any securities of the Company or its subsidiaries, outstanding as of
the date hereof, that are convertible into or exercisable or exchangeable
for or repayable with any securities of the Company and its subsidiaries;
(iv) in connection with Growth PRIDES or Income PRIDES to be created or
recreated upon substitution of Pledged Securities, or Ordinary Shares
issuable upon early settlement of the Income PRIDES or Growth PRIDES; (v)
in connection with any merger, acquisition or acquisition of assets by the
Company, the consideration for which are securities of the Company; or (vi)
upon exercise of stock options.

                                    12
<PAGE>
     (j)  Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.

     (k)  Documentary, Stamp or Similar Issue Taxes. The Company will jointly
 and severally indemnify and hold harmless the Underwriters against any
documentary, stamp or similar issue tax, including any interest and
penalties, on the creation, issue and sale of the Securities and on the
execution and delivery of this Underwriting Agreement. All payments to be
made by the Company hereunder shall be made without withholding or
deduction for or on account of any present or future taxes, duties or
governmental charges whatsoever unless the Company is compelled by law to
deduct or withhold such taxes, duties or charges. In that event, the
Company shall pay such additional amounts as may be necessary in order that
the net amounts received after such withholding or deduction shall equal
the amounts that would have been received if no withholding or deduction
had been made.

     (l)  Reserve of Ordinary Shares. The Company will reserve and keep
available at all times, free of preemptive or other similar rights and liens
and adverse claims, sufficient Ordinary Shares to satisfy any obligations to
issue Ordinary Shares upon settlement of the Purchase Contracts and shall
take all actions necessary to keep effective the Registration Statement
with respect to the Ordinary Shares.

     Section 4.  Payment of Expenses.

     (a)  Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Underwriting Agreement, the Purchase
contracts, the Purchase Contract Agreement and the Pledge Agreement
including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed
and of each amendment thereto, (ii) the preparation, printing and delivery
to the Underwriters of this Underwriting Agreement, any Agreement among
Underwriters, the other Operative Agreements, and such other documents as
may be required in connection with the offering, purchase, sale, issuance
or delivery of the Securities, (iii) the preparation, issuance and delivery
of the Securities and any certificates for the Securities, to the
Underwriters, including any transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents (including transfer agents and
registrars), as well as the fees and disbursements of the Purchase Contract
Agent, the Collateral Agent, any depositary and their respective counsel,
(v) the qualification of the Securities under state securities laws in
accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the
preparation, printing and delivery of the Blue Sky Survey, and any
amendment thereto, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus and the Prospectus and any amendments
or supplements thereto, (vii) the fees charged by nationally recognized
statistical rating organizations for the rating of the Securities, if
applicable, and (viii) the filing fees incident to, and the reasonable fees
and disbursements of counsel to the Underwriters in connection with, the
review, if any, by the National Association of Securities Dealers, Inc.
(the "NASD") of the terms of the sale of the Securities.

     (b)  Termination of Agreement. If this Underwriting Agreement is
terminated by the Underwriters in accordance with the provisions of Section 5
or Section 9(a)(i) or 9(a)(ii) hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.

                                     13
<PAGE>
     Section 5.  Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Securities pursuant to this
Underwriting Agreement are subject to the accuracy of the representations
and warranties of the Company contained in Section 1 hereof or in
certificates of any officer of the Company or any of its respective
subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:

     (a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective
under the 1933 Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or be pending or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
information relating to the description of the Securities, the specific
method of distribution of the Securities and similar matters shall have
been filed with the Commission in accordance with Rule 424(b)(1), (2), (3),
(4) or (5), as applicable.

     (b)  Opinions of Counsel for the Company. At Closing Time, the
Underwriters shall have received the favorable opinions, each dated as of
Closing Time, of Maples and Calder, Cayman Islands counsel for the Company,
Conyers Dill & Pearman, Bermuda counsel for the Company, Peter N. Mear,
Esq., General Counsel of the Company, and Mayer, Brown & Platt, United States
counsel for the Company, each in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such letters for
each of the other Underwriters, to the effect set forth in: Exhibit A
hereto with respect to the opinion of Maples and Calder; Exhibit B hereto
with respect to the opinion of Conyers Dill & Pearman; Exhibit C hereto
with respect to the opinion of Peter N. Mear, Esq., and Exhibit D hereto
with respect to the opinion of Mayer, Brown & Platt, and, as to each
opinion, to such further effect as counsel to the Underwriters may
reasonably request.

     (c)  Opinion of Counsel for Purchase Contract Agent. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Emmet, Marvin & Martin, LLP, counsel to the Purchase Contract
Agent, in form and substance satisfactory to counsel for the Underwriters,
to the effect that:

          (i)  The Bank of New York is duly incorporated and is validly
     existing as a national banking association with trust powers under
     the laws of the United States with all necessary power and authority to
     execute, deliver and perform its obligations under the Purchase
     Contract Agreement, the Pledge Agreement and the Remarketing
     Agreement;

          (ii)   The execution, delivery and performance by the Purchase
     Contract Agent of the Purchase Contract Agreement, the Pledge Agreement
     and the Remarketing Agreement, and the authentication and delivery of the
     Securities have been duly authorized by all necessary action on the part
     of the Purchase Contract Agent. The Purchase Contract Agreement, the
     Pledge Agreement and the Remarketing Agreement have been duly executed
     and delivered by the Purchase Contract Agent, and constitute the legal,
     valid and binding obligations of the Purchase Contract Agent, enforceable
     against the Purchase Contract Agent in accordance with their respective
     terms, except as the enforcement thereof may be limited by bankruptcy,
     insolvency (including, without limitation, all laws relating to
     fraudulent transfers), reorganization, moratorium or other similar laws
     affecting the enforcement of creditors' rights generally or by general
     equitable principles (regardless of whether enforcement is considered in
     a proceeding at law or in equity);

          (iii)   The execution, delivery and performance of the Purchase
     Contract Agreement, the Pledge Agreement and the Remarketing Agreement by
     the Purchase Contract Agent does not conflict with or constitute a
     breach of the charter or by-laws of the Purchase Contract Agent;
     and
                                     14
<PAGE>

          (iv)   No consent, approval or authorization of, or registration
     with or  notice to, any Illinois or federal governmental authority or
     agency is required for the execution, delivery or performance by
     the Purchase Contract Agent of the Purchase Contract Agreement,
     the Pledge Agreement and the Remarketing Agreement.

     (d)   Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood LLP, counsel for the Underwriters, in form and substance
reasonably satisfactory to the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters. In
giving such opinion, such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to the
Underwriters. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.

     (e)   Officers' Certificate. At Closing Time, the Underwriters shall have
received a certificate of the Chairman, President and Chief Executive
Officer or the General Counsel and Secretary of the Company and of the
chief financial officer, chief accounting officer or chief investment
officer of the Company, dated as of Closing Time, to the effect that (i)
there has not been, since the date of this Underwriting Agreement or since
the respective dates as of which information is given in the Prospectus,
any material adverse change, or any development or event involving a
prospective material adverse change, in the financial condition, business
or results of operations of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business,
(ii) the representations and warranties of the Company in Section 1(a) are
true and correct with the same force and effect as though expressly made at
and as of the Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted, are pending or,
to the best of such officers' knowledge, are threatened by the Commission.

     (f)  Accountant's Comfort Letters. At the time of the execution of this
Underwriting Agreement, the Underwriters shall have received from
PricewaterhouseCoopers LLP a letter, dated such date, in form and substance
satisfactory to the Underwriters, together with signed or reproduced copies
of such letters for each of the other Underwriters, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus.

     (g)   Bring-down Comfort Letters. At Closing Time, the Underwriters shall
have received from PricewaterhouseCoopers LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (j) of this Section 5, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Time.

     (h)  Ratings. At Closing Time and at any relevant Date of Delivery, the
Securities shall be rated no lower than "BBB" by Standard & Poor's Rating
Service and "a2" by Moody's Investors Service, Inc., and the Company shall
have delivered to the Underwriters a letter, dated as of such date, from
each such rating organization, or other evidence satisfactory to the
Underwriters, confirming that the Securities have such ratings. Since the
time of execution of this Underwriting Agreement, there shall not have
occurred a downgrading in, or withdrawal of, the rating assigned to the
Securities or any of the Company's securities or the Company's financial
strength or claims paying ability by any such rating organization or any
other "nationally recognized statistical rating organization," as defined
for purposes of Rule 436(g)(2) under the 1933 Act Regulations, and no such
rating organization shall have publicly announced that it has under
surveillance or review with negative implications its rating of the
Securities or any of the Company's securities or the Company's financial
strength or claims paying ability.

                                    15
<PAGE>

     (i)  Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option to purchase all or any portion of the
Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the
Company or any of its subsidiaries hereunder shall be true and correct as
of each Date of Delivery, and, at the relevant Date of Delivery the
Underwriters shall have received:

          (1)  The favorable opinions of (i) Maples and Calder, Cayman Islands
     counsel for the Company, (ii) Conyers Dill & Pearman, Bermuda
     counsel for the Company, (iii) Peter N. Mear, Esq., General
     Counsel of the Company, and (iv) Mayer, Brown & Platt, United
     States counsel for the Company, each in form and substance
     satisfactory to counsel for the Underwriters, dated such Date of
     Delivery, relating to the Option Securities and otherwise to the
     same effect as the opinions required by Section 5(b) hereof.

          (2)  The favorable opinion of Emmet, Marvin & Martin, LLP, counsel to
     the Purchase Contract Agent, in form and substance satisfactory to
     counsel for the Underwriters, dated such Date of Delivery,
     relating to the Option Securities and otherwise to the same effect
     as the opinion required by Section 5(c) hereof.

          (3)  The favorable opinion of Brown & Wood LLP, counsel for the
     Underwriters, in form and substance reasonably satisfactory to the
     Underwriters, dated such Date of Delivery, relating to the Option
     Securities and otherwise to the same effect as the opinion
     required by Section 5(d) hereof.

          (4)  A certificate, dated such Date of Delivery, of the Chairman,
     President and Chief Executive Officer or the General Counsel and
     Secretary of the Company and of the chief financial officer, chief
     accounting officer or chief investment officer of the Company,
     confirming that the certificate delivered at the Closing Time
     pursuant to Section 5(e) hereof remains true and correct as of
     such Date of Delivery.

          (5)      A letter from PricewaterhouseCoopers LLP, in form and
     substance satisfactory to the Underwriters and dated such Date of
     Delivery, substantially the same in form and substance as the letter
     furnished to the Underwriters pursuant to Section 5(f) hereof,
     except that the "specified date" on the letter furnished pursuant
     to this paragraph shall be a date not more than three business
     days prior to such Date of Delivery.

     (j)  Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by Company in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.

     (k)  Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Underwriting Agreement (or, with respect to the Underwriters' exercise of
the over-allotment option for the purchase of Option Securities on a Date
of Delivery after the Closing Time, the obligations of the Underwriters to
purchase the Option Securities on such Date of Delivery) may be terminated
by the Underwriters by notice to the Company at any time at or prior to the
Closing Time (or such Date of Delivery, as applicable), and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.

                                    16
<PAGE>

     Section 6.  Indemnification.

     (a)  Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:

                  (1) against any and all loss, liability, claim, damage
         and expense whatsoever, as incurred, arising out of any untrue
         statement or alleged untrue statement of a material fact contained
         in the Registration Statement (or any amendment thereto), or the
         omission or alleged omission therefrom of a material fact required
         to be stated therein or necessary to make the statements therein
         not misleading or arising out of any untrue statement or alleged
         untrue statement of a material fact included in any preliminary
         prospectus or the Prospectus (or any amendment or supplement
         thereto), or the omission or alleged omission therefrom of a
         material fact necessary in order to make the statements therein,
         in the light of the circumstances under which they were made, not
         misleading;

                  (2) against any and all loss, liability, claim, damage
         and expense whatsoever, as incurred, to the extent of the
         aggregate amount paid in settlement of any litigation, or any
         investigation or proceeding by any governmental agency or body,
         commenced or threatened, or any claim whatsoever based upon any
         such untrue statement or omission, or any such alleged untrue
         statement or omission; provided that (subject to Section 6(d)
         below) any such settlement is effected with the written consent of
         the Company; and

                  (3) against any and all expense whatsoever, as incurred
         (including the fees and disbursements of counsel chosen by Merrill
         Lynch), reasonably incurred in investigating, preparing or
         defending against any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or
         threatened, or any claim whatsoever based upon any such untrue
         statement or omission, or any such alleged untrue statement or
         omission, to the extent that any such expense is not paid under
         (1) or (2) above;

provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Underwriters expressly for use
in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).

     (b)  Indemnification of the Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Underwriters expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).

                                    17
<PAGE>

     (c)  Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by the Underwriters, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this Section 6
or Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

     (d)  Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(2) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.

     Section 7.  Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand, from
the offering of the Securities pursuant to this Underwriting Agreement or
(ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.

                                    18
<PAGE>

         The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other hand, in connection with the offering of
the Securities pursuant to this Underwriting Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of such Securities (before deducting expenses) received by the
Company and the total underwriting commission received by the Underwriters,
in each case as set forth on the cover of the Prospectus, bear to the
aggregate initial public offering price of such Securities as set forth on
such cover.

         The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

         The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.

         Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of any
such untrue or alleged untrue statement or omission or alleged omission.

         No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.

         For purposes of this Section 7, each person, if any, who controls
an Underwriter within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Company.
The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the principal amount of Initial
Securities set forth opposite their respective names in Schedule A hereto,
and not joint.

     Section 8.  Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Underwriting Agreement or in certificates of officers of the Company or any
of its subsidiaries submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or controlling person, or by or on behalf of the
Company, and shall survive delivery of and payment for the Securities.

                                    19
<PAGE>

Section 9.  Termination.

     (a)  Underwriting Agreement. The Underwriters may terminate this
Underwriting Agreement by notice to the Company, at any time at or prior to
the Closing Time, if (i) there has been, since the time of execution of
this Underwriting Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change, or any
development or event involving a prospective material adverse change, in
the financial condition, business or results of operations of the Company
and its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, or (ii) there has occurred any material
adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis
or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case
referred to in this clause (ii), the effect of which is such as to make it,
in the judgment of the Underwriters, impracticable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) trading in
any securities of the Company has been suspended or materially limited by
the Commission or the New York Stock Exchange, or if trading generally on
the New York Stock Exchange or the American Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices
have been required, by either of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or
(iv) a banking moratorium has been declared by either U.S. Federal, New
York or Bermuda authorities.

     (b)  Liabilities. If this Underwriting Agreement is terminated pursuant to
this Section 9, such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof, and provided
further that Sections 1, 6, 7 and 8 shall survive such termination and
remain in full force and effect.

     Section 10.  Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Securities which it or they
are obligated to purchase under this Underwriting Agreement (the "Defaulted
Securities"), then the Underwriters shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Underwriters shall not
have completed such arrangements within such 24-hour period, then:

              (a) if the number of Defaulted Securities does not exceed
         10% of the number of Securities to be purchased on such date
         pursuant to this Underwriting Agreement, the non-defaulting
         Underwriters shall be obligated, severally and not jointly, to
         purchase the full amount thereof in the proportions that their
         respective underwriting obligations under this Underwriting
         Agreement bear to the underwriting obligations of all
         non-defaulting Underwriters, or

              (b) if the number of Defaulted Securities exceeds 10% of
         the number of Securities to be purchased on such date pursuant to
         this Underwriting Agreement, this Underwriting Agreement (or, with
         respect to the Underwriters' exercise of the over-allotment option
         for the purchase of Option Securities on a Date of Delivery after
         the Closing Time, the obligations of the Underwriters to purchase
         such Option Securities on such Date of Delivery) shall terminate
         without liability on the part of any non-defaulting Underwriter.

         No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.

                                    20
<PAGE>

         In the event of any such default which does not result in (i) a
termination of this Underwriting Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Securities,
as the case may be, either the Underwriters or the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any
other documents or arrangements.

     Section 11.  Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Merrill Lynch,
Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower,
New York, New York 10281-1201, attention of Joseph Consolino, Director,
Financial Institutions Group; and notices to the Company shall be directed
to it at The ACE Building, 30 Woodbourne Avenue, Hamilton HM 08 Bermuda,
attention of the General Counsel and Secretary.

     Section 12. Parties. This Underwriting Agreement shall inure to the
benefit of and be binding upon the Underwriters, the Company, and their
respective successors. Nothing expressed or mentioned in this Underwriting
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company, and their respective
successors and the controlling persons and officers, directors and trustees
referred to in Sections 6 and 7 and their heirs and legal representatives,
any legal or equitable right, remedy or claim under or in respect of this
Underwriting Agreement or any provision herein contained. This Underwriting
Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons and officers, directors and
trustees and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.

     Section 13.  Consent to Jurisdiction; Miscellaneous. Each of the parties
hereto hereby expressly and irrevocably submits to the non-exclusive
jurisdiction of any competent court in the place of its domicile and any
United States Federal or New York State court sitting in the Borough of
Manhattan in The City of New York in any action, suit or proceeding arising
out of or relating to this Underwriting Agreement or the transactions
contemplated hereby to the extent that such court has subject matter
jurisdiction over the controversy, and expressly and irrevocably waives, to
the extent permitted under applicable law, any immunity from the
jurisdiction thereof and any claim or defense in such action, suit or
proceeding based on a claim of improper venue, forum non conveniens or any
similar basis to which it might otherwise be entitled in any such action,
suit or proceeding. The Company irrevocably appoints ACE USA, Inc., 1133
Avenue of the Americas, 32nd Floor, New York, New York 10036 as its
authorized agent in the Borough of Manhattan in The City of New York upon
which process may be served in any such action, suit or proceeding, and
agrees that service of process upon such agent, and written notice of said
service to the Company by the person serving the same to the address
provided in Section 11, shall be deemed in every respect effective service
of process upon the the Company, in any such action, suit or proceeding.
The Company further agrees to take any and all action as may be necessary
to maintain such designation and appointment of such agent in full force
and effect for a period of seven years from the date of this Underwriting
Agreement.

                                    21
<PAGE>

     Section 14.  Waiver of Immunities. To the extent that the Company or any
of its properties, assets or revenues may have or may hereafter become
entitled to, or have attributed to them, any right of immunity, on the
grounds of sovereignty, from any legal action, suit or proceeding, from
set-off or counterclaim, from the jurisdiction of any court, from service
of process, from attachment upon or prior to judgment, or from attachment
in aid of execution of judgment, or from execution of judgment, other legal
process or proceeding for the giving of any relief or for the enforcement
of any judgment, in any jurisdiction in which proceedings may at any time
be commenced, with respect to their obligations, liabilities or any other
matter under or arising out of or in connection with this Underwriting
Agreement or any additional agreement, the Company hereby irrevocably and
unconditionally, to the extent permitted by applicable law, waives and
agrees not to plead or claim any such immunity and consents to such relief
and enforcement.

     Section 15.  Judgement Currency. The Company agrees to indemnify each
Underwriter against any loss incurred by such Underwriter as a result of
any judgment or order being given or made for any amount due hereunder and
such judgment or order being expressed and paid in a currency (the
"Judgment Currency") other than United States dollars and as a result of
any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the Judgment Currency for the
purpose of such judgment or order, and (ii) the rate of exchange at which
such Underwriter is able to purchase United States dollars with the amount
of the Judgment Currency actually received by such Underwriter. The
foregoing indemnity shall constitute a separate and independent obligation
of the Company and shall continue in full force and effect notwithstanding
any such judgment or order as aforesaid. The term "rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of, or conversion into, the relevant currency.

     Section 16.  GOVERNING LAW AND TIME.  THIS UNDERWRITING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

     Section 17.  Effect of Headings.  The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.

     If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this Underwriting Agreement, along with all counterparts, will
become a binding agreement between the Underwriters and the Company in
accordance with its terms.

                                      Very truly yours,

                                      ACE LIMITED

                                      By: -------------------------------------
                                            Name: Christopher Z. Marshall
                                            Title:  Chief Financial Officer

CONFIRMED AND ACCEPTED,
 as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
            INCORPORATED
BANC OF AMERICA SECURITIES LLC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION

By:  MERRILL LYNCH, PIERCE, FENNER & SMITH
                 INCORPORATED

By: -----------------------------------------
         Authorized Signatory

                                     22
<PAGE>

                                  Sch-A-1
                                                                    Schedule A

                                                              Number of
                                                               Initial
                   Underwriter                                Securities
                   ----------                                 ----------
    Merrill Lynch, Pierce, Fenner & Smith
                 Incorporated..............................
    Banc of America Securities LLC.........................
    Donaldson, Lufkin & Jenrette Securities Corporation....

             Total..........................................  ==========

                                  Sch-A-1

<PAGE>

                                                                    Schedule B

                                ACE LIMITED
                         (a Cayman Islands company)

     6,000,000 FELINE PRIDES (Stated Amount of $50 per FELINE PRIDES),

                               consisting of

                          6,000,000 Income PRIDES
                             each consisting of
        a Purchase Contract of ACE Limited requiring the purchase on
                         May 16, 2003 (or earlier)
                           of Ordinary Shares of
                                ACE Limited
                                    and
          an 8.25% Cumulative Redeemable Preferred Share, Series A
           of ACE Limited ($50 Liquidation Preference per Share)

          1.   The initial public offering price per Security, determined as
     provided in said Section 2, shall be $50 per Security.

          2.   The price per Security to be paid by the several Underwriters
     shall be equal to the initial public offering price set forth in
     paragraph 1 above. The Company shall pay a commission to the
     Underwriters equal to nine million dollars ($9,000,000) and, with
     respect to the Option Securities, $1.50 per Option Security.

                                  Sch-B-1

<PAGE>

                                                                      Exhibit A

            FORM OF OPINION OF MAPLES AND CALDER, THE COMPANY'S
                  CAYMAN ISLANDS COUNSEL, TO BE DELIVERED
                          PURSUANT TO SECTION 5(b)

          (1)  The Company has been duly incorporated and is validly existing
     and in good standing as an exempted company, under the laws of the Cayman
     Islands, and has the corporate power and corporate authority to own, lease
     and operate its property, and to conduct its business, as described in the
     Registration Statement and the Prospectus, and to enter into and perform
     its obligations under, or as contemplated under, the Operative Agreements.

          (2)  The authorized share capital of the Company, as set out in its
     Memorandum and Articles of Association, conforms as to legal
     matters to the description thereof contained in the Registration
     Statement and the Prospectus.

          (3)  The Operative Agreements have been duly authorized, executed and
      delivered by the Company.

          (4)  The execution and delivery by the Company of, and the performance
      by the Company of its obligations under, the Operative Agreements
      do not and will not (A) violate any provision of the Memorandum
      and Articles of Association of the Company; (B) contravene any
      provision of any law, public rule or regulation of the Cayman
      Islands applicable to the Company; (C) to the best of such
      counsel's knowledge, contravene any existing published order or
      decree of the courts of the Cayman Islands by which the Company is
      bound or by which its properties or assets may be affected; or (D)
      require any consent, approval or authorization or order of, or
      qualification with, any Cayman Islands governmental agency in
      connection with the offer and sale of the Securities.

          (5)  To the best of such counsel's knowledge, but based only upon a
      search of the cause list at the offices of the Grand Courts of the
      Cayman Islands, there was no action, suit or proceeding to which
      the Company is a party or to which the assets, properties or
      operations of the Company is subject, before the courts of the
      Cayman Islands at the close of business on [specify a recent
      date].

          (6)  All statements made in the Prospectus with regard to statutes,
      regulations, rules, treaties and other laws of the Cayman Islands
      (including, but not limited to, insurance, regulatory and tax
      matters and the Companies Law (1998 Revision) of the Cayman
      Islands) and enforcement of judgments in the Cayman Islands are
      accurate.

          (7)  Pursuant to the Underwriting Agreement, and to the extent that
      the laws of the Cayman Islands are relevant, the Company has legally,
      validly, effectively and irrevocably submitted to the jurisdiction
      of the United States Federal and New York State courts sitting in
      the Borough of Manhattan in The City of New York, State of New
      York, and has legally, validly and effectively appointed ACE USA,
      Inc. as the authorized agent of the Company for the purposes
      described in Section 13 of the Underwriting Agreement assuming
      this to be the case as a matter of the applicable United States
      Federal and New York State laws.

                                    A-1
<PAGE>

          (8)  The choice of the laws of the State of New York, United States
      of America as the governing law of the Underwriting Agreement is a
      valid and effective choice of law and in an action brought before
      a court of competent jurisdiction in the Cayman Islands, the laws
      of the State of New York would, to the extent specifically pleaded
      and proved as a fact by expert evidence, be recognized and applied
      by such court to all issues concerning the formal and essential
      validity of the Underwriting Agreement and the interpretation
      thereof, except that in any such action such court will apply
      those laws of the Cayman Islands as such court characterizes as
      procedural, and will not apply those laws of the State of New York
      as such court characterizes as procedural.

          (9)  Although there is no statutory enforcement in the Cayman Islands
      of a judgment obtained in New York, the courts of the Cayman
     Islands will recognize and enforce a foreign judgment of a court
     of competent jurisdiction, based on the principle that a judgment
     of a competent foreign court imposes upon the judgment debtor an
     obligation to pay the sum for which judgment has been given
     provided such judgment is final, for a liquidated sum, not in
     respect of taxes or a fine or penalty, and was not obtained in a
     manner and is not of a kind the enforcement of which is contrary
     to the public policy of the Cayman Islands. A Cayman Islands court
     may stay proceedings if concurrent proceedings are being brought
     elsewhere. For the purposes of enforcement of a judgment granted
     against the Company in respect of the Underwriting Agreement, a
     court in the Cayman Islands would recognize the jurisdiction of
     the applicable federal or state court to the jurisdiction of which
     the Company has submitted rendering such judgment if service of
     process on the Company is effected pursuant to and in accordance
     with the provisions of the Underwriting Agreement.

          (10) On the basis that the Company carries on its business as set
     forth in the Prospectus, there is no requirement that it be licensed
     under the Insurance Law, 1979, as amended of the Cayman Islands.

          (11)  The Securities to be purchased by the Underwriters from the
     Company have been authorized for issuance and sale to the
     Underwriters and, when issued and delivered by the Company
     pursuant to the Underwriting Agreement against payment of the
     consideration set forth therein, will be validly issued and fully
     paid and non-assessable; the issuance of such Securities will not
     be subject the preemptive or other similar rights arising by law
     or otherwise.

          (12) The Ordinary Shares subject to the Purchase Contract Agreement
     have been validly authorized and reserved for issuance and, when
     issued and delivered by the Company in accordance with the
     provisions of the Purchase Contract Agreement, the Purchase
     Contracts and the Pledge Agreement, will be fully paid and
     non-assessable; the issuance of such Ordinary Shares will not be
     subject to preemptive or other similar rights arising by law or
     otherwise.
                                    A-2
<PAGE>

          (13) The Preferred Shares have been duly authorized for issuance by
      the company and, when issued and delivered against payment therefor as
      provided in the Prospectus, will be validly issued and fully paid
      and non-assessable. The issuance of the Preferred Shares will not
      be subject to preemptive or other similar rights. All corporate
      action required to be taken for the authorization, issuance and
      delivery of the Preferred Shares has been validly taken.

         [In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the Cayman
Islands, to the extent such counsel deems proper and specified in such
opinion, upon the opinion of other counsel whom such counsel believes to be
reliable (which opinion shall be dated and furnished to the Underwriters at
the Closing Time, shall be satisfactory in form and substance to counsel
for the Underwriters and shall expressly state that the Underwriters may
rely on such opinion as if it were addressed to them), provided that such
counsel shall state in their opinion that they believe that they and the
Underwriters are justified in relying upon such opinion, and (B) as to
matters of fact (but not as to legal conclusions), to the extent such
counsel deems proper, on certificates of responsible officers of the
Company, its subsidiaries and public officials.]

                                    A-3
<PAGE>

                                                                      Exhibit B

          FORM OF OPINION OF CONYERS DILL & PEARMAN, THE COMPANY'S
                      BERMUDA COUNSEL, TO BE DELIVERED
                          PURSUANT TO SECTION 5(b)

          (1)  Each of ACE Bermuda Insurance Ltd. and Tempest Reinsurance
     Company Limited (collectively, the "Bermuda Insurance Subsidiaries") (A)
     is validly existing under the laws of Bermuda as a company with
     limited liability and is in good standing under the laws of
     Bermuda (meaning that such company has not failed to make any
     filing with any Bermuda government authority or to pay any Bermuda
     government fee or tax, the failure of which would make such
     company immediately liable to be struck off the Register of
     Companies and thereby cease to exist under the laws of Bermuda)
     and (B) the corporate objects and powers contained in the
     Memorandum of Association of each of the Bermuda Insurance
     Subsidiaries are sufficient to allow them to carry on their
     business and to own, lease and operate its properties as both are
     described in the Prospectus.

          (2)  The Company is validly registered under the Companies Act 1981
     as a Permit Company and is in good standing under the laws of Bermuda
     (meaning that such company has not failed to make any filing with
     any Bermuda government authority or to pay any Bermuda government
     fee or tax which is required to be paid in respect of Permit
     Companies in Bermuda).

         (3)  Based solely upon a certified copy of the Register of Members
     for each of the Bermuda Insurance Subsidiaries, and without further
     inquiry, (A) all of the issued shares in the share capital of each
     of the Bermuda Insurance Subsidiaries have been duly and validly
     authorized and issued and are fully paid and nonassessable
     (meaning that no further sums are required to be paid by the
     holders thereof in connection with the issue of such shares); and
     (B) the Company is the registered holder of all the issued shares
     of each of the Bermuda Insurance Subsidiaries.

          (4)  Each of the Bermuda Insurance Subsidiaries is duly registered
     as an insurer under the Insurance Act of 1978 (Bermuda) and the
     regulations promulgated thereunder (together, the "Insurance Act")
     and as so registered, each Bermuda Insurance Subsidiary may
     conduct the insurance business as described in the Prospectus; and
     based solely on the Certificates of Compliance and without
     independent inquiry, each of the Bermuda Insurance Subsidiaries
     has filed with the appropriate Bermuda governmental authority all
     reports, documents or other information required to be filed under
     the Insurance Act.

          (5)  The Company is not registered as an insurer under the Insurance
     Act and is therefore not required to comply with the requirements
     of the Insurance Act applicable to registered insurers.

          (6)  The execution and delivery by the Company of, and the
     performance by the Company of its obligations under the Operative
     Agreements do not and will not (A) violate any provision of the Memorandum
     of Association or By-laws of either of the Bermuda Insurance
     Subsidiaries or any applicable law, regulation, order or decree in
     Bermuda; (B) based solely upon the Cause Book, contravene any
     judgment, order or decree by the Bermuda Supreme Court against the
     Company or the Bermuda Insurance Subsidiaries; or (C) require any
     consent, approval or authorization or order of, or qualification
     with, any Bermuda governmental agency.

          (7)  Based solely upon the Cause Book and without further inquiry,
     there is no action, suit or proceeding now pending before the
     Bermuda Supreme Court against the Company or the Bermuda Insurance
     Subsidiaries or any of their respective properties.

                                    B-1
<PAGE>

          (8)  All statements made in the Registration Statement and Prospectus
     with respect to statutes, regulations, rules, treaties and other
     laws of Bermuda (including, but not limited to, statements made
     with respect to the Insurance Act and Bermuda tax matters) fairly
     and accurately present the information set forth therein and such
     counsel's opinion as to such matters.

         [In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of Bermuda,
to the extent such counsel deems proper and specified in such opinion, upon
the opinion of other counsel whom such counsel believes to be reliable
(which opinion shall be dated and furnished to the Underwriters at the
Closing Time, shall be satisfactory in form and substance to counsel for
the Underwriters and shall expressly state that the Underwriters may rely
on such opinion as if it were addressed to them), provided that such
counsel shall state in their opinion that they believe that they and the
Underwriters are justified in relying upon such opinion, and (B) as to
matters of fact (but not as to legal conclusions), to the extent such
counsel deems proper, on certificates of responsible officers of the
Company, its subsidiaries and public officials.]

                                    B-2
<PAGE>

                                                                    Exhibit C

                  FORM OF OPINION OF PETER N. MEAR, ESQ.,
                      GENERAL COUNSEL OF THE COMPANY,
                  TO BE DELIVERED PURSUANT TO SECTION 5(b)

          (1)  The Company is qualified to do business, and is in good
     standing, as a foreign corporation, under the laws of each jurisdiction
     in which the conduct of its business or its ownership or leasing of
     property requires such qualification, except to the extent that
     the failure to be so qualified or to be in good standing would not
     singly or in the aggregate result in a Material Adverse Change;

          (2)  Each of ACE Bermuda Insurance Ltd., Tempest Reinsurance
     Company Limited, ACE USA, Inc. and ACE INA Holdings Inc. is qualified to
     transact business and is in good standing (with respect to jurisdictions
     which recognize such concept) in each jurisdiction in which it owns or
     leases real property or in which the conduct of its business requires
     such qualification, except where the failure to be so qualified or to be
     in good standing (with respect to jurisdictions which recognize such
     concept) would not singly or in the aggregate result in a Material Adverse
     Change;

          (3)  Except as set forth in the Registration Statement and the
     Prospectus, such counsel does not know of any outstanding (A)
     securities or obligations of the Company convertible into or
     exchangeable for any shares of capital stock of the Company or any
     of its subsidiaries; (B) rights, warrants or options to acquire or
     purchase from the Company any shares of capital stock of the
     Company or any such convertible or exchangeable securities or
     obligations; or (C) obligations or understandings of the Company
     to issue or sell any shares of capital stock of the Company or any
     of its subsidiaries, any such convertible or exchangeable
     securities or obligations, or any such warrants, rights or
     obligations; and

          (4)  To the best of such counsel's knowledge, and other than as
     disclosed in the Prospectus, there are no threatened legal
     proceedings against the Company or any of its subsidiaries which,
     if determined adversely to the Company or such subsidiary, would
     result in a Material Adverse Change.

         [In rendering such opinion, such counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent such counsel deems
proper, on certificates of responsible officers of the Company, its
subsidiaries and public officials.]

                                    C-1
<PAGE>

                                                                      Exhibit D

                  FORM OF OPINION OF MAYER, BROWN & PLATT,
                   UNITED STATES COUNSEL FOR THE COMPANY,
                  TO BE DELIVERED PURSUANT TO SECTION 5(b)

          (1)  Each of ACE INA Holdings Inc. and ACE USA, Inc. is duly
     incorporated and is validly existing as a corporation in good standing
     under the laws of the State of Delaware.

          (2) The execution and delivery by the Company of, and the performance
     by the Company of its obligations under, each of the Operative
     Agreements to which it is a party and any other agreement or
     instrument entered into or issued or to be entered into or issued
     by the Company in connection with the transactions contemplated by
     the Registration Statement and the Prospectus and the consummation
     by the Company of the transactions contemplated by the Operative
     Agreements do not and will not (A) contravene any provision of any
     United States federal or New York State law, rule or regulation,
     in each case which, in such counsel's opinion, based on such
     counsel's experience, are normally applicable to transactions of
     the type contemplated by the Operative Agreements ("United States
     Applicable Laws"), except that such counsel need not express any
     opinion in this paragraph with respect to state securities laws;
     (B) contravene any judgment, order or decree known to such counsel
     without independent inquiry of any United States federal or New
     York State court or governmental agency or body having
     jurisdiction over the Company or any of its subsidiaries or by
     which the Company or any of its subsidiaries is bound or by which
     their properties or assets may be affected; (C) conflict with,
     result in any breach of or constitute a default (or an event
     which, with notice or lapse of time, or both, would constitute a
     default) under, or give rise to any right to accelerate the
     maturity or require the prepayment of any indebtedness or the
     purchase of any capital stock under, or result in the creation or
     imposition of any lien, charge or encumbrance upon any properties
     or assets of ACE INA Holdings Inc. or any of its subsidiaries,
     pursuant to the terms of, any agreement or instrument filed as an
     exhibit to the Company's Annual Report on Form 10-K for the fiscal
     year ended December 30, 1999 or any agreement or instrument
     otherwise known to such counsel to which the Company or any of its
     subsidiaries is a party or by which it or any of them may be
     bound, or to which any of the assets, properties or operations of
     the Company or any of its subsidiaries is subject, or the
     certificate of incorporation or bylaws of ACE INA Holdings Inc. or
     ACE USA, except for such conflicts, breaches, violations,
     defaults, accelerations, repayments, repurchases, liens, charges
     or encumbrances that would not singly or in the aggregate result
     in a Material Adverse Change; or (D) based upon such counsel's
     review of the United States Applicable Laws, require any consent,
     approval or authorization or order of, or qualification with, any
     United States federal or state governmental agency or authority or
     court, except such as have been obtained under the 1933 Act, the
     1933 Act Regulations and such as may be required under state
     securities or blue sky laws or state insurance laws in connection
     with the offer and sale of the Securities.

          (3)  The Operative Agreements have been duly authorized, executed
     and delivered by the Company.

          (4)  Assuming due authorization, execution and delivery of the
     Purchase Contract Agreement by the Purchase Contract Agent, the Purchase
     Contract Agreement constitutes a valid and binding agreement of
     the Company, enforceable against the Company in accordance with
     its terms, except as the enforcement thereof may be limited by
     bankruptcy, insolvency (including, without limitation, all laws
     relating to fraudulent transfers), reorganization, moratorium or
     other similar laws affecting the enforcement of creditors' rights
     generally or by general equitable principles (regardless of
     whether enforcement is considered in a proceeding at law or in
     equity).

                                    D-1
<PAGE>

          (5)  Assuming due authorization, execution and delivery of the Pledge
     Agreement by the Collateral Agent and the Purchase Contract Agent,
     the Pledge Agreement constitutes a valid and binding agreement of
     the Company, enforceable against the Company in accordance with
     its terms, except as the enforcement thereof may be limited by
     bankruptcy, insolvency (including, without limitation, all laws
     relating to fraudulent transfers), reorganization, moratorium or
     other similar laws affecting the enforcement of creditors' rights
     generally or by general equitable principles (regardless of
     whether enforcement is considered in a proceeding at law or in
     equity).

          (6)  The Securities and the Operative Agreements conform in all
     material respects to the statements relating thereto contained in
     the Prospectus and are in substantially the form filed or
     incorporated by reference, as the case may be, as an exhibit to
     the Registration Statement.

          (7)  Such counsel does not know, after inquiry of officers of the
     Company and based solely on such inquiry, of any action, suit or
     proceeding before or by any United States federal or state
     government, governmental instrumentality or court now pending or
     threatened against or affecting the Company or any of its
     subsidiaries or any of their respective assets or properties that
     is required to be described in the Registration Statement or the
     Prospectus and is not so described or of any contract or other
     document that is required to be described in the Registration
     Statement or the Prospectus, or to be filed as an exhibit to the
     Registration Statement, that is not described or filed, as
     required.

          (8)  The statements in the Registration Statement and the Prospectus
     insofar as they are descriptions of contracts, agreements,
     instruments or proceedings, or constitute statements or summaries
     of United States federal or New York State laws or legal
     conclusions with respect thereto, are accurate and present fairly
     the information required to be shown.

          (9)  The Registration Statement (including any Rule 462(b)
     Registration Statement) and the Prospectus, excluding the documents
     incorporated by reference therein, and each amendment or
     supplement to the Registration Statement (including any Rule
     462(b) Registration Statement) and Prospectus, excluding the
     documents incorporated by reference therein, as of their
     respective effective or issue dates (other than the financial
     statements and supporting schedules and other financial data
     included therein or omitted therefrom, as to which such counsel
     need express no opinion) complied as to form in all material
     respects with the requirements of the 1933 Act and the 1933 Act
     Regulations.

          (10) The documents incorporated by reference in the Prospectus
     (other than the financial statements and supporting schedules and other
     financial data included therein or omitted therefrom, as to which
     such counsel need express no opinion), when they became effective
     or were filed with the Commission, as the case may be, complied as
     to form in all material respects with the requirements of the 1933
     Act or the 1934 Act, as applicable, and the rules and regulations
     of the Commission thereunder.

          (11) The Securities, upon issuance, will be excluded or exempted
     under, or beyond the purview of, the Commodity Exchange Act, as amended
     (the "Commodity Exchange Act"), and the rules and regulations of
     the Commodity Futures Trading Commission under the Commodity
     Exchange Act (the "Commodity Exchange Act Regulations").

          (12) The Company is not, and upon the issuance and sale of the
     Securities as contemplated in the Underwriting Agreement and the
     application of the net proceeds therefrom as described in the
     Prospectus will not be, an "investment company" within the meaning
     of the Investment Company Act of 1940, as amended (the "1940
     Act").

                                   D-2
<PAGE>

          (13) When issued in accordance with the terms of the Purchase
     Contract Agreement and delivered against payment therefor as provided in
     the Underwriting Agreement, the holders of the Securities will be
     entitled to the right and subject to the obligations specified in
     the Purchase Contract Agreement.

          (14) The provisions of the Pledge Agreement are effective to create
     in favor of the Collateral Agent for the benefit of the Company a
     valid security interest under the UCC in all "securities
     entitlements" (as defined in Section 8-102(a)(17) of the UCC and
     the Federal Book-Entry Regulations) now or hereafter credited to
     the Collateral Account and relating to the Preferred Shares or the
     Treasury Securities (the "Pledged Securities Entitlements"); and
     the provisions of the Pledge Agreement are effective under the UCC
     and the Federal Book-Entry Regulations to perfect the security
     interest of the Collateral Agent for the benefit of the Company in
     the Pledged Securities Entitlements.

          (15) The Security Certificates are in the form contemplated by the
     Purchase Contract Agreement.

         Such counsel shall also state that it has been advised by the
Commission that the Registration Statement (including any Rule 462(b)
Registration Statement) became effective under the 1933 Act; that any
required filings of the Prospectus pursuant to Rule 424(b) have been made
in the manner and within the time period required by Rule 424(b); and that,
based solely on conversations with the Commission, no stop order suspending
the effectiveness of the Registration Statement (or such Rule 462(b)
Registration Statement) has been issued and no proceedings for the purpose
have been instituted, are pending or, to such counsel's knowledge, are
contemplated under the 1933 Act.

        Such counsel shall also state that they have examined various
documents and participated in conferences with representatives of the
Company and their accountants and with representatives of the Underwriters
and their counsel at which times the contents of the Registration Statement
and the Prospectus and related matters were discussed, and that, although
they are not passing upon and assume no responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus or making any representation that they have
independently verified or checked the accuracy, completeness or fairness of
such statements, except as set forth above, no facts have come to such
counsel's attention that cause such counsel to believe that the
Registration Statement (including any Rule 462(b) Registration Statement)
or any post-effective amendment thereto, at the time the Registration
Statement (including any Rule 462(b) Registration Statement) or any
post-effective amendment thereto (including the filing of the Company's
Annual Report on Form 10-K with the Commission) became effective or as of
the date of the Underwriting Agreement, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; or that
the Prospectus or any amendment or supplement thereto, at the date of the
Prospectus, at the date of any such amendment or supplement or at the
Closing Time, included or includes any untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (such counsel need
not express a belief with respect to the financial statements and
supporting schedules and other financial data included in or omitted from
the Registration Statement (including any Rule 462(b) Registration
Statement) or any post-effective amendment thereto or the Prospectus or any
amendment or supplement thereto).

         [In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the State
of New York, the corporate laws of the State of Delaware or the federal
laws of the United States of America, to the extent such counsel deems
proper and specified in such opinion, upon the opinion of other counsel
whom such counsel believes to be reliable (which opinion shall be dated and
furnished to the Underwriters at the Closing Time, shall be satisfactory in
form and substance to counsel for the Underwriters and shall expressly
state that the Underwriters may rely on such opinion as if it were
addressed to them), provided that such counsel shall state in their opinion
that they believe that they and the Underwriters are justified in relying
upon such opinion, and (B) as to matters of fact (but not as to legal
conclusions), to the extent such counsel deems proper, on certificates of
responsible officers of the Company, its subsidiaries and public
officials.]

                                    D-3Exhibit 10.2

                                ACE LIMITED

                                    AND

                           THE BANK OF NEW YORK,
                         AS PURCHASE CONTRACT AGENT

                             ------------------

                        PURCHASE CONTRACT AGREEMENT

                             ------------------

                         Dated as of April 12, 2000

<PAGE>

                             TABLE OF CONTENTS

                                 ARTICLE I
          DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.1.    DEFINITIONS...................................................1
SECTION 1.2.    COMPLIANCE CERTIFICATES AND OPINIONS..........................9
SECTION 1.3.    FORM OF DOCUMENTS DELIVERED TO AGENT..........................9
SECTION 1.4.    ACTS OF HOLDERS; RECORD DATES................................10
SECTION 1.5.    NOTICES......................................................11
SECTION 1.6.    NOTICE TO HOLDERS; WAIVER....................................12
SECTION 1.7.    EFFECT OF HEADINGS AND TABLE OF CONTENTS.....................12
SECTION 1.8.    SUCCESSORS AND ASSIGNS.......................................12
SECTION 1.9.    SEPARABILITY CLAUSE..........................................12
SECTION 1.10.   BENEFITS OF AGREEMENT........................................12
SECTION 1.11.   GOVERNING LAW................................................12
SECTION 1.12.   LEGAL HOLIDAYS...............................................13
SECTION 1.13.   COUNTERPARTS.................................................13
SECTION 1.14.   INSPECTION OF AGREEMENT......................................13

                             ARTICLE II
                         CERTIFICATE FORMS

SECTION 2.1.    FORMS OF CERTIFICATES GENERALLY..............................13
SECTION 2.2.    FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION................14

                            ARTICLE III
                           THE SECURITIES

SECTION 3.1.    TITLE AND TERMS; DENOMINATIONS...............................14
SECTION 3.2.    RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.........14
SECTION 3.3.    EXECUTION, AUTHENTICATION, DELIVERY AND DATING...............15
SECTION 3.4.    TEMPORARY CERTIFICATES.......................................16
SECTION 3.5.    REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE..........16
SECTION 3.6.    BOOK-ENTRY INTERESTS.........................................18
SECTION 3.7.    NOTICES TO HOLDERS...........................................18
SECTION 3.8.    APPOINTMENT OF SUCCESSOR CLEARING AGENCY.....................18
SECTION 3.9.    DEFINITIVE CERTIFICATES......................................18
SECTION 3.10.   MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES...........19
SECTION 3.11.   PERSONS DEEMED OWNERS........................................20
SECTION 3.12.   CANCELLATION.................................................20
SECTION 3.13.   ESTABLISHMENT OR REESTABLISHMENT OF GROWTH PRIDES............21
SECTION 3.14.   ESTABLISHMENT OR REESTABLISHMENT OF INCOME PRIDES............22
SECTION 3.15.   TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT..23
SECTION 3.16.   CUSIP NUMBERS................................................23

                             ARTICLE IV
                        THE PREFERRED SHARES

SECTION 4.1.    PAYMENT OF DIVIDEND; RIGHTS TO DIVIDENDS PRESERVED;
                DIVIDEND RATE RESET; NOTICE..................................23
SECTION 4.2.    NOTICE AND VOTING............................................24

                                     i

<PAGE>

                             ARTICLE V
                       THE PURCHASE CONTRACTS

SECTION 5.1.    PURCHASE OF ORDINARY SHARES..................................25
SECTION 5.2.    PAYMENT OF PURCHASE PRICE....................................26
SECTION 5.3.    ISSUANCE OF ORDINARY SHARES..................................30
SECTION 5.4.    ADJUSTMENT OF SETTLEMENT RATE................................30
SECTION 5.5.    NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS...............35
SECTION 5.6.    TERMINATION EVENT; NOTICE....................................35
SECTION 5.7.    EARLY SETTLEMENT.............................................36
SECTION 5.8.    NO FRACTIONAL SHARES.........................................37
SECTION 5.9.    CHARGES AND TAXES............................................37

                             ARTICLE VI
                              REMEDIES

SECTION 6.1.    UNCONDITIONAL RIGHT OF HOLDERS TO PURCHASE ORDINARY SHARES...38
SECTION 6.2.    RESTORATION OF RIGHTS AND REMEDIES...........................38
SECTION 6.3.    RIGHTS AND REMEDIES CUMULATIVE...............................38
SECTION 6.4.    DELAY OR OMISSION NOT WAIVER.................................38
SECTION 6.5.    UNDERTAKING FOR COSTS........................................38
SECTION 6.6.    WAIVER OF STAY OR EXTENSION LAWS.............................39

                            ARTICLE VII
                             THE AGENT

SECTION 7.1.    CERTAIN DUTIES AND RESPONSIBILITIES..........................39
SECTION 7.2.    NOTICE OF DEFAULT............................................40
SECTION 7.3.    CERTAIN RIGHTS OF AGENT......................................40
SECTION 7.4.    NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.......41
SECTION 7.5.    MAY HOLD SECURITIES..........................................41
SECTION 7.6.    MONEY HELD IN CUSTODY........................................41
SECTION 7.7.    COMPENSATION AND REIMBURSEMENT...............................42
SECTION 7.8.    CORPORATE AGENT REQUIRED; ELIGIBILITY........................42
SECTION 7.9.    RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR............42
SECTION 7.10.   ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.......................44
SECTION 7.11.   MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS..44
SECTION 7.12.   PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.......44
SECTION 7.13.   NO OBLIGATIONS OF AGENT......................................45
SECTION 7.14.   TAX COMPLIANCE...............................................45

                            ARTICLE VIII
                      SUPPLEMENTAL AGREEMENTS

SECTION 8.1.    SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS...........45
SECTION 8.2.    SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS..............46
SECTION 8.3.    EXECUTION OF SUPPLEMENTAL AGREEMENTS.........................47
SECTION 8.4.    EFFECT OF SUPPLEMENTAL AGREEMENTS............................47
SECTION 8.5.    REFERENCE TO SUPPLEMENTAL AGREEMENTS.........................47

                             ARTICLE IX
               NSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 9.1.    COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY
                PROPERTY EXCEPT UNDER CERTAIN CONDITIONS.....................47
SECTION 9.2.    RIGHTS AND DUTIES OF SUCCESSOR CORPORATION...................48
SECTION 9.3.    OPINION OF COUNSEL GIVEN TO AGENT............................48

                                      ii

<PAGE>

                             ARTICLE X
                             COVENANTS

SECTION 10.1.   PERFORMANCE UNDER PURCHASE CONTRACTS.........................48
SECTION 10.2.   MAINTENANCE OF OFFICE OR AGENCY..............................48
SECTION 10.3.   COMPANY TO RESERVE ORDINARY SHARES...........................49
SECTION 10.4.   COVENANTS AS TO ORDINARY SHARES..............................49

EXHIBIT A       Form of Income PRIDES Certificate
EXHIBIT B       Form of Growth PRIDES Certificate
EXHIBIT C       Instruction to Collateral Agent
EXHIBIT D       Instruction to Purchase Contract Agent
EXHIBIT E       Notice to Settle with Separate Cash

                                       iii

<PAGE>

         PURCHASE CONTRACT AGREEMENT, dated as of April 12, 2000, between
ACE Limited, a company duly organized and existing under the laws of the
Cayman Islands (the "Company"), and The Bank of New York, a New York
banking corporation, acting as purchase contract agent for the Holders of
Securities from time to time (the "Agent").

                                  RECITALS

         The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.

         All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms,
have been done.

                                WITNESSETH:

         For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:

                                 ARTICLE I
          DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1.      Definitions.

         For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

         (a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular; and
nouns and pronouns of the masculine gender include the feminine and neuter
genders;

         (b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;

         (c) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and

         (d) the following terms have the meanings given to them in this
Section 1.1(d).

         "Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.

         "Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.

         "Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Agent" shall mean such Person.

<PAGE>

         "Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions
hereof.

         "Applicable Market Value" has the meaning specified in Section
5.1.

         "Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The
City of New York, whether or not published on days that are Legal Holidays,
and of general circulation in The City of New York. The Authorized
Newspaper for the purposes of the Reset Spread Announcement Date, is
currently anticipated to be The Wall Street Journal (NYC edition).

         "Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected
on the books of the Clearing Agency or on the books of a Person maintaining
an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).

         "Board of Directors" means the board of directors of the Company
or a duly authorized committee of that board.

         "Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Agent.

         "Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.

         "Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions and trust companies in The City of
New York are permitted or required by any applicable law to close.

         "Cash Settlement" has the meaning set forth in Section 5.2(a)(i).

         "Certificate" means an Income PRIDES Certificate or a Growth
PRIDES Certificate.

         "Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book-entry transfers and pledges of the
Securities.

         "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.

         "Closing Price" has the meaning specified in Section 5.1.

                                      2

<PAGE>

         "Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.

         "Collateral Agent" means The Bank of New York, a New York banking
corporation, as Collateral Agent under the Pledge Agreement until a
successor Collateral Agent shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter "Collateral
Agent" shall mean the Person who is then the Collateral Agent thereunder.

         "Collateral Substitution" has the meaning specified in Section
3.13.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.

         "Corporate Trust Office" means the principal corporate trust
office of the Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located
at 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention:
Corporate Trust Administration.

         "Current Market Price" has the meaning specified in Section
5.4(a)(8).

         "Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.

         "Dividend Rate" means the percentage rate per annum of the Stated
Amount of the Preferred Shares at which dividends thereon are payable, if
declared.

         "DTC" means The Depository Trust Company, the initial Clearing Agency.

         "Early Settlement" has the meaning specified in Section 5.7(a).

         "Early Settlement Amount" has the meaning specified in Section
5.7(a).

         "Early Settlement Date" has the meaning specified in Section
5.7(a).

         "Early Settlement Rate" has the meaning specified in Section
5.7(b).

         "Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.

         "Expiration Date" has the meaning specified in Section 1.4.

         "Expiration Time" has the meaning specified in Section 5.4(a)(6).

         "Failed Remarketing" has the meaning specified in Section 5.2(b).

                                      3

<PAGE>

         "Global Certificate" means a Certificate that evidences all or
part of the Securities and is registered in the name of a Depositary or a
nominee thereof.

         "Growth PRIDES" means the collective rights and obligations of a
holder of a Growth PRIDES Certificate in respect of a 1/20th undivided
beneficial interest in a Treasury Security, subject in each case to the
Pledge thereof, and the related Purchase Contract.

         "Growth PRIDES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Growth
PRIDES specified on such certificate.

         "Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.

         "Holder," when used with respect to a Security, means the Person
in whose name the Security evidenced by an Income PRIDES Certificate and/or
a Growth PRIDES Certificate is registered in the related Income PRIDES
Register and/or the Growth PRIDES Register, as the case may be.

         "Income PRIDES" means the collective rights and obligations of a
Holder of an Income PRIDES Certificate in respect of a Preferred Share,
subject to the Pledge thereof, and the related Purchase Contract.

         "Income PRIDES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Income
PRIDES specified on such certificate.

         "Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.

         "Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by the Chairman of the Board, the
Vice Chairman, the President, the Chief Financial Officer, the Chief
Administrative Officer, General Counsel, Secretary or any Vice President
(or other officer performing similar functions) of the Company and
delivered to the Agent.

         "NYSE" has the meaning specified in Section 5.1.

         "Officer's Certificate" means a certificate signed by the Chairman
of the Board, the Vice Chairman, the President, the Chief Financial
Officer, the Chief Administrative Officer, General Counsel, Secretary or
any Vice President (or other officer performing similar functions) of the
Company and delivered to the Agent.

         "One-Month Treasury Bill" means direct obligations of the United
States (which may be obligations traded on a when-issued basis only) having
a maturity comparable to the remaining term to the mandatory redemption
date of the Preferred Shares, as agreed upon by the Company and the Reset
Agent. The rate for the One-Month Treasury Bill will be the bid side rate
displayed at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date in the Telerate
system (or if the Telerate system is (a) no longer available on the third
Business Day immediately preceding the Purchase Contract Settlement Date or
(b) in the opinion of the Reset Agent (after consultation with the Company)
no longer an appropriate system from which to obtain such rate, such other
nationally recognized quotation system as, in the opinion of the Reset
Agent (after consultation with the Company) is appropriate). If such rate
is not so displayed, the rate for the One-Month Treasury Bill shall be, as
calculated by the Reset Agent, the yield to maturity for the One-Month

                                      4

<PAGE>

Treasury Bill, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates, as of 10:30
A.M., New York City time, on the third Business Day immediately preceding
the Purchase Contract Settlement Date, of three leading United States
government securities dealers selected by the Reset Agent (after
consultation with the Company) (which may include the Reset Agent or an
Affiliate thereof).

         "Ordinary Shares" means the ordinary shares, par value
US$0.041666667, of the Company.

         "Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an
Affiliate.

         "Outstanding Securities," with respect to any Income PRIDES or
Growth PRIDES, means, as of the date of determination, all Income PRIDES or
Growth PRIDES evidenced by Certificates theretofore authenticated, executed
and delivered under this Agreement, except:

                   (i) If a Termination Event has occurred, (A) Growth
         PRIDES and (B) Income PRIDES for which the Stated Amount of the
         related Preferred Share has been theretofore deposited with the
         Agent in trust for the Holders of such Income PRIDES;

                   (ii) Income PRIDES and Growth PRIDES evidenced by
         Certificates theretofore cancelled by the Agent or delivered to
         the Agent for cancellation or deemed cancelled pursuant to the
         provisions of this Agreement; and

                   (iii) Income PRIDES and Growth PRIDES evidenced by
         Certificates in exchange for or in lieu of which other
         Certificates have been authenticated, executed on behalf of the
         Holder and delivered pursuant to this Agreement, other than any
         such Certificate in respect of which there shall have been
         presented to the Agent proof satisfactory to it that such
         Certificate is held by a bona fide purchaser in whose hands the
         Income PRIDES or Growth PRIDES evidenced by such Certificate are
         valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Income PRIDES or Growth PRIDES owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that,
in determining whether the Agent shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver,
only Income PRIDES or Growth PRIDES which a Responsible Officer of the
Agent actually knows to be so owned shall be so disregarded. Income PRIDES
or Growth PRIDES so owned which have been pledged in good faith may be
regarded as Outstanding Securities if the pledgee establishes to the
satisfaction of the Agent the pledgee's right so to act with respect to
such Income PRIDES or Growth PRIDES and that the pledgee is not the Company
or any Affiliate of the Company.

                                      5

<PAGE>

         "Payment Date" means each February 16, May 16, August 16 and
November 16, commencing May 16, 2000.

         "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

         "Permitted Investments" has the meaning set forth in Section 1.1
of the Pledge Agreement.

         "Pledge" means the pledge under the Pledge Agreement of the
Preferred Shares or the Treasury Securities, in each case constituting a
part of the Securities.

         "Pledge Agreement" means the Pledge Agreement, dated as of the
date hereof, by and among the Company, the Collateral Agent and the Agent,
on its own behalf and as attorney-in-fact for the Holders from time to time
of the Securities.

         "Predecessor Certificate" means a Predecessor Income PRIDES
Certificate or a Predecessor Growth PRIDES Certificate.

         "Predecessor Growth PRIDES Certificate" of any particular Growth
PRIDES Certificate means every previous Growth PRIDES Certificate
evidencing all or a portion of the rights and obligations of the Company
and the Holder under the Growth PRIDES evidenced thereby; and, for the
purposes of this definition, any Growth PRIDES Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Growth PRIDES Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as
the mutilated, destroyed, lost or stolen Growth PRIDES Certificate.

         "Predecessor Income PRIDES Certificate" of any particular Income
PRIDES Certificate means every previous Income PRIDES Certificate
evidencing all or a portion of the rights and obligations of the Company
and the Holder under the Income PRIDES evidenced thereby; and, for the
purposes of this definition, any Income PRIDES Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Income PRIDES Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as
the mutilated, destroyed, lost or stolen Income PRIDES Certificate.

         "Preferred Shares" means the 8.25% Cumulative Redeemable Preferred
Shares, Series A, $1.00 par value per share, of the Company, having a
stated liquidation amount of $50 per share.

         "Proceeds" has the meaning set forth in Section 1.1 of the Pledge
Agreement.

         "Purchase Contract," when used with respect to any Security, means
the contract forming a part of such Security and obligating the Company to
sell and the Holder of such Security to purchase Ordinary Shares on the
terms and subject to the conditions set forth in Article Five hereof.

         "Purchase Contract Settlement Date" means May 16, 2003.

                                      6

<PAGE>

         "Purchase Contract Settlement Fund" has the meaning specified in
Section 5.3.

         "Purchase Price" has the meaning specified in Section 5.1.

         "Purchased Shares" has the meaning specified in Section 5.4(a)(6).

         "Record Date" for the distribution payable on any Payment Date
means, as to any Global Certificate, the Business Day next preceding such
Payment Date, and as to any other Certificate, a day selected by the
Company which shall be more than one Business Day but less than 60 Business
Days prior to such Payment Date.

         "Register" means the Income PRIDES Register and the Growth PRIDES
Register.

         "Registrar" means the Income PRIDES Registrar and the Growth
PRIDES Registrar.

         "Remarketing Agent" has the meaning specified in Section 5.2.

         "Remarketing Agreement" means the Remarketing Agreement, dated
April 12, 2000, by and among the Company, the Remarketing Agent and the
Agent.

         "Remarketing Fee" has the meaning specified in Section 5.2.

         "Remarketing Underwriting Agreement" has the meaning specified in
the Remarketing Agreement.

         "Reorganization Event" has the meaning specified in Section
5.4(b).

         "Reset Agent" means a nationally recognized investment banking
firm chosen by the Company to determine the Reset Rate. It is currently
anticipated that Merrill Lynch, Pierce, Fenner & Smith Incorporated will
act in such capacity.

         "Reset Announcement Date" means the tenth (10th) Business Day
immediately preceding the Purchase Contract Settlement Date.

         "Reset Rate" means the dividend rate per annum (to be determined
by the Reset Agent), equal to the sum of (X) the Reset Spread and (Y) the
rate of interest on the One-Month Treasury Bill in effect on the third
Business Day immediately preceding the Purchase Contract Settlement Date,
that the Preferred Shares should bear in order for the Preferred Shares to
have an approximate market value of 100.5% of their aggregate liquidation
amount on the third Business Day immediately preceding the Purchase
Contract Settlement Date; provided, that the Company may limit such Reset
Spread to be no higher than 200 basis points (2%); and provided, further,
that in the event of a Failed Remarketing, the Reset Rate shall be the
dividend rate per annum in effect on the Business Day immediately preceding
the Purchase Contract Settlement Date.

         "Reset Spread" means a spread amount to be determined by the Reset
Agent on the tenth (10th) Business Day immediately preceding the Purchase
Contract Settlement Date.

                                      7

<PAGE>

         "Responsible Officer," when used with respect to the Agent, means
any officer of the Agent assigned by the Agent to administer its corporate
trust matters.

         "Security" means an Income PRIDES or a Growth PRIDES.

         "Settlement Rate" has the meaning specified in Section 5.1.

         "Stated Amount" means $50.

         "Termination Date" means the date, if any, on which a Termination
Event occurs.

         "Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief under any applicable system of bankruptcy laws, adjudicating the
Company to be insolvent, or approving as properly filed a petition seeking
reorganization or liquidation of the Company or any other similar
applicable law, and, unless such judgment, decree or order shall have been
entered within 60 days prior to the Purchase Contract Settlement Date, such
decree or order shall have continued undischarged and unstayed for a period
of 60 days; or (ii) a judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such
judgment, decree or order shall have been entered within 60 days prior to
the Purchase Contract Settlement Date, such judgment, decree or order shall
have continued undischarged and unstayed for a period of 60 days, or (iii)
at any time on or prior to the Purchase Contract Settlement Date, the
Company shall file a petition for relief under any applicable system of
bankruptcy laws, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking
reorganization or liquidation under such laws or any other similar
applicable law, or shall consent to the filing of any such petition, or
shall consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.

         "Threshold Appreciation Price" has the meaning specified in
Section 5.1.

         "Threshold Depreciation Price" has the meaning specified in
Section 5.1.

         "TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.

         "Trading Day" has the meaning specified in Section 5.1.

         "Treasury Security" means a zero coupon U.S. Treasury security
(CUSIP Number 912833 FS4) with a principal amount at maturity equal to
$1,000 and maturing on May 15, 2003.

                                      8

<PAGE>

         "Underwriting Agreement" means the Underwriting Agreement, dated
April 6, 2000, between the Company and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and
Donaldson, Lufkin & Jenrette Securities Corporation.

         "Vice President" means any vice president, whether or not
designated by a number or a word or words added before or after the title
"vice president."

Section 1.2.      Compliance Certificates and Opinions.

         Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Agent an
Officer's Certificate stating that all conditions precedent, if any,
provided for in this Agreement relating to the proposed action have been
complied with and, if requested by the Agent, an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion
need be furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:

                   (1) a statement that the individual signing such
         certificate or opinion has read such covenant or condition and the
         definitions herein relating thereto;

                   (2) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                   (3) a statement that, in the opinion of such individual,
         he or she has made such examination or investigation as is
         necessary to enable such individual to express an informed opinion
         as to whether or not such covenant or condition has been complied
         with; and

                   (4) a statement as to whether, in the opinion of such
         individual, such condition or covenant has been complied with.

Section 1.3.      Form of Documents Delivered to Agent.

         In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.

         Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.

                                      9

<PAGE>

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be
consolidated and form one instrument.

Section 1.4.      Acts of Holders; Record Dates.

         (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or
taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the Company, if made in
the manner provided in this Section.

         (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.

         (c) The ownership of Securities shall be proved by the Income
PRIDES Register or the Growth PRIDES Register, as the case may be.

         (d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Certificate.

         (e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make
or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Agreement to be given,
made or taken by Holders of Securities. If any record date is set pursuant
to this paragraph, the Holders of the Outstanding Income PRIDES and the
Outstanding Growth PRIDES, as the case may be, on such record date, and no
other Holders, shall be entitled to take the relevant action with respect
to the Income PRIDES or the Growth PRIDES, as the case may be, whether or
not such Holders remain Holders after such record date; provided that no
such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this

                                      10

<PAGE>

paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite number of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Agent in writing and to each Holder of Securities
in the manner set forth in Section 1.6.

         With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to
time may change the Expiration Date to any earlier or later day; provided
that no such change shall be effective unless notice of the proposed new
Expiration Date is given to the Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the Company shall
be deemed to have initially designated the 180th day after such record date
as the Expiration Date with respect thereto, subject to its right to change
the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.

Section 1.5.      Notices.

         Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with:

                  (1) the Agent by any Holder or by the Company shall be
         sufficient for every purpose hereunder (unless otherwise herein
         expressly provided) if made, given, furnished or filed in writing
         and personally delivered or mailed, first-class postage prepaid,
         to the Agent at The Bank of New York, 101 Barclay Street, Floor 21
         West, New York, New York 10286, Attention: Corporate Trust
         Administration, or at any other address previously furnished in
         writing by the Agent to the Holders and the Company; or

                  (2) the Company by the Agent or by any Holder shall be
         sufficient for every purpose hereunder (unless otherwise herein
         expressly provided) if made, given, furnished or filed in writing
         and personally delivered or mailed, first-class postage prepaid,
         to the Company at ACE Limited, The ACE Building, 30 Woodbourne
         Avenue, Hamilton HM 08, Bermuda, or at any other address
         previously furnished in writing to the Agent by the Company; or

                  (3) the Collateral Agent by the Agent, the Company or any
         Holder shall be sufficient for every purpose hereunder (unless
         otherwise herein expressly provided) if made, given, furnished or
         filed in writing and personally delivered or mailed, first-class
         postage prepaid, addressed to the Collateral Agent at The Bank of
         New York, 101 Barclay Street, Floor 21 West, New York, New York
         10286, Attention: Corporate Trust Administration, or at any other
         address previously furnished in writing by the Collateral Agent to
         the Agent, the Company and the Holders.

                                      11

<PAGE>

Section 1.6.      Notice to Holders; Waiver.

         Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at its address as it appears in the
applicable Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Agent, but
such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.

         In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Agent shall constitute a sufficient notification for every purpose
hereunder.

Section 1.7.      Effect of Headings and Table of Contents.

         The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.

Section 1.8.      Successors and Assigns.

         All covenants and agreements in this Agreement by the Company
shall bind its successors and assigns, whether so expressed or not.

Section 1.9.      Separability Clause.

         In case any provision in this Agreement or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in
any way be affected or impaired thereby.

Section 1.10.     Benefits of Agreement.

         Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this
Agreement. The Holders from time to time shall be beneficiaries of this
Agreement and shall be bound by all of the terms and conditions hereof and
of the Securities evidenced by their Certificates by their acceptance of
delivery of such Certificates.

Section 1.11.     Governing Law.

         This Agreement and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.

                                      12

<PAGE>

Section 1.12.     Legal Holidays.

         In any case where any Purchase Contract Settlement Date shall not
be a Business Day, then (notwithstanding any other provision of this
Agreement, the Income PRIDES Certificates or the Growth PRIDES
Certificates), the Purchase Contracts shall not be performed on such date,
but the Purchase Contracts shall be performed on the immediately following
Business Day with the same force and effect as if performed on the Purchase
Contract Settlement Date.

Section 1.13.     Counterparts.

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

Section 1.14.     Inspection of Agreement.

         A copy of this Agreement shall be available at all reasonable
times during normal business hours at the Corporate Trust Office for
inspection by any Holder.

                                ARTICLE II
                             CERTIFICATE FORMS

Section 2.1.      Forms of Certificates Generally.

         The Income PRIDES Certificates (including the form of Purchase
Contract forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required
by the rules of any securities exchange on which the Income PRIDES are
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Income PRIDES
Certificates, as evidenced by their execution of the Income PRIDES
Certificates.

         The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers of the Company
executing such Income PRIDES Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.

         The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required
by the rules of any securities exchange on which the Growth PRIDES may be
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Growth PRIDES
Certificates, as evidenced by their execution of the Growth PRIDES
Certificates.

                                      13

<PAGE>

         The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers of the Company
executing such Growth PRIDES Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.

         Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:

         THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
         PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
         REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
         THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART
         FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE
         IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
         OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN
         THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
         AGREEMENT.

Section 2.2.      Form of Agent's Certificate of Authentication.

         The form of the Agent's certificate of authentication of the
Income PRIDES shall be in substantially the form set forth on the form of
the Income PRIDES Certificates.

         The form of the Agent's certificate of authentication of the
Growth PRIDES shall be in substantially the form set forth on the form of
the Growth PRIDES Certificates.

                                ARTICLE III
                               THE SECURITIES

Section 3.1.      Title and Terms; Denominations.

         The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 6,000,000 (6,900,000 if the Underwriters' over-allotment option
pursuant to the Underwriting Agreement is exercised in full), except for
Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.7 or 8.5. Growth PRIDES will be
issued only in the manner described in Section 3.13 hereof.

         The Certificates shall be issuable only in registered form and
only in denominations of a single Income PRIDES or Growth PRIDES and any
integral multiple thereof.

Section 3.2.      Rights and Obligations Evidenced by the Certificates.

         Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Preferred
Share, subject to the Pledge of such Preferred Share by such Holder
pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Income PRIDES

                                      14

<PAGE>

shall pledge, pursuant to the Pledge Agreement, the Preferred Share forming
a part of such Income PRIDES, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title, and interest of
such Holder in such Preferred Share for the benefit of the Company, to
secure the obligation of the Holder under each Purchase Contract to
purchase the Ordinary Shares of the Company. Prior to the purchase of
Ordinary Shares under each Purchase Contract, the Purchase Contracts shall
not entitle the Holders of Income PRIDES Certificates to any of the rights
of a holder of Ordinary Shares, including, without limitation, the right to
vote or receive any dividends or other payments or to consent or to receive
notice as stockholders in respect of the meetings of stockholders or for
the election of directors of the Company or for any other matter, or any
other rights whatsoever as stockholders of the Company.

         Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/20th undivided beneficial interest
in a Treasury Security, subject to the Pledge of such interest in such
Treasury Security by such Holder pursuant to the Pledge Agreement, and the
rights and obligations of the Holder thereof and the Company under one
Purchase Contract. Prior to the purchase of Ordinary Shares under each
Purchase Contract, the Purchase Contracts shall not entitle the Holders of
Growth PRIDES Certificates to any of the rights of a holder of Ordinary
Shares, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the election
of directors of the Company or for any other matter, or any other rights
whatsoever as stockholders of the Company.

Section 3.3.      Execution, Authentication, Delivery and Dating.

         Subject to the provisions of Sections 3.13 and 3.14 hereof, upon
the execution and delivery of this Agreement, and at any time and from time
to time thereafter, the Company may deliver Certificates executed by the
Company to the Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holders and deliver such
Certificates.

         The Certificates shall be executed on behalf of the Company by the
Chairman of the Board, the Vice Chairman, the President, the Chief
Financial Officer, the Chief Administrative Officer, General Counsel,
Secretary or any Vice President (or other officer performing similar
functions) of the Company and delivered to the Agent. The signature of any
of these officers on the Certificates may be manual or facsimile.

         Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of such
Certificates.

                                      15

<PAGE>

         No Purchase Contract evidenced by a Certificate shall be valid
until such Certificate has been executed on behalf of the Holder by the
manual signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent
shall be conclusive evidence that the Holder of such Certificate has
entered into the Purchase Contracts evidenced by such Certificate.

         Each Certificate shall be dated the date of its authentication.

         No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by
manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder.

Section 3.4.      Temporary Certificates.

         Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holders, and deliver, in lieu of such definitive
Certificates, temporary Certificates which are in substantially the form
set forth in Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Income PRIDES
or Growth PRIDES are listed, or as may, consistently herewith, be
determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.

         If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After
the preparation of definitive Certificates, the temporary Certificates
shall be exchangeable for definitive Certificates upon surrender of the
temporary Certificates at the Corporate Trust Office, at the expense of the
Company and without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number
of Income PRIDES or Growth PRIDES, as the case may be, as the temporary
Certificate or Certificates so surrendered. Until so exchanged, the
temporary Certificates shall in all respects evidence the same benefits and
the same obligations with respect to the Income PRIDES or Growth PRIDES, as
the case may be, evidenced thereby as definitive Certificates.

Section 3.5.      Registration; Registration of Transfer and Exchange.

         The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations
as it may prescribe, the Agent shall provide for the registration of Income
PRIDES Certificates and of transfers of Income PRIDES Certificates (the
Agent, in such capacity, the "Income PRIDES Registrar") and a register (the
"Growth PRIDES Register") in which, subject to such reasonable regulations
as it may prescribe, the Agent shall provide for the registration of the
Growth PRIDES Certificates and transfers of Growth PRIDES Certificates (the
Agent, in such capacity, the "Growth PRIDES Registrar").

                                      16

<PAGE>

         Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be.

         At the option of the Holder, Certificates may be exchanged for
other Certificates, of any authorized denominations and evidencing a like
number of Income PRIDES or Growth PRIDES, as the case may be, upon
surrender of the Certificates to be exchanged at the Corporate Trust
Office. Whenever any Certificates are so surrendered for exchange, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.

         All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number
of Income PRIDES or Growth PRIDES, as the case may be, and be entitled to
the same benefits and subject to the same obligations, under this Agreement
as the Income PRIDES or Growth PRIDES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.

         Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent duly executed, by the Holder
thereof or its attorney duly authorized in writing.

         No service charge shall be made for any registration of transfer
or exchange of a Certificate, but the Company and the Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Certificates, other than any exchanges pursuant
to Sections 3.6 and 8.5 not involving any transfer.

         Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated
to authenticate, execute on behalf of the Holder and deliver any
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i)
if the Purchase Contract Settlement Date has occurred, deliver the number
of Ordinary Shares issuable in respect of the Purchase Contracts forming a
part of the Securities evidenced by such Certificate, (ii) in the case of
Income PRIDES, if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the aggregate Stated Amount of
the Preferred Shares evidenced thereby, or (iii) in the case of Growth
PRIDES, if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Treasury Securities evidenced
thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.

                                      17

<PAGE>

Section 3.6.      Book-Entry Interests.

         The Certificates, on original issuance, will be issued in the form
of one or more, fully registered Global Certificates, to be delivered to
the Depositary by, or on behalf of, the Company. Such Global Certificate
shall initially be registered on the books and records of the Company in
the name of Cede & Co., the nominee of the Depositary, and no Beneficial
Owner will receive a definitive Certificate representing such Beneficial
Owner's interest in such Global Certificate, except as provided in Section
3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:

         (a) the provisions of this Section 3.6 shall be in full force and
effect;

         (b) the Company shall be entitled to deal with the Clearing Agency
for all purposes of this Agreement (including receiving approvals, votes or
consents hereunder) as the Holder of the Securities and the sole holder of
the Global Certificate(s) and shall have no obligation to the Beneficial
Owners;

         (c) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section
3.6 shall control; and

         (d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. The Clearing Agency will make
book-entry transfers among Clearing Agency Participants and receive and
transmit dividends on the Preferred Shares to such Clearing Agency
Participants.

Section 3.7.      Notices to Holders.

         Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Company's
agent shall give such notices and communications to the Holders and, with
respect to any Securities registered in the name of a Clearing Agency or
the nominee of a Clearing Agency, the Company or the Company's agent shall,
except as set forth herein, have no obligations to the Beneficial Owners.

Section 3.8.      Appointment of Successor Clearing Agency.

         If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in
its sole discretion, appoint a successor Clearing Agency with respect to
the Securities.

Section 3.9.      Definitive Certificates.

         If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 3.8, (ii) the Company elects to terminate the
book-entry system through the Clearing Agency with respect to the

                                      18

<PAGE>

Securities, or (iii) there shall have occurred and be continuing a default
by the Company in respect of its obligations under one or more Purchase
Contracts, then upon surrender of the Global Certificates representing the
Book-Entry Interests with respect to the Securities by the Clearing Agency,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance
with the instructions of the Clearing Agency. The Company shall not be
liable for any delay in delivery of such instructions and may conclusively
rely on and shall be protected in relying on, such instructions.

Section 3.10.     Mutilated, Destroyed, Lost and Stolen Certificates.

         If any mutilated Certificate is surrendered to the Agent, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Certificate at the cost of the Holder, evidencing the same
number of Income PRIDES or Growth PRIDES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.

         If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity at the cost of the Holder
as may be required by them to hold each of them and any agent of any of
them harmless, then, in the absence of notice to the Company or the Agent
that such Certificate has been acquired by a bona fide purchaser, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver to the Holder,
in lieu of any such destroyed, lost or stolen Certificate, a new
Certificate, evidencing the same number of Income PRIDES or Growth PRIDES,
as the case may be, and bearing a Certificate number not contemporaneously
outstanding.

         Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated
to authenticate, execute on behalf of the Holder, and deliver to the
Holder, a Certificate on or after the Business Day immediately preceding
the earlier of the Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the
Agent shall (i) if the Purchase Contract Settlement Date has occurred,
deliver the number of Ordinary Shares issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate,
or (ii) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Preferred Shares or the Treasury
Securities, as the case may be, evidenced thereby, in each case subject to
the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.

         Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Agent) connected therewith.

         Every new Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder in
respect of the Security evidenced thereby, whether or not the destroyed,
lost or stolen Certificate (and the Securities evidenced thereby) shall be
at any time enforceable by anyone, and shall be entitled to all the
benefits and be subject to all the obligations of this Agreement equally
and proportionately with any and all other Certificates delivered
hereunder.

                                      19

<PAGE>

         The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Certificates.

Section 3.11.     Persons Deemed Owners.

         Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the
Agent, may treat the Person in whose name such Certificate is registered as
the owner of the Income PRIDES or Growth PRIDES evidenced thereby, for the
purpose of receiving dividends on the Preferred Shares, if declared,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any dividends on the Preferred Shares shall be
overdue and notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent, shall be
affected by notice to the contrary.

         Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent or any
agent of the Company or the Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Clearing
Agency (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Clearing Agency and owners of
beneficial interests in such Global Certificate, the operation of customary
practices governing the exercise of rights of such Clearing Agency (or its
nominee) as Holder of such Global Certificate.

Section 3.12.     Cancellation.

         All Certificates surrendered for delivery of Ordinary Shares on or
after the Purchase Contract Settlement Date, upon the transfer of Preferred
Shares or Treasury Securities, as the case may be, after the occurrence of
a Termination Event or pursuant to an Early Settlement, or upon the
registration of a transfer or exchange of a Security, or a Collateral
Substitution or the re-establishment of an Income PRIDES shall, if
surrendered to any Person other than the Agent, be delivered to the Agent
and, if not already cancelled, shall be promptly cancelled by it. The
Company may at any time deliver to the Agent for cancellation any
Certificates previously authenticated, executed and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled
by the Agent. No Certificates shall be authenticated, executed on behalf of
the Holder and delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly permitted by
this Agreement. All cancelled Certificates held by the Agent shall be
disposed of by the Agent in accordance with its customary practices.

         If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.

                                      20

<PAGE>

Section 3.13.     Establishment or Reestablishment of Growth PRIDES.

         A Holder may separate the Preferred Shares from the related
Purchase Contracts in respect of an Income PRIDES by substituting for such
Preferred Shares, Treasury Securities in an aggregate principal amount at
maturity equal to the aggregate Stated Amount of such Preferred Shares (a
"Collateral Substitution"), at any time from and after the date of this
Agreement and on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date by (a) depositing with the Collateral
Agent Treasury Securities having an aggregate principal amount at maturity
equal to the aggregate Stated Amount of the Preferred Shares comprising
part of such Income PRIDES and (b) transferring the related Income PRIDES
to the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred the
relevant amount of Treasury Securities to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to release the
Preferred Shares underlying such Income PRIDES, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit C hereto. Upon receipt of the Treasury Securities
described in clause (a) above and the instruction described in clause (b)
above, in accordance with the terms of the Pledge Agreement, the Collateral
Agent will release to the Agent, on behalf of the Holder, Preferred Shares
having a corresponding aggregate Stated Amount of such Preferred Shares
from the Pledge, free and clear of the Company's security interest therein,
and upon receipt thereof the Agent shall promptly:

                   (i) cancel the related Income PRIDES;

                   (ii) transfer the related Preferred Shares to the
         Holder; and

                   (iii) authenticate, execute on behalf of such Holder and
         deliver a Growth PRIDES Certificate executed by the Company in
         accordance with Section 3.3 evidencing the same number of Purchase
         Contracts as were evidenced by the cancelled Income PRIDES.

         Holders who elect to separate the Preferred Shares from the
related Purchase Contract and to substitute Treasury Securities for such
Preferred Shares, shall be responsible for any fees or expenses payable to
the Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.

         Holders may make Collateral Substitutions only in integral
multiples of 20 Income PRIDES.

         In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Income
PRIDES or fails to deliver an Income PRIDES Certificate to the Agent after
depositing Treasury Securities with the Collateral Agent, the Preferred
Shares constituting a part of such Income PRIDES, and any distributions on
such Preferred Share, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Income PRIDES are so
transferred or the Income PRIDES Certificate is so delivered, as the case
may be, or, with respect to an Income PRIDES Certificate, such Holder
provides evidence satisfactory to the Company and the Agent that such
Income PRIDES Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Agent and the Company.

                                      21

<PAGE>

         Except as described in this Section 3.13, for so long as the
Purchase Contract underlying an Income PRIDES remains in effect, such
Income PRIDES shall not be separable into its constituent parts, and the
rights and obligations of the Holder in respect of the Preferred Shares,
and Purchase Contract comprising such Income PRIDES may be acquired, and
may be transferred and exchanged, only as an Income PRIDES.

Section 3.14.     Establishment or Reestablishment of Income PRIDES.

         A Holder of a Growth PRIDES may create or recreate Income PRIDES
at any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date by (a) depositing with the Collateral
Agent Preferred Shares having an aggregate Stated Amount equal to the
aggregate principal amount at maturity of the Pledged Treasury Securities
comprising part of the Growth PRIDES and (b) transferring the related
Growth PRIDES to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the Holder has
transferred the relevant amount of Preferred Shares, to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent to
release the Treasury Securities underlying such Growth PRIDES, whereupon
the Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of the
Preferred Shares described in clause (a) above and the instruction
described in clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will effect the release of the Treasury
Securities having a corresponding aggregate principal amount at maturity
from the Pledge to the Agent free and clear of the Company's security
interest therein, and upon receipt thereof the Agent shall promptly:

                   (i) cancel the related Growth PRIDES;

                   (ii) transfer the Treasury Securities to the Holder; and

                   (iii) authenticate, execute on behalf of such Holder and
         deliver an Income PRIDES Certificate executed by the Company in
         accordance with Section 3.3 evidencing the same number of Purchase
         Contracts as were evidenced by the cancelled Growth PRIDES.

         Holders of Growth PRIDES may establish or reestablish Income
PRIDES in integral multiples of 20 Growth PRIDES for 20 Preferred Shares
only.

         Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and Purchase Contract comprising such Growth PRIDES may be
acquired, and may be transferred and exchanged only as a Growth PRIDES.

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Section 3.15.     Transfer of Collateral upon Occurrence of Termination Event.

         Upon the occurrence of a Termination Event and the transfer to the
Agent of the Preferred Shares or the Treasury Securities, as the case may
be, underlying the Income PRIDES and the Growth PRIDES pursuant to the
terms of the Pledge Agreement, the Agent shall request transfer
instructions with respect to such Preferred Shares or Treasury Securities,
as the case may be, from each Holder by written request mailed to such
Holder at its address as it appears in the Income PRIDES Register or the
Growth PRIDES Register, as the case may be. Upon book-entry transfer of the
Income PRIDES or Growth PRIDES or delivery of an Income PRIDES Certificate
or Growth PRIDES Certificate to the Agent with such transfer instructions,
the Agent shall transfer the Preferred Shares or Treasury Securities, as
the case may be, underlying such Income PRIDES or Growth PRIDES, as the
case may be, to such Holder by book-entry transfer, or other appropriate
procedures, in accordance with such instructions. In the event a Holder of
Income PRIDES or Growth PRIDES fails to effect such transfer or delivery,
the Preferred Shares or Treasury Securities, as the case may be, underlying
such Income PRIDES or Growth PRIDES, as the case may be, and any
distributions thereon, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until such Income PRIDES
or Growth PRIDES are transferred or the Income PRIDES Certificate or Growth
PRIDES Certificate is surrendered or such Holder provides satisfactory
evidence that such Income PRIDES Certificate or Growth PRIDES Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Agent and the Company.

Section 3.16.     CUSIP Numbers.

         The Company in issuing the Securities may use CUSIP numbers (if
then generally in use), and, if so, the Agent shall use CUSIP numbers in
notices as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Agent of any change in the CUSIP numbers.

                                ARTICLE IV
                            THE PREFERRED SHARES

Section 4.1.      Payment of Dividend; Rights to Dividends Preserved;
                  Dividend Rate Reset; Notice.

         A distribution on any Preferred Share which is paid on any Payment
Date shall, subject to receipt thereof by the Agent from the Collateral
Agent as provided by the terms of the Pledge Agreement, be paid to the
Person in whose name the Income PRIDES Certificate (or one or more
Predecessor Income PRIDES Certificates) of which such Preferred Share is a
part is registered at the close of business on the Record Date for such
Payment Date.

         Each Income PRIDES Certificate evidencing Preferred Shares
delivered under this Agreement upon registration of transfer of or in
exchange for or in lieu of any other Income PRIDES Certificate shall carry
the rights to accumulated and unpaid dividends, and to accumulate
dividends, which were carried by the Preferred Shares underlying such other
Income PRIDES Certificate.

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<PAGE>

         In the case of any Income PRIDES with respect to which Cash
Settlement of the underlying Purchase Contract is effected on the Business
Day immediately preceding the Purchase Contract Settlement Date pursuant to
prior notice, or with respect to which Early Settlement of the underlying
Purchase Contract is effected on an Early Settlement Date, or with respect
to which a Collateral Substitution is effected, in each case on a date that
is after any Record Date and on or prior to the next succeeding Payment
Date, dividends on the Preferred Shares underlying such Income PRIDES
otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such dividends shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Income PRIDES Certificate
(or one or more Predecessor Income PRIDES Certificates) was registered at
the close of business on the Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Income
PRIDES with respect to which Cash Settlement or Early Settlement of the
underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date or an Early Settlement
Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, dividends on the related Preferred Shares
that would otherwise be payable after the Purchase Contract Settlement Date
or Early Settlement Date shall not be payable hereunder to the Holder of
such Income PRIDES; provided, however, that to the extent that such Holder
continues to hold the separated Preferred Shares that formerly comprised a
part of such Holder's Income PRIDES, such Holder shall be entitled to
receive the dividends on such separated Preferred Shares.

         The applicable Dividend Rate on the Preferred Shares on and after
the Purchase Contract Settlement Date will be reset on the third Business
Day immediately preceding the Purchase Contract Settlement Date to the
Reset Rate (such Reset Rate to be in effect on and after the Purchase
Contract Settlement Date). On the Reset Announcement Date, the Reset Spread
and the One-Month Treasury Bill to be used to determine the Reset Rate will
be announced by the Company. On the Business Day immediately following the
Reset Announcement Date, the Preferred Shares Holders will be notified of
such Reset Spread and the One-Month Treasury Bill by the Company. Such
notice shall be sufficiently given to Holders of Preferred Shares if
published in an Authorized Newspaper in The City of New York.

         Not less than 7 calendar days nor more than 15 calendar days prior
to the Reset Announcement Date, the Company will notify DTC or its nominee
(or any successor Clearing Agency or its nominee) by first-class mail,
postage prepaid, to notify the Beneficial Owners or Clearing Agency
Participants holding Income PRIDES or Growth PRIDES, of such Reset
Announcement Date and the procedures to be followed by such Holders of
Income PRIDES who intend to settle their obligation under the Purchase
Contract with separate cash on the Purchase Contract Settlement Date.

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Section 4.2.      Notice and Voting.

         Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining
to the Preferred Shares pledged with the Collateral Agent but only to the
extent instructed by the Holders as described below. Upon receipt of notice
of any meeting at which holders of Preferred Shares are entitled to vote or
upon any solicitation of consents, waivers or proxies of holders of
Preferred Shares, the Agent shall, as soon as practicable thereafter, mail
to the Holders of Income PRIDES a notice (a) containing such information as
is contained in the notice or solicitation, (b) stating that each Holder on
the record date set by the Agent therefor (which, to the extent possible,
shall be the same date as the record date for determining the holders of
Preferred Shares entitled to vote) shall be entitled to instruct the Agent
as to the exercise of the voting rights pertaining to the Preferred Shares
underlying their Income PRIDES and (c) stating the manner in which such
instructions may be given. Upon the written request of the Holders of
Income PRIDES on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of Preferred
Shares as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Income PRIDES, the
Agent shall abstain from voting the Preferred Share underlying such Income
PRIDES. The Company hereby agrees, if applicable, to solicit Holders of
Income PRIDES to timely instruct the Agent in order to enable the Agent to
vote such Preferred Shares.

                                 ARTICLE V
                           THE PURCHASE CONTRACTS

Section 5.1.      Purchase of Ordinary Shares.

         Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.7 hereof, obligate the Holder of the
related Security to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of newly issued Ordinary Shares equal to the
Settlement Rate unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event with respect to the
Security of which such Purchase Contract is a part. The "Settlement Rate"
is equal to (a) if the Applicable Market Value (as defined below) is equal
to or greater than $26.3281 (the "Threshold Appreciation Price"), 1.8991
Ordinary Shares per Purchase Contract, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price, but is greater than $18.9563
(the "Threshold Depreciation Price"), the number of Ordinary Shares equal
to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Value is less than or equal to Threshold Depreciation
Price, 2.6376 Ordinary Shares per Purchase Contract, in each case subject
to adjustment as provided in Section 5.4 (and in each case rounded upward
or downward to the nearest 1/10,000th of a share). As provided in Section
5.8, no fractional Ordinary Shares will be issued upon settlement of
Purchase Contracts.

         The "Applicable Market Value" means the average of the Closing
Prices per Ordinary Share on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.

         The "Closing Price" of the Ordinary Shares on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Ordinary Shares on the New
York Stock Exchange (the "NYSE") on such date or, if the Ordinary Shares
are not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Ordinary Shares are so listed, or if the Ordinary Shares are
not so listed on a United States national or regional securities exchange,
as reported by The Nasdaq Stock Market, or, if the Ordinary Shares are not
so reported, the last quoted bid price for the Ordinary Shares in the

                                      25

<PAGE>

over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market
value of the Ordinary Shares on such date as of 4:00 p.m., New York City
time, as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company.

         A "Trading Day" means a day on which the Ordinary Shares (A) are
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (B)
have traded at least once on the national or regional securities exchange
or association or over-the-counter market that is the primary market for
the trading of the Ordinary Shares.

         Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, irrevocably authorizes the Agent to enter into and
perform the related Purchase Contract on its behalf as its attorney-in-fact
(including the execution of Certificates on behalf of such Holder), agrees
to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, and consents to the
provisions hereof, irrevocably authorizes the Agent as its attorney-in-fact
to enter into and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound by the Pledge of
the Preferred Shares or the Treasury Securities pursuant to the Pledge
Agreement; provided that upon a Termination Event, the rights of the Holder
of such Security under the Purchase Contract may be enforced without regard
to any other rights or obligations. Each Holder of an Income PRIDES or a
Growth PRIDES, by its acceptance thereof, further covenants and agrees,
that, to the extent and in the manner provided in Section 5.2 and the
Pledge Agreement, but subject to the terms thereof, payments in respect of
the Stated Amount of the Preferred Shares or the Proceeds of the Treasury
Securities on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.

         Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of
such transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor
shall be released from the obligations under this Agreement, the Purchase
Contracts underlying the Certificates so transferred and the Pledge
Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to
be bound by the provisions of this paragraph.

Section 5.2.      Payment of Purchase Price.

         (a) (i) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Agent in the manner described in
Section 5.7, each Holder of an Income PRIDES must notify the Agent by use
of a notice in substantially the form of Exhibit E hereto of its intention
to pay in cash ("Cash Settlement") the Purchase Price for the Ordinary
Shares to be purchased pursuant to a Purchase Contract. Such notice shall
be made on or prior to 5:00 p.m., New York City time, on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date. The Agent
shall promptly notify the Collateral Agent of the receipt of such a notice
from a Holder intending to make a Cash Settlement.

                                      26

<PAGE>

         (ii) A Holder of an Income PRIDES who has so notified the Agent of
its intention to make a Cash Settlement is required to pay the Purchase
Price to the Collateral Agent prior to 11:00 a.m., New York City time, on
the Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check
or wire transfer, in each case in immediately available funds payable to or
upon the order of the Company. Any cash received by the Collateral Agent
will be invested promptly by the Collateral Agent in Permitted Investments
and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Collateral
Agent in respect of the investment earnings from the investment in such
Permitted Investments will be distributed to the Agent when received for
payment to the Holder.

         (iii) If a Holder of an Income PRIDES fails to notify the Agent of
its intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute an event of default and the Holder
shall be deemed to have consented to the disposition of the pledged
Preferred Shares pursuant to the remarketing as described in paragraph (b)
below. If a Holder of an Income PRIDES does notify the Agent as provided in
paragraph (a)(i) above of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph (a)(ii) above, such
failure shall also constitute a default; however, the Preferred Shares of
such a Holder will not be remarketed but instead the Collateral Agent, for
the benefit of the Company, will exercise its rights as a secured party
with respect to such Preferred Shares, including those rights specified in
paragraph (c) below.

         (b) In order to dispose of the Preferred Shares of Income PRIDES
Holders who have not notified the Agent of their intention to effect a Cash
Settlement as provided in paragraph (a)(i) above, the Company shall engage
a nationally recognized investment bank (the "Remarketing Agent") pursuant
to the Remarketing Agreement to sell such Preferred Shares. In order to
facilitate the remarketing, the Agent shall notify, by 10:00 a.m., New York
City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, the Remarketing Agent of the aggregate number of
Preferred Shares to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing
such Preferred Shares to the Remarketing Agent. Upon receipt of such notice
from the Agent and such Preferred Shares from the Collateral Agent, the
Remarketing Agent will, on the third Business Day immediately preceding the
Purchase Contract Settlement Date, use its reasonable efforts to remarket
such Preferred Shares on such date at a price of approximately 100.5% (but
not less than 100%) of the aggregate stated liquidation amount of such
Preferred Shares, plus accumulated and unpaid distributions, if any,
thereon. After deducting as the remarketing fee ("Remarketing Fee") an
amount not exceeding 25 basis points (.25%) of the aggregate stated
liquidation amount of the remarketed Preferred Shares from any amount of
such proceeds in excess of the aggregate stated liquidation amount of the
remarketed Preferred Shares plus accumulated and unpaid dividends, if any,

                                      27

<PAGE>

then the Remarketing Agent will remit the entire amount of the proceeds
from such remarketing to the Collateral Agent. Such portion of the
proceeds, equal to the aggregate stated liquidation amount of such
Preferred Shares, will automatically be applied by the Collateral Agent, in
accordance with the Pledge Agreement to satisfy in full such Income PRIDES
holders' obligations to pay the Purchase Price for the Ordinary Shares
under the related Purchase Contracts on the Purchase Contract Settlement
Date. Any proceeds in excess of those required to pay the Purchase Price
and the Remarketing Fee will be remitted to the Agent for payment to the
Holders of the related Income PRIDES. Income PRIDES Holders whose Preferred
Shares are so remarketed will not otherwise be responsible for the payment
of any Remarketing Fee in connection therewith. If, in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket the related
Preferred Shares of such Holders of Income PRIDES at a price not less then
100% of the aggregate stated liquidation amount of such Preferred Shares
plus accumulated and unpaid dividends, if any, the remarketing will be
deemed to have failed (a "Failed Remarketing") and in accordance with the
terms of the Pledge Agreement, the Collateral Agent for the benefit of the
Company will exercise its rights as a secured party with respect to such
Preferred Shares, including those actions specified in paragraph (c) below;
provided, that if upon a Failed Remarketing the Collateral Agent exercises
such rights for the benefit of the Company with respect to such Preferred
Shares, any accumulated and unpaid dividends on such Preferred Shares will
become payable by the Company to the Agent for payment to the Beneficial
Owner of the Income PRIDES to which such Preferred Shares relates. Such
payment will be made by the Company on or prior to 11 a.m., New York City
time, on the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer in
immediately available funds payable to or upon the order of the Agent. The
Company will cause a notice of such Failed Remarketing to be published on
the second Business Day immediately preceding the Purchase Contract
Settlement Date in an Authorized Newspaper in The City of New York.

         (c) With respect to any Preferred Shares beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as
required in (a)(ii) above, or with respect to Preferred Shares which are
subject to a Failed Remarketing, the Collateral Agent for the benefit of
the Company reserves all of its rights as a secured party with respect
thereto and, subject to applicable law and paragraph (g) below, may, among
other things, (i) retain the Preferred Shares in full satisfaction of the
Holders obligations under the Purchase Contracts or (ii) sell the Preferred
Shares in one or more public or private sales.

         (d) (i) Unless a Holder of Growth PRIDES settles the underlying
Purchase Contract through the early delivery of cash to the Agent in the
manner described in Section 5.7, each Holder of a Growth PRIDES must notify
the Agent by use of a notice in substantially the form of Exhibit E hereto
of its intention to pay in cash the Purchase Price for the Ordinary Shares
to be purchased pursuant to a Purchase Contract on or prior to 5:00 p.m.,
New York City time, on the second Business Day immediately preceding the
Purchase Contract Settlement Date.

         (ii) A Holder of a Growth PRIDES who has so notified the Agent of
its intention to make a Cash Settlement in accordance with paragraph (d)(i)
above is required to pay the Purchase Price to the Collateral Agent prior
to 11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in specific Permitted Investments as
directed in writing by the Company and paid to the Company on the Purchase
Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any
funds received by the Collateral Agent in respect of the investment
earnings from the investment in such Permitted Investments will be
distributed to the Agent when received for payment to the Holder.

                                      28

<PAGE>

         (iii) If a Holder of a Growth PRIDES notifies the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i)
above, but fails to make such payment as required by paragraph (d)(ii)
above, then upon the maturity of the Pledged Treasury Securities held by
the Collateral Agent on the Business Day immediately prior to the Purchase
Contract Settlement Date, the principal amount at maturity of the Treasury
Securities received by the Collateral Agent will be invested promptly in
specific overnight Permitted Investments as directed in writing by the
Company. On the Purchase Contract Settlement Date, an amount equal to the
Purchase Price will be remitted to the Company as payment thereof without
receiving any instructions from the Holder. In the event the sum of the
proceeds from the related Pledged Treasury Securities and the investment
earnings earned from such investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Agent for the benefit
of the Holder of the related Growth PRIDES when received.

         (e) Any distribution to Holders of excess funds and interest
described above shall be payable at the office of the Agent in The City of
New York maintained for that purpose or, at the option of the Holder, by
check mailed to the address of the Person entitled thereto at such address
as it appears on the Register.

         (f) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Collateral Agent in the manner
described herein, the Company shall not be obligated to issue any Ordinary
Shares in respect of a Purchase Contract or deliver any certificate
therefor to the Holder unless it shall have received payment in full of the
Purchase Price for the Ordinary Shares to be purchased thereunder in the
manner herein set forth.

         Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
Pledged Preferred Shares or the Pledged Treasury Securities underlying the
relevant Security to be released from the Pledge by the Collateral Agent
free and clear of any security interest of the Company and transferred to
the Agent for delivery to the Holder thereof or its designee as soon as
practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate
procedures, in accordance with instructions provided by the Holder thereof,
transfer such Preferred Shares or such Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold
such Preferred Shares or such Treasury Securities, and any dividends or
distributions thereon, in the name of the Agent or its nominee in trust for
the benefit of such Holder).

         (g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement
or the proceeds of any Collateral Pledged to secure the obligations of the
Holders and in no event will Holders be liable for any deficiency between
the proceeds of Collateral disposition and the Purchase Price.

                                      29

<PAGE>

Section 5.3.      Issuance of Ordinary Shares.

         Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its receipt of
payment in full of the Purchase Price for the Ordinary Shares purchased by
the Holders pursuant to the foregoing provisions of this Article and
subject to Section 5.4(b), the Company shall issue and deposit with the
Agent, for the benefit of the Holders of the Outstanding Securities, one or
more certificates representing the newly issued Ordinary Shares registered
in the name of the Agent (or its nominee) as custodian for the Holders
(such certificates for Ordinary Shares, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date,
being hereinafter referred to as the "Purchase Contract Settlement Fund")
to which the Holders are entitled hereunder. Subject to the foregoing, upon
surrender of a Certificate to the Agent on or after the Purchase Contract
Settlement Date, together with settlement instructions thereon duly
completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of
whole Ordinary Shares which such Holder is entitled to receive pursuant to
the provisions of this Article Five (after taking into account all
Securities then held by such Holder) together with cash in lieu of
fractional shares as provided in Section 5.8 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the
Certificate so surrendered shall forthwith be cancelled. Such shares shall
be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the
Agent. If any Ordinary Shares issued in respect of a Purchase Contract are
to be registered to a Person other than the Person in whose name the
Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such
registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.

Section 5.4.      Adjustment of Settlement Rate.

         (a)      Adjustments for Dividends, Distributions, Stock Splits, Etc.

                  (1) In case the Company shall pay or make a dividend or
other distribution on the Ordinary Shares in Ordinary Shares, the
Settlement Rate, as in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing
such Settlement Rate by a fraction of which the numerator shall be the
number of Ordinary Shares outstanding at the close of business on the date
fixed for such determination and the denominator shall be the sum of such
number of shares and the total number of shares constituting such dividend
or other distribution, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), the number of
Ordinary Shares at the time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of Ordinary
Shares. The Company will not pay any dividend or make any distribution on
Ordinary Shares held in the treasury of the Company.

                                      30

<PAGE>

                  (2) In case the Company shall issue rights, options or
warrants to all holders of its Ordinary Shares (not being available on an
equivalent basis to Holders of the Securities upon settlement of the
Purchase Contracts underlying such Securities) entitling them, for a period
expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, options or warrants, to
subscribe for or purchase Ordinary Shares at a price per share less than
the Current Market Price per Ordinary Share on the date fixed for the
determination of shareholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan), the
Settlement Rate in effect at the opening of business on the day following
the date fixed for such determination shall be increased by dividing such
Settlement Rate by a fraction, the numerator of which shall be the number
of Ordinary Shares outstanding at the close of business on the date fixed
for such determination plus the number of Ordinary Shares which the
aggregate of the offering price of the total number of Ordinary Shares so
offered for subscription or purchase would purchase at such Current Market
Price and the denominator of which shall be the number of Ordinary Shares
outstanding at the close of business on the date fixed for such
determination plus the number of Ordinary Shares so offered for
subscription or purchase, such increase to become effective immediately
after the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of
Ordinary Shares at any time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of Ordinary
Shares. The Company shall not issue any such rights, options or warrants in
respect of Ordinary Shares held in the treasury of the Company.

                  (3) In case outstanding Ordinary Shares shall be
subdivided or split into a greater number of Ordinary Shares, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding Ordinary
Shares shall each be combined into a smaller number of Ordinary Shares, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day
following the day upon which such subdivision, split or combination becomes
effective.

                  (4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Ordinary Shares evidences of its
indebtedness or assets (including securities, but excluding any rights or
warrants referred to in paragraph (2) of this Section, any dividend or
distribution paid exclusively in cash and any dividend or distribution
referred to in paragraph (1) of this Section), the Settlement Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the
date fixed for the determination of shareholders entitled to receive such
distribution by a fraction, the numerator of which shall be the Current
Market Price per Ordinary Share on the date fixed for such determination
less the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution
filed with the Agent) of the portion of the assets or evidences of
indebtedness so distributed applicable to one Ordinary Share and the
denominator of which shall be such Current Market Price per Ordinary Share,
such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution. In any case in which
this paragraph (4) is applicable, paragraph (2) of this Section shall not
be applicable.

                                      31

<PAGE>

                  (5) In case the Company shall, (I) by dividend or
otherwise, distribute to all holders of its Ordinary Shares cash (excluding
any cash that is distributed in a Reorganization Event to which Section
5.4(b) applies or as part of a distribution referred to in paragraph (4) of
this Section) in an aggregate amount that, combined together with (II) the
aggregate amount of any other distributions to all holders of its Ordinary
Shares made exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment pursuant
to this paragraph (5) or paragraph (6) of this Section has been made and
(III) the aggregate of any cash plus the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of consideration payable in respect of any
tender or exchange offer by the Company or any of its subsidiaries for all
or any portion of the Ordinary Shares concluded within the 12 months
preceding the date of payment of the distribution described in clause (I)
above and in respect of which no adjustment pursuant to this paragraph (5)
or paragraph (6) of this Section has been made, exceeds 5% of the product
of the Current Market Price per Ordinary Share on the date for the
determination of holders of Ordinary Shares entitled to receive such
distribution times the number of Ordinary Shares outstanding on such date,
then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate shall be increased so that
the same shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by
a fraction (i) the numerator of which shall be equal to the Current Market
Price per Ordinary Share on the date fixed for such determination less an
amount equal to the quotient of (x) the combined amount distributed or
payable in the transactions described in clauses (I), (II) and (III) above
and (y) the number of Ordinary Shares outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
Current Market Price per Ordinary Share on such date for determination.

                  (6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion of the
Ordinary Shares shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to shareholders
(based on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (II) the aggregate of the cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as
of the expiration of such tender or exchange offer, of consideration
payable in respect of any other tender or exchange offer, by the Company or
any subsidiary of the Company for all or any portion of the Ordinary Shares
expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph
(5) of this Section or this paragraph (6) has been made and (III) the
aggregate amount of any distributions to all holders of the Company's
Ordinary Shares made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section or this paragraph (6)
has been made, exceeds 5% of the product of the Current Market Price per
Ordinary Share as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender or exchange offer (as it may be
amended) times the number of Ordinary Shares outstanding (including any
tendered shares) on the Expiration Time, then, and in each such case,

                                      32

<PAGE>

immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a
fraction (i) the numerator of which shall be equal to (A) the product of
(I) the Current Market Price per Ordinary Share on the date of the
Expiration Time and (II) the number of Ordinary Shares outstanding
(including any tendered shares) on the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the transactions
described in clauses (I), (II) and (III) above (assuming in the case of
clause (I) the acceptance, up to any maximum specified in the terms of the
tender or exchange offer, of Purchased Shares), and (ii) the denominator of
which shall be equal to the product of (A) the Current Market Price per
Ordinary Share as of the Expiration Time and (B) the number of Ordinary
Shares outstanding (including any tendered shares) as of the Expiration
Time less the number of all shares validly tendered and not withdrawn as of
the Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares").

                  (7) The reclassification of Ordinary Shares into
securities including securities other than Ordinary Shares (other than any
reclassification upon a Reorganization Event to which Section 5.4(b)
applies) shall be deemed to involve (a) a distribution of such securities
other than Ordinary Shares to all holders of Ordinary Shares (and the
effective date of such reclassification shall be deemed to be "the date
fixed for the determination of stockholders entitled to receive such
distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of Ordinary Shares
outstanding immediately prior to such reclassification into the number of
Ordinary Shares outstanding immediately thereafter (and the effective date
of such reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which
such subdivision, split or combination becomes effective" within the
meaning of paragraph (3) of this Section).

                  (8) The "Current Market Price" per Ordinary Share on any
day means the average of the daily Closing Prices for the 5 consecutive
Trading Days selected by the Company commencing not more than 30 Trading
Days before, and ending not later than, the earlier of the day in question
and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph,
the term "ex date", when used with respect to any issuance or distribution,
shall mean the first date on which the Ordinary Shares trades regular way
on such exchange or in such market without the right to receive such
issuance or distribution.

                                      33

<PAGE>

                  (9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of an Ordinary Share (or if there is
not a nearest 1/10,000th of a share to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. If an adjustment is made to the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.4(a), an adjustment shall also be made to the
Applicable Market Value solely to determine which of clauses (a), (b) or
(c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction, the numerator of
which shall be the Settlement Rate immediately after such adjustment
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this
Section 5.4(a) and the denominator of which shall be the Settlement Rate
immediately before such adjustment; provided, however, that if such
adjustment to the Settlement Rate is required to be made pursuant to the
occurrence of any of the events contemplated by paragraph (1), (2), (3), (4),
(5), (7) or (10) of this Section 5.4(a) during the period taken into
consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.

                  (10) The Company may make such increases in the
Settlement Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any income tax to
any holders of Ordinary Shares resulting from any dividend or distribution
of stock or issuance of rights or warrants to purchase or subscribe for
stock or from any event treated as such for income tax purposes or for any
other reasons.

         (b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company with
or into another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the Ordinary Shares
outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of the Company or another
corporation), (ii) any sale, transfer, lease or conveyance to another
Person of the property of the Company as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition) or
(iv) any liquidation, dissolution or winding up of the Company other than
as a result of or after the occurrence of a Termination Event (any such
event, a "Reorganization Event"), the Settlement Rate will be adjusted to
provide that each Holder of Securities will receive on the Purchase

                                      34

<PAGE>

Contract Settlement Date with respect to each Purchase Contract forming a
part thereof, the kind and amount of securities, cash and other property
receivable upon such Reorganization Event (without any interest thereon,
and without any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement Date) by a
Holder of the number of Ordinary Shares issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event assuming such Holder of
Ordinary Shares is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (any such Person, a
"Constituent Person"), or an Affiliate of a Constituent Person to the
extent such Reorganization Event provides for different treatment of
Ordinary Shares held by Affiliates of the Company and non-affiliates and
such Holder failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable upon such
Reorganization Event (provided that if the kind or amount of securities,
cash and other property receivable upon such Reorganization Event is not
the same for each Ordinary Share held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this Section the
kind and amount of securities, cash and other property receivable upon such
Reorganization Event by each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the non-electing
shares). In the event of such a Reorganization Event, the Person formed by
such consolidation, merger or exchange or the Person which acquires the
assets of the Company or, in the event of a liquidation or dissolution of
the Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement supplemental
hereto providing that the Holders of each Outstanding Security shall have
the rights provided by this Section 5.6. Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive
Reorganization Events.

Section 5.5.      Notice of Adjustments and Certain Other Events.

                  (a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:

                  (i) forthwith compute the Settlement Rate in accordance
         with Section 5.4 and prepare and transmit to the Agent an
         Officer's Certificate setting forth the Settlement Rate, the
         method of calculation thereof in reasonable detail, and the facts
         requiring such adjustment and upon which such adjustment is based;
         and

                  (ii) within 10 Business Days following the occurrence of
         an event that requires an adjustment to the Settlement Rate
         pursuant to Section 5.4 (or if the Company is not aware of such
         occurrence, as soon as practicable after becoming so aware),
         provide a written notice to the Holders of the Securities of the
         occurrence of such event and a statement in reasonable detail
         setting forth the method by which the adjustment to the Settlement
         Rate was determined and setting forth the adjusted Settlement
         Rate.

         (b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with
respect to the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed in making the same. The Agent
shall not be accountable with respect to the validity or value (or the kind
or amount) of any Ordinary Shares, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase
Contract; and the Agent makes no representation with respect thereto. The
Agent shall not be responsible for any failure of the Company to issue,
transfer or deliver any Ordinary Shares pursuant to a Purchase Contract or
to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article.

Section 5.6.      Termination Event; Notice.

                                      35

<PAGE>

         The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights and obligations of Holders to purchase Ordinary Shares, shall
immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior
to the Purchase Contract Settlement Date, a Termination Event shall have
occurred. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Preferred
Shares, forming a part of such Securities in the case of Income PRIDES, or
Treasury Securities in the case of Growth PRIDES, in accordance with the
provisions of Section 4.3 of the Pledge Agreement. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in
the Register.

Section 5.7.      Early Settlement.

         (a) Subject to and upon compliance with the provisions of this
Section 5.7, at the option of the Holder thereof, Purchase Contracts
underlying Securities, having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof, may be settled early ("Early Settlement") in
the case of Income PRIDES on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date and in the case of Growth
PRIDES on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, in each case, as provided herein. In
order to exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early on the reverse thereof duly completed and
accompanied by payment (payable to the Company in immediately available
funds in an amount (the "Early Settlement Amount") equal to (i) the product
of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement plus
(ii) in the case of Income PRIDES Certificates, if such delivery is made
with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening
of business on such Payment Date, an amount equal to the sum of the
dividends on the related Preferred Shares payable on such Payment Date.
Except as provided in the immediately preceding sentence, no payment or
adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any dividends on the Ordinary Shares issued upon such Early
Settlement. If the foregoing requirements are first satisfied with respect
to Purchase Contracts underlying any Securities at or prior to 5:00 p.m.,
New York City time, on a Business Day, such day shall be the "Early
Settlement Date" with respect to such Securities and if such requirements
are first satisfied after 5:00 p.m., New York City time, on a Business Day
or on a day that is not a Business Day, the "Early Settlement Date" with
respect to such Securities shall be the next succeeding Business Day.

         (b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be
entitled to receive, 1.8991 Ordinary Shares on account of each Purchase
Contract as to which Early Settlement is effected (the "Early Settlement
Rate"). The Early Settlement Rate shall be adjusted in the same manner and
at the same time as the Settlement Rate is adjusted. As promptly as
practicable after Early Settlement of Purchase Contracts in accordance with
the provisions of this Section 5.7, the Company shall issue and shall
deliver to the Agent at the Corporate Trust Office a certificate or
certificates for the full number of Ordinary Shares issuable upon such
Early Settlement together with payment in lieu of any fraction of a share,
as provided in Section 5.8.

                                      36

<PAGE>

         (c) No later than the third Business Day after the applicable
Early Settlement Date the Company shall cause (i) the Ordinary Shares
issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Preferred Shares, in the case of Income
PRIDES, or the related Treasury Securities, in the case of Growth PRIDES,
to be released from the Pledge by the Collateral Agent and transferred, in
each case to the Agent for delivery to the Holder thereof or its designee.

         (d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of Ordinary Shares from the Company and the Preferred Shares, or
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided
by the Holder thereof on the applicable form of Election to Settle Early on
the reverse of the Certificate evidencing the related Securities, (i)
transfer to the Holder the Preferred Shares or Treasury Securities, as the
case may be, forming a part of such Securities, and (ii) deliver to the
Holder a certificate or certificates for the full number of Ordinary Shares
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.8.

         (e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Agent shall authenticate, countersign and deliver to the Holder thereof, at
the expense of the Company, a Certificate evidencing the Securities as to
which Early Settlement was not effected.

Section 5.8.      No Fractional Shares.

         No fractional shares or scrip representing fractional Ordinary
Shares shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement of any Purchase
Contracts. If Certificates evidencing more than one Purchase Contract shall
be surrendered for settlement at one time by the same Holder, the number of
full Ordinary Shares which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Purchase Contracts
evidenced by the Certificates so surrendered. Instead of any fractional
Ordinary Share which would otherwise be deliverable upon settlement of any
Purchase Contracts on the Purchase Contract Settlement Date or upon Early
Settlement, the Company, through the Agent, shall make a cash payment in
respect of such fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value. The Company shall
provide the Agent from time to time with sufficient funds to permit the
Agent to make all cash payments required by this Section 5.8 in a timely
manner.

Section 5.9.      Charges and Taxes.

         The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the Ordinary Shares
pursuant to the Purchase Contracts; provided, however, that the Company
shall not be required to pay any such tax or taxes which may be payable in
respect of any exchange of or substitution for a Certificate evidencing a
Security or any issuance of an Ordinary Share in a name other than that of
the registered Holder of a Certificate surrendered in respect of the
Securities evidenced thereby, other than in the name of the Agent, as
custodian for such Holder, and the Company shall not be required to issue
or deliver such share certificates or Certificates unless or until the
Person or Persons requesting the transfer or issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

                                      37
<PAGE>
                                ARTICLE VI
                                  REMEDIES

Section 6.1.      Unconditional Right of Holders to Purchase Ordinary Shares.

         The Holder of any Income PRIDES or Growth PRIDES shall have the
right, which is absolute and unconditional, to purchase Ordinary Shares
pursuant to the Purchase Contract constituting a part of such Security and
to institute suit for the enforcement of any such right to purchase
Ordinary Shares and payment and such rights shall not be impaired without
the consent of such Holder.

Section 6.2.      Restoration of Rights and Remedies.

         If any Holder has instituted any proceeding to enforce any right
or remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of such Holder shall continue as though no such proceeding had
been instituted.

Section 6.3.      Rights and Remedies Cumulative.

         Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or
reserved to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

Section 6.4.      Delay or Omission Not Waiver.

         No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver
of any such right. Every right and remedy given by this Article or by law
to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by such Holders.

Section 6.5.      Undertaking for Costs.

         All parties to this Agreement agree, and each Holder of Income
PRIDES or Growth PRIDES, by its acceptance of such Income PRIDES or Growth
PRIDES shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Agent for any action taken, suffered
or omitted by it as Agent, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Agent, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% of the Outstanding Securities, or to any
suit instituted by any Holder for the enforcement of dividends on any
Preferred Shares, if declared, on or after the respective Payment Date
therefor in respect of any Security held by such Holder, or for enforcement
of the right to purchase Ordinary Shares under the Purchase Contracts
constituting part of any Security held by such Holder.

                                        38
<PAGE>

Section 6.6.      Waiver of Stay or Extension Laws.

         The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Agreement; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Agent or
the Holders, but will suffer and permit the execution of every such power
as though no such law had been enacted.

                                ARTICLE VII
                                 THE AGENT

Section 7.1.      Certain Duties and Responsibilities.

     (a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth
in this Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Agent; and

     (2) in the absence of bad faith, willful misconduct or negligence on
its part, the Agent may, with respect to the Securities, conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the case of any
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Agent, the Agent shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Agreement, but need not confirm or investigate the
accuracy of mathematical calculations stated therein.

     (b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent
failure to act, its own bad faith, or its own willful misconduct, except
that

          (1) this Subsection shall not be construed to limit the effect of
     Subsection (a) of this Section;

          (2) the Agent shall not be liable for any error of judgment made
     in good faith by a Responsible Officer, unless it shall be proved that
     the Agent was negligent in ascertaining the pertinent facts; and

          (3) no provision of this Agreement shall require the Agent to
     expend or risk its own funds or otherwise incur any financial
     liability in the performance of any of its duties hereunder, or in the
     exercise of any of its rights or powers, if adequate indemnity is not
     provided to it.

                                       39
<PAGE>

     (c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of
this Section.

     (d) The Agent is authorized to execute and deliver the Pledge Agreement
in its capacity as Agent.

Section 7.2.      Notice of Default.

         Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge,
the Agent shall transmit by mail to the Company and the Holders of
Securities, as their names and addresses appear in the Register, notice of
such default hereunder, unless such default shall have been cured or
waived.

Section 7.3.      Certain Rights of Agent.

         Subject to the provisions of Section 7.1:

     (a) the Agent may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;

     (b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;

     (c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate of the Company;

     (d) the Agent may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;

     (e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Agent, in its discretion, may make reasonable further
inquiry or investigation into such facts or matters related to the
execution, delivery and performance of the Purchase Contracts as it may see
fit, and, if the Agent shall determine to make such further inquiry or
investigation, it shall be given a reasonable opportunity to examine the
books, records and premises of the Company, personally or by agent or
attorney;
                                      40
<PAGE>

     (f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed
with due care by it hereunder;

     (g) the rights, privileges, protections, immunities and benefits given
to the Agent, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Agent in each of its
capacities hereunder, and to each agent custodian and other Person employed
to act hereunder; and

     (h) the Agent may request that the Company delivery an Officer's
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Agreement, which Officer's Certificate may be signed by any person
authorized to sign an Officer's Certificate, including any person specified
as so authorized in any such certificate previously delivered and not
superseded.

Section 7.4.      Not Responsible for Recitals or Issuance of Securities.

         The recitals contained herein and in the Certificates shall be
taken as the statements of the Company and the Agent assumes no
responsibility for their accuracy. The Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Securities,
or of the Pledge Agreement or the Pledge. The Agent shall not be
accountable for the use or application by the Company of the proceeds in
respect of the Purchase Contracts.

Section 7.5.      May Hold Securities.

         Any Registrar or any other agent of the Company, or the Agent and
its Affiliates, in their individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company, the
Collateral Agent or any other Person with the same rights it would have if
it were not Registrar or such other agent, or the Agent.

Section 7.6.      Money Held in Custody.

         Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or
provided herein. The Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as otherwise agreed
in writing with the Company.

                                      41
<PAGE>

Section 7.7.      Compensation and Reimbursement.

         The Company agrees:

          (1) to pay to the Agent from time to time such compensation as
     shall be agreed in writing between the Company and the Agent for all
     services rendered by it hereunder;

          (2) except as otherwise expressly provided herein, to reimburse
     the Agent upon its request for all reasonable expenses, disbursements
     and advances incurred or made by the Agent in accordance with any
     provision of this Agreement (including the reasonable compensation and
     the reasonable expenses and disbursements of its agents and counsel),
     except any such expense, disbursement or advance as may be
     attributable to its negligence, willful misconduct or bad faith; and

          (3) to indemnify the Agent and any predecessor Agent for, and to
     hold it harmless against, any and all loss, liability, damage, claim
     or expense, including taxes (other than taxes based on the income of
     the Agent), incurred without negligence, willful misconduct or bad
     faith on its part, arising out of or in connection with the acceptance
     or administration of its duties hereunder, including the costs and
     expenses of defending itself against any claim or liability in
     connection with the exercise or performance of any of its powers or
     duties hereunder.

         The provisions of this Section 7.7 shall survive the termination
of this Agreement.

Section 7.8.      Corporate Agent Required; Eligibility.

         There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or
being a member of a bank holding company having) a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority and having a Corporate Trust Office in the
Borough of Manhattan, The City of New York, if there be such a corporation
in the Borough of Manhattan, The City of New York, qualified and eligible
under this Article and willing to act on reasonable terms. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time
the Agent shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

Section 7.9.      Resignation and Removal; Appointment of Successor.

     (a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.

                                    42
<PAGE>

     (b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If
the instrument of acceptance by a successor Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days after the giving
of such notice of resignation, the resigning Agent may petition, at the
expense of the Company, any court of competent jurisdiction for the
appointment of a successor Agent.

     (c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and
the Company. If the instrument of acceptance by a successor Agent required
by Section 7.10 shall not have been delivered to the Agent within 30 days
after the giving of such notice or removal, the Agent being removed may
petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Agent.

     (d)      if at any time:

          (1) the Agent fails to comply with Section 310(b) of the TIA, as
     if the Agent were an indenture trustee under an indenture qualified
     under the TIA, after written request therefor by the Company or by any
     Holder who has been a bona fide Holder of a Security for at least six
     months; or

          (2) the Agent shall cease to be eligible under Section 7.8 and
     shall fail to resign after written request therefor by the Company or
     by any such Holder; or

          (3) the Agent shall become incapable of acting or shall be
     adjudged a bankrupt or insolvent or a receiver of the Agent or of its
     property shall be appointed or any public officer shall take charge or
     control of the Agent or of its property or affairs for the purpose of
     rehabilitation, conservation or liquidation;

then, in any such case, (i) the Company by a Board Resolution may remove
the Agent, or (ii) any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Agent and the appointment of a successor Agent.

     (e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Agent and shall comply with the applicable requirements of Section 7.10. If
no successor Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Agent.

     (f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and
addresses appear in the applicable Register. Each notice shall include the
name of the successor Agent and the address of its Corporate Trust Office.

                                   43
<PAGE>

Section 7.10.     Acceptance of Appointment by Successor.

     (a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Agent; but, on the request of the
Company or the successor Agent, such retiring Agent shall, upon payment of
its charges, execute and deliver an instrument transferring to such
successor Agent all the rights, powers and trusts of the retiring Agent and
shall duly assign, transfer and deliver to such successor Agent all
property and money held by such retiring Agent hereunder.

     (b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.

     (c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible
under this Article.

Section 7.11.     Merger, Conversion, Consolidation or Succession to Business.

         Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Agent, shall be the successor of the Agent hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Certificates
shall have been authenticated and executed on behalf of the Holders, but
not delivered, by the Agent then in office, any successor by merger,
conversion or consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and executed with
the same effect as if such successor Agent had itself authenticated and
executed such Securities.

Section 7.12.     Preservation of Information; Communications to Holders.

     (a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in
its capacity as Registrar.

                                   44
<PAGE>

     (b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof
that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states
that the applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Securities and is
accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Agent shall, mail to all the
Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Agent of the materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.

Section 7.13.     No Obligations of Agent.

         Except to the extent otherwise provided in this Agreement, the
Agent assumes no obligations and shall not be subject to any liability
under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance
thereof, shall be deemed to have agreed, that the Agent's execution of the
Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no
obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof.

Section 7.14.     Tax Compliance.

     (a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by
applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment of
all amounts required to be withheld to the appropriate taxing authority or
its designated agent.

     (b) The Agent shall comply with any written direction received from
the Company with respect to the reasonable application of such requirements
to particular payments or Holders or in other particular circumstances, and
may for purposes of this Agreement rely on any such direction in accordance
with the provisions of Section 7.1(a)(2) hereof.

     (c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available,
on written request, to the Company or its authorized representative within
a reasonable period of time after receipt of such request.

                               ARTICLE VIII
                          SUPPLEMENTAL AGREEMENTS

Section 8.1.      Supplemental Agreements Without Consent of Holders.

         Without the consent of any Holders, the Company and the Agent, at
any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Agent, for
any of the following purposes:

                                 45
<PAGE>
          (1) to evidence the succession of another Person to the Company,
     and the assumption by any such successor of the covenants of the
     Company herein and in the Certificates; or

          (2) to add to the covenants of the Company for the benefit of the
     Holders, or to surrender any right or power herein conferred upon the
     Company; or

          (3) to evidence and provide for the acceptance of appointment
     hereunder by a successor Agent; or

          (4) to make provision with respect to the rights of Holders
     pursuant to the requirements of Section 5.4(b); or

          (5) to cure any ambiguity, to correct or supplement any
     provisions herein which may be inconsistent with any other provisions
     herein, or to make any other provisions with respect to such matters
     or questions arising under this Agreement, provided such action shall
     not adversely affect the interests of the Holders.

Section 8.2.      Supplemental Agreements with Consent of Holders.

         With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when
authorized by a Board Resolution, and the Agent may enter into an agreement
or agreements supplemental hereto for the purpose of modifying in any
manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities;
provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,

          (1) change any Payment Date;

          (2) change the amount or the type of Collateral required to be
     Pledged to secure a Holder's Obligations under the Purchase Contract,
     impair the right of the Holder of any Purchase Contract to receive
     distributions on the related Collateral (except for the rights of
     Holders of Income PRIDES to substitute the Treasury Securities for the
     Pledged Preferred Shares or the rights of holders of Growth PRIDES to
     substitute Preferred Shares for the Pledged Treasury Securities) or
     otherwise adversely affect the Holder's rights in or to such
     Collateral or adversely alter the rights in or to such Collateral;

          (3) impair the right to institute suit for the enforcement of any
     Purchase Contract;

          (4) reduce the number of Ordinary Shares to be purchased pursuant
     to any Purchase Contract, increase the price to purchase Ordinary
     Shares upon settlement of any Purchase Contract, change the Purchase
     Contract Settlement Date or otherwise adversely affect the Holder's
     rights under any Purchase Contract; or

          (5) reduce the percentage of the outstanding Purchase Contracts
     the consent of whose Holders is required for any such supplemental
     agreement;

                               46
<PAGE>

provided, that if any amendment or proposal referred to above would
adversely affect only the Income PRIDES or the Growth PRIDES, then only the
affected class of Holder as of the record date for the Holders entitled to
vote thereon will be entitled to vote on such amendment or proposal, and
such amendment or proposal shall not be effective except with the consent
of Holders of not less than a majority of such class.

         It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the
substance thereof.

Section 8.3.      Execution of Supplemental Agreements.

         In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Agent shall be
entitled to receive and (subject to Section 7.1) shall be fully protected
in relying upon, an Officer's Certificate and an Opinion of Counsel stating
that the execution of such supplemental agreement is authorized or
permitted by this Agreement. The Agent may, but shall not be obligated to,
enter into any such supplemental agreement which affects the Agent's own
rights, duties or immunities under this Agreement or otherwise.

Section 8.4.      Effect of Supplemental Agreements.

         Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder
shall be bound thereby.

Section 8.5.      Reference to Supplemental Agreements.

         Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to
this Article may, and shall if required by the Agent, bear a notation in
form approved by the Agent as to any matter provided for in such
supplemental agreement. If the Company shall so determine, new Certificates
so modified as to conform, in the opinion of the Agent and the Company, to
any such supplemental agreement may be prepared and executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Agent in exchange for Outstanding Certificates.

                                ARTICLE IX
                 CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 9.1.      Covenant Not to Merge, Consolidate, Sell or Convey Property
                  Except Under Certain Conditions.

                                  47
<PAGE>

         The Company covenants that it will not merge or consolidate with
any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless (i) either the Company shall be the continuing corporation, or the
successor (if other than the Company) shall expressly assume all the
obligations of the Company under the Purchase Contracts, the Preferred
Shares, this Agreement and the Pledge Agreement by one or more supplemental
agreements in form reasonably satisfactory to the Agent and the Collateral
Agent, executed and delivered to the Agent and the Collateral Agent by such
corporation, and (ii) the Company or such successor corporation, as the
case may be, shall not, immediately after such merger or consolidation, or
such sale, assignment, transfer, lease or conveyance, be in default in the
performance of any covenant or condition hereunder, under any of the
Securities or under the Pledge Agreement.

Section 9.2.      Rights and Duties of Successor Corporation.

         In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
corporation in accordance with Section 9.1, such successor corporation
shall succeed to and be substituted for the Company with the same effect as
if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or
in the name of ACE Limited any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and
any Certificate evidencing Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Agent for that
purpose. All the Certificates so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Certificates theretofore
or thereafter issued in accordance with the terms of this Agreement as
though all of such Certificates had been issued at the date of the
execution hereof.

         In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form (but not
in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.

Section 9.3.      Opinion of Counsel Given to Agent.

         The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, assignment, transfer, lease or conveyance, and any such
assumption, complies with the provisions of this Article and that all
conditions precedent to the consummation of any such consolidation, merger,
sale, assignment, transfer, lease or conveyance have been met.

                                  48
<PAGE>

                                 ARTICLE X
                                 COVENANTS

Section 10.1.     Performance Under Purchase Contracts.

         The Company covenants and agrees for the benefit of the Holders
from time to time of the Securities that it will duly and punctually
perform its obligations under the Purchase Contracts in accordance with the
terms of the Purchase Contracts and this Agreement.

Section 10.2.     Maintenance of Office or Agency.

         The Company will maintain in the Borough of Manhattan, The City of
New York an office or agency where Certificates may be presented or
surrendered for acquisition of Ordinary Shares upon settlement of the
Purchase Contracts on the Purchase Contract Settlement Date or Early
Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer
or exchange, for a Collateral Substitution or re-establishment of an Income
PRIDES and where notices and demands to or upon the Company in respect of
the Securities and this Agreement may be served. The Company will give
prompt written notice to the Agent of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Agent with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the
Company hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.

         The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company will give prompt written notice to the Agent of any
such designation or rescission and of any change in the location of any
such other office or agency. The Company hereby designates as the place of
payment for the Securities the Corporate Trust Office and appoints the
Agent at its Corporate Trust Office as paying agent in such city.

Section 10.3.     Company to Reserve Ordinary Shares.

         The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights,
out of its authorized but unissued Ordinary Shares the full number of
Ordinary Shares issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Certificates.

Section 10.4.     Covenants as to Ordinary Shares.

         The Company covenants that all Ordinary Shares which may be issued
against tender of payment in respect of any Purchase Contract constituting
a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.

                                49
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.

                                         ACE LIMITED

                                         By:____________________________
                                         Name:
                                         Title:

                                         THE BANK OF NEW YORK
                                         as Purchase Contract Agent

                                         By:____________________________
                                         Name:
                                         Title:

                                   50
<PAGE>

                                                                EXHIBIT A

         THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN
THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.

         Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the Company or its agent for registration of transfer,
exchange or payment, and any Certificate issued is registered in the name
of Cede & Co., or such other name as requested by an authorized
representative of The Depository Trust Company, and any payment hereon is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.

No. R-1                                                 CUSIP No.: 004408 20 9
Initial Number of Income PRIDES: -6,000,000-

                         Income PRIDES Certificate

         This Income PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Income PRIDES set forth above, subject
to increase or decrease in the equivalent aggregate principal amount set
forth on the schedule hereto. Each Income PRIDES represents (i) beneficial
ownership by the Holder of one share of 8.25% Cumulative Redeemable
Preferred Stock, Series A, US$1.00 par value per share (the "Preferred
Share"), of ACE Limited, a company duly organized and existing under the
laws of the Cayman Islands (the "Company"), having a stated liquidation
amount of US$50, subject to the Pledge of such Preferred Share by such
Holder pursuant to the Pledge Agreement and (ii) the rights and obligations
of the Holder under one Purchase Contract with the Company. All capitalized
terms used herein which are defined in the Purchase Contract Agreement have
the meaning set forth therein.

         Pursuant to the Pledge Agreement, the Preferred Shares
constituting part of each Income PRIDES evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion
of such Income PRIDES.

         The Pledge Agreement provides that all payments of the Stated
Amount of or cash dividends on, any Pledged Preferred Shares (as defined in
the Pledge Agreement) constituting part of the Income PRIDES received by
the Collateral Agent shall be paid by the Collateral Agent by wire transfer
in same day funds (i) in the case of (A) cash dividends with respect to
Pledged Preferred Shares, and (B) any payments of the Stated Amount with
respect to any Preferred Shares that have been released from the Pledge
pursuant to the Pledge Agreement, to the Agent to the account designated by
the Agent, no later than 2:00 p.m., New York City time, on the Business Day

                                   A-1
<PAGE>

such payment is received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on a day that is not
a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day) and (ii) in the case of payments
of the Stated Amount of any Pledged Preferred Shares to the Company on the
Purchase Contract Settlement Date (as defined herein) in accordance with
the terms of the Pledge Agreement, in full satisfaction of the respective
obligations of the Holders of the Income PRIDES of which such Pledged
Preferred Shares are a part under the Purchase Contracts forming a part of
such Income PRIDES. Distributions on any Preferred Share forming part of an
Income PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 of each year, commencing May
16, 2000 (a "Payment Date"), shall, subject to receipt thereof by the Agent
from the Collateral Agent, be paid to the Person in whose name this Income
PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment
Date.

         Each Purchase Contract evidenced hereby obligates the Holder of
this Income PRIDES Certificate to purchase, and the Company to sell, on May
16, 2003 (the "Purchase Contract Settlement Date"), at a price equal to $50
(the "Stated Amount"), a number of ordinary shares, US$0.041666667 par
value per share ("Ordinary Shares"), of the Company, equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement
Date there shall have occurred a Termination Event or an Early Settlement
with respect to the Income PRIDES of which such Purchase Contract is a
part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the "Purchase Price")
for the Ordinary Shares purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase
Contract Settlement Date by application of payment received in respect of
the Stated Amount of the Pledged Preferred Shares pledged to secure the
obligations under such Purchase Contract of the Holder of the Income PRIDES
of which such Purchase Contract is a part.

         Dividends on the Preferred Shares will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by
check mailed to the address of the Person entitled thereto as such address
appears on the Income PRIDES Register.

         Reference is hereby made to the further provisions set forth on
the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed
by the Agent by manual signature, this Income PRIDES Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.

                                        A-2

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.

                               ACE LIMITED

                               By: _______________________________
                               Name:
                               Title:

                               By: _______________________________
                               Name:
                               Title:

                               HOLDER SPECIFIED ABOVE (as to obligations of
                               such Holder under the Purchase Contracts
                               evidenced hereby)

                               By:    THE BANK OF NEW YORK
                                      not individually but solely as
                                      Attorney-in-Fact of such Holder

                               By:___________________________________
                               Name:
                               Title:

  Dated:  April 12, 2000

                                 A-3

<PAGE>

                   AGENT'S CERTIFICATE OF AUTHENTICATION

         This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.

                                    By:   THE BANK OF NEW YORK,
                                          as Purchase Contract Agent

                                    By:___________________________________
                                              Authorized Signatory

Dated:  April 12, 2000

                                 A-4
<PAGE>

               (Form of Reverse of Income PRIDES Certificate)

         Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of April 12, 2000 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and
The Bank of New York, a New York banking corporation, as Purchase Contract
Agent (including its successors thereunder, herein called the "Agent"), to
which Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.

         Each Purchase Contract evidenced hereby obligates the Holder of
this Income PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price"), a number of Ordinary Shares of the Company equal to
the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Purchase Contract is
a part. The "Settlement Rate" is equal to (a) if the Applicable Market
Value (as defined below) is equal to or greater than $26.3281 (the
"Threshold Appreciation Price"), 1.8991 Ordinary Shares per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $18.9563 (the "Threshold
Depreciation Price"), the number of Ordinary Shares per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Value is less than or equal to the Threshold
Depreciation Price, 2.6376 Ordinary Shares per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional Ordinary Shares will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.

         Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of
the related Income PRIDES to purchase at the Purchase Price, and the
Company to sell, a number of newly issued Ordinary Shares equal to the
Early Settlement Rate or the Settlement Rate, as applicable.

         The "Applicable Market Value" means the average of the Closing
Price per Ordinary Share on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.

         The "Closing Price" of the Ordinary Shares on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Ordinary Shares on the New
York Stock Exchange (the "NYSE") on such date or, if the Ordinary Shares is
not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Ordinary Shares is so listed, or if the Ordinary Shares is not
so listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Ordinary Shares is not so
reported, the last quoted bid price for the Ordinary Shares in the
over-the-counter market as reported by the National Quotation Bureau or

                                  A-5
<PAGE>

similar organization, or, if such bid price is not available, the market
value of the Ordinary Shares on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by
the Company.

         A "Trading Day" means a day on which the Ordinary Shares (A) is
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (B)
has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Ordinary Shares.

         In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Income PRIDES Certificate shall pay the Purchase Price
for the Ordinary Shares purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement, or an Early Settlement or
from the proceeds of a remarketing of the related Pledged Preferred Shares
of such holders. A Holder of Income PRIDES who does not elect, on or prior
to 5:00 p.m., New York City time, on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, to make an effective Cash
Settlement or an Early Settlement, shall pay the Purchase Price for the
Ordinary Shares to be issued under the related Purchase Contract from the
Proceeds of the sale of the related Pledged Preferred Shares held by the
Collateral Agent. Such sale will be made by the Remarketing Agent pursuant
to the terms of the Remarketing Agreement and the Remarketing Underwriting
Agreement on the third Business Day immediately preceding the Purchase
Contract Settlement Date. If, as provided in the Purchase Contract
Agreement, upon the occurrence of a Failed Remarketing the Collateral
Agent, for the benefit of the Company, exercises its rights as a secured
creditor with respect to the Pledged Preferred Shares related to this
Income PRIDES certificate, any accumulated and unpaid dividends on such
Pledged Preferred Shares will become payable by the Company to the holder
of this Income PRIDES Certificate in the manner provided for in the
Purchase Contract Agreement.

         The Company shall not be obligated to issue any Ordinary Shares in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate
purchase price for the Ordinary Shares to be purchased thereunder in the
manner herein set forth.

         Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Income PRIDES Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Preferred Share (as defined in the Pledge
Agreement) from the Pledge. An Income PRIDES shall thereafter represent the
right to receive the Preferred Share in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.

                                       A-6
<PAGE>

         Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining
to the Pledged Preferred Shares. Upon receipt of notice of any meeting at
which holders of Preferred Shares are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Preferred
Shares, the Agent shall, as soon as practicable thereafter, mail to the
Income PRIDES holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Income
PRIDES holder on the record date set by the Agent therefor (which, to the
extent possible, shall be the same date as the record date for determining
the holders of Preferred Shares entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to
the Preferred Shares constituting a part of such holder's Income PRIDES and
(c) stating the manner in which such instructions may be given. Upon the
written request of the Income PRIDES Holders on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum
number of Preferred Shares as to which any particular voting instructions
are received. In the absence of specific instructions from the Holder of an
Income PRIDES, the Agent shall abstain from voting the Preferred Share
evidenced by such Income PRIDES.

         The Income PRIDES Certificates are issuable only in registered
form and in denominations of a single Income PRIDES and any integral
multiple thereof. The transfer of any Income PRIDES Certificate will be
registered and Income PRIDES Certificates may be exchanged as provided in
the Purchase Contract Agreement. The Income PRIDES Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A holder who elects to substitute a Treasury Security for Preferred Shares
thereby creating Growth PRIDES, shall be responsible for any fees or
expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying an Income PRIDES remains in effect, such Income PRIDES shall not
be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of the Preferred Share and
Purchase Contract constituting such Income PRIDES may be transferred and
exchanged only as an Income PRIDES. The holder of an Income PRIDES may
substitute for the Pledged Preferred Shares securing its obligation under
the related Purchase Contract Treasury Securities in an aggregate principal
amount at maturity equal to the aggregate Stated Amount of the Pledged
Preferred Shares in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such Collateral
Substitution, the Security for which such Pledged Treasury Securities
secures the Holder's obligation under the Purchase Contract shall be
referred to as a "Growth PRIDES." A Holder may make such Collateral
Substitution only in integral multiples of 20 Income PRIDES for 20 Growth
PRIDES. Such Collateral Substitution may cause the equivalent aggregate
principal amount of this Income PRIDES Certificate to be increased or
decreased; provided, however, the equivalent aggregate principal amount of
Income PRIDES Certificate shall not exceed $400,000,000. All such
adjustments to the equivalent aggregate principal amount of this Income
PRIDES Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.

         A Holder of Growth PRIDES may create or recreate Income PRIDES by
depositing with the Collateral Agent Preferred Shares having an aggregate
Stated Amount equal to the aggregate principal amount at maturity of the
Pledged Treasury Securities comprising part of the Growth PRIDES in
exchange for the release of such Pledged Treasury Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement.
Any such recreation may be effected only in integral multiples of 20 Growth
PRIDES for 20 Income PRIDES.

                                 A-7
<PAGE>

         The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Agent or the Company, if, on or prior to the Purchase Contract Settlement
Date, a Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in
the Income PRIDES Register. Upon and after the occurrence of a Termination
Event, the Collateral Agent shall release the Preferred Shares from the
Pledge in accordance with the provisions of the Pledge Agreement.

         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof may be settled early ("Early Settlement") as
provided in the Purchase Contract Agreement. In order to exercise the right
to effect Early Settlement with respect to any Purchase Contracts evidenced
by this Income PRIDES Certificate, the Holder of this Income PRIDES
Certificate shall deliver this Income PRIDES Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of immediately available
funds payable to the order of the Company in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times
(B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (ii) if such delivery is made with
respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business
on such Payment Date, the dividends on the related Preferred Shares payable
on such Payment Date, if declared, with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Preferred Shares underlying such Securities shall
be released from the Pledge as provided in the Pledge Agreement and the
Holder shall be entitled to receive a number of Ordinary Shares on account
of each Purchase Contract forming part of an Income PRIDES as to which
Early Settlement is effected equal to the Early Settlement Rate. The Early
Settlement Rate shall initially be equal to 1.8991 Ordinary Shares and
shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.

         Upon registration of transfer of this Income PRIDES Certificate,
the transferee shall be bound (without the necessity of any other action on
the part of such transferee, except as may be required by the Agent
pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Income PRIDES Certificate. The Company
covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.

                                     A-8
<PAGE>

         The Holder of this Income PRIDES Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Income PRIDES evidenced hereby on his behalf
as his attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee,
agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents
to the provisions of the Purchase Contract Agreement, authorizes the Agent
to enter into and perform the Pledge Agreement on his behalf as its
attorney-in-fact, and consents to the Pledge of the underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the
terms thereof, payments in respect to the Stated Amount of the Pledged
Preferred Shares on the Purchase Contract Settlement Date shall be paid by
the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.

         Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.

         The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to conflicts of laws principles thereof.

         The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Income PRIDES
Certificate is registered as the owner of the Income PRIDES evidenced
hereby for the purpose of receiving payments of dividends payable quarterly
on the Preferred Shares, if declared, performance of the Purchase Contracts
and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary,
and neither the Company, the Agent nor any such agent shall be affected by
notice to the contrary.

         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of Ordinary Shares.

         A copy of the Purchase Contract Agreement is available for
inspection at the designated office of the Agent.

                                   A-9

<PAGE>

                               ABBREVIATIONS

         The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM  -                            as tenants in common

UNIF GIFT MIN ACT -                             Custodian
                                      ---------------------------------
                                      (cust)                  (minor)

                                      Under Uniform Gifts to Minors Act

                                      _________________________________
                                                   (State)

TEN ENT -                             as tenants by the entireties

JT TEN -                              as joint tenants with right of
                                      survivorship and not as tenants
                                      in common

Additional abbreviations may also be used though not in the above list.

                        ---------------------------

    FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________

(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing

_______________________________________________________________________________
attorney to transfer said Income PRIDES Certificates on the books of ACE
Limited with full power of substitution in the premises.

Dated:________________                            _____________________________
                                                  Signature

                                 A-10
<PAGE>

                                                  NOTICE: The signature to this
                                                  assignment must correspond
                                                  with the name as it appears
                                                  upon the face of the within
                                                  Income PRIDES Certificates
                                                  in every particular, without
                                                  alteration or enlargement
                                                  or any change whatsoever.

Signature Guarantee:________________________

                                 A-11
<PAGE>

                          SETTLEMENT INSTRUCTIONS

         The undersigned Holder directs that a certificate for Ordinary
Shares deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Income
PRIDES evidenced by this Income PRIDES Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.

Dated:_________________                   _____________________________________
                                          Signature
                                          Signature Guarantee:_________________
                                          (if assigned to another person)

If shares are to be registered
in the name of and delivered to           REGISTERED HOLDER
a Person other than the
Holder, please (i) print such
Person's name and address and
(ii) provide a guarantee of your
signature:

                                           Please print name and address
                                           of Registered Holder:

----------------------------                ------------------------------------
         Name                                            Name

----------------------------                ------------------------------------
         Address                                       Address

----------------------------                ------------------------------------

----------------------------                ------------------------------------

----------------------------                ------------------------------------

Social Security or other
Taxpayer Identification
Number, if any                              ____________________________________

                                  A-12
<PAGE>

                          ELECTION TO SETTLE EARLY

         The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Income PRIDES evidenced by this
Income PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Income PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for Ordinary Shares deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment
for any fractional share and any Income PRIDES Certificate representing any
Income PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated
below. Pledged Preferred Shares deliverable upon such Early Settlement will
be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.

Dated:__________________                         _____________________________
                                                             Signature

Signature Guarantee:_______________________________

                                     A-13
<PAGE>

         Number of Securities evidenced hereby as to which Early Settlement
of the related Purchase Contracts is being elected:

If Ordinary Shares or Income PRIDES         REGISTERED HOLDER
Certificates are to be registered
in the name of and delivered to and
Pledged Preferred Shares are to be
transferred to a Person other than
the Holder, please print such
Person's name and address:

                                             Please print name and address
                                             of Registered Holder:

----------------------------                ------------------------------------
         Name                                              Name

----------------------------                ------------------------------------
         Address                                          Address

----------------------------                ------------------------------------

----------------------------                ------------------------------------

----------------------------                ------------------------------------

Social Security or other
Taxpayer Identification
Number, if any                              ____________________________________

Transfer Instructions for Pledged Preferred Shares Transferable Upon Early
Settlement or a Termination Event:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

                                  A-12
<PAGE>

                   TO BE ATTACHED TO GLOBAL CERTIFICATES

                            OUTSTANDING BALANCES

         The following increases or decreases in this Global Certificate
have been made:

                                              Equivalent
           Amount of         Amount of     Principal Amount     Signature of
          decrease in       increase in     of this Global       authorized
           equivalent        equivalent       Certificate       signatory of
        Principal Amount  Principal Amount  following such    Transfer Agent or
          of the Global     of the Global     decrease or        Securities
 Date      Certificate       Certificate       increase          Custodian
------  ----------------  ----------------  ----------------  -----------------

                                           A-15

<PAGE>

                                                                EXHIBIT B

         THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN
THE NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.

         Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the Company or its agent for registration of transfer,
exchange or payment, and any Certificate issued is registered in the name
of Cede & Co., or such other name as requested by an authorized
representative of The Depository Trust Company, and any payment hereon is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.

No. R-1                                                 CUSIP No.: 004408 30 8
Initial Number of Growth PRIDES :- 0 -

                         Growth PRIDES Certificate

         This Growth PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Growth PRIDES set forth above, subject
to increase or decrease in the equivalent aggregate principal amount set
forth on the schedule hereto. Each Growth PRIDES represents (i) a 1/20th
undivided beneficial ownership interest in a Treasury Security, subject to
the Pledge of such interest in such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with ACE Limited, a company duly
organized and existing under the laws of the Cayman Islands (the
"Company"). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.

         Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Growth PRIDES evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion
of such Growth PRIDES.

                                  B-1
<PAGE>

         Each Purchase Contract evidenced hereby obligates the Holder of
this Growth PRIDES Certificate to purchase, and the Company, to sell, on
May 16, 2003 (the "Purchase Contract Settlement Date"), at a price equal to
$50 (the "Stated Amount"), a number of ordinary shares, US$0.041666667 par
value per share ("Ordinary Shares"), of the Company equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there
shall have occurred a Termination Event or an Early Settlement with respect
to the Growth PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price for the Ordinary Shares purchased
pursuant to each Purchase Contract evidenced hereby will be paid by
application of the Proceeds from the Treasury Securities pledged to secure
the obligations under such Purchase Contract in accordance with the terms
of the Pledge Agreement.

         Reference is hereby made to the further provisions set forth on
the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed
by the Agent by manual signature, this Growth PRIDES Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.

                                    B-2
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.

                                   ACE LIMITED

                                   By: ___________________________
                                   Name:
                                   Title:

                                   By: ___________________________
                                   Name:
                                   Title:

                                   HOLDER SPECIFIED ABOVE (as to obligations
                                   of such Holder under the Purchase Contracts)

                                   By:  THE BANK OF NEW YORK,
                                        not individually but solely as
                                        Attorney-in-Fact of such Holder

                                   By: ____________________________
                                   Name:
                                   Title:

Dated:  April 12, 2000

                                    B-3
<PAGE>

                   AGENT'S CERTIFICATE OF AUTHENTICATION

         This is one of the Growth PRIDES referred to in the
within-mentioned Purchase Contract Agreement.

                                    By:  THE BANK OF NEW YORK,
                                         as Purchase Contract Agent

                                    By:__________________________________
                                              Authorized Signatory

Dated:  April 12, 2000

                                  B-4
<PAGE>

                   (Reverse of Growth PRIDES Certificate)

         Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of April 12, 2000 (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and
The Bank of New York, a New York banking corporation, as Purchase Contract
Agent (including its successors thereunder, herein called the "Agent"), to
which the Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company and the Holders and of the terms upon which the Growth
PRIDES Certificates are, and are to be, executed and delivered.

         Each Purchase Contract evidenced hereby obligates the Holder of
this Growth PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price") a number of Ordinary Shares of the Company equal to
the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Purchase Contract is
a part. The "Settlement Rate" is equal to (a) if the Applicable Market
Value (as defined below) is equal to or greater than $26.3281 (the
"Threshold Appreciation Price"), 1.8991 Ordinary Shares per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $18.9563 (the "Threshold
Depreciation Price"), the number of Ordinary Shares per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Value is less than or equal to the Threshold
Depreciation Price, 2.6376 Ordinary Shares per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional Ordinary Shares will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.

         Each Purchase Contract evidenced hereby which is settled through
Early Settlement shall obligate the Holder of the related Growth PRIDES to
purchase at the Purchase Price, and the Company to sell, a number of newly
issued Ordinary Shares equal to the Early Settlement Rate.

         The "Applicable Market Value" means the average of the Closing
Prices per Ordinary Share on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.

                               B-5
<PAGE>

         The "Closing Price" of the Ordinary Shares on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Ordinary Shares on the New
York Stock Exchange (the "NYSE") on such date or, if the Ordinary Shares is
not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Ordinary Shares is so listed, or if the Ordinary Shares is not
so listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Ordinary Shares is not so
reported, the last quoted bid price for the Ordinary Shares in the
over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market
value of the Ordinary Shares on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by
the Company.

         A "Trading Day" means a day on which the Ordinary Shares (A) is
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (B)
has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Ordinary Shares.

         In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Growth PRIDES Certificate shall pay the Purchase Price
for the Ordinary Shares purchased pursuant to each Purchase Contract
evidenced hereby by effecting either an Early Settlement of each such
Purchase Contract or by applying a principal amount at maturity of the
Pledged Treasury Securities underlying such Holder's Growth PRIDES equal to
the Stated Amount of such Purchase Contract to the purchase of the Ordinary
Shares.

         The Company shall not be obligated to issue any Ordinary Shares in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate
purchase price for the Ordinary Shares to be purchased thereunder in the
manner herein set forth.

         Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Growth PRIDES Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) forming a part of each Growth PRIDES from the Pledge. A Growth
PRIDES shall thereafter represent the right to receive the Treasury
Securities forming a part of such Growth PRIDES in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.

                                     B-6
<PAGE>

         The Growth PRIDES Certificates are issuable only in registered
form and only in denominations of a single Growth PRIDES and any integral
multiple thereof. The transfer of any Growth PRIDES Certificate will be
registered and Growth PRIDES Certificates may be exchanged as provided in
the Purchase Contract Agreement. The Growth PRIDES Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A Holder who elects to substitute Preferred Shares for Pledged Treasury
Securities, thereby recreating Income PRIDES, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying a Growth PRIDES remains in effect, such Growth PRIDES shall not
be separable into its constituent parts, and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
the Purchase Contract constituting such Growth PRIDES may be transferred
and exchanged only as a Growth PRIDES. The Holder of a Growth PRIDES may
substitute for the Pledged Treasury Securities securing its obligation
under the related Purchase Contract Preferred Shares with a Stated Amount
equal to the aggregate principal amount at maturity of the Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement. From and after such Collateral Substitution, the
Security for which such Preferred Shares secures the Holder's obligation
under the Purchase Contract shall be referred to as an "Income PRIDES." A
Holder may make such Collateral Substitution only in integral multiples of
20 Growth PRIDES for 20 Preferred Shares. Such Collateral Substitution may
cause the equivalent aggregate principal amount at maturity of this Growth
PRIDES Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Growth PRIDES
Certificate shall not exceed $400,000,000. All such adjustments to the
equivalent aggregate principal amount of this Growth PRIDES Certificate
shall be duly recorded by placing an appropriate notation on the Schedule
attached hereto.

         A Holder of Income PRIDES may create or recreate a Growth PRIDES
by delivering to the Collateral Agent Treasury Securities in an aggregate
principal amount at maturity equal to the aggregate Stated Amount of the
Pledged Preferred Shares in exchange for the release of such Pledged
Preferred Shares in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. Any such recreation of a Growth PRIDES
may be effected only in multiples of 20 Income PRIDES for 20 Growth PRIDES.

         The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
Contract Adjustment Payments, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Agent or the Company, if, on or prior to the Purchase Contract Settlement
Date, a Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than
two business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in
the Growth PRIDES Register. Upon and after the occurrence of a Termination
Event, the Collateral Agent shall release the Treasury Securities from the
Pledge in accordance with the provisions of the Pledge Agreement.

                                   B-7
<PAGE>
         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof may be settled early ("Early Settlement") as
provided in the Purchase Contract Agreement. In order to exercise the right
to effect Early Settlement with respect to any Purchase Contracts evidenced
by this Growth PRIDES Certificate, the Holder of this Growth PRIDES
Certificate shall deliver this Growth PRIDES Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of immediately available
funds payable to the order of the Company in an amount (the "Early
Settlement Amount") equal to the product of (A) the Stated Amount times (B)
the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement. Upon Early Settlement of Purchase
Contracts by a Holder of the related Securities, the Pledged Treasury
Securities underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of Ordinary Shares on account of each Purchase Contract
forming part of a Growth PRIDES as to which Early Settlement is effected
equal to the Early Settlement Rate. The Early Settlement Rate shall
initially be equal to 1.8991 Ordinary Shares and shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as
provided in the Purchase Contract Agreement.

         Upon registration of transfer of this Growth PRIDES Certificate,
the transferee shall be bound (without the necessity of any other action on
the part of such transferee, except as may be required by the Agent
pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Growth PRIDES Certificate. The Company
covenants and agrees, and the Holder, by his acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.

         The Holder of this Growth PRIDES Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Growth PRIDES evidenced hereby on his behalf
as its attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee
in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge Agreement on his
behalf as his attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this Growth PRIDES Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to the extent and
in the manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect to the
Stated Amount of the Pledged Treasury Securities on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.

                                B-8
<PAGE>
         Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.

         The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to conflicts of laws principles thereof.

         The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Growth PRIDES
Certificate is registered as the owner of the Growth PRIDES evidenced
hereby for the purpose of receiving payments of interest on the Treasury
Securities, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the
Company, the Agent nor any such agent shall be affected by notice to the
contrary.

         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of Ordinary Shares.

         A copy of the Purchase Contract Agreement is available for
inspection at the designated office of the Agent.

                                   B-9

<PAGE>
                               ABBREVIATIONS

         The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM  -                                 as tenants in common

UNIF GIFT MIN ACT -                                Custodian
                                           ---------------------------
                                           (cust)              (minor)

                                           Under Uniform Gifts to Minors Act

                                           ____________________________
                                                      (State)

TEN ENT -                                  as tenants by the entireties

JT TEN -                                   as joint tenants with right of
                                           survivorship and not as tenants in
                                           common

Additional abbreviations may also be used though not in the above list.

                       ------------------------------

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto_______________________________________________________________

_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)

_______________________________________________________________________________

_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)

the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing

_______________________________________________________________________________
attorney to transfer said Growth PRIDES Certificates on the books of ACE
Limited with full power of substitution in the premises.

                                  B-10
<PAGE>

Dated:  _________________                   __________________________
                                            Signature

                                            NOTICE: The signature to this
                                            assignment must correspond with the
                                            name as it appears upon the face
                                            of the within Growth PRIDES
                                            Certificates in every particular,
                                            without alteration or enlargement
                                            or any change whatsoever.

Signature Guarantee:__________________

                                      B-11
<PAGE>
                          SETTLEMENT INSTRUCTIONS

         The undersigned Holder directs that a certificate for Ordinary
Shares deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Growth
PRIDES evidenced by this Growth PRIDES Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.

Dated:_______________________                    ______________________________
                                                  Signature
                                                  Signature Guarantee:

If shares are to be registered in
the name of and delivered                REGISTERED HOLDER
to a Person other than the
Holder, please print such Person's
name and address:

                                              Please print name and
                                              address of Registered
                                              Holder:

_______________________________                ________________________________
            Name                                          Name

_______________________________                ________________________________
          Address                                        Address

_______________________________                ________________________________

_______________________________                ________________________________

_______________________________                ________________________________

Social Security or other
Taxpayer Identification
Number, if any                                 ________________________________

                                    B-12

<PAGE>

                          ELECTION TO SETTLE EARLY

         The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Growth PRIDES evidenced by this
Growth PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Growth PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for Ordinary Shares deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment
for any fractional share and any Growth PRIDES Certificate representing any
Growth PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.

Dated:______________________                   ________________________________
                                                            Signature

Signature Guarantee: _________________________

                                   B-13
<PAGE>
         Number of Securities evidenced hereby as to which Early Settlement
of the related Purchase Contracts is being elected:

If Ordinary Shares or Growth          REGISTERED HOLDER
PRIDES Certificates are to
be registered in the name of and
delivered to and Pledged Treasury
Securities are to be transferred to
a Person other than the Holder, please
print such Person's name and address:

                                             Please print name and
                                             address of Registered
                                             Holder:

___________________________________          __________________________________
               Name                                        Name

___________________________________          __________________________________
              Address                                     Address

___________________________________          __________________________________

___________________________________          __________________________________

___________________________________          __________________________________

Social Security or other
Taxpayer Identification
Number, if any                               __________________________________

Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:

___________________________________

___________________________________

___________________________________

                                  B-14
<PAGE>

                   TO BE ATTACHED TO GLOBAL CERTIFICATES

                            OUTSTANDING BALANCES

The following increases or decreases in this Global Certificate have been made:

                                              Equivalent
           Amount of         Amount of     Principal Amount     Signature of
          decrease in       increase in     of this Global       authorized
           equivalent        equivalent       Certificate       signatory of
        Principal Amount  Principal Amount  following such    Transfer Agent or
          of the Global     of the Global     decrease or        Securities
 Date      Certificate       Certificate       increase          Custodian
------  ----------------  ----------------  ----------------  -----------------

                                        B-15

<PAGE>
                                                                  EXHIBIT C

                INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
                              COLLATERAL AGENT

The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York
Attention: Corporate Trust Administration

         Re:  FELINE PRIDES of ACE Limited (the "Company"),

         We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of April 12, 2000, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from
time to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$_____ aggregate principal amount at maturity of
Treasury Securities] [$_______ Stated Amount of Preferred Shares] in
exchange for the [Pledged Preferred Shares] [Pledged Treasury Securities]
held by you in accordance with the Pledge Agreement and has delivered to us
a notice stating that the Holder has transferred [Treasury Securities]
[Preferred Shares] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Preferred
Shares], and upon the payment by such Holder of any applicable fees, to
release the [Preferred Shares] [Treasury Securities] related to such
[Income PRIDES] [Growth PRIDES] to us in accordance with the Holder's
instructions.

Date:____________________                      _______________________________

                                               By:____________________________
                                               Name:
                                               Title:

                                               Signature Guarantee:___________

Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Shares] for the [Pledged Preferred Shares]
[Pledged Treasury Securities]:

                                   C-1

<PAGE>

-----------------------------                ---------------------------------
Name                                          Social Security or other Taxpayer
                                              Identification Number, if any

-----------------------------
Address

-----------------------------

-----------------------------

                                       C-2

<PAGE>

                                                                   EXHIBIT D

                   INSTRUCTION TO PURCHASE CONTRACT AGENT

The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York
Attention: Corporate Trust Administration

         Re:   FELINE PRIDES of ACE Limited (the "Company"),

         The undersigned Holder hereby notifies you that it has delivered
to The Bank of New York, as Collateral Agent, [$_______ aggregate principal
amount at maturity of Treasury Securities] [$_______ Stated Amount of
Preferred Shares] in exchange for the [Pledged Preferred Shares] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with
Section 4.1 of the Pledge Agreement, dated April 12, 2000, among you, the
Company and the Collateral Agent. The undersigned Holder has paid the
Collateral Agent all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Preferred
Shares] [Pledged Treasury Securities] related to such [Income PRIDES]
[Growth PRIDES].

Date:____________________                      _______________________________

                                               By:____________________________

                                               Signature Guarantee:____________

Dated:

Please print name and address of Registered Holder:

-------------------------                    __________________________________
Name                                         Social Security or other Taxpayer
                                             Identification Number, if any

Address

-------------------------
-------------------------
-------------------------

                                        D-1
<PAGE>
                                                                  EXHIBIT E

                     NOTICE TO SETTLE BY SEPARATE CASH

The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York
Attention: Corporate Trust Administration

         Re: FELINE PRIDES of ACE Limited (the "Company"),

         The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.3 of the Purchase Contract Agreement, dated as of
April 12, 2000 between the Company, yourselves, as Purchase Contract Agent
and as Attorney-in-Fact for the Holders of the Purchase Contracts, that
such Holder has elected to pay to the Collateral Agent, on or prior to
11:00 a.m. New York City time, on the Business Day immediately preceding
the Purchase Contract Settlement Date, (in lawful money of the United
States by [certified or cashiers check] [wire transfer] in immediately
available funds), $_________ as the Purchase Price for the Ordinary Shares
issuable to such Holder by the Company under the related Purchase Contract
on the Purchase Contract Settlement Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holders election to make such cash settlement with respect to the Purchase
Contracts related to such Holder's [Income PRIDES] [Growth PRIDES].

Date:____________________                  ____________________________________

                                           By:_________________________________

                                           Signature Guarantee:________________

Dated:

Please print name and address of Registered Holder:

__________________________                  ___________________________________
Name                                        Social Security or other Taxpayer
                                            Identification Number, if any

Address

-------------------------
-------------------------
-------------------------

                                   E-1

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