Document:

<PAGE>

                SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
                -----------------------------------------------

     This SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
dated as of November 30, 2000, by and among the following parties:

LENDER/SECURED PARTY:            NTFC CAPITAL CORPORATION, a Delaware
                                 corporation with offices at 501 Corporate
                                 Centre Drive, Franklin, Tennessee 37067
                                 (the "Lender"),
                                 and

BORROWERS/DEBTOR:                FOCAL COMMUNICATIONS CORPORATION, a Delaware
                                 corporation with its principal place of
                                 business at 200 N. LaSalle Street, Chicago,
                                 Illinois 60601 (together with its subsidiaries
                                 identified on Schedule A hereto, collectively
                                 referred to as the "Borrower").

This Second Amendment to Loan and Security Agreement (i) amends that certain
Loan and Security Agreement between the Borrower and the Lender dated as of
December 30, 1998 (as amended by that certain First Amendment to Loan and
Security Agreement dated as of April 15, 2000, the "Existing Agreement" and as
further amended by this Amendment, the "Agreement"), (ii) amends certain
provisions of the Unconditional Guaranty, dated as of December 30, 1998 (the
"Guaranty"), and (iii) includes the general terms and conditions herein and
all the exhibits and schedules attached hereto, all of which are incorporated
herein. In the event of a conflict between the general terms and conditions and
any schedule, the additional terms and conditions stated in the schedule shall
control.

                  ARTICLE 1: AMENDMENTS TO EXISTING AGREEMENT
                  -------------------------------------------

     The Existing Agreement is hereby amended as follows:

     1.01  Schedule 7.15 of the Existing Agreement is hereby amended by deleting
the present Schedule 7.15 and replacing it with Schedule B hereto.

     1.02  Section 8.04(a) of the Existing Agreement is hereby amended by
inserting the following after the phrase "whether now owned or hereafter
acquired":

     "; provided, the foregoing shall not prohibit any of the following: (1) the
  merger of any wholly-owned subsidiary of Focal Communications Corporation
("FCC") with FCC or with any other wholly-owned subsidiary of FCC, (ii) the
contribution by FCC of the stock of any of its wholly-owned subsidiaries to
Focal Financial Services, Inc. ("FFS"), (iii) the formation of any of Focal
Equipment Finance, LLC ("FEF") or Focal Fiber Leasing, LLC ("FFL"), each a
Delaware single member limited liability company, (iv) the leasing by FFS, FEF
or FFL of any

<PAGE>

     Telecommunications Assets to any other wholly-owned subsidiary of FCC, (v)
     the contribution of cash by FCC to FFS as an addition to the share capital
     of FFS and (vi) the equitization of intercompany debt owing among the
     Borrower and the Guarantors.

     1.03 Section 8.04(b) of the Existing Agreement is hereby amended by
inserting the following after the phrase "shall have been taken":

     "; provided, the foregoing shall not require consent from the Lender with
     respect to any of the transactions described in the proviso to clause (a)
     above".

     1.04 Section 8.06 of the Existing Agreement is hereby amended by adding
the following at the end thereof (immediately prior to the period):

     "; it being understood that any of the foregoing shall be permitted to the
     extent being done in connection with the telecommunications business".

     1.05 Section 9.01(f) of the Existing Agreement is hereby amended by
replacing the dollar amount "$300,000" with the dollar amount "$5,000,000".

     1.06 Section 1.01 of the Existing Agreement is hereby amended by inserting
the following definitions in alphabetical order:

     "Credit and Guaranty Agreement" means that certain Credit and Guaranty
     Agreement, dated as of August 25, 2000, among the Borrower and certain
     lending and financial institutions party thereto, as the same may be
     amended, modified or supplemented from time to time in accordance with the
     Intercreditor Agreement.

     "Intercreditor Agreement" means that certain Intercreditor Agreement, dated
     as of November __, 2000, by and between Lender and Citibank, N.A., as the
     Collateral Agent for the lenders party to the Credit and Guaranty
     Agreement.

                       ARTICLE 2: AMENDMENT TO GUARANTY
                       --------------------------------

     The Guaranty is hereby amended as follows:

     2.01 Section 2.10 of the Guaranty is hereby amended by adding the following
sentence at the end thereof:

    "Notwithstanding anything in the foregoing to the contrary, (i) Guarantor
    shall be permitted to pledge intercompany obligations in favor of the
    lenders under the Credit and Guaranty Agreement (and to perfect the
    interests therein by delivery, filing of financing statements and
    otherwise), and (ii) Borrower may incur and guarantee obligations under the
    Credit and Guaranty Agreement, in each case as and to the extent more fully
    described in the Intercreditor Agreement."

<PAGE>

                            ARTICLE 3: AFFIRMATIONS
                            -----------------------

     3.01.  Borrower hereby represents and warrants that (a) the representations
and warranties contained in Article 4 of the Loan Agreement are true and correct
on and as of the date hereof as though made on and as of the date hereof (b) on
the date hereof no Default or Event of Default has occurred and is continuing or
exists or will occur or exist after giving effect to this Second Amendment.

                        ARTICLE 4: CONDITIONS PRECEDENT
                        -------------------------------

     4.01.  The effectiveness of this Second Amendment shall be subject to
Lender's receipt of such additional UCC filings and other documents as Lender
may reasonably require to secure the Loans.

                           ARTICLE 5: MISCELLANEOUS
                           ------------------------

     5.01.  Except as amended and provided above, the Loan Agreement shall
remain in full force and effect, and the Loan Agreement, as amended, is hereby
ratified by Borrower and Lender.

     5.02.  Borrower represents and warrants that the execution and terms of
this Second Amendment have been duly authorized by all necessary and appropriate
corporate action.

     5.03.  This Second Amendment shall be governed by and construed in
accordance with the internal laws of the State of Tennessee.

     5.04.  All capitalized terms used herein shall, unless otherwise
specifically defined herein, have the meanings assigned to such terms in the
Loan Agreement.
<PAGE>

                                  Schedule A
                                      to
                Second Amendment to Loan And Security Agreement

<TABLE>
<CAPTION>

                                                      Type of            Jurisdiction of
                                                      -------            ---------------
               Name of Subsidiary                   Organization          Organization
               ------------------                   ------------         ---------------
<S>                                                 <C>                  <C>
----------------------------------------------------------------------------------------
Focal Communications Corporation of California      Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Colorado        Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Florida         Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Georgia         Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Illinois        Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Massachusetts   Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Michigan        Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Mid-Atlantic    Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Minnesota       Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Missouri        Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of New Jersey      Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of New York        Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Ohio            Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Pennsylvania    Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Texas           Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Virginia        Corporation          Virginia
----------------------------------------------------------------------------------------
Focal Communications Corporation of Washington      Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Communications Corporation of Wisconsin       Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Financial Services, Inc.                      Corporation          Delaware
----------------------------------------------------------------------------------------
Focal International Corp.                           Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Telecommunications Corporation                Corporation          Delaware
----------------------------------------------------------------------------------------
Focal Equipment Finance, LLC                        Limited Liability    Delaware
                                                    Company
----------------------------------------------------------------------------------------
Fiber Leasing, LLC                                  Limited Liability    Delaware
                                                    Company
----------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                  Schedule B

                                      to

                Second Amendment to Loan And Security Agreement

1.   Total Secured Debt to Total Capitalization. At the time of each advance and
     at the end of each fiscal quarter, Borrower shall maintain a ratio of Total
     Secured Debt to Total Capitalization of not more than *** to ***. For
     purposes of this ratio, the following definitions apply:

          Total Capitalization:  The sum of (a) Total Consolidated Debt and (b)
          paid-in-equity capital (including preferred stock but excluding
          additional equity issued as pay-in-kind dividends on issued and
          outstanding equity securities and excluding any accumulated deficits
          resulting from operations).

          Total Secured Debt:  Indebtedness of Borrower secured by a lien on
          assets of the Borrower, excluding Indebtedness secured by accounts
          receivable.

2.   Cash Flow Coverage Ratio. Borrower shall maintain a minimum Cash Flow
     Coverage Ratio (measured at the end of each fiscal quarter for the past
     four fiscal quarters) of at least ***, beginning in the last fiscal
     quarter of fiscal year 2003. For purposes of this ratio, the following
     definitions apply:

          Cash Flow Coverage Ratio: At the end of any fiscal period, the ratio
          of Borrower's Cash Flow (as defined in the agreement) plus interest
          income for such fiscal period to Borrower's Debt Service for such
          fiscal period.

          Debt Service:  For any fiscal period of Borrower, the sum of all
          principal and interest payments that Borrower is required to make
          during such period on account of all its Indebtedness including,
          without limitation, (a) amounts due during such period on account of
          capitalized leases, (b) the then current portion of any long term
          Indebtedness, including any Subordinated Indebtedness, (c) amounts due
          on short term Indebtedness, and (d) amounts due under the NTFC
          Agreement and the Note.

3.   Minimum Revenues:  Borrower shall maintain minimum revenues in an amount
     equal to or greater than 85% of the levels set forth below:

<TABLE>
<CAPTION>
               Fiscal Year Ended            Projected Revenues
               <S>                          <C>

               December 31, 1999            $***
               December 31, 2000            $***
               December 31, 2001            $***
               December 31, 2002            $***
</TABLE>

---------------
***Confidential information omitted pursuant to a request for confidential
   treatment filed separately with the Securities and Exchange Commission.

                                      -5-
<PAGE>

        December 31, 2003         $***
        December 31, 2004         $***

4.  Minimum EBITDA.  Borrower shall maintain minimum EBITDA in an amount equal
    to or greater than the levels set forth below:

        Fiscal Year Ended         Projected EBITDA
        -----------------         ----------------
        December 31, 1999         $***
        December 31, 2000         $***
        December 31, 2001         $***
        December 31, 2002         $***
        December 31, 2003         $***
        December 31, 2004         $***

---------------
***Confidential information omitted pursuant to a request for confidential
   treatment filed separately with the Securities and Exchange Commission.

                                      -6-
<PAGE>

    IN WITNESS WHEREOF, the parties hereto have duly executed this Second
Amendment to Loan and Security Agreement as of the date and year first above
written.

LENDER:                                 BORROWER:
-------                                 ---------
NTFC CAPITAL CORPORATION                FOCAL COMMUNICATIONS CORPORATION

BY:   /s/  Henry Cruz                   BY:   /s/  Robert M. Junkroski
    ------------------------------          ------------------------------
TITLE:   Vice President                 TITLE:   VP and Treasurer
       ---------------------------             ---------------------------
DATE:   12/04/00                        DATE:   12/04/00
      ----------------------------            ----------------------------<PAGE>

                                                                    Exhibit 10.6

                             EMPLOYMENT AGREEMENT

     THIS AGREEMENT, made and entered into as of October 1, 1998 (the "Effective
Date"), by and between Clare Moran (the "Executive") and LaSalle Re Limited (the
"Company");

                               WITNESSETH THAT:

     WHEREAS, the parties desire to enter into this Agreement pertaining to the
continued employment of the Executive by the Company;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, it is hereby covenanted and agreed by the Executive and the Company
as follows:

     1. Performance of Services. The Executive's continued employment with the
Company shall be subject to the following:

(a)  Subject to the provisions of this Agreement, the Company hereby agrees to
     employ the Executive as a Vice President of the Company during the
     Agreement Term (as defined below), and the Executive hereby agrees to
     remain in the employ of the Company during the Agreement Term.

(b)  During the Agreement Term, while the Executive is employed by the Company,
     the Executive shall devote, subject to paragraph 1(f), his full time,
     energies and talents to performing his duties under this Agreement.

(c)  The Executive agrees that he shall perform his duties faithfully and
     efficiently subject to the directions of the Board of Directors (the
     "Board") and the Chief Executive Officer (the "CEO") of the Company. The
     Executive's duties may include providing services for the Company, LaSalle
     Re Holdings Limited (the "Holding Company"), and the Subsidiaries (as
     defined below), as determined by the CEO; provided that the Executive shall
     not, without his consent, be assigned tasks that would be inconsistent with
     his position at the Company. The Executive will have such authority and
     power as are inherent to the undertakings applicable to his position and
     necessary to carry out his responsibilities and the duties required of him
     hereunder.

(d)  While the Executive is employed by the Company, he shall be subject to the
     duties that reasonably apply to the Company's officers and employees
     (including, without limitation, the duty of loyalty to the Company).

(e)  The Company may change the Executive's title and duties in the event of
     reorganization, restructuring, or similar circumstances, except that the
     Executive shall have a senior executive position at all times during the
     Agreement Term while he is employed by the Company.

                                       1
<PAGE>

(f)  Notwithstanding the foregoing provisions of this paragraph 1, during the
     Agreement Term, the Executive may devote reasonable time to activities
     other than those required under this Agreement, including the supervision
     of his personal investments, and activities involving professional,
     charitable, educational, religious and similar types of organizations,
     speaking engagements, membership of the boards of directors of other
     organizations, and similar type of activities, to the extent that such
     other activities do not inhibit or prohibit the performance of the
     Executive's duties under this Agreement, or conflict in any material way
     with the business of the Company, the Holding Company, or any Subsidiary;
     provided, however, that except as otherwise expressly provided in this
     Agreement, the Executive shall not serve on the board of any business, or
     hold any position with any business without the consent of the Board and
     the CEO of the Company.

(g)  The Executive will be required to maintain a residence in Bermuda while
     employed by the Company.

(h)  The Company will use its reasonable best efforts to maintain a Bermuda work
     permit for the Executive. The Executive shall cooperate with the Company
     and the appropriate authorities in maintaining such permit. The Executive's
     employment by the Company is conditioned upon the Company's ability to keep
     current all required work permits, and except as otherwise provided in this
     paragraph 1(h), the Company shall have no further obligation to the
     Executive if, after employing its reasonable best efforts, it is unable to
     maintain such permits. If despite the Company's best efforts to maintain
     the Bermuda work permit, the work permit is terminated or revoked by the
     Government of Bermuda through no fault of the Executive, then the Executive
     shall be deemed to have received written notice from the Company that his
     Date of Termination is the date on which the termination or revocation of
     his or her work permit is effective, and the Executive shall be entitled to
     the benefits provided for Termination by the Company under Section 3(g). In
     addition, the Company shall reimburse the Executive for reasonable costs
     actually incurred by the Executive and the members of his or her immediate
     family to relocate to the nation in which the Executive maintains
     citizenship; provided, however, that such reimbursement shall be made only
     if such relocation occurs within a reasonable time following such Date of
     Termination. The reasonableness of the cost and time of relocation shall be
     determined by the Board of Directors of the Company.

(i)  Subject to the provisions of this Agreement, the Executive shall not be
     required to perform services under this Agreement during any period that he
     is Disabled. The Executive shall be considered "Disabled" during any period
     in which he has a physical or mental disability which renders him
     incapable, after reasonable accommodation, of performing his duties under
     this Agreement. In the event of a dispute as to whether the Executive is
     Disabled, the Company may refer the same to a licensed practicing physician
     of the Company's choice, and the Executive agrees to submit to such tests
     and examination as such physician shall deem appropriate.

                                       2
<PAGE>

(j)  The "Agreement Term" shall be the period beginning on the Effective Date
     and ending on the first anniversary of the Effective Date; provided,
     however, that such Agreement Term shall automatically be renewed daily,
     such that at any time on or after the Effective Date, the remaining term
     shall equal one year. However, such additional day-to-day renewals may be
     terminated by either party be delivering written notice of such termination
     to the other party, in accordance with the requirements of paragraph 18.
     The cessation of the automatic renewals shall be effective on the date such
     written notice is deemed to be given to the other party in accordance with
     paragraph 18, such that the Agreement term shall end on the one-year
     anniversary of the date such written notice is deemed given to the other
     party. For purposes of this Agreement, a Notice of Termination, as
     described in paragraph 3(i), shall be deemed to be a notice to terminate
     day-to-day renewals.

(k)  For purposes of this Agreement, the term "Subsidiary" shall mean any
     company (regardless of whether incorporated) during any period in which 50%
     or more of the total combined voting power of all classes of stock (or
     other ownership interest) entitled to vote is owned, directly or
     indirectly, by the Company.

     2. Compensation. Subject to the provisions of this Agreement, during the
Agreement Term, while he is employed by the Company, the Company shall
compensate the Executive for the Executive's services as follows:

(a)  Salary. The Executive shall receive, for each 12-consecutive month period
     beginning on the Effective Date and each anniversary thereof, in
     substantially equal monthly or more frequent installments, an annual base
     salary of $125,000 (the "Salary"). In no event shall the Salary of the
     Executive be reduced to an amount that is less than the amount specified in
     this paragraph (a), or to an amount that is less than the amount that he
     was previously receiving, except to the extent that reductions of the same
     percentage are being made at the same time to the salaries of all other
     Company officers in the corporate office at or above the vice-president
     level, and such Salary shall be restored to its prior level when, and to
     the same extent, as the restoration that applies to the other officers.

(b)  Bonus. The Executive shall be entitled to receive bonuses from the Company
     as determined in the discretion of the Board.

(c)  Disability. The Executive shall receive from the Company disability income
     replacement coverage which will provide for replacement of income at a
     commercially reasonable rate during any period in which the Executive is
     Disabled if the disability arose during the Agreement Term and prior to the
     Executive's Date of Termination. During any period while the Executive is
     Disabled, and is otherwise entitled to receive Salary under this Agreement,
     any Salary payments to the Executive shall be reduced by the amount of any
     benefits paid for the same period of time under the Company's disability
     income replacement coverage.

(d)  Pension. The Company will provide the Executive with a defined contribution
     savings plan, into which the Company will make a contribution for each
     fiscal year equal to 10%

                                       3
<PAGE>

     of the Salary paid to the Executive for such fiscal year. The plan will
     also provide that the Executive may make annual contributions equal to or
     less than the Company's contribution.

(e)  Automobile. The Company will provide the Executive with an allowance toward
     the cost of an automobile in Bermuda, the amount of which will be approved
     by the CEO. The Company will assume responsibility for the cost of
     insurance, maintenance and similar items. The Executive's personal use of
     the automobile will be permitted. The perquisite shall be governed by the
     rules and limitations set down from time to time by the Company.

(f)  Housing/Living Allowance. The Company shall provide the Executive with a
     housing and living expense allowance at the annual rate of $36,000 for the
     Agreement Term, with such allowance to be payable to the Executive in
     monthly instalments.

(g)  Professional Dues. The Company will reimburse the Executive for reasonable
     professional dues to maintain her professional standing as a Chartered
     Accountant.

(h)  Other Benefits. Except as otherwise specifically provided to the contrary
     in this Agreement, the Executive shall be provided with the welfare
     benefits and other fringe benefits to the same extent and on the same terms
     as those benefits are provided by the Company from time to time to the
     Company's other senior management employees. However, the Company shall not
     be required to provide a benefit or perquisite under this paragraph 2(h) if
     such benefit or perquisite would duplicate (or otherwise be the same type
     as) a benefit or perquisite specifically required to be provided under
     another provision of this Agreement.

(i)  Expenses. Upon approval by the CEO, the Company will reimburse the
     Executive for reasonable expenses for entertainment, traveling, meals,
     lodging and similar items in promoting the Company's business which the
     Executive documents on a form used by the Company to report business
     expenses.

(j)  Indemnification. The Company shall maintain officers liability insurance in
     commercially reasonable amounts (as reasonably determined by the Board),
     and the Executive shall be covered under such insurance to the same extent
     as other senior management employees of the Company. The Executive shall be
     eligible for indemnification by the Company under the Company's bye-laws as
     currently in effect. The Company agrees that it shall not take any action
     that would impair the Executive's rights to indemnification under the
     Company's bye-laws, as currently in effect.

(k)  Holiday/Vacation. The Executive shall be subject to the holiday and
     vacation policy that applies to other senior executives of the Company.

(l)  Dollar Amounts. As used in this Agreement, "dollars" or numbers preceded by
     the symbol "$" shall mean amounts in United States Dollars.

                                       4
<PAGE>

     3. Termination. The Executive's employment during the Agreement Term may be
terminated by the Company or the Executive without any breach of this Agreement
only under the circumstances described in paragraphs 3(a) through 3(g):

(a)  Death. The Executive's employment will terminate upon his death.

(b)  Permanently Disabled. The Company may terminate the Executive's employment
     if he is Permanently Disabled. "Permanently Disabled" means that the
     Executive is eligible for benefits under the Company's long-term disability
     plan.

(c)  Cause. The Company may terminate the Executive's employment at any time for
     Cause. "Cause" shall mean:

     (i)    the wilful and continued failure by the Executive to substantially
            perform his duties with the Company (other than any such failure
            resulting from the Executive's being Disabled), within a reasonable
            period of time after a written demand for substantial performance is
            delivered to the Executive by the CEO, which demand specifically
            identifies the manner in which the CEO believes that the Executive
            has not substantially performed his duties;

     (ii)   the wilful engaging by the Executive in conduct which is
            demonstrably and materially injurious to the Company or the Holding
            Company, monetarily or otherwise; or

     (iii)  the engaging by the Executive in egregious misconduct involving
            serious moral turpitude to the extent that, in the reasonable
            judgment of the CEO, the Executive's credibility and reputation no
            longer conform to the standard of the Company's executives.

     For purposes of this Agreement, no act, or failure to act, on the
     Executive's part shall be deemed "wilful" unless done, or omitted to be
     done, by the Executive not in good faith and without reasonable belief that
     the Executive's action or omission was in the best interest of the Company
     or the Holding Company.

(d)  Constructive Discharge. If the Executive (i) provides written notice to the
     Company of the occurrence of a material breach of this Agreement by the
     Company, which specifically identifies the manner in which the Executive
     believes that the breach has occurred; (ii) the Company fails to correct
     such breach within a reasonable time after such notice; and (iii) the
     Executive resigns within the 60-day period following the occurrence of such
     breach, then the Executive shall be considered to have been constructively
     discharged.

(e)  Resignation by Executive. The Executive may resign for any reason by giving
     the Company ninety days prior written notice, except the Executive will
     be treated as

                                       5
<PAGE>

     having resigned under this paragraph 3(e) only if he has not been
     constructively discharged under paragraph 3(d).

(f)  Mutual Agreement. This Agreement may be terminated at any time by the
     mutual agreement of the parties. Any termination of the Executive's
     employment by mutual agreement of the parties will be memorialized by an
     agreement which is reduced in writing and signed by the Executive and the
     CEO or other duly appointed officer of the Company.

(g)  Termination by Company. The Company may terminate the Executive's
     employment at any time for any reason by giving the Executive prior written
     notice, except the Executive's employment will not be treated as having
     been terminated under this paragraph 3(g) if the termination is for reasons
     of being Permanently Disabled or for Cause.

(h)  Date of Termination. "Date of Termination" means the last day the Executive
     is employed by the Company, provided that the Executive's employment is
     terminated in accordance with the foregoing provisions of this paragraph 3.

(i)  Notice of Termination. Any termination of the Executive's employment by the
     Company or the Executive (other than a termination pursuant to paragraph
     3(a) or paragraph 3(f)) must be communicated by a written Notice of
     Termination to the other party hereto. For purposes of this Agreement, a
     "Notice of Termination" means a dated notice which indicates the specific
     termination provision in this Agreement relied on and which sets forth in
     reasonable detail the facts and circumstances, if any, claimed to provide a
     basis for termination of the Executive's employment under the provision so
     indicated.

     4. Rights Upon Termination. This paragraph 4 describes the payments and
benefits to be provided to the Executive after his Date of Termination:

(a)  Payment of Previously Earned Amounts. The Executive shall receive payment
     of accrued but unpaid Salary, vacation pay and, if expressly provided for
     in paragraph 4(d), a pro rata portion of his bonus (if any), in each case
     for the period ending with the Executive's Date of Termination.

(b)  No Severance Payments. If the Executive's Date of Termination occurs during
     or after the end of the Agreement Term, or because of (i) the Executive's
     death, (ii) his being Permanently Disabled (paragraph 3(b)), (iii) his
     termination for Cause (paragraph 3(c)), or (iv) his resignation (paragraph
     3(e)), then, except as otherwise expressly provided for in this Agreement,
     no payments shall be due to the Executive under this Agreement for periods
     after the Date of Termination.

(c)  Salary Continuation. If the Executive's Date of Termination occurs during
     the Agreement Term because of (i) his discharge by the Company for reasons
     other than Cause

                                       6
<PAGE>

     (described in paragraph 3(c)), or (ii) his constructive discharge
     (described in paragraph 3(d)), the Executive shall continue to receive
     Salary payments (at the rate in effect on the Date of Termination) in
     monthly or more frequent instalments through the earliest of: (i) the last
     day of the Agreement Term; (ii) the date of the Executive's death, or (iii)
     the date, if any, of the breach by the Executive of the non-competition
     requirements of paragraph 7, the confidentiality requirements of paragraph
     8 or the non-disparagement requirements of paragraph 9.

(d)  Pro rata Bonus. Except as otherwise provided in this paragraph 4(d), the
     Executive shall not receive a bonus for the fiscal year in which the
     Executive's Date of Termination occurs. If the Executive's Date of
     Termination occurs during the Agreement Term as a result of (i) the
     Executive's death (ii) his being Permanently Disabled (paragraph 3(b)),
     (iii) his discharge by the Company for reasons other than Cause (described
     in paragraph 3(c)), or (iv) his constructive discharge (described in
     paragraph 3(d)), the Executive shall receive a pro rata portion of the
     bonus, if any, which would have been paid pursuant to paragraph 2(b) for
     the fiscal year in which the Executive's Date of Termination occurs. Such
     portion, if any, shall be calculated for the period ending on the Date of
     Termination and shall be paid to the Executive (or his estate) within a
     reasonable period of time after the Company calculates the bonus amount, if
     any, for all employees for the fiscal year.

(e)  Housing/Living Expenses, Medical Benefits. If the Executive is entitled to
     Salary Continuation payments pursuant to paragraph 4(c), the Executive
     shall receive a housing and living expense allowance (described in
     paragraph 2(g)) and may continue to participate in the medical and dental
     plans in which he participated on the day before his Date of Termination
     through the earlier of: (i) the last day for which the Executive receives
     Salary Continuation payments pursuant to paragraph 4(c); or (ii) three (3)
     months after the Executive's Date of Termination. Participation in the
     medical and dental plans is subject to the Executive's payment of the
     applicable employee portion of the monthly premium cost, if any. If the
     Company ceases offering the medical and dental plans in which the Executive
     participated on the day before his Date of Termination to Company employees
     during this time, the Executive may elect to participate in any other
     medical or dental plan offered by the Company to its employees, provided
     however, that the Executive shall be responsible for paying the applicable
     employee portion of the monthly premium cost.

(f)  Other Programs. No benefits shall be payable to the Executive under any
     other severance pay arrangement or similar arrangement maintained by the
     Company or any Subsidiary. Except as otherwise expressly provided in this
     Agreement, no other payments or benefits shall be due to the Executive
     following the Date of Termination (except as otherwise specifically
     provided under the terms of an employee benefit plan or arrangement).

     5. Duties on Termination. Subject to the provisions of this Agreement,
during the period beginning on the date of delivery of a Notice of Termination,
and ending on the Date of Termination, the Executive shall continue to perform
his duties as set forth in this Agreement, and shall also perform such services
for the Company and the Holding Company as are necessary and appropriate for a
smooth transition to the Executive's successor, if any. Notwithstanding the

                                       7
<PAGE>

foregoing provisions of this paragraph 5, the Company may suspend the Executive
from performing his duties under this Agreement following the delivery of a
Notice of Termination providing for the Executive's resignation, or delivery by
the Company of a Notice of Termination providing for the Executive's termination
of employment for any reason; provided, however, that during the period of
suspension (which shall end on the Date of Termination), the Executive shall
continue to be treated as employed by the Company for other purposes, and his
rights to compensation or benefits shall not be reduced by reason of the
suspension.

     6. Set-Off. If the Executive's employment with the Company is terminated
for any reason and, under the terms of this Agreement, the Executive is
otherwise entitled to receive Salary and bonus payments, such payments will be
reduced by the amount of any salary and bonus payments the Executive receives in
connection with other employment.

     7. Non-competition. While the Executive is employed by the Company, and
during the Non-Competition Period (as defined below), the Executive agrees that
he will not directly or indirectly perform services in a financial-related
position in Bermuda for a direct competitor of the Company. A financial-related
position shall include, but is not limited to, a financial officer or
comptroller.

For purposes of this paragraph 7:

     "Non-Competition Period" shall be determined as follows:

     (A)  If the Executive's Date of Termination occurs under circumstances
          other than those described in paragraph 3(d) (relating to constructive
          discharge) or paragraph 3(g) (relating to certain terminations by the
          Company), the Non-Competition Period shall be the period beginning on
          the Date of Termination, and ending on the twenty-four-month (24)
          anniversary of the Date of Termination.

     (B)  If the Executive's Date of Termination occurs under circumstances
          described in paragraph 3(d) (relating to constructive discharge) or
          paragraph 3(g) (relating to certain terminations by the Company), the
          Non-Competition Period shall be the period beginning on the Date of
          Termination, and ending on the earlier to occur of the last day of the
          Agreement Term or the twenty-four-month (24) anniversary of the Date
          of Termination. However, under this paragraph (B), the Company, in its
          discretion, by notice provided to the Executive not later than fifteen
          (15) days after the Date of Termination, may extend the Non-
          Competition Period beyond the end of the Agreement Term, to a date
          specified in such notice (but not later than the twenty-four-month
          anniversary of the Date of Termination), but only if the Company
          agrees to provide the salary continuation payments described in
          paragraph 4(c) during such Non-Competition Period.

Nothing in this paragraph 7, paragraph 8 or paragraph 9 shall be construed as
limiting the Executive's duty of loyalty to the Company while he is employed by
the Company or any other duty he may otherwise have to the Company while he is
employed by the Company.

                                       8
<PAGE>

     8. Confidential Information. Except as may be required by the lawful order
of a court or agency of competent jurisdiction, or except to the extent that the
Executive has express authorization from the Company, the Executive agrees to
keep secret and confidential indefinitely all non-public information (including,
without limitation, information regarding litigation and pending litigation)
concerning the Company, the Holding Company, and the Subsidiaries which was
acquired by or disclosed to the Executive during the course of his employment
with the Company, or during the course of his consultation with the Company
following his termination of employment (regardless of whether consultation is
pursuant to paragraph 10), and not to disclose the same, either directly or
indirectly, to any other person, firm, or business entity, or to use it in any
way. To the extent that the Executive obtains information on behalf of the
Company, the Holding Company, or any of the Subsidiaries that may be subject to
attorney-client privilege as to the Company's attorneys, the Executive shall
take reasonable steps to maintain the confidentiality of such information and to
preserve such privilege. Nothing in the foregoing provisions of this paragraph 8
shall be construed so as to prevent the Executive from using, in connection with
his employment for himself or an employer other than the Company, the Holding
Company, or any of the Subsidiaries, knowledge which was acquired by him during
the course of his employment with the Company, the Holding Company, and the
Subsidiaries, and which is generally known to persons of his experience in other
companies in the same industry.

     9. Non-Disparagement. The Executive agrees that, while he is employed by
the Company, and after his Date of Termination, he shall not make any false,
defamatory or disparaging statements about the Company, the Holding Company, the
Subsidiaries, or the officers or directors of the Company, the Holding Company,
or the Subsidiaries that are reasonably likely to cause material damage to the
Company, the Holding Company, the Subsidiaries, or their officers or directors.
While the Executive is employed by the Company, and after his Date of
Termination, the Company agrees, on behalf of itself, the Holding Company, and
the Subsidiaries, that neither the officers nor the directors of the Company,
the Holding Company, or the Subsidiaries shall make any false, defamatory or
disparaging statements about the Executive that are reasonably likely to cause
material damage to Executive.

     10. Defense of Claims. The Executive agrees that, for the period beginning
the Effective Date, and continuing for a reasonable period after the Executive's
termination of employment with the Company, the Executive will cooperate with
the Company, the Holding Company and the Subsidiaries in defense of any claims
that may be made against the Company, the Holding Company and the Subsidiaries,
and will cooperate with the Company, the Holding Company or the Subsidiaries in
the prosecution of any claims that may be made by the Company, the Holding
Company or the Subsidiaries, to the extent that such claims may relate to
services performed by the Executive for the Company. The Executive agrees to
promptly inform the Company if he becomes aware of any lawsuits involving such
claims that may be filed against the Company, the Holding Company or the
Subsidiaries. The Company agrees to reimburse the Executive for all of the
Executive's reasonable out-of-pocket expenses associated with such cooperation,
including travel expenses. For periods after the Executive's employment with the
Company terminates, the Company agrees to provide reasonable compensation to the
Executive for such cooperation. The determination of the reasonableness of such
compensation

                                       9
<PAGE>

shall take into account information provided to the Company by the Executive or
otherwise known to the Company, which may include, without limitation, (a) the
Executive's rate of compensation at the time he ceased employment with the
Company, and whether he is then receiving other compensation payments from the
Company; (b) the Executive's rate of compensation at the time of such
cooperation; (c) the amount of time required of the Executive for such
cooperation; (d) difficulty of the issues as to which the cooperation is
required; (e) the amount of inconvenience to the Executive resulting from such
cooperation (including consideration of factors such as the amount of travel
required of the Executive, the effect on other commitments of the Executive, and
the amount of advance notice provided to the Executive); and (f) whether such
cooperation would be legally required in the absence of the requirements of this
paragraph 10. The Executive also agrees to promptly inform the Company if he is
asked to assist in any investigation of the Company, the Holding Company or the
Subsidiaries (or their actions) that may relate to services performed by the
Executive for the Company, regardless of whether a lawsuit has then been filed
against the Company, the Holding Company or the Subsidiaries with respect to
such investigation.

     11. Remedies. The Executive acknowledges that the Company or the Holding
Company would be irreparably injured by a violation of paragraph 7, paragraph 8,
or paragraph 9, and he agrees that the Company, in addition to any other
remedies available to it for such breach or threatened breach, shall be entitled
to a preliminary injunction, temporary restraining order, or other equivalent
relief, restraining the Executive from any actual or threatened breach of either
paragraph 7, paragraph 8 or paragraph 9. The Company acknowledges that the
Executive would be irreparably injured by a violation of paragraph 9, and the
Company agrees that the Executive, in addition to any other remedies available
to him for such breach or threatened breach, shall be entitled to a preliminary
injunction, temporary restraining order, or other equivalent relief, restraining
the Company from any actual or threatened breach of paragraph 9. If a bond is
required to be posted in order for the Company or the Executive to secure an
injunction or other equitable remedy, the parties agree that said bond need not
be more than a nominal sum.

     12. Nonalienation. The interests of the Executive under this Agreement are
not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Executive or the Executive's beneficiary.

     13. Amendment. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing without the consent of any other person. So
long as the Executive lives, no person, other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject matter
hereof.

     14. Applicable Law. The provisions of this Agreement shall be construed in
accordance with the laws of Bermuda, without regard to the conflict of law
provisions of any jurisdiction. All disputes shall be arbitrated or litigated
(whichever is applicable) in Bermuda.

                                       10
<PAGE>

     15. Severability. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed or modified).

     16. Waiver of Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party or any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time. The failure of any party hereto to take any action by
reason of such breach will not deprive such party of the right to take action at
any time while such breach continues.

     17. Successors. This Agreement shall be binding upon, and inure to the
benefit of, the Company and its successors and assigns and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company's assets and business.

     18. Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or sent
by facsimile or prepaid overnight courier to the parties at the addresses set
forth below (or such other addresses as shall be specified by the parties by
like notice). Such notices, demands, claims and other communications shall be
deemed given:

(a)  in the case of delivery by overnight service with guaranteed next day
     delivery, the next day or the day designated for delivery;

(b)  in the case of certified, registered or similar mail delivery, five days
     after deposit in the local mail; or

(c)  in the case of facsimile, the date upon which the transmitting party
     received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the mail or by overnight service are to be delivered to the
addresses set forth below:

to the Company:

     LaSalle Re Limited
     25 Church Street
     Hamilton HMFX - Bermuda

                                      11
<PAGE>

or to the Executive:

     Clare Moran
     25 Church Street
     Hamilton, HMFX, Bermuda

All notices to the Company shall be directed to the attention of the chief
executive officer of the Company, with a copy to the Secretary of the Company.
Each party, by written notice furnished to the other party, may modify the
applicable delivery address, except that notice of change of address shall be
effective only upon receipt.

     19. Arbitration of All Disputes. Any controversy or claim arising out of or
relating to this Agreement (or the breach thereof) shall be settled by final,
binding and non-appealable arbitration in Bermuda by three arbitrators. Except
as otherwise expressly provided in this paragraph 19, the arbitration shall be
conducted in accordance with the Arbitration Act 1986 as then in effect. One of
the arbitrators shall be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two arbitrators. If the
first two arbitrators cannot agree on the third arbitrator within 30 days of the
appointment of the second arbitrator, then the third arbitrator shall be
appointed by the President of the Bermuda Bar Council.

     20. Survival of Agreement. Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive's employment with the Company.

     21. Entire Agreement. Except as otherwise noted herein, this Agreement,
including any Exhibit(s) attached hereto, constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior and contemporaneous agreements, if any, between the parties relating to
the subject matter hereof. The enforceability of this Agreement shall not cease
or otherwise be adversely affected by the termination of the Executive's
employment with the Company.

     22. Acknowledgment by Executive. The Executive represents to the Company
that he is knowledgeable and sophisticated as to business matters, including the
subject matter of this Agreement, that he has read this Agreement and that he
understands its terms. The Executive acknowledges that, prior to assenting to
the terms of this Agreement, he has been given a reasonable time to review it,
to consult with counsel of his choice, and to negotiate at arm's-length with the
Company as to the contents. The Executive and the Company agree that the
language used in this Agreement is the language chosen by the parties to express
their mutual intent, and that no rule of strict construction is to be applied
against any party hereto. The Executive represents and warrants that he is not,
and will not become a party to any agreement, contract, arrangement or
understanding, whether of employment or otherwise, that would in any way
restrict or prohibit him from undertaking or performing his duties in accordance
with this Agreement.

                                      12
<PAGE>

     23. Titles and Headings. Titles and headings in this Agreement are for ease
of reference and convenience only, and shall not be construed to affect the
meaning of any provision of this Agreement.

     IN WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf,
and its corporate seal to be hereunto affixed, all as of the day and year first
above written.

                                   /s/ Clare Moran
                                   --------------------------
                                   Clare Moran

                                   LASALLE RE LIMITED
                                       /s/ Guy Hengesbaugh
                                   By:
                                      -----------------------
                                      Guy Hengesbaugh
                                      Chief Executive Officer

                                      13

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