Document:

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                                                                   Exhibit 10.18

                              AMENDED AND RESTATED
                             VALIDUS HOLDINGS, LTD.
                          2005 LONG TERM INCENTIVE PLAN

                  1.       Purposes.

                  The purposes of the Amended and Restated 2005 Long Term
Incentive Plan are to advance the interests of Validus Holdings, Ltd. and its
shareholders by providing a means to attract, retain, and motivate employees,
consultants and directors of Validus Holdings, Ltd., its subsidiaries and
affiliates, to provide for competitive compensation opportunities, to encourage
long term service, to recognize individual contributions and reward achievement
of performance goals, and to promote the creation of long term value for
shareholders by aligning the interests of such persons with those of
shareholders.

                  2.       Definitions.

                  For purposes of the Plan, the following terms shall be defined
as set forth below:

                  (a) "Affiliate" means any entity other than the Company and
its Subsidiaries that is designated by the Board or the Committee as a
participating employer under the Plan; provided, however, that the Company
directly or indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the ownership interests in
such entity.

                  (b) "Award" means any Option, SAR, Restricted Share,
Restricted Share Unit, Performance Share, Performance Unit, Dividend Equivalent,
or Other Share-Based Award granted to an Eligible Person under the Plan.

                  (c) "Award Agreement" means any written agreement, contract,
or other instrument or document evidencing an Award.

                  (d) "Beneficiary" means the person, persons, trust or trusts
which have been designated by an Eligible Person in his or her most recent
written beneficiary designation filed with the Company to receive the benefits
specified under this Plan upon the death of the Eligible Person, or, if there is
no designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

                  (e)      "Board" means the Board of Directors of the Company.

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                  (f) "Change in Control" means consummation of (i) a sale of
all or substantially all of the consolidated assets of the Company and its
Subsidiaries to a person who is not either a member of, or an affiliate of a
member of, the Initial Investor Group (as defined below); or (ii) a sale by the
Company, one or more members of the Initial Investor Group or any of their
respective affiliates resulting in more than 50% of the voting stock of the
Company ("Voting Shares") being held by a person or group (as such terms are
used in the Exchange Act) that does not include any member of the Initial
Investor Group or any of their respective affiliates; or (iii) a merger or
consolidation of the Company into another person as a result of which a person
or group acquires more than 50% of the Voting Shares of the Company that does
not include any member of, or an affiliate of a member of, the Initial Investor
Group; provided, however, that a Change in Control shall occur if and only if
after any such event listed in (i)-(iii) above the Initial Investor Group is
unable to elect a majority of the board of directors (or other governing body
equivalent thereto) of the entity that purchased the assets in the case of an
event described in (i) above, the Company in the case of an event described in
(ii) above, or the resulting entity in the case of an event described in (iii)
above, as the case may be. The "Initial Investor Group" shall mean (i) Aquiline
Financial Services Fund L.P., and (ii) the other Investors under Subscription
Agreements with the Company dated December 9, 2005.

                  (g) "Code" means the Internal Revenue Code of 1986, as amended
from time to time. References to any provision of the Code shall be deemed to
include successor provisions thereto and regulations thereunder.

                  (h) "Committee" means the Compensation Committee of the Board,
or such other Board committee (which may include the entire Board) as may be
designated by the Board to administer the Plan.

                  (i) "Company" means Validus Holdings, Ltd., a corporation
organized under the laws of Bermuda, or any successor corporation.

                  (j) "Director" means a member of the Board who is not an
employee of the Company, a Subsidiary or an Affiliate.

                  (k) "Dividend Equivalent" means a right, granted under Section
5(g), to receive cash, Shares, or other property equal in value to dividends
paid with respect to a specified number of Shares. Dividend Equivalents may be
awarded on a free-standing basis or in connection with another Award, and may be
paid currently or on a deferred basis.

                  (l) "Effective Date" has the meaning set forth in Section 7(k)
below.

                  (m) "Eligible Person" means (i) an employee or consultant of
the Company, a Subsidiary or an Affiliate, including any director who is an
employee, or (ii) a Director.

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                  (n) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time. References to any provision of the Exchange Act
shall be deemed to include successor provisions thereto and regulations
thereunder.

                  (o) "Fair Market Value" means, with respect to Shares or other
property on a day, the fair market value of such Shares or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. If the Shares are listed on any established stock
exchange or a national market system, unless otherwise determined by the
Committee in good faith, the Fair Market Value of Shares on a day shall mean the
closing price per Share on the day (or, if the Shares were not traded on that
day, the next preceding day that the Shares were traded) on the principal
exchange or market system on which the Shares are traded, as such prices are
officially quoted on such exchange.

                  (p) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.

                  (q) "NQSO" means any Option that is not an ISO.

                  (r) "Offering" has the meaning set forth in the Offering
Memorandum relating to Company equity dated October 13, 2005, as supplemented.

                  (s) "Option" means a right, granted under Section 5(b), to
purchase Shares.

                  (t) "Other Share-Based Award" means a right, granted under
Section 5(h), that relates to or is valued by reference to Shares.

                  (u) "Participant" means an Eligible Person who has been
granted an Award under the Plan.

                  (v) "Performance Share" means a performance share granted
under Section 5(f).

                  (w) "Performance Unit" means a performance unit granted under
Section 5(f).

                  (x) "Plan" means this Amended and Restated 2005 Long Term
Incentive Plan.

                  (y) "Restricted Shares" means an Award of Shares under Section
5(d) that may be subject to certain restrictions and to a risk of forfeiture.

                  (z) "Restricted Share Unit" means a right, granted under
Section 5(e), to receive Shares or cash at the end of a specified deferral
period.

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                  (aa) "Rule 16b-3" means Rule 16b-3, as from time to time in
effect and applicable to the Plan and Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act.

                  (bb) "SAR" or "Share Appreciation Right" means the right,
granted under Section 5(c), to be paid an amount measured by the difference
between the exercise price of the right and the Fair Market Value of Shares on
the date of exercise of the right, with payment to be made in cash, Shares, or
property as specified in the Award or determined by the Committee.

                  (cc) "Shares" means common shares, $0.10 par value per share,
of the Company, and such other securities as may be substituted for Shares
pursuant to Section 4(b) hereof.

                  (dd) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if each
of the corporations (other than the last corporation in the unbroken chain) owns
shares possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.

                  (ee) "Termination of Service" means, unless otherwise defined
in an applicable Award Agreement, the termination of the Participant's
employment, consulting services or directorship with the Company, its
Subsidiaries and its Affiliates, as the case may be. A Participant employed by a
Subsidiary of the Company or one of its Affiliates shall also be deemed to incur
a Termination of Service if the Subsidiary of the Company or Affiliate ceases to
be such a Subsidiary or an Affiliate, as the case may be, and the Participant
does not immediately thereafter become an employee or director of, or a
consultant to, the Company, another Subsidiary of the Company or an Affiliate.
Temporary absences from employment because of illness, vacation or leave of
absence and transfers among the Company and its Subsidiaries and Affiliates
shall not be considered a Termination of Service. If the Participant has a
written employment agreement with the Company, a Subsidiary or Affiliate that
defines "Date of Termination", unless otherwise determined by the Committee, the
Participant shall be treated as having terminated employment for purposes of
this Plan on the Date of Termination.

                  3. Administration.

                  (a) Authority of the Committee. The Plan shall be administered
by the Committee, and the Committee shall have full and final authority to take
the following actions, in each case subject to and consistent with the
provisions of the Plan:

                  (i) to select Eligible Persons to whom Awards may be granted;

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                  (ii) to designate Affiliates;

                  (iii) to determine the type or types of Awards to be granted
            to each Eligible Person;

                  (iv) to determine the type and number of Awards to be granted,
            the number of Shares to which an Award may relate, the terms and
            conditions of any Award granted under the Plan (including, but not
            limited to, any exercise price, grant price, or purchase price, any
            restriction or condition, any schedule for lapse of restrictions or
            conditions relating to transferability or forfeiture,
            exercisability, or settlement of an Award, and waiver or
            accelerations thereof, and waivers of performance conditions
            relating to an Award, based in each case on such considerations as
            the Committee shall determine), and all other matters to be
            determined in connection with an Award;

                  (v) to determine whether, to what extent, and under what
            circumstances an Award may be settled, or the exercise price of an
            Award may be paid, in cash, Shares, other Awards, or other property,
            or an Award may be canceled, forfeited, exchanged, or surrendered;

                  (vi) to determine whether, to what extent, and under what
            circumstances cash, Shares, other Awards, or other property payable
            with respect to an Award will be deferred either automatically, at
            the election of the Committee, or at the election of the Eligible
            Person;

                  (vii) to prescribe the form of each Award Agreement, which
            need not be identical for each Eligible Person;

                  (viii) to adopt, amend, suspend, waive, and rescind such rules
            and regulations and appoint such agents as the Committee may deem
            necessary or advisable to administer the Plan;

                  (ix) to correct any defect or supply any omission or reconcile
            any inconsistency in the Plan and to construe and interpret the Plan
            and any Award, rules and regulations, Award Agreement, or other
            instrument hereunder;

                  (x) to accelerate the exercisability or vesting of all or any
            portion of any Award or to extend the period during which an Award
            is exercisable;

                  (xi) to determine whether uncertificated Shares may be used in
            satisfying Awards and otherwise in connection with the Plan; and

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                  (xii) to make all other decisions and determinations as may be
            required under the terms of the Plan or as the Committee may deem
            necessary or advisable for the administration of the Plan.

                  (b) Manner of Exercise of Committee Authority. The Committee
shall have sole discretion in exercising its authority under the Plan. Any
action of the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Company, Subsidiaries, Affiliates,
Eligible Persons, any person claiming any rights under the Plan from or through
any Eligible Person, and shareholders. The express grant of any specific power
to the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to other members of the Board or officers or managers of the Company or
any Subsidiary or Affiliate the authority, subject to such terms as the
Committee shall determine, to perform administrative functions and, with respect
to Awards granted to persons not subject to Section 16 of the Exchange Act, to
perform such other functions as the Committee may determine, to the extent
permitted under Rule 16b-3 (if applicable) and applicable law.

                  (c) Limitation of Liability. Each member of the Committee
shall be entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or other employee of the
Company or any Subsidiary or Affiliate, the Company's independent certified
public accountants, or other professional retained by the Company to assist in
the administration of the Plan. No member of the Committee, and no officer or
employee of the Company acting on behalf of the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Committee and any officer
or employee of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company with respect to any
such action, determination, or interpretation.

                  (d) No Option or SAR Repricing Without Shareholder Approval.
Except as provided in the first sentence of Section 4(b) hereof relating to
certain antidilution adjustments, unless the approval of shareholders of the
Company is obtained, Options and SARs issued under the Plan shall not be amended
to lower their exercise price, Options and SARs issued under the Plan will not
be exchanged for other Options or SARs with lower exercise prices, and no other
action shall be taken with respect to Options or SARs that would be treated as a
repricing under the rules of the principal stock exchange on which the Shares
are listed.

                  (e) Limitation on Committee's Authority under 409A. Anything
in this Plan to the contrary notwithstanding, the Committee's authority to
modify outstanding Awards shall be limited to the extent necessary so that the
existence of such authority does not (i) cause an Award that is not otherwise
deferred compensation subject to Section 409A of the Code to become deferred
compensation subject to Section 409A of the Code or (ii) cause

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an Award that is otherwise deferred compensation subject to Section 409A of the
Code to fail to meet the requirements prescribed by Section 409A of the Code.

                  4. Shares Subject to the Plan.

                  (a) Subject to adjustment as provided in Section 4(b) hereof,
(i) the total number of Shares reserved for issuance in connection with Awards
under the Plan shall be _______________,1 and (ii) the total number of Shares
which may be issued under ISOs granted under the Plan shall be 15,000,000. No
Award may be granted if the number of Shares to which such Award relates, when
added to the number of Shares previously issued under the Plan, exceeds the
number of Shares reserved for issuance under the Plan in clause (i) of the
preceding sentence. If any Awards are forfeited, canceled, terminated, exchanged
or surrendered or such Award is settled in cash or otherwise terminates without
a distribution of Shares to the Participant, any Shares counted against the
number of Shares reserved and available under the Plan with respect to such
Award shall, to the extent of any such forfeiture, settlement, termination,
cancellation, exchange or surrender, again be available for Awards under the
Plan. Upon the exercise of any Award granted in tandem with any other Awards,
such related Awards shall be canceled to the extent of the number of Shares as
to which the Award is exercised.

                  (b) In the event that the Committee shall determine that any
dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, share
exchange, extraordinary distribution, or other similar corporate transaction or
event, affects the Shares such that an adjustment is appropriate in order to
prevent dilution or enlargement of the rights of Eligible Persons under the
Plan, then the Committee shall make such equitable changes or adjustments as it
deems appropriate and, in such manner as it may deem equitable, (i) adjust any
or all of (x) the number and kind of shares which may thereafter be issued under
the Plan, (y) the number and kind of shares, other securities or other
consideration issued or issuable in respect of outstanding Awards, and (z) the
exercise price, grant price, or purchase price relating to any Award or (ii)
provide for a distribution of cash or property in respect of any Award;
provided, however, in each case that, with respect to ISOs, such adjustment
shall be made in accordance with Section 424(a) of the Code, unless the
Committee determines otherwise; provided further, however, that no adjustment
shall be made pursuant to this Section 4 that causes any Award to be

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1     A number equal to the number of shares available for issuance prior to the
      amendment plus 10% of fully diluted common shares (after giving effect to
      warrants, restricted shares and stock options issued and authorized,
      including shares reserved and/or available under the Plan) immediately
      after the consummation of the initial public offering.

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                                      -8-

treated as deferred compensation pursuant to Section 409A of the Code. If an
extraordinary cash dividend is declared and paid on Shares after the grant of an
Option or SAR and before the exercise of the Option or SAR, unless otherwise
expressly provided in an applicable Award Agreement, the holder of the Option or
SAR will have a right to receive an amount equal to the amount of the dividend
per Share times the number of Shares subject to the Option or SAR; provided ,
however, that, unless otherwise determined by the Committee, no amount will be
paid in respect of an Option or SAR unless and until the Option or SAR (or the
portion thereof on which the amount is paid) has vested, and it is intended that
the dividend right will otherwise be structured to comply with Section 409A of
the Code, to the extent applicable. In addition, the Committee is authorized to
make adjustments in the terms and conditions of, and the criteria and
performance objectives, if any, included in, Awards in recognition of unusual or
non-recurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or any Subsidiary or Affiliate or the
financial statements of the Company or any Subsidiary or Affiliate, or in
response to changes in applicable laws, regulations, or accounting principles.

                  (c) In the event that the Company is a party to a merger or
consolidation or a Change in Control shall occur, outstanding Awards shall be
subject to the agreement of merger or consolidation or other applicable
transaction agreement. Such agreement, without the Participants' consent, may
provide for: (i) continuation or assumption of such outstanding Awards under the
Plan by the Company (if it is the surviving corporation) or by the surviving
corporation or its parent; (ii) substitution by the surviving corporation or its
parent of awards with substantially the same terms for such outstanding Awards
(and, if the Company is not a publicly traded entity, substitution of shares
with equity of the surviving corporation or its parent with substantially the
same terms as the outstanding Shares); (iii) acceleration of the vesting of or
right to exercise such outstanding Awards immediately prior to or as of the date
of the merger or consolidation or Change in Control, and the expiration of such
outstanding Awards to the extent not timely exercised by the date of the merger,
consolidation, Change in Control or other date thereafter designated by the
Board; or (iv) cancellation of all or any portion of the outstanding Awards by a
cash payment of the excess, if any, of the Fair Market Value of the shares
subject to such outstanding Awards or portion thereof being canceled over the
aggregate exercise price, if any, with respect to such Awards or portion thereof
being canceled.

                  (d) Any Shares distributed pursuant to an Award may consist,
in whole or in part, of authorized and unissued Shares or treasury Shares
including Shares acquired by purchase in the open market or in private
transactions.

                  5. Specific Terms of Awards.

                  (a) General. Awards may be granted on the terms and conditions
set forth in this Section 5. In addition, the Committee may impose on any Award
or the exercise

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thereof, at the date of grant or thereafter (subject to Section 7(d)), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including terms regarding forfeiture of
Awards or continued exercisability of Awards in the event of Termination of
Service by the Eligible Person.

                  (b) Options. The Committee is authorized to grant Options,
which may be NQSOs or ISOs, to Eligible Persons on the following terms and
conditions:

                  (i) Exercise Price. The exercise price per Share purchasable
            under an Option shall be determined by the Committee; provided,
            however, that the exercise price per Share shall not be less than
            the Fair Market Value per Share on the date of grant.

                  (ii) Option Term. The term of each Option shall be determined
            by the Committee; provided, however, that such term shall not be
            longer than ten years from the date of grant of the Option.

                  (iii) Time and Method of Exercise. The Committee shall
            determine at the date of grant or thereafter the time or times at
            which an Option may be exercised in whole or in part (including,
            without limitation, upon achievement of performance criteria if
            deemed appropriate by the Committee), the methods by which such
            exercise price may be paid or deemed to be paid (including, without
            limitation, broker-assisted exercise arrangements), the form of such
            payment (including, without limitation, cash, Shares, notes or other
            property), and the methods by which Shares will be delivered or
            deemed to be delivered to Eligible Persons.

                  (iv) Early Exercise. The Committee may provide at the time of
            grant or any time thereafter, in its sole discretion, that any
            Option shall be exercisable with respect to Shares that otherwise
            would not then be exercisable, provided that, in connection with
            such exercise, the Participant enters into a form of Restricted
            Share agreement approved by the Committee with respect to the Shares
            received on exercise.

                  (v) ISOs. The terms of any ISO granted under the Plan shall
            comply in all respects with the provisions of Section 422 of the
            Code, including but not limited to the requirement that the ISO
            shall be granted within ten years from the earlier of the date of
            adoption or shareholder approval of the Plan. ISOs may only be
            granted to employees of the Company or a Subsidiary.

                  (c) SARs. The Committee is authorized to grant SARs (Share
Appreciation Rights) to Eligible Persons on the following terms and conditions:

                  (i) Right to Payment. A SAR shall confer on the Eligible
            Person to whom it is granted a right to receive with respect to each
            Share subject thereto, upon exercise thereof, the excess of (1) the
            Fair Market Value of one Share on the date of exercise

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            over (2) the exercise price per Share of the SAR, as determined by
            the Committee as of the date of grant of the SAR (which shall not be
            less than the Fair Market Value per Share on the date of grant.

                  (ii) Other Terms. The Committee shall determine, at the time
            of grant, the time or times at which a SAR may be exercised in whole
            or in part (which shall not be more than ten years after the date of
            grant of the SAR), the method of exercise, method of settlement,
            form of consideration payable in settlement, method by which Shares
            will be delivered or deemed to be delivered to Eligible Persons,
            whether or not a SAR shall be in tandem with any other Award, and
            any other terms and conditions of any SAR. Unless the Committee
            determines otherwise, a SAR (1) granted in tandem with an NQSO may
            be granted at the time of grant of the related NQSO or at any time
            thereafter and (2) granted in tandem with an ISO may only be granted
            at the time of grant of the related ISO.

                  (d) Restricted Shares. The Committee is authorized to grant
Restricted Shares to Eligible Persons on the following terms and conditions:

                  (i) Issuance and Restrictions. Restricted Shares shall be
            subject to such restrictions on transferability and other
            restrictions, if any, as the Committee may impose at the date of
            grant or thereafter, which restrictions may lapse separately or in
            combination at such times, under such circumstances (including,
            without limitation, upon achievement of performance criteria if
            deemed appropriate by the Committee), in such installments, or
            otherwise, as the Committee may determine. Except to the extent
            restricted under the Award Agreement relating to the Restricted
            Shares, an Eligible Person granted Restricted Shares shall have all
            of the rights of a shareholder including, without limitation, the
            right to vote Restricted Shares and the right to receive dividends
            thereon.

                  (ii) Forfeiture. Except as otherwise determined by the
            Committee, at the date of grant or thereafter, upon Termination of
            Service during the applicable restriction period, Restricted Shares
            and any accrued but unpaid dividends or Dividend Equivalents that
            are at that time subject to restrictions shall be forfeited;
            provided, however, that the Committee may provide, by rule or
            regulation or in any Award Agreement, or may determine in any
            individual case, that restrictions or forfeiture conditions relating
            to Restricted Shares will be waived in whole or in part in the event
            of Termination of Service resulting from specified causes, and the
            Committee may in other cases waive in whole or in part the
            forfeiture of Restricted Shares.

                  (iii) Certificates for Shares. Restricted Shares granted under
            the Plan may be evidenced in such manner as the Committee shall
            determine. If certificates representing Restricted Shares are
            registered in the name of the Eligible Person, such cer-

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                                      -11-

            tificates shall bear an appropriate legend referring to the terms,
            conditions, and restrictions applicable to such Restricted Shares,
            and, unless otherwise determined by the Committee, the Company shall
            retain physical possession of the certificate and the Participant
            shall deliver a stock power to the Company, endorsed in blank,
            relating to the Restricted Shares.

                  (iv) Dividends. Dividends paid on Restricted Shares shall be
            either paid at the dividend payment date, or deferred for payment to
            such date, and subject to such conditions, as determined by the
            Committee, in cash or in restricted or unrestricted Shares having a
            Fair Market Value equal to the amount of such dividends. Unless
            otherwise determined by the Committee, Shares distributed in
            connection with a Share split or dividend in Shares, and other
            property distributed as a dividend, shall be subject to restrictions
            and a risk of forfeiture to the same extent as the Restricted Shares
            with respect to which such Shares or other property has been
            distributed.

                  (v) Early Exercise Options. The Committee shall award
            Restricted Shares to a Participant upon the Participant's early
            exercise of an Option under Section 5(b)(iv) hereof. Unless
            otherwise determined by the Committee, the lapse of restrictions
            with respect to such Restricted Shares shall occur on the same
            schedule as the exercisability of the Option for which the
            Restricted Shares were exercised.

                  (e) Restricted Share Units. The Committee is authorized to
grant Restricted Share Units to Eligible Persons, subject to the following terms
and conditions:

                  (i) Award and Restrictions. Delivery of Shares or cash, as the
            case may be, will occur upon expiration of the deferral period
            specified for Restricted Share Units by the Committee (or, if
            permitted by the Committee, as elected by the Eligible Person). In
            addition, Restricted Share Units shall be subject to such
            restrictions as the Committee may impose, if any (including, without
            limitation, the achievement of performance criteria if deemed
            appropriate by the Committee), at the date of grant or thereafter,
            which restrictions may lapse at the expiration of the deferral
            period or at earlier or later specified times, separately or in
            combination, in installments or otherwise, as the Committee may
            determine.

                  (ii) Forfeiture. Except as otherwise determined by the
            Committee at the date of grant or thereafter, upon Termination of
            Service during the applicable deferral period or portion thereof to
            which forfeiture conditions apply (as provided in the Award
            Agreement evidencing the Restricted Share Units), or upon failure to
            satisfy any other conditions precedent to the delivery of Shares or
            cash to which such Restricted Share Units relate, all Restricted
            Share Units that are at that time subject to deferral or restriction
            shall be forfeited; provided, however, that the Committee may
            provide, by rule or regulation or in any Award Agreement, or may
            determine in any indi-

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                                      -12-

            vidual case, that restrictions or forfeiture conditions relating to
            Restricted Share Units will be waived in whole or in part in the
            event of Termination of Service resulting from specified causes, and
            the Committee may in other cases waive in whole or in part the
            forfeiture of Restricted Share Units.

                  (iii) Dividend Equivalents. Unless otherwise determined by the
            Committee at the date of grant, Dividend Equivalents on the
            specified number of Shares covered by a Restricted Share Unit shall
            be either (A) paid with respect to such Restricted Share Unit at the
            dividend payment date in cash or in restricted or unrestricted
            Shares having a Fair Market Value equal to the amount of such
            dividends, or (B) deferred with respect to such Restricted Share
            Unit and the amount or value thereof automatically deemed reinvested
            in additional Restricted Share Units or other Awards, as the
            Committee shall determine or permit the Participant to elect.

                  (f) Performance Shares and Performance Units. The Committee is
authorized to grant Performance Shares or Performance Units or both to Eligible
Persons on the following terms and conditions:

                  (i) Performance Period. The Committee shall determine a
            performance period (the "Performance Period") of one or more years
            or other periods and shall determine the performance objectives for
            grants of Performance Shares and Performance Units. Performance
            objectives may vary from Eligible Person to Eligible Person and
            shall be based upon the performance criteria as the Committee may
            deem appropriate. The performance objectives may be determined by
            reference to the performance of the Company, or of a Subsidiary or
            Affiliate, or of a division or unit of any of the foregoing.
            Performance Periods may overlap and Eligible Persons may participate
            simultaneously with respect to Performance Shares and Performance
            Units for which different Performance Periods are prescribed.

                  (ii) Award Value. At the beginning of a Performance Period,
            the Committee shall determine for each Eligible Person or group of
            Eligible Persons with respect to that Performance Period the range
            of number of Shares, if any, in the case of Performance Shares, and
            the range of dollar values, if any, in the case of Performance
            Units, which may be fixed or may vary in accordance with such
            performance or other criteria specified by the Committee, which
            shall be paid to an Eligible Person as an Award if the relevant
            measure of Company performance for the Performance Period is met.

                  (iii) Significant Events. If during the course of a
            Performance Period there shall occur significant events as
            determined by the Committee which the Committee expects to have a
            substantial effect on a performance objective during such period,
            the Committee may revise such objective.

<PAGE>

                                      -13-

                  (iv) Forfeiture. Except as otherwise determined by the
            Committee, at the date of grant or thereafter, upon Termination of
            Service during the applicable Performance Period, Performance Shares
            and Performance Units for which the Performance Period was
            prescribed shall be forfeited; provided, however, that the Committee
            may provide, by rule or regulation or in any Award Agreement, or may
            determine in an individual case, that restrictions or forfeiture
            conditions relating to Performance Shares and Performance Units will
            be waived in whole or in part in the event of Terminations of
            Service resulting from specified causes, and the Committee may in
            other cases waive in whole or in part the forfeiture of Performance
            Shares and Performance Units.

                  (v) Payment. Each Performance Share or Performance Unit may be
            paid in whole Shares, or cash, or a combination of Shares and cash
            either as a lump sum payment or in installments, all as the
            Committee shall determine, at the time of grant of the Performance
            Share or Performance Unit or otherwise, commencing as soon as
            practicable after the end of the relevant Performance Period.

                  (g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to Eligible Persons. The Committee may provide, at the date
of grant or thereafter, that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Shares, or
other investment vehicles as the Committee may specify; provided, however, that,
unless otherwise determined by the Committee, Dividend Equivalents (other than
freestanding Dividend Equivalents) shall be subject to all conditions and
restrictions of any underlying Awards to which they relate.

                  (h) Other Share-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to Eligible Persons such
other Awards that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, unrestricted shares awarded purely as a "bonus" and not subject to
any restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
notes or other property, as the Committee shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, shall also be
authorized pursuant to this Section 5(h).

<PAGE>

                                      -14-

                  6. Certain Provisions Applicable to Awards.

                  (a) Stand-Alone, Additional, Tandem and Substitute Awards.
Awards granted under the Plan may, in the discretion of the Committee, be
granted to Eligible Persons either alone or in addition to, in tandem with, or
in exchange or substitution for, any other Award granted under the Plan or any
award granted under any other plan or agreement of the Company, any Subsidiary
or Affiliate, or any business entity to be acquired by the Company or a
Subsidiary or Affiliate, or any other right of an Eligible Person to receive
payment from the Company or any Subsidiary or Affiliate. Awards may be granted
in addition to or in tandem with such other Awards or awards, and may be granted
either as of the same time as, or a different time from, the grant of such other
Awards or awards. Subject to the provisions of Section 3(d) hereof prohibiting
Option and SAR repricing without shareholder approval, the per Share exercise
price of any Option, or grant price of any SAR, which is granted in connection
with the substitution of awards granted under any other plan or agreement of the
Company or any Subsidiary or Affiliate, or any business entity to be acquired by
the Company or any Subsidiary or Affiliate, shall be determined by the
Committee, in its discretion.

                  (b) Term of Awards. The term of each Award granted to an
Eligible Person shall be for such period as may be determined by the Committee;
provided, however, that in no event shall the term of any Option or SAR exceed a
period of ten years from the date of its grant (or, in the case of ISOs, such
shorter period as may be applicable under Section 422 of the Code).

                  (c) Form of Payment Under Awards. Subject to the terms of the
Plan and any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may
be made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, Shares, notes or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The Committee may make rules relating to installment or
deferred payments with respect to Awards, including the rate of interest to be
credited with respect to such payments, and the Committee may require deferral
of payment under an Award if, in the sole judgment of the Committee, it may be
necessary in order to avoid nondeductibility of the payment under Section 162(m)
of the Code.

                  (d) Nontransferability. Unless otherwise set forth by the
Committee in an Award Agreement, Awards shall not be transferable by an Eligible
Person except by will or the laws of descent and distribution (except pursuant
to a Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Person only by such Eligible Person or his guardian or legal
representative. An Eligible Person's rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to
claims of the Eligible Person's creditors.

<PAGE>

                                      -15-

                  (e) Noncompetition. The Committee may, by way of the Award
Agreements or otherwise, establish such other terms, conditions, restrictions
and/or limitations, if any, of any Award, provided they are not inconsistent
with the Plan, including, without limitation, the requirement that the
Participant not engage in competition with, solicit customers or employees of,
or disclose or use confidential information of the Company or its Affiliates.

                  7. General Provisions.

                  (a) Compliance with Legal and Trading Requirements. The Plan,
the granting and exercising of Awards thereunder, and the other obligations of
the Company under the Plan and any Award Agreement, shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any stock exchange, regulatory or governmental agency as may be
required. The Company, in its discretion, may postpone the issuance or delivery
of Shares under any Award until completion of such stock exchange or market
system listing or registration or qualification of such Shares or any required
action under any state, federal or foreign law, rule or regulation as the
Company may consider appropriate, and may require any Participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Shares in compliance with applicable
laws, rules and regulations. No provisions of the Plan shall be interpreted or
construed to obligate the Company to register any Shares under federal, state or
foreign law. The Shares issued under the Plan may be subject to such other
restrictions on transfer as determined by the Committee.

                  (b) No Right to Continued Employment or Service. Neither the
Plan nor any action taken thereunder shall be construed as giving any employee,
consultant or director the right to be retained in the employ or service of the
Company or any of its Subsidiaries or Affiliates, nor shall it interfere in any
way with the right of the Company or any of its Subsidiaries or Affiliates to
terminate any employee's, consultant's or director's employment or service at
any time.

                  (c) Taxes. The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Shares, or any payroll or other
payment to an Eligible Person, amounts of withholding and other taxes due in
connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and Eligible
Persons to satisfy obligations for the payment of withholding taxes and other
tax obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Person's tax obligations;
provided, however, that the amount of tax withholding to be satisfied by
withholding Shares shall be limited to the minimum amount of taxes, including
employment taxes, required to be withheld under applicable Federal, state and
local law.

<PAGE>
                                      -16-

                  (d) Changes to the Plan and Awards. The Board may amend,
alter, suspend, discontinue, or terminate the Plan or the Committee's authority
to grant Awards under the Plan without the consent of shareholders of the
Company or Participants, except that any such amendment or alteration shall be
subject to the approval of the Company's shareholders (i) to the extent such
shareholder approval is required under the rules of any stock exchange or
automated quotation system on which the Shares may then be listed or quoted, or
(ii) as it applies to ISOs, to the extent such shareholder approval is required
under Section 422 of the Code; provided, however, that, without the consent of
an affected Participant, no amendment, alteration, suspension, discontinuation,
or termination of the Plan may materially and adversely affect the rights of
such Participant under any Award theretofore granted to him or her. The
Committee may waive any conditions or rights under, amend any terms of, or
amend, alter, suspend, discontinue or terminate, any Award theretofore granted,
prospectively or retrospectively; provided, however, that, without the consent
of a Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her.

                  (e) No Rights to Awards; No Shareholder Rights. No Eligible
Person or employee shall have any claim to be granted any Award under the Plan,
and there is no obligation for uniformity of treatment of Eligible Persons and
employees. No Award shall confer on any Eligible Person any of the rights of a
shareholder of the Company unless and until Shares are duly issued or
transferred to the Eligible Person in accordance with the terms of the Award.

                  (f) Unfunded Status of Awards. The Plan is intended to
constitute an "unfunded" plan for incentive compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company; provided, however, that
the Committee may authorize the creation of trusts or make other arrangements to
meet the Company's obligations under the Plan to deliver cash, Shares, other
Awards, or other property pursuant to any Award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant.

                  (g) Nonexclusivity of the Plan. Neither the adoption of the
Plan by the Board nor its submission to the shareholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of options and other awards
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

<PAGE>

                                      -17-

                  (h) Not Compensation for Benefit Plans. No Award payable under
this Plan shall be deemed salary or compensation for the purpose of computing
benefits under any benefit plan or other arrangement of the Company for the
benefit of its employees, consultants or directors unless the Company shall
determine otherwise.

                  (i) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.

                  (j) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan, and any Award
Agreement shall be determined in accordance with the laws of New York, without
giving effect to principles of conflict of laws thereof.

                  (k) Effective Date; Plan Termination. This Amendment and
Restatement of the Plan shall become effective as of January 1, 2007 (the
"Effective Date"), subject to approval by the shareholders of the Company. The
Plan shall terminate as to future awards on the date which is ten (10) years
after the Effective Date.

                  (l) Section 409A . It is intended that the Plan and Awards
issued thereunder will comply with Section 409A of the Code (and any regulations
and guidelines issued thereunder) to the extent the Awards are subject thereto,
and the Plan and such Awards shall be interpreted on a basis consistent with
such intent. The Plan and any Award Agreements issued thereunder may be amended
in any respect deemed by the Board or the Committee to be necessary in order to
preserve compliance with Section 409A of the Code.

                  (m) Titles and Headings. The titles and headings of the
sections in the Plan are for convenience of reference only. In the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.<PAGE>

                                                                   EXHIBIT 10.30

                                 Dated May 2007

                         THE PERSONS NAMED IN SCHEDULE 1

                                       and

                              VALIDUS HOLDINGS LTD

                              SHARE SALE AGREEMENT

                 relating to the sale and purchase of the whole
                         of the issued share capital of
                               Talbot Holdings Ltd

LINKLATERS LLP
One Silk Street
London EC2Y 8HQ

Telephone: (44-20) 7456 2000
Facsimile: (44-20) 7456 2222

Ref: AIC
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                      PAGE
------                                                                      ----
<S>                                                                         <C>
1  Interpretation........................................................      2
2  Agreement to Sell the Shares..........................................     14
3  Consideration.........................................................     15
4  Conditions............................................................     20
5  Actions Pending Completion............................................     22
6  Completion............................................................     28
7  Leakage...............................................................     29
8  Warranties............................................................     30
9  Whole Agreement and Remedies..........................................     32
10 Other Provisions......................................................     33
Schedule 1 Particulars of Sellers, Shares Sold etc.......................     48
Schedule 2 Particulars of the Company and Subsidiaries...................     49
Schedule 3 Completion Obligations........................................     60
Schedule 4 Warranties given by the Sellers and Warrantors under
           Clause 8......................................................     63
Schedule 5 Limitation of Liability under Clause 8.1......................     81
Schedule 6 Properties....................................................     89
Schedule 7 Optionholders.................................................     94
Schedule 8 Employment parties............................................     96
Schedule 9 Terms applicable to the Base Share Consideration..............     97
Schedule 10 Rule 3b-4 of the Exchange Act and definition of US Person....     99
Schedule 11 Share Election Form..........................................    101
</TABLE>

                                       i

<PAGE>

AGREEMENT FOR SALE OF SHARES

THIS AGREEMENT is made on May 2007

BETWEEN:

(1)  THE PERSONS named in Schedule 1 (the "SELLERS" and each a "SELLER"); and

(2)  VALIDUS HOLDINGS LTD, a company with limited liability organised under the
     laws of Bermuda (Registration No. EC37417) whose principal place of
     business is at 19 Par La Ville Road, Hamilton, HM11, Bermuda (the
     "PURCHASER").

WHEREAS:

(A)  The Sellers have agreed to sell the Shares (as defined below) and to assume
     the obligations imposed on the Sellers under this Agreement subject to and
     in accordance with the terms of this Agreement.

(B)  The Purchaser has agreed to purchase the Shares and assume the obligations
     imposed on the Purchaser under this Agreement subject to and in accordance
     with the terms of this Agreement.

(C)  The Shares which those Employee Sellers who are Optionholders will sell to
     the Purchaser in accordance with the terms of this Agreement will include:

     (i)  the EBT Common Shares which will be transferred by the EBT to certain
          of the Optionholders prior to, and conditional upon, Completion
          pursuant to the exercise by them of all of the Options held by them
          over Common Shares as at the date of this Agreement in accordance with
          the Share Option Scheme; and

     (ii) the Class B Common Shares which will be issued to certain of the
          Optionholders prior to, and conditional upon, Completion pursuant to
          the exercise by them of all of the Options held by them over Class B
          Common Shares as at the date of this Agreement in accordance with the
          Share Option Scheme,

     such transactions, the "OPTIONS TRANSACTIONS".

(D)  Simultaneously with the execution and delivery of this Agreement, each of
     the persons identified in Schedule 8 hereto has entered into a term sheet
     between such person and a Group Company, contemplating the execution and
     delivery of an amendment and restatement of such person's existing
     employment arrangement with such Group Company to be effective at
     Completion.

It is agreed as follows:

1    INTERPRETATION

     In this Agreement, unless the context otherwise requires, the provisions in
     this Clause 1 apply:

                                        2

<PAGE>

1.1  DEFINITIONS

     "A PREFERENCE SHARES" means the 60,504,000 7.5 per cent. cumulative,
     convertible, redeemable A preference shares with a par value of US$0.002
     each in the capital of the Company;

     "2005 ACCOUNTS" means the audited consolidated financial statements of the
     Group as at 31 December 2005;

     "ACCOUNTS" means the audited consolidated financial statements of the Group
     as at the Accounts Date;

     "ACCOUNTS DATE" means 31 December 2006;

     "ACCRUED PREFERENCE DIVIDEND" means the dividend which will be accrued and
     payable on the A Preference Shares pursuant to the Byelaws in respect of
     the period from (but excluding) 1 November 2006 up to (and including) the
     date of Completion, together with all other amounts accrued but unpaid on
     the A Preference Shares pursuant to the Byelaws;

     "ACTUARIAL RESERVES REVIEW" means the actuarial reserves review dated 9
     February 2007 prepared by EMB Consultancy in respect of the Group;

     "AGREED TERMS" means, in relation to a document, such document in the terms
     agreed between the parties and signed for identification by or on behalf of
     the Purchaser and the Sellers' Solicitors with such alterations as may be
     agreed in writing between the parties from time to time for any reason
     including to take account of any changes between the date of this Agreement
     and Completion;

     "B PREFERENCE SHARES" means the 12,499,000 convertible, redeemable B
     convertible preference shares with a par value of US$0.002 each in the
     capital of the Company;

     "BASE SHARE CONSIDERATION" has the meaning set out in Clause 3.1.1(ii);

     "BMA" means the Bermuda Monetary Authority;

     "BONUS LETTERS" means the letters dated 25 February 2004 from Talbot
     Underwriting Ltd to each of VG Southey and AJ Keys relating to certain cash
     payments, which letters are disclosed in the Data Room;

     "BUSINESS DAY" means a day on which banks are open for business in London
     and Bermuda (excluding Saturdays, Sundays and public holidays);

     "BYELAWS" means the Byelaws of the Company as at the date of this
     Agreement;

     "CASH COMPONENT" has the meaning set out in Clause 3.1.4(ii);

     "CLASS B COMMON SHARES" means the 7,462,500 Class B Common Shares of par
     value US$0.002 each in the capital of the Company into which Options over
     Class B Common Shares will be converted prior to, and conditional upon,
     Completion in accordance with the Share Option Scheme;

     "CODAN" means Codan Trust Company Limited, acting solely in its capacity as
     trustee of whichever Trust or Trusts is or are then relevant;

     "COMMON SHARES" means the 50,000,000 common shares of par value US$0.002
     each in the capital of the Company in issue as at the date of this
     Agreement which include, for the avoidance of doubt, the EBT Common Shares;

                                        3

<PAGE>

     "COMPANY" means Talbot Holdings Ltd, a company incorporated in Bermuda
     (Registration No. 31149) whose registered office is at Clarendon House, 2
     Church Street, Hamilton, HM11, Bermuda;

     "COMPANY PENSION SCHEME" means the defined contribution group personal
     pension scheme sponsored by the Group;

     "COMPLETION" means the completion of the sale and purchase of the Shares
     pursuant to Clause 6;

     "CONSIDERATION" has the meaning set out in Clause 3.1.1;

     "CONDITIONS PRECEDENT" means the conditions set out in Clause 4.1;

     "CONFIDENTIALITY AGREEMENT" means the agreement dated 25 January 2007 and
     made between the Purchaser (1) and the Company (2) pursuant to which the
     Company made available certain confidential information relating to the
     Group;

     "CORE WARRANTIES" means those Warranties set out in paragraphs 1.2, 1.5,
     2.2, 2.5, 2.6.1, 2.11.1 and 2.11.2 of Schedule 4;

     "CURE PERIOD" has the meaning given to that term in the definition of
     Material Adverse Event in this Clause 1.1;

     "DATA ROOM" means the virtual data room administered by Merrill Corporation
     Limited the contents of which are listed in the Data Room Index;

     "DATA ROOM INDEX" means the index of documents included in the Data Room
     attached as Schedule 2 of the Disclosure Letter;

     "DISCLOSURE LETTER" means the letter of even date with this Agreement from
     the Warrantors to the Purchaser;

     "DORMANT SUBSIDIARIES" means the Subsidiaries set out in Section B of Part
     2 of Schedule 2;

     "DUE DILIGENCE REPORTS" means the Vendor Due Diligence Report, the Tax Due
     Diligence Report and the Actuarial Reserves Review and each a "DUE
     DILIGENCE REPORT";

     "EARLIEST COMPLETION DATE" means the date falling two Business Days after
     the Conditions Precedent have been satisfied or waived and the Sellers have
     provided evidence of their ability to satisfy the obligations specified in
     Schedule 3;

     "EBT" means the Talbot Holdings Employee Benefit Trust;

     "EBT COMMON SHARES" means the 875,000 common shares of par value US$0.002
     each in the capital of the Company currently held by Codan (in its capacity
     as trustee of the EBT) which will be transferred to those Optionholders who
     have Options over Common Shares on the exercise by them of those Options
     prior to, and conditional upon, Completion in accordance with the Share
     Option Scheme;

     "EBT LOAN" means the loan from the Company to the EBT for the purpose of
     acquiring Common Shares from departing employees, which amounts to
     US$517,500 and L49,980.87;

     "EMPLOYEE" means an employee of any Group Company, including a Senior
     Employee;

     "EMPLOYEE SELLER CASH CONSIDERATION" has the meaning set out in Clause
     3.1.1(ii);

                                        4

<PAGE>

     "EMPLOYEE SELLER CONSIDERATION" has the meaning set out in Clause
     3.1.1(ii);

     "EMPLOYEE SELLERS" means the Sellers listed in Part 1 of Schedule 1 (other
     than PC Churchill, DK Newbigging, DP Redhead, the Ashdown Trust, the
     Dynevor Trust and the Rams Hill Trust) and each an "EMPLOYEE SELLER";

     "EMPLOYEE SHAREHOLDERS' AGREEMENT" means the agreement dated 16 February
     2002 between, inter alia, the Company and certain of the Employee Sellers
     as disclosed in the Data Room;

     "ENCUMBRANCE" means any claim, charge, mortgage, security, lien, option,
     power of sale, hypothecation or other third party right, retention of
     title, right of pre-emption, right of first refusal or security interest of
     any kind;

     "EXCHANGE ACT" means the United States Securities Exchange Act of 1934, as
     amended;

     "EXERCISE PRICE" means the total aggregate exercise price payable by each
     Optionholder as set out against his/her name in column (3) of Schedule 7 in
     respect of all of the Options to be exercised by him/her prior to, and
     conditional upon, Completion;

     "FAL" or "FUNDS AT LLOYD'S" has the meaning given to that term under the
     Lloyd's Membership Byelaw (No. 5 of 2005);

     "FAL PROVIDERS' AGREEMENT" means the Amended and Restated FAL Providers'
     Agreement dated 29 November 2006 (document 6.1.8.3 of the Data Room Index);

     "FSA" means the UK Financial Services Authority;

     "GROUP" or "GROUP COMPANIES" means the Company and the Subsidiaries and
     "GROUP COMPANY" means any one of them;

     "GROUP'S CAPITAL STACK" means the leveraged capital structure employed by
     the Group to meet its Funds at Lloyd's requirements in respect of any
     Lloyd's year of account, the details of which are disclosed in the Data
     Room;

     "INFORMATION MEMORANDUM" means the Information Memorandum relating to the
     Company dated January 2007;

     "INSTITUTIONAL SELLERS" means the Sellers listed in Part 3 of Schedule 1
     and each an "INSTITUTIONAL SELLER";

     "INTEREST RATE" means the rate per annum of two per cent above the base
     rate from time to time of Lloyds TSB Bank plc;

     "LEAKAGE" means (whether direct or indirect):

     (a)  any (A) dividend or distribution declared, paid or made, whether or
          not in specie, by any Group Company to any shareholders of the Company
          including any of the Sellers or their connected persons, other than
          the payments referred to in sub-paragraph (j) below, or (B) investment
          or loan (other than season ticket loans made to employees in
          accordance with their employment arrangements) made, or committed to
          be made, by any Group Company in or to any shareholder of the Company
          (including any of the Sellers) or their respective connected persons
          (other than to another Group Company);

     (b)  any payments or accruals made, or agreed to be made, by any Group
          Company, to (or assets transferred to or liabilities assumed,
          indemnified or incurred for the

                                        5

<PAGE>

          benefit of) any of the Sellers or their connected persons by any Group
          Company other than payments or accruals made, or required to be made,
          pursuant to the terms of commercial agreements in the ordinary course
          of any Group Company's trading which, for the avoidance of doubt,
          shall include all of the payments or accruals referred to in
          sub-paragraphs (k) and (l) below;

     (c)  any payments or accruals made, or agreed to be made, by any Group
          Company to any of the Sellers or their connected persons, in respect
          of any share capital or other securities or debt obligations of any
          Group Company being issued, redeemed, purchased, repaid or prepaid, or
          any other return of capital;

     (d)  the waiver by any Group Company of any amount owed to that Group
          Company by the Sellers or their connected persons, other than any of
          the waivers referred to in sub-paragraph (k) below;

     (e)  any fees, costs or expenses incurred, paid or accrued or agreed to be
          incurred, paid or accrued by any Group Company of professional fees
          incurred in connection with this Agreement or the transactions to be
          entered into pursuant to this Agreement ("PROFESSIONAL FEES"); and

     (f)  any payment made or agreed to be made to any pension scheme of any of
          the Sellers or their connected persons in excess of payments made in
          the ordinary course of business pursuant to that Seller's contractual
          entitlement to the same,

     but shall not include (each of the following, a "PERMITTED LEAKAGE"):

     (g)  payments and accruals of salary, employer's National Insurance
          contributions, employee benefits and directors' fees and expenses
          required to be made in accordance with the existing contractual terms
          included in documents listed in the Data Room Index (or otherwise
          required by applicable law or regulation or arising from the
          transactions to be entered into pursuant to this Agreement);

     (h)  payments, awards and allocations of bonuses and accruals of
          entitlements to, and discretionary amounts, which may be considered to
          have accrued, in respect of, any bonuses in accordance with the terms
          of the Staff Profit Share Plan or the Bonus Letters;

     (i)  payments and accruals of expenses made to any of the Sellers in the
          ordinary and usual course of business;

     (j)  payments and accruals of the Accrued Preference Dividend;

     (k)  payments made or accrued, or waivers granted or entitlements arising
          in relation to any of 1384 Capital Limited, the Shrewsbury Companies
          or participants in the Group's Capital Stack (including all interest
          and other payments on or in respect of the Group's Capital Stack) in
          each case required to be made in accordance with existing contractual
          terms of documents listed in the Data Room Index;

     (l)  any management fees paid or accrued up to the date of Completion by
          any Group Company to Olympus or The Black Diamond Group LLC required
          to be made pursuant to the Management Fee Agreements (but excluding:
          (i) any pre-paid amount of such management fees to the extent that it
          relates to a period which is unexpired as at the date of Completion;
          and (ii) for the avoidance of doubt, any fees or expenses, whether
          payable pursuant to such agreements or otherwise, in relation to any
          of the transactions to be entered into pursuant to this Agreement);

                                        6

<PAGE>

     (m)  the amount of L230,000 accrued in the Accounts in respect of the
          Vendor Due Diligence Report;

     (n)  any employer's National Insurance required to be paid in relation to
          any acceleration of payments made under the Staff Profit Share Plan or
          in respect of unpaid bonuses as disclosed in the Disclosure Letter
          and/or the exercise of the Options by the Optionholders, as the case
          may be;

     (o)  the cost of any directors and officers insurance and run-off insurance
          cover and the cost of any pension trustee liability insurance and any
          run-off insurance cover;

     (p)  any other Leakage which has been provided for in the Accounts; or

     (q)  any payments agreed to be made or accrued or interest payments or
          other amounts due to any of the Sellers or their connected persons as
          a result of any of the matters listed in (g) to (p) above,

     provided that Permitted Leakage, other than waivers, may only be made in
     cash (and not other assets);

     "LEASES" means the leases and licence held by the Group in respect of the
     Properties as described in more detail in Schedule 6;

     "LLOYD'S" means the Council and Society of Lloyd's incorporated under the
     Lloyd's Acts 1871 to 1982 of England and Wales;

     "LOSSES" means all losses, liabilities, costs (including legal costs),
     charges, expenses, actions, proceedings, claims, damages and demands;

     "MANAGEMENT FEE AGREEMENTS" means the terms of an engagement letter dated 5
     December 2001 from Black Diamond Group LLC to the Company, as subsequently
     extended by further letters, most recently a letter dated 9 February 2006
     and the management fee agreement dated 25 November 2003 between Olympus
     Advisory Partners Inc. and the Company, in each case as disclosed in the
     Data Room;

     "MANAGEMENT PRESENTATIONS" means the presentations by management of the
     Group to the Purchaser and its advisers on 19, 20 and 21 March 2007;

     "MANAGEMENT WARRANTIES" means the Warranties set out in paragraph 2 of
     Schedule 4, and each a "MANAGEMENT WARRANTY";

     "MATERIAL ADVERSE EFFECT" means any breach as set out in paragraphs (i),
     (ii) or (iii) of the definition of Material Adverse Event (in the case of
     Clauses 5.1 and 5.2 and any deemed repetition at Completion of the Core
     Warranties occurring after the date of this Agreement and in any other case
     occurring at any time) which reduces the net asset value of the Group by
     more than US$40 million below the net asset value of the Group as stated in
     the Accounts, but shall not include any such breach resulting from:

     (i)  events or factors affecting the insurance industry or the economy
          generally unless they affect the Group disproportionately in relation
          to other companies with similar exposures and to a material extent;

     (ii) the identity of, or facts relating uniquely to, the Purchaser; or

     (iii) any action required to be taken in order to implement any
          transactions contemplated by this Agreement;

                                        7

<PAGE>

     "MATERIAL ADVERSE EVENT" means any of the following:

     (i)  there having been a breach by the Sellers of Clauses 5.1 or 5.2 which
          could reasonably have been avoided or prevented by the Sellers;

     (ii) other than the Core Warranties (to which sub-paragraph (iii) below
          shall apply), there having been a breach of the Warranties as at the
          date of this Agreement, which breach would not have arisen but for the
          fraud or wilful default of any of the Sellers; or

     (iii) there having been a breach of any of the Core Warranties, including a
          breach were any such Core Warranties deemed to be repeated at any time
          prior to Completion, which, in the case of the Core Warranties set out
          in paragraphs 2.5 and 2.6.1 of Schedule 4, could reasonably have been
          avoided or prevented by any of the Warrantors,

     and which in each case (a) (except in the case of Core Warranties 1.2 and
     1.5 of Schedule 4) has a Material Adverse Effect and (b) (if capable of
     remedy) (and a breach of Core Warranties 2.11.1 and 2.11.2 shall be deemed
     not to be capable of remedy) has not been remedied within 14 days of the
     Purchaser giving notice to the Sellers of the occurrence of the Material
     Adverse Event or, if earlier, by the Earliest Completion Date (provided
     that the Purchaser has given such notice) (the "CURE PERIOD");

     "NET CASH CONSIDERATION" means:

     (i)  in respect of a Non-Employee Seller, the amount of Non-Employee Cash
          Consideration set out next to his/her/its name in column (8) of
          Schedule 1 less his/her/its pro rata share (by reference to
          his/her/its percentage shareholding in the Company on a fully diluted
          basis) of the Permitted Deductions;

     (ii) in respect of an Employee Seller (other than in respect of their
          Option Shares to which the provisions of (iii) below shall apply), the
          amount of Employee Seller Cash Consideration set out next to his/her
          name in column (8) of Schedule 1 less his/her pro rata share (by
          reference to his/her percentage shareholding in the Company (excluding
          his/her Option Shares) on a fully diluted basis) of the Permitted
          Deductions; and

     (iii) in respect of an Optionholder in relation to the Employee Seller Cash
          Consideration payable to that Optionholder in respect of his/her
          Option Shares, the amount set out against his/her name in column (9)
          of Schedule 1 after deducting therefrom (i) the amount of that
          Optionholder's Exercise Price, (ii) his/her pro rata share (by
          reference to the percentage his/her Option Shares bears to the total
          share capital of the Company on a fully diluted basis) of the
          Permitted Deductions; and (iii) any amount required to be deducted by
          Talbot Underwriting Services Ltd under PAYE or in respect of
          employees' National Insurance, in accordance with applicable
          legislation in connection with the exercise of the Options of each
          Optionholder;

     "MINIMUM CASH AMOUNT" means, in respect of each Employee Seller, an amount
     equal to the following:

     (i)  his/her pro rata share of the Permitted Deductions (as set out in
          paragraphs (ii) and/or (iii) of the definition of Net Cash
          Consideration in this Clause 1.1 as applicable);

                                        8

<PAGE>

     (ii) the Exercise Price (if any) payable by that Employee Seller in respect
          of his/her Option Shares; and

     (iii) the amount (if any) required to be deducted by Talbot Underwriting
          Services Ltd under PAYE or in respect of employee's National
          Insurance, in each case in accordance with applicable legislation in
          connection with any exercise by that Employee Seller of his/her
          Options;

     "NON-EMPLOYEE SELLER CASH CONSIDERATION" has the meaning set out in Clause
     3.1.1(i);

     "NON-EMPLOYEE SELLERS" means all of the Sellers other than Employee
     Sellers, and each a "NON-EMPLOYEE SELLER";

     "OLYMPUS" means each of OGF III (Caymans 1), L.P., OGF IV (Caymans 1), L.P.
     and Olympus Executive Fund, L.P. or, where the context so requires, all of
     them together;

     "OPTIONHOLDERS" means the Employee Sellers who hold options over shares in
     the Company as at the date of this Agreement, and who will exercise those
     options for shares in the Company prior to, and conditional upon,
     Completion being those Employee Sellers listed in column (1) of Schedule 7,
     and each an "OPTIONHOLDER";

     "OPTIONS" means the options over the share capital of the Company held as
     at the date of this Agreement by the Optionholders, such Options being as
     listed against the names of each Optionholder in column (2) of Schedule 7
     (being all of the options in existence as at the date of this Agreement
     under the Share Option Scheme);

     "OPTION SHARES" means the Shares received by each Optionholder on the
     exercise of his/her Options (all of which Options shall be exercised in
     full on or before Completion);

     "OPTIONS TRANSACTIONS" has the meaning given in recital (C);

     "PAYMENT INSTRUCTIONS" has the meaning set out in Clause 3.1.9(i);

     "PERMITTED DEDUCTIONS" means any professional fees or expenses which the
     Company has contracted to pay and which are payable by the Sellers in
     connection with this Agreement as approved by any two of MEA Carpenter, CNR
     Atkin, GAM Bonvarlet, JS Clouting or ND Wachman, provided that at least one
     of the approving persons must be MEA Carpenter, GAM Bonvarlet or ND
     Wachman;

     "PROPERTIES" means the leasehold properties, brief details of which are set
     out in Schedule 6 and "PROPERTY" means any one of or any part or parts of
     any one of them;

     "PURCHASER'S GROUP" means the Purchaser and its subsidiaries and holding
     company from time to time and any subsidiaries of such holding company
     (and, following Completion, shall include the Group Companies);

     "PURCHASER'S SOLICITORS" means Kendall Freeman of One Fetter Lane, London
     EC4A 1JB;

     "REGISTRATION RIGHTS AGREEMENT" means the agreement dated 24 November 2003
     between (inter alia) the Company, its shareholders, Olympus, Reservoir
     Capital Partners L.P., Reservoir Capital Master Fund L.P. and Intermediate
     Capital Group PLC as disclosed in the Data Room;

     "RELEVANT REGULATOR" means each of Lloyd's, the FSA and the BMA;

     "RESERVOIR AGENT" means Reservoir Capital Group LLC;

                                        9

<PAGE>

     "RESERVOIR LETTER OF CREDIT" means the letter of credit provided by
     Reservoir Capital Partners, L.P., Reservoir Capital Master Fund, L.P.,
     Reservoir Capital Master Fund II, L.P. and Reservoir Capital Investment
     Partners, L.P;

     "RING FENCING LETTERS" means the three letters from Lloyd's addressed to
     Talbot Underwriting Ltd dated 9 November 2001, 11 February 2002 and 19
     November 2003 relating to past liabilities of Shrewsbury Underwriting
     Capital Ltd and Shrewsbury Underwriting Capital (Bermuda) Ltd;

     "SELLERS' SOLICITORS" means Linklaters LLP of One Silk Street, London EC2Y
     8HQ;

     "SENIOR EMPLOYEE" means each of MEA Carpenter, CNR Atkin, ND Wachman, GAM
     Bonvarlet, JS Clouting, NJ Hales, GS Langford, MS Johnson, JE Skinner, JG
     Ross, SF Lloyd, RW Fielder, JRA Bamford, SEH Barr, G Cooke, JAJA McDonald,
     LE Nevill, DG Burns, JAA Colquhoun, I Fordham, JG Cutts and PJ Miller;

     "SHAREHOLDERS' AGREEMENT" means the agreement dated 25 November 2003
     between the Company and its shareholders as disclosed in the Data Room;

     "SHARE CONSIDERATION" has the meaning set forth in Clause 3.1.4(i);

     "SHARE OPTION SCHEME" means the Talbot Holdings Ltd. Share Option Plan,
     details of which are included in the Data Room and pursuant to which
     options have been granted over 875,000 Common Shares and 7,462,500 Class B
     Common Shares;

     "SHARES" means the Common Shares, Class B Common Shares, A Preference
     Shares and B Preference Shares, which together will constitute the whole of
     the issued share capital of the Company as at the date of Completion;

     "SHREWSBURY COMPANIES" means Shrewsbury Underwriting Capital Ltd,
     Shrewsbury Underwriting Capital (Bermuda) Ltd and Shrewsbury Holdings Ltd;

     "SHREWSBURY TRANSACTIONS" means: (a) the sale by the Company of all of the
     issued share capital of Shrewsbury Holdings Limited to Rupert Atkin,
     Michael Carpenter, Jane Clouting and Nigel Wachman as trustees for the then
     existing shareholders in the Company in proportion to their then existing
     holdings; and (b) the subsequent sale by Shrewsbury Holdings Limited of:
     (i) (A) all of the 67,746,236 issued A common shares of $1.00 each in the
     capital of Shrewsbury Underwriting Capital (Bermuda) Ltd; and (B) all of
     the 58,006,255 issued A ordinary shares of L1.00 each in the capital of
     Shrewsbury Underwriting Capital Ltd to FOSPV Limited; and (ii) (A) all of
     the 1,357,640 issued C common shares of $0.05 each in the capital of
     Shrewsbury Underwriting Capital (Bermuda) Ltd; and (B) all of the 1,162,450
     issued C ordinary shares of L0.05 each in the capital of Shrewsbury
     Underwriting Capital Ltd to Global Securitisation Services Limited, in its
     capacity as trustee of Great Ormond Street;

     "STAFF PROFIT SHARE PLAN" means the staff profit share plan adopted by
     Talbot Underwriting Ltd on 6 May 2003, as subsequently amended on 26
     October 2005, 14 March 2006 and 27 April 2007, and which is disclosed in
     the Data Room;

     "SUBSIDIARIES" means the subsidiaries of the Company details of which are
     contained in Part 2 of Schedule 2;

     "SYNDICATE 1183" means the Lloyd's syndicate in respect of which Talbot
     Underwriting Ltd. acts as managing agent (as defined in the Underwriting
     Byelaw (No. 2 of 2003));

                                       10

<PAGE>

     "TALBOT 2002" means Talbot 2002 Underwriting Capital Ltd, details of which
     are set out in Section A of Part 2 of Schedule 2;

     "TAXATION" or "TAX" means all forms of taxation and statutory,
     governmental, state, federal, provincial, local, government or municipal
     charges, duties, imposts, deductions, liabilities to account,
     contributions, withholdings, liabilities and levies, including US federal
     excise tax and other premium tax (and any other tax whatsoever) whether of
     the United Kingdom, the United States, Bermuda or elsewhere in the world,
     and any interest, penalty, charges, fines or surcharge relating thereto
     whether the Company or any of the Subsidiaries is primarily liable or
     secondarily liable;

     "TAXATION AUTHORITY" means any taxing, government, local government, fiscal
     or other authority (whether within or outside the United Kingdom) competent
     to impose, assess, administer or collect any Taxation, including Her
     Majesty's Revenue & Customs (and any predecessor authority) and the United
     States Internal Revenue Service;

     "TAX DUE DILIGENCE REPORT" means the tax due diligence report dated 9 March
     2007, together with the erratum issued on 4 May 2007, prepared by KPMG in
     respect of the Group;

     "TCGA" means the Taxation of Chargeable Gains Act 1992;

     "TERMINATION AGREEMENTS" means the agreements to terminate each of the
     Shareholders' Agreement, the Employee Shareholders' Agreement, the
     Management Fee Agreements and the Registration Rights Agreement, in each
     case in Agreed Terms;

     "TITLE AND CAPACITY WARRANTIES" means the Warranties set out in Part 1 of
     Schedule 4 and each a "TITLE AND CAPACITY WARRANTY";

     "TRUSTS" means those trusts whose assets include, or as at Completion will
     include, Shares and each a "TRUST";

     "TRUSTEES" means Codan and Heidi Hutter solely in their capacity as trustee
     of the relevant trust and each a "TRUSTEE";

     "UK GAAP" means generally accepted accounting practices and principles in
     the United Kingdom for non public companies;

     "US" means the United States of America;

     "US DOLLAR" or "US$" means the lawful currency of the US;

     "US GAAP" means generally accepted accounting practices and principles in
     the US for non public companies;

     "US SELLERS" means the Sellers listed in Part 2 of Schedule 1 and each a
     "US SELLER";

     "VALIDUS" means the Purchaser;

     "VALIDUS BYE-LAWS" means the bye-laws of Validus as originally adopted on
     December 7, 2005 and as in effect from time to time;

     "VALIDUS COMMON SHARES" means the voting common shares of the Purchaser,
     par value US$0.10 per share;

     "VALIDUS SECURITIES" means the Validus Common Shares to be issued to
     Employee Sellers as contemplated under Clause 3 of this Agreement;

                                       11
<PAGE>

     "VAT" means United Kingdom Value Added Tax;

     "VATA" means the Value Added Tax Act 1994;

     "VENDOR DUE DILIGENCE REPORT" means the vendor due diligence report dated 7
     March 2007 prepared by PricewaterhouseCoopers in respect of the Group;

     "WARRANTIES" means the warranties set out in Schedule 4 and "WARRANTY"
     means any one of them; and

     "WARRANTORS" means MEA Carpenter, CNR Atkin, ND Wachman, GAM Bonvarlet, JS
     Clouting, NJ Hales, GS Langford, MS Johnson, DP Redhead and JG Ross and
     each a "WARRANTOR".

1.2  SUBORDINATE LEGISLATION

     References to a statutory provision include any subordinate legislation
     made from time to time under that provision which is in force at the date
     of this Agreement.

1.3  MODIFICATION ETC. OF STATUTES

     References to a statute or statutory provision include that statute or
     provision as from time to time modified or re-enacted or consolidated
     whether before or after the date of this Agreement so far as such
     modification, re-enactment or consolidation applies or is capable of
     applying to any transactions entered into in accordance with this Agreement
     prior to Completion and (so far as liability thereunder may exist or can
     arise) shall include also any past statutory provision (as from time to
     time modified, re-enacted or consolidated) which such provision has
     directly or indirectly replaced except to the extent that any statutory
     provision made or enacted after the date of this Agreement would create or
     increase a liability of any party under this Agreement.

1.4  CONNECTED PERSONS

     1.4.1 A person who is an individual shall be deemed to be connected with
          another individual if that person is the individual's wife or husband,
          or is a relative, or the wife or husband of a relative, of the
          individual or of the individual's wife or husband.

     1.4.2 A company is connected with another company:

          (i)  if the same person has control of both, or a person has control
               of one and persons connected with him, or he and persons
               connected with him, have control of the other; or

          (ii) if a group of two or more persons has control of each company,
               and the groups either consist of the same persons or could be
               regarded as consisting of the same persons by treating (in one or
               more cases) a member of either group as replaced by a person with
               whom he is connected.

          A company is connected with another person if that person has control
          of it or if that person and persons connected with him together have
          control of it.

     1.4.3 Any two or more persons acting together to secure or exercise control
          of a company shall be treated in relation to that company as connected
          with one

                                       12

<PAGE>

          another and with any person acting on the directions of any of them to
          secure or exercise control of the company.

     1.4.4 Any general partner of any of the Institutional Sellers shall be
          deemed to be connected with that Institutional Seller.

     1.4.5 In this Clause 1.4:

          (i)  "company" includes any body corporate or unincorporated
               association;

          (ii) "relative" means brother, sister, ancestor or lineal descendant;

          (iii) "control" means the exercise, or the ability to exercise or the
               entitlement to acquire, direct or indirect control over the
               company's affairs, and in particular, but without prejudice to
               the generality of the preceding words, the possession of or the
               entitlement to acquire:

               (a)  the greater part of the share capital or issued share
                    capital of the company or of the voting power in the
                    company; or

               (b)  such part of the issued share capital of the company as
                    would, if the whole of the income of the company were in
                    fact distributed among the participators (without regard to
                    any rights which he/she or any other person has as a loan
                    creditor), entitle him/her to receive the greater part of
                    the amount so distributed; or

               (c)  such rights as would, in the event of the winding-up of the
                    company or in any other circumstances, entitle him to
                    receive the greater part of the assets of the company which
                    would then be available for distribution among the
                    participators.

1.5  ACCOUNTS

     Any reference to "audited accounts" shall include, where applicable, the
     directors' and auditors' reports, and consolidated financial statements
     comprising the consolidated balance sheets of the Company and subsidiaries
     as of the Accounts Date and 31 December 2005, and the related consolidated
     statements of income/(loss) and comprehensive income/(loss), changes in
     shareholders' equity and cash flows for the years then ended and all
     accompanying notes to the consolidated financial statements, together with
     all documents which are or would be required by law to be annexed to that
     company's accounts to be laid before that company in general meeting in
     respect of the accounting reference period in question.

1.6  COMPANIES ACT 1985

     The words "HOLDING COMPANY" and "SUBSIDIARY" shall have the same meanings
     in this Agreement as their respective definitions in the Companies Act
     1985.

1.7  INTERPRETATION ACT 1978

     The Interpretation Act 1978 shall apply to this Agreement in the same way
     as it applies to an enactment.

                                       13

<PAGE>

1.8  INCLUDING, ETC

     Any phrase introduced by the terms "INCLUDING", "INCLUDE," "IN PARTICULAR"
     or any similar expression shall be construed as illustrative and shall not
     limit the generality of the words preceding those terms nor shall any words
     following such terms be considered an exhaustive list.

1.9  CLAUSES, SCHEDULES ETC.

     References to this Agreement include any recitals and Schedules to it and
     references to Clauses and Schedules are to clauses of and schedules to this
     Agreement. References to paragraphs within a Schedule are to paragraphs of
     that Schedule.

1.10 INFORMATION

     Any reference to books, records or other information means books, records
     or other information in any form including paper, electronically stored
     data, magnetic media, film and microfilm.

1.11 HEADINGS

     Headings shall be ignored in construing this Agreement.

2    AGREEMENT TO SELL THE SHARES

2.1  SALE AND PURCHASE OF SHARES

     2.1.1 On and subject to the terms of this Agreement, on Completion:

          (i)  each Seller (as to those of the Shares specified against
               his/her/its name in columns (3) to (7), as the case may be, of
               Schedule 1) agrees to sell or procure to be sold; and

          (ii) the Purchaser, relying on the several warranties and undertakings
               contained in this Agreement, agrees to purchase,

          the Shares.

     2.1.2 The Shares shall be sold with full title guarantee free from all
          Encumbrances and together with all rights and advantages now and
          hereafter attaching to them as at Completion (including the right to
          receive all dividends or distributions declared, made or paid on or
          after Completion other than any unpaid Accrued Preference Dividend).

     2.1.3 None of the parties shall be obliged to complete the acquisition or
          sale of the Shares unless the acquisition and sale of all of the
          Shares is completed simultaneously.

2.2  RIGHTS OF PRE-EMPTION

     The Sellers hereby waive irrevocably: (i) any and all rights of pre-emption
     over the Shares conferred either by the Byelaws or by any other document or
     in any other way; and (ii) any and all rights conferred by the Employee
     Shareholders' Agreement on the UK Steering

                                       14

<PAGE>

     Group (as defined therein) to specify the transferee of any of the Shares
     and any obligation imposed by that agreement on an Employee Seller to
     notify the UK Steering Group of his/her intention to sell the Shares in
     accordance with the terms of this Agreement and shall procure that on or
     prior to Completion any and all such rights and obligations are waived
     irrevocably by any other person entitled thereto.

2.3  TERMINATION OF CERTAIN EXISTING AGREEMENTS

     On Completion, the parties to each of the Shareholders' Agreement, the
     Employee Shareholders' Agreement, the Management Fee Agreements and the
     Registration Rights Agreement who are parties to this Agreement agree that
     the Shareholders' Agreement, the Employee Shareholders' Agreement, the
     Management Fee Agreements and the Registration Rights Agreement shall be
     terminated with effect from Completion and no party shall have any claim
     against the other or against any Group Company in respect thereof other
     than, in the case of the Management Fee Agreements, any fees and expenses
     accrued up to the date of Completion.

2.4  Each Seller, on behalf of itself and any person controlled by that Seller,
     effective upon Completion, hereby unconditionally waives any change of
     control or other similar right or provision or any right which it might
     have (whether pursuant to the FAL Providers' Agreement or otherwise) to
     participate in the Group's Capital Stack or otherwise to provide FAL in
     respect of the underwriting of Talbot 2002 in relation to the 2008 or any
     subsequent underwriting year of account, or to negotiate or meet with the
     Group Companies with respect to funding the Group's Capital Stack or
     otherwise providing FAL in respect of the underwriting of Talbot 2002 in
     relation to the 2008 or any subsequent underwriting year of account. For
     the avoidance of doubt, notwithstanding any other provision of this
     Agreement, except as specifically stated in this Clause 2.4 nothing in this
     Agreement will be construed or interpreted as waiving, relinquishing,
     restricting or limiting any rights relating to the Group's Capital Stack
     held by any Seller who participates in the Group's Capital Stack under the
     FAL Providers' Agreement, any previous FAL providers' agreement or any
     other relevant document.

3    CONSIDERATION

3.1  AMOUNT

     3.1.1 The deemed aggregate consideration for the purchase of the Shares
          under this Agreement shall be US$410,000,000.00 in cash and Validus
          Common Shares (the "CONSIDERATION").

          The Consideration shall be allocated and paid as follows:

          (i)  with respect to the aggregate Shares owned at Completion by
               Non-Employee Sellers, cash consideration in the amount of
               US$302,999,413.64 ("NON-EMPLOYEE SELLER CASH CONSIDERATION"), to
               be allocated among the Non-Employee Sellers as set out in Clause
               3.1.2 below; and

          (ii) with respect to the aggregate Shares owned at Completion by
               Employee Sellers: (a) consideration in the amount of
               US$79,176,543.36 payable as set forth in Clauses 3.1.3 and 3.1.4
               ("EMPLOYEE SELLER CASH CONSIDERATION"); and (b) 1,209,741 Validus
               Common Shares (such

                                       15

<PAGE>

               number of shares to be appropriately adjusted for any stock
               dividends, stock splits or recombinations or similar transactions
               after the date of this Agreement and prior to Completion) duly
               authorised by Validus and, upon Completion, to be allocated in
               accordance with Clause 3.1.5(i) and validly issued, fully paid
               and non-assessable (meaning that no further sums are required to
               be paid by holders thereof in connection with the issue thereof)
               and entitled to vote and participate in distributions and
               dividends on a pari passu basis with the Validus Common Shares
               then in issue, in accordance with the Validus Bye-Laws (the "BASE
               SHARE CONSIDERATION" and, together with the Employee Seller Cash
               Consideration, the "EMPLOYEE SELLER CONSIDERATION"). The Employee
               Seller Consideration shall be allocated among the Employee
               Sellers as set out in Clauses 3.1.3 to 3.1.7 below.

     3.1.2 The Non-Employee Seller Cash Consideration shall be paid by the
          Purchaser to the Sellers' Solicitors (to hold on trust for the
          Non-Employee Sellers) at Completion in accordance with Clause 6.3 by
          crediting the account which shall have been notified to the Purchaser
          in accordance with Clause 10.11. Such amount shall be allocated among
          the Non-Employee Sellers such that each Non-Employee Seller shall be
          paid his/her/its Net Cash Consideration and his/her/its pro rata
          amount of the Permitted Deductions shall be paid in accordance with
          Clause 3.1.8. Such amount shall be paid by the Sellers' Solicitors to
          each of the Non-Employee Sellers by crediting the account of that
          Non-Employee Seller which shall have been notified to the Sellers'
          Solicitors in accordance with Clause 10.11. For the avoidance of
          doubt, provided the Purchaser has delivered the aggregate Non-Employee
          Seller Cash Consideration to the Sellers' Solicitors in accordance
          with this Clause 3.1.2, the Purchaser shall be deemed to have
          delivered the Non-Employee Seller Cash Consideration to the
          Non-Employee Sellers and shall have no responsibility with respect to
          the allocation among the Non-Employee Sellers set out above, including
          the timing or method of it.

     3.1.3 Subject to any elections made by any Employee Sellers pursuant to
          Clause 3.1.4, the Employee Seller Cash Consideration amounts shall be
          paid by the Purchaser to the Sellers' Solicitors (to hold on trust for
          the Employee Sellers) at Completion in accordance with Clause 6.3 by
          crediting the account which shall have been notified to the Purchaser
          in accordance with Clause 10.11. Except in the case of the Option
          Shares to which the provisions of Clause 3.1.7 shall apply, the
          Employee Seller Cash Consideration shall be allocated among the
          Employee Sellers such that each Employee Seller shall be paid his/her
          Net Cash Consideration and his/her/its pro rata amount of the
          Permitted Deductions shall be paid in accordance with Clause 3.1.8.
          Such amount shall be paid by the Sellers' Solicitors to each of the
          Employee Sellers by crediting the account of that Employee Seller
          which shall have been notified to the Sellers' Solicitors in
          accordance with Clause 10.11. For the avoidance of doubt, provided the
          Purchaser has delivered the aggregate Employee Seller Cash
          Consideration to the Sellers' Solicitors in accordance with this
          Clause 3.1.3, the Purchaser shall be deemed to have delivered the
          Employee Seller Cash Consideration to the Employee Sellers and shall
          have no responsibility with respect to the allocation among the
          Employee Sellers set out above, including the timing or method of it.

                                       16

<PAGE>

     3.1.4

          (i)  The Employee Seller Cash Consideration payable to any Employee
               Seller will, subject to the following proviso, be paid by the
               Purchaser in cash; provided however that any Employee Seller may
               elect, which election, once duly made in accordance with the
               terms hereof, shall be irrevocable (such election, being
               hereinafter referred to as "SHARE ELECTION") to receive (subject
               to the provisions of sub-paragraph (ii) below) a portion of the
               Employee Seller Cash Consideration payable to him/her in an
               amount of Validus Common Shares equal to (a) the portion of such
               Employee Seller Cash Consideration subject to such Share Election
               divided by (b) US$23.00 (such number of shares to be
               appropriately adjusted by the Purchaser for any stock dividends,
               stock splits or recombinations or similar transactions after the
               date of this Agreement and prior to Completion) duly authorised
               by Validus and, upon Completion, to be validly issued, fully paid
               and non-assessable (meaning that no further sums are required to
               be paid by holders thereof in connection with the issue thereof)
               and entitled to vote and participate in distributions and
               dividends on a pari passu basis with the Validus Common Shares
               then in issue, in accordance with the Validus Bye-Laws. A Share
               Election will only be effective if the applicable Employee Seller
               delivers to Validus (with a copy to the Company Secretary of the
               Company) a duly executed and completed Share Election Form in the
               form attached hereto as Schedule 11 (a "SHARE ELECTION FORM")
               within two weeks of the date of this Agreement. Validus Common
               Shares issued pursuant to this Clause 3.1.4(i) are referred to
               herein as "ELECTION SHARE CONSIDERATION" and, taken together with
               Base Share Consideration, "SHARE CONSIDERATION." For the
               avoidance of doubt, any Employee Seller Cash Consideration with
               respect to which a Share Election was not duly made in accordance
               with the terms hereof shall be payable in cash.

          (ii) To the extent that any Share Election made by an Employee Seller
               would result in the cash component of the Employee Seller
               Consideration payable to that Employee Seller (the "CASH
               COMPONENT") being less than his/her Minimum Cash Amount, his/her
               Share Election shall be amended and the percentage amount
               included in his/her Share Election Form reduced such that the
               amount of the Cash Component payable to that Employee Seller is
               not less than the Minimum Cash Amount.

     3.1.5

          (i)  The Base Share Consideration shall be issued by the Purchaser to
               each Employee Seller as to the number of Validus Common Shares
               set out against his/her name in column (10) of Schedule 1 in
               accordance with terms set out in Clause 3.1.1(ii) and Schedule 9,
               including the provisions with respect to transfer restrictions,
               forfeiture and repurchase by Validus for nominal consideration on
               the terms set out in Schedule 9.

          (ii) The Election Share Consideration (if any) shall be issued by the
               Purchaser to each Employee Seller who has made a valid election
               in accordance with the terms set out in Clause 3.1.4. For the
               avoidance of doubt, the provisions with respect to transfer
               restrictions, forfeiture and repurchase by

                                       17

<PAGE>

               Validus for nominal consideration on the terms set out in
               Schedule 9 shall not apply to the Election Share Consideration.

          (iii) Notwithstanding the foregoing, Validus will pay cash in lieu of
               any fractional Validus Common Shares otherwise issuable to any
               Employee Seller as Share Consideration, at a rate of US$23.00 per
               whole Validus Common Share (pro rated for such fractional share).

     3.1.6

          (i)  On Completion, the Purchaser shall provide each Employee Seller
               with a duly certified extract from the Validus share register,
               showing the registration of the Validus Common Shares issued to
               him/her as Share Consideration in the name of such Employee
               Seller. An issue of Validus Common Shares in accordance with
               Clauses 3.1.4 to 3.1.6, shall be a good discharge by the
               Purchaser of its obligation under this Agreement to issue the
               Validus Common Shares representing the Share Consideration.

          (ii) Validus Common Shares issued as Share Consideration will be
               subject to the Validus Bye-laws, including without limitation the
               restrictions on transfer contained therein, and each Employee
               Seller hereby agrees to execute and hereby agrees to be bound by
               any lock-up or similar agreement generally executed by members of
               management of Validus or its subsidiaries in connection with the
               initial public offering of common shares of Validus.

     3.1.7 Subject to any elections made by any Employee Sellers in respect of
          their Option Shares pursuant to Clause 3.1.4, the total aggregate
          amount of the Employee Seller Cash Consideration payable to the
          Optionholders on Completion in respect of their Option Shares shall be
          allocated and paid by the Sellers' Solicitors as follows:

          (i)  the total amount of the Exercise Prices due from Optionholders to
               the Company on the issue to them of Class B Common Shares will be
               paid to the Company;

          (ii) such amount of the Exercise Prices due from Optionholders to the
               EBT on the transfer to them of the EBT Common Shares as is
               required to repay in full the amount outstanding under the EBT
               Loan as at the date of Completion shall be paid to the Company
               and such payment by the Sellers' Solicitors to the Company shall
               be good discharge to the EBT of its obligation to the Company
               under the EBT Loan and shall constitute full and final settlement
               of the same;

          (iii) subject to (ii) above, the remaining amount (if any) due from
               Optionholders to the EBT on the transfer to them of the EBT
               Common Shares shall be paid to the EBT;

          (iv) any amount required to be deducted by Talbot Underwriting
               Services Ltd under PAYE or in respect of employees' National
               Insurance in accordance with applicable legislation in connection
               with the exercise of the Options shall be paid to Talbot
               Underwriting Services Ltd;

          (v)  each Optionholder shall be paid his/her Net Cash Consideration;
               and

                                       18

<PAGE>

          (vi) each Optionholder's pro rata amount of the Permitted Deductions
               shall be paid in accordance with Clause 3.1.8,

          by crediting the appropriate account, in each case, which shall have
          been notified to the Sellers' Solicitors in accordance with Clause
          10.11.

     3.1.8 Permitted Deductions shall be paid by the Sellers' Solicitors in
          accordance with the Payment Instructions as follows:

          (i)  to the extent that such Permitted Deductions relate to
               professional fees and expenses which constitute Leakage, an
               amount equal to such Leakage, as set out in the Payment
               Instructions, will be paid to the Company on Completion; and

          (ii) the remaining amount of Permitted Deductions shall be paid to the
               relevant advisers, in the amounts set out in the Payment
               Instructions, by crediting the appropriate account, in each case,
               which shall have been notified to the Sellers' Solicitors in
               accordance with Clause 10.11.

     3.1.9

          (i)  No later than three Business Days prior to Completion, the
               persons listed in Clause 10.5 shall notify the Sellers'
               Solicitors of the amounts payable in accordance with Clauses
               3.1.2 to 3.1.8 to each of the Non-Employee Sellers, each of the
               Employees Sellers, the Company, the EBT, Talbot Underwriting
               Services Ltd, each Optionholder and each adviser (as the case may
               be) (the "PAYMENT INSTRUCTIONS").

          (ii) The Sellers' Solicitors shall be entitled to rely upon the
               Payment Instructions and shall be under no obligation to verify
               the accuracy or otherwise of such instructions. For the avoidance
               of doubt, the Sellers' Solicitors shall have no liability to any
               person, and each of the Sellers and the Purchaser waives any
               right to bring or make any claim or otherwise to seek any
               recourse or compensation against or from the Sellers' Solicitors,
               for any payments made by the Sellers' Solicitors in accordance
               with the Payment Instructions and the provisions of Clauses 3.1.2
               to 3.1.8.

     3.1.10 Validus hereby agrees that to the extent Validus files a
          registration statement on Form S-3 (or successor form) with the US
          Securities Exchange Commission in connection with a shelf-registration
          of Validus Common Shares and generally offers Validus senior
          management shareholders the opportunity to register a portion of their
          Validus Common Shares as selling shareholders in such registration
          statement, Validus will offer the Employee Sellers an opportunity to
          participate therein on substantially similar terms with respect to a
          portion of their Share Consideration, subject to applicable law and
          the Validus Bye-Laws. Notwithstanding the foregoing, Validus shall not
          be required to include such Validus Common Shares in such registration
          statement to the extent such shares are then freely tradeable without
          restriction under the US Securities Act of 1933, as amended, either
          pursuant to an exemption available with respect thereto under Rule
          144(k) or Regulation S promulgated thereunder.

                                       19

<PAGE>

3.2  REDUCTION OF CONSIDERATION

     If any payment is made by any Seller to the Purchaser in respect of any
     claim against that Seller for any breach of any of the Warranties, the
     pre-Completion covenants in Clause 5 or any other provision of this
     Agreement (or any agreement entered into pursuant to this Agreement), the
     payment shall be made by way of adjustment of the Consideration paid to
     that Seller and the amount of the Consideration paid to that Seller shall
     be deemed to have been reduced by the amount of such payment.

4    CONDITIONS

4.1  CONDITIONS PRECEDENT

     4.1.1 The respective obligations of each of the parties hereto to effect
          Completion of this Agreement are conditional upon:

          (i)  the FSA having given notice in writing in terms satisfactory to
               the Sellers and the Purchaser (each acting reasonably and in good
               faith) that the FSA approves or has no objection to the Purchaser
               and any other relevant member of the Purchaser's Group and any
               controller (within the meaning of the Financial Services and
               Markets Act 2000) of any of them acquiring control (within the
               meaning of the Financial Services and Markets Act 2000) of Talbot
               Underwriting Ltd and Underwriting Risk Services Ltd pursuant to
               this Agreement or, in the absence of such notice, the three month
               period within which the FSA may serve a notice of objection under
               those provisions having elapsed without the FSA having served any
               notice of objection;

          (ii) the BMA having given notice in writing in terms satisfactory to
               the Sellers and the Purchaser (each acting reasonably and in good
               faith) that the BMA approves or has no objection to the Purchaser
               or any other relevant member of the Purchaser's Group acquiring
               control of the Company, Talbot Capital Ltd and Talbot Insurance
               (Bermuda) Ltd pursuant to this Agreement and to becoming an
               indirect shareholder controller of Talbot Insurance (Bermuda) Ltd
               in accordance with the Bermuda Insurance Act 1978;

          (iii) Lloyd's having given notice in writing in accordance with
               paragraph 12 of the Membership Byelaw (No. 5 of 2005) in terms
               satisfactory to the Sellers and the Purchaser (each acting
               reasonably and in good faith) that it approves or has no
               objection to the Purchaser and any other relevant member of the
               Purchaser's Group and any controller (within the meaning of the
               Definitions Byelaw (No. 7 of 2005)) acquiring control (within the
               meaning of the Definitions Byelaw (No. 7 of 2005)) of Talbot 2002
               and Talbot Underwriting Capital Ltd;

          (iv) the Franchise Board (being a board established by Lloyd's with
               that name) having given notice in writing in accordance with
               paragraph 43 of the Underwriting Byelaw (No. 2 of 2003) in terms
               satisfactory to the Sellers and the Purchaser (each acting
               reasonably and in good faith) that it approves or has no
               objection to the Purchaser and any other relevant member of the
               Purchaser's Group and any controller acquiring control ("control"
               and

                                       20

<PAGE>

               "controller" being within the meaning of the Definitions Byelaw
               (No. 7 of 2005)) of Talbot Underwriting Ltd; and

          (v)  the persons mentioned in paragraph 9 of the undertaking given by
               Underwriting Risk Services Ltd as part of its coverholder
               application form having been notified of the matters required to
               be notified pursuant to such paragraph (including any changes to
               the information requested in paragraph k of Part A, Section 1 of
               such application form as a result of Completion).

     4.1.2 The obligation of the Purchaser to effect Completion of this
          Agreement is conditional upon Talbot Underwriting Ltd having received
          written confirmation from Lloyd's that the sale of the Shares to the
          Purchaser will not affect any assurance or commitment given by Lloyd's
          in the Ring Fencing Letters.

4.2  RESPONSIBILITY FOR SATISFACTION

     4.2.1 The parties shall use all reasonable endeavours to ensure the
          satisfaction of the Conditions Precedent as soon as reasonably
          practicable, including procuring the making of all requisite
          applications and notifications and using reasonable endeavours to
          procure the provision as promptly as possible of all such information
          as is requested by any Relevant Regulator in connection with the
          satisfaction of the Conditions Precedent. Each Party undertakes to
          inform the other party of all communications (whether in writing or
          otherwise) with any Relevant Regulator as soon as reasonably
          practicable and to provide such other party with copies of all
          documents provided to any such body.

     4.2.2 Without prejudice to Clause 4.2.1, the Sellers and the Purchaser
          agree that all requests and enquiries from any Relevant Regulator,
          government, governmental, supranational or trade agency, court or
          other regulatory body shall be dealt with by the Sellers and the
          Purchaser in consultation with each other and the Sellers and the
          Purchaser shall promptly co-operate with and provide all necessary
          information and assistance reasonably required by such regulator,
          government, agency, court or body upon being requested to do so by the
          other.

4.3  NON-SATISFACTION

     4.3.1 The Purchaser shall promptly give notice to the Sellers, and the
          Sellers shall promptly give notice to the Purchaser, of the
          satisfaction of the Conditions Precedent as soon as reasonably
          practicable, and in any event within five Business Days of becoming
          aware of the same. If the Conditions Precedent are not satisfied on or
          before 24 August 2007 or such other date as the Purchaser and the
          Sellers may agree, the Purchaser or (in the case of the Conditions
          Precedent contained in Clause 4.1.1 only) the Sellers may in its or
          their sole discretion terminate this Agreement. Where this Agreement
          is terminated under this Clause 4.3, no party shall have any claim
          against any other under it, save for fraud or any claim arising from
          breach of any undertaking contained in Clause 4.2, and that provision
          along with the provisions of Clauses 10.2, 10.3, 10.10, 10.14, 10.17
          and 10.18, shall remain in full force and effect notwithstanding this
          Agreement having otherwise terminated.

                                       21

<PAGE>

     4.3.2 Notwithstanding the foregoing, neither the Sellers nor the Purchaser
          may rely, either as a basis for not consummating Completion or
          terminating this Agreement and abandoning the transactions
          contemplated hereby, on the failure of any condition set out in Clause
          4.1 to be satisfied if such failure was caused by such party's breach
          of any provision of this Agreement or failure to use its reasonable
          endeavours to consummate Completion, as required by and subject to
          Clause 4.2.

5    ACTIONS PENDING COMPLETION

5.1  SELLERS' GENERAL OBLIGATIONS

     Each Seller shall use all reasonable endeavours to procure that, pending
     Completion, subject to Clause 5.5 and save insofar as agreed in writing by
     the Purchaser (such agreement not to be unreasonably withheld or delayed):

     5.1.1 subject to any restrictions imposed on the Group Companies pursuant
          to this Clause 5 or any other obligations with which the Purchaser has
          requested in writing that any Group Company comply, each Group Company
          will carry on its business (including the management and operation of
          Syndicate 1183) in all material respects in the ordinary and usual
          course and substantially consistent with its practice in the 12 months
          prior to Completion, provided that this shall not prohibit any action
          that is required to be taken in order to effect (in accordance with
          the terms of this Agreement) the transactions contemplated by this
          Agreement;

     5.1.2 each Group Company shall not make or agree to make any payment other
          than normal course payments in the ordinary and usual course of
          business and consistent with past practice;

     5.1.3 each Group Company shall manage its working capital and maintain its
          accounting records in the ordinary and usual course of business and in
          all material respects in a manner consistent with the 12 months ended
          31 December 2006;

     5.1.4 each Group Company will:

          (i)  maintain in force all insurance policies normally kept in force
               by it for the benefit of it and/or the Group Companies (which,
               for the avoidance of doubt, does not include any inwards or
               outwards insurance or reinsurance contracts or any other
               insurance or reinsurance contracts entered into by Syndicate 1183
               or Talbot 2002);

          (ii) will not amend any such insurance policies but, for the avoidance
               of doubt, the Company shall not be precluded from notifying its
               insurers about, and making such amendments to its directors and
               officers insurance cover as the directors of the Company (acting
               reasonably) may consider prudent in respect of, the Purchaser's
               forthcoming public offering of its securities or the transactions
               contemplated by this Agreement;

          (iii) will make all insurance claims under such policies in relation
               to itself and/or the Group Companies in accordance with the
               ordinary course of business and its previous practice of making
               such insurance claims; and

          (iv) will not settle any such claim below the amount claimed;

                                       22

<PAGE>

     5.1.5 each Group Company shall operate materially in accordance with all
          regulatory requirements (including the Lloyd's Byelaws and the
          regulations of the Lloyd's Franchise Board from time to time);

     5.1.6 Talbot 2002 shall not amend, terminate or waive the benefits of or
          permit the amendment, termination or waiver of, any agreement in
          relation to the Group's Capital Stack;

     5.1.7 prompt written notice is provided to the Purchaser at any time any
          undertaking or warranty of the Sellers or the Warrantors ceases to be
          accurate in any material respect (whether or not such warranty is
          required to be reaffirmed at any time after the date of this
          Agreement); and

     5.1.8 to the extent reasonably requested by the Purchaser, senior
          management of the Company cooperate and assist the Purchaser in
          obtaining waivers and consents from Lloyds TSB of any change of
          control or other rights arising or resulting from Completion.

5.2  RESTRICTIONS ON THE SELLERS

     Without prejudice to the generality of Clause 5.1, each Seller shall,
     between the date of this Agreement and Completion, use all reasonable
     endeavours to procure, that each Group Company shall not, except to the
     extent expressly set forth in this Agreement to give effect to, and to
     comply with, this Agreement or any other agreement to which both the
     Company and the Purchaser is a party, without the prior written consent of
     the Purchaser such consent not to be unreasonably withheld or delayed,
     directly or indirectly:

     5.2.1 incur or enter into any agreement or commitment involving any capital
          expenditure in excess of L250,000 singly or together with other
          capital expenditures exclusive of VAT, except as otherwise set out in
          the Disclosure Letter;

     5.2.2 save as permitted under Clause 5.2.1, enter into or amend any
          contract not in the ordinary and usual course of business and which
          either: (i) is not capable of being terminated by the Group Companies
          in their sole discretion at any time with twelve months' notice or
          less without compensation, penalty or premium; or (ii) involves total
          expenditure in excess of L150,000, taken together with all other
          contracts so entered into or amended;

     5.2.3 permit or cause any Leakage except Permitted Deductions which shall
          be repaid to the Company on Completion pursuant to Clause 3.1.8(i);

     5.2.4 in relation to any Property:

          (i)  apply for any planning permission;

          (ii) effect any change of use of such Property;

          (iii) except as disclosed in the Disclosure Letter, terminate or serve
               any notice to terminate, surrender or accept any surrender of or
               waive the terms of any lease, tenancy or licence;

          (iv) agree any new rent or fee payable under any lease, tenancy or
               licence, provided that no such consent shall be required in
               respect of any increase in rent payable in respect of any
               Property pursuant to a rent review in

                                       23

<PAGE>

               accordance with the terms of the existing lease or licence with
               any unconnected third party;

          (v)  enter into or vary any agreement, lease, tenancy, licence or
               other commitment; or

          (vi) sell, convey, transfer, assign or charge any Property or grant
               any rights or easements over any Property or enter into any
               covenants affecting any Property or agree to do any of the
               foregoing;

     5.2.5 (i) incur any borrowings or any other indebtedness or request the
          issue of any letter of credit in the aggregate in excess of L100,000
          all of which shall be prepayable at any time without penalty or
          premium; (ii) prepay any indebtedness prior to its scheduled maturity
          or amend the terms governing any indebtedness; (iii) otherwise pay,
          discharge or satisfy any claims, liabilities or obligations (whether
          absolute, accrued, contingent or otherwise) except (in the case of
          this sub-clause (iii) only but subject to the other terms of this
          Agreement) in the ordinary course of business consistent with previous
          practice;

     5.2.6 except as required by law, contemplated by the term sheets referred
          to in recital (D) or as disclosed in the Disclosure Letter:

          (i)  make any amendment (whether to take effect prior to, on or after
               Completion) to the terms and conditions of employment of any
               Employee, consultant or officer of any Group Company (including
               as to remuneration, pension entitlements or other benefits) or
               agree to provide any gratuitous payment or benefit to any such
               person or any of his or her dependents; or

          (ii) terminate or take any steps to terminate the contract of
               employment of, or dismiss (constructively or otherwise), any
               Employee, consultant or officer (except in accordance with normal
               disciplinary procedures); or

          (iii) engage or appoint any employee with a salary of L100,000 or more
               per annum;

     5.2.7 discontinue or amend the Company Pension Scheme or commence to wind
          it up or communicate to any employee any plan, proposal or intention
          to amend, wind up, terminate or exercise any discretion other than in
          accordance with the terms of the documents governing, the Company
          Pension Scheme;

     5.2.8 amend the Staff Profit Share Plan or the Bonus Letters or, except as
          disclosed in the Disclosure Letter, communicate to any employee any
          plan, proposal or intention to amend, terminate or exercise any
          discretion, or accelerate the payment of any amount deferred or
          deferrable thereunder;

     5.2.9 pay, or agree to pay, or accelerate the payment of:

          (i)  any gratuitous bonus; or

          (ii) any benefits under the Company Pension Scheme, the Staff Profit
               Share Plan or the Bonus Letters, each as in effect on the date of
               this Agreement, or any other bonus arrangement other than
               scheduled payments as required by the terms of the documents
               governing such scheme, plan or bonus arrangement or other than as
               disclosed in the Disclosure Letter;

                                       24

<PAGE>

     5.2.10 introduce or seek to introduce any new pension scheme, profit share
          plan or other bonus or incentive compensation arrangements or any
          employee benefit plan or arrangements;

     5.2.11 other than any acquisition, disposal or investment (or any agreement
          to do any of the foregoing) in respect of the assets of Syndicate 1183
          and alterations made to the investment portfolio containing the assets
          of the Group comprising the Funds at Lloyd's arrangements, in each
          case in accordance with the applicable investment management
          guidelines and investment policies and guidelines, each as in effect
          on the date of this Agreement and in the ordinary course of business,
          acquire or agree to acquire or dispose of or agree to dispose of any
          assets for amounts which when aggregated exceed L250,000, exclusive of
          VAT;

     5.2.12 amend any of the terms on which facilities or services which are
          material to the Group are supplied, except where required to do so in
          order to comply with any applicable legal or regulatory requirements
          or in respect of the negotiations discussed in the disclosures against
          paragraphs 2.5.2 and 2.21.3 of Schedule 4 in the Disclosure Letter;

     5.2.13 save as required in connection with the Options Transactions,
          create, allot, issue, reduce, redeem or repurchase any share or loan
          capital (or option to subscribe for or right to acquire the same) of
          any Group Company other than to another Group Company;

     5.2.14 other than as disclosed in the Disclosure Letter or any acquisition,
          disposal or investment (or any agreement to do any of the foregoing)
          in respect of the assets of Syndicate 1183 and alterations made to the
          investment portfolio containing the assets of the Group comprising the
          Funds at Lloyd's arrangements, in each case in accordance with the
          applicable investment management guidelines and investment policies
          and guidelines, each as in effect on the date of this Agreement and in
          the ordinary course of business, acquire or agree to acquire any
          share, shares or other interest in any company, partnership or other
          venture;

     5.2.15 other than as disclosed in the Disclosure Letter, make any change to
          its accounting practices or policies (except to the extent required to
          comply with any changes after the date of the Agreement, in UK GAAP or
          US GAAP as applicable) or amend its memorandum, articles of
          association or byelaws (as applicable) except as required by law;

     5.2.16 save for claims under inwards and outwards insurance and reinsurance
          policies and broker and coverholder disputes in Syndicate 1183's
          ordinary course of business, commence any litigation or arbitration
          proceedings to which a Group Company is a party which are material
          and/or involve a potential liability of L100,000 or more or settle any
          such litigation or arbitration proceedings which were commenced prior
          to the date of this Agreement;

     5.2.17 make any change to the nature or organisation of its business;

     5.2.18 discontinue or cease to operate all or any part of its business;

     5.2.19 materially alter, amend, vary, cancel or commute any material
          reinsurance arrangements to which any Group Company is a party;

                                       25

<PAGE>

     5.2.20 make or change any tax election, file an amendment to any tax return
          or settle or compromise any tax liability, except where required to do
          so in order to comply with any applicable legal or regulatory
          requirement;

     5.2.21 enter into any transaction with or for the benefit of any of its
          directors or any other person who is connected with any of its
          directors (within the meaning of section 839 of the Income and
          Corporation Taxes Act 1988) other than on normal arm's length terms;

     5.2.22 appoint new auditors;

     5.2.23 fail to deal with customer information as required by applicable law
          or contract or fail to maintain proprietary information consistent
          with, and on the same basis as, past practice;

     5.2.24 fail to keep accounting records on a basis consistent with
          applicable law and past practice;

     5.2.25 save for ex gratia payments arising in the ordinary course of
          business of Syndicate 1183, make any ex gratia payments;

     5.2.26 save as disclosed in the Disclosure Letter, change the investment
          managers appointed by any Group Company or alter or amend or deviate
          from the investment policy, guidelines or criteria of the Group
          Companies as in effect on the date of this Agreement;

     5.2.27 alter or amend its line structure or write any new classes of
          business (in each case from those disclosed in the Data Room) which
          would be material to the Group; or

     5.2.28 authorise any of, or agree to take or cause any of, the foregoing
          actions.

5.3  TERMINATION

     5.3.1 The Purchaser shall be entitled by notice in writing to the Sellers
          to terminate this Agreement (other than Clauses 1, 10.3,10.10,10.14,
          10.17 and 10.18) if prior to the Earliest Completion Date a Material
          Adverse Event has occurred and is continuing at the date such notice
          is served provided that the Purchaser cannot terminate this Agreement
          pursuant to this Clause 5.3.1 in respect of a Material Adverse Event
          that has a Cure Period until such period has expired without the
          Material Adverse Event being remedied.

     5.3.2 For the avoidance of doubt, the Purchaser's right of termination
          under Clause 5.3.1 shall terminate and cease to have any further
          effect on the Earliest Completion Date, whether or not Completion
          shall occur on that date.

     5.3.3 Any failure by the Purchaser to exercise its right to terminate this
          Agreement under this Clause 5.3 shall not constitute a waiver of any
          other rights of the Purchaser under this Agreement arising out of any
          breach of any Warranty or Clauses 5.1 or 5.2.

5.4  OTHER RELEVANT SELLERS' OBLIGATIONS PRIOR TO COMPLETION

     5.4.1 Without prejudice to the generality of Clauses 5.1 and 5.2, prior to
          Completion each Seller shall use reasonable endeavours to procure that
          the Group Companies shall:

                                       26

<PAGE>

          (i)  allow the Purchaser and its agents (including legal advisers,
               auditors, financial advisers and actuaries), upon reasonable
               notice, reasonable access to, and to take copies of, the books,
               records and documents of or relating in whole or in part to the
               Group, provided that the obligations of the Sellers under this
               Clause 5.4.1(i) shall not extend to allowing access to
               information which would compromise litigation privilege or which
               might compromise privilege in respect of future litigation or
               which is reasonably regarded as confidential to the activities of
               the Sellers otherwise than in relation to the Group Companies ;
               and

          (ii) (a) maintain their respective books and records in all material
               respects in the same manner and with the same degree of care that
               such books and records have been maintained prior to the date of
               this Agreement and in accordance with all applicable laws and
               Lloyd's requirements; and (b) provide to the Purchaser, if
               requested, promptly after they become available, all statutory or
               other similar statements and reports filed with any Relevant
               Regulator, including all such statements and reports required by
               Lloyd's, and all such statements shall be prepared on a basis
               consistent with previous practice and in accordance with the
               regulations applicable thereto; and (c) allow the Purchaser to
               appoint an observer to attend any board meetings of any Group
               Company or any meetings of the audit, remuneration, independent
               review or investment committees of the board of any Group Company
               and provide at least 48 hours notice of, and the agenda relating
               to, the same.

     5.4.2 Prior to Completion, none of the Warrantors will knowingly and
          deliberately take any action which they could reasonably have avoided
          or prevented that would or is reasonably likely to result in any of
          the Warranties ceasing to be true (whether or not such Warranty is
          required to be reaffirmed at any time after the date of this
          Agreement).

5.5  NORMAL COURSE PAYMENTS

     For the avoidance of doubt, nothing in any of the foregoing provisions of
     this Clause 5 or any other provision of this Agreement shall restrict the
     ability of any Group Company (without the need to obtain the Purchaser's
     consent) to make payments or accruals or to accrue liabilities in the
     ordinary course of business as carried on at the date of this Agreement,
     which shall include:

     5.5.1 payments or accruals required by contract or by law or regulation in
          respect of the Group's Capital Stack (including all applicable
          interest payments);

     5.5.2 payments or accruals of the Accrued Preference Dividend;

     5.5.3 Permitted Leakage; and

     5.5.4 Permitted Deductions, and to the extent such payments constitute
          Leakage they shall be repaid to the Company on Completion pursuant to
          Clause 3.1.8(i).

5.6  RESTRICTIVE COVENANTS

     5.6.1 Each Seller which is a body corporate shall not (and undertakes to
          procure that no person controlled by it shall), and each Seller that
          is not a body corporate

                                       27

<PAGE>

          undertakes that he/she shall not, either directly or indirectly and
          either alone or in conjunction with or on behalf of any other person
          (whether on his/her/its own account or as a principal, partner,
          shareholder, director, employee, consultant, agent or in any other
          capacity whatsoever):

          (i)  either pending or within two years after Completion, solicit,
               induce or endeavour to entice to leave the service or the
               employment of any member of the Group, any Senior Employee with
               whom that Seller had dealings in the 12 months prior to
               Completion (whether or not such Senior Employee would breach
               their contract of employment or engagement by reason of leaving
               the service of the business in which they work) provided,
               however, that the foregoing will not prohibit any Seller from (i)
               making generalised searches for employees by the use of
               advertisements in the media (including trade media) or by
               engaging search firms to engage in searches that are not targeted
               or focused on any Senior Employee; or (ii) hiring any person
               whose employment has been terminated by the Purchaser's Group or
               any Group Company on or after Completion; and/or

          (ii) without limitation to the provisions of this Clause 5.6 and
               without limitation in time, use any trade or business or domain
               name or e-mail address or distinctive mark, style or logo used by
               or in the business of any member of the Group at any time during
               the two years before Completion or anything intended or likely to
               be confused with the same, except to the extent relevant to
               ongoing employment with any Group Company or the Purchaser's
               Group.

     5.6.2 Each undertaking contained in Clause 5.6.1 shall be construed as a
          separate and severable undertaking and if one or more of the
          undertakings is held to be against the public interest or unlawful or
          in any way an unreasonable restraint of trade or unenforceable in
          whole or in part for any reason, the remaining undertakings or parts
          thereof, as appropriate, shall continue to bind the Sellers with such
          deletion or modification as may be necessary to make it valid and
          enforceable.

     5.6.3 The Sellers agree that the undertakings contained in Clause 5.6.1 are
          reasonable and are entered into for the purpose of protecting the
          goodwill and confidential information of the business of each Group
          Company and that accordingly the benefit of the undertakings in Clause
          5.6.1 may be assigned by the Purchaser and its successors in title
          without the consent of the Sellers.

6    COMPLETION

6.1  DATE AND PLACE

     Completion shall take place at the offices of the Sellers' Solicitors or at
     such other place as may reasonably be agreed between the Purchaser and the
     Sellers two Business Days following fulfilment of the Conditions Precedent
     or on such other date as may be agreed between the Purchaser and the
     Sellers.

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<PAGE>

6.2  OBLIGATIONS ON COMPLETION

     On Completion the Sellers and the Purchaser shall each procure that their
     obligations specified in Schedule 3 are fulfilled.

6.3  PAYMENT OF PRICE

     Against compliance with the foregoing provisions the Purchaser shall pay
     the Consideration to the Sellers in accordance with the provisions of
     Clause 3.1.

6.4  RIGHT TO TERMINATE

     If the foregoing provisions of this Clause 6 are not complied with in any
     material respect by either the Sellers or the Purchaser to the reasonable
     satisfaction of the other by or on the date set for Completion, the
     non-defaulting party shall be entitled (in addition to and without
     prejudice to all other rights or remedies available to it including the
     right to claim damages) by written notice to the defaulting party served on
     such date:

     6.4.1 to elect to terminate this Agreement without liability on the part of
          the non-defaulting party; or

     6.4.2 to effect Completion so far as practicable having regard to the
          defaults which have occurred; or

     6.4.3 to fix a new date for Completion (not being more than 20 Business
          Days after the agreed date for Completion) in which case the foregoing
          provisions of this Clause 6 shall apply to Completion as so deferred.

7    LEAKAGE

     7.1.1 In the event of any Leakage which constitutes a breach of Clause
          5.2.3 or the warranty set out in paragraph 2.15.3 of Schedule 4, the
          only person(s) who shall be liable for such breach shall be the
          Seller(s) who (or whose connected persons) received such Leakage and
          in such instance:

     (i)  prior to Completion, the Purchaser may (at its election) either (a)
          deduct an amount equal to such Leakage received by that Seller(s) (or
          his/her/its connected persons) from the Consideration due to that
          Seller and his/her/its Net Cash Consideration shall be reduced
          accordingly or (b) recover such Leakage in accordance with sub-clause
          (ii) below; and

     (ii) after Completion, the Seller who received any Leakage (either directly
          or through his/her/its connected persons) shall pay, on demand, to the
          Company (or such Group Company as the Purchaser may direct) an amount
          of cash equal to the Leakage received by him/her/it or his/her/its
          connected persons.

     7.1.2 No later than two Business Days prior to Completion, there shall be
          delivered to the Purchaser a statement (in such form as shall be
          agreed between the Purchaser and the Sellers, acting reasonably)
          providing details of any Leakage which has occurred between the
          Accounts Date and the date of Completion, together with details of any
          payments made or to be made or costs incurred or to be incurred by any
          Group Company between the Accounts Date and the date of Completion
          under sub-paragraphs (j), (k), (l) and (o) of the definition of
          Permitted Leakage.

                                       29

<PAGE>

8    WARRANTIES

8.1  INCORPORATION OF SCHEDULE 4

     8.1.1 Each Seller warrants to the Purchaser in the terms set out in
          paragraph 1 of Schedule 4, each Warrantor warrants to the Purchaser in
          the terms set out in paragraph 2 of Schedule 4 and in each case
          subject to:

          (i)  the matters referred to in Clause 8.2;

          (ii) any matter or thing hereafter done or omitted to be done pursuant
               to and in accordance with this Agreement or otherwise at the
               request in writing or with the approval in writing of the
               Purchaser; and

          (iii) the limitations of liability set out in Schedule 5.

          Each Employee Seller warrants to the Purchaser in the terms set out in
          paragraph 3 of Schedule 4.

     8.1.2 Each Seller (as to the Warranties set out in paragraph 1 of Schedule
          4 only) and Warrantor (as to the Warranties set out in paragraph 2 of
          Schedule 4) acknowledges that the Purchaser has entered into this
          Agreement in reliance upon the Warranties given by him/her/it. Save as
          expressly otherwise provided, the Warranties shall be separate and
          independent and shall not be limited by reference to any other
          paragraph of the said Schedule or by anything in this Agreement.

     8.1.3 Any statement qualified by the expression "so far as the Warrantors
          are aware", "to the Warrantors' knowledge, information and belief",
          "known to the Warrantors" or any similar expression shall be deemed to
          refer only to matters within the actual knowledge of the Warrantors
          having made due and careful enquiries of each other.

     8.1.4 Each of the Sellers agrees and undertakes that (in the absence of
          fraud) he/she/it has no rights against and shall not make any claim
          against any Employee, director, agent or officer of any Group Company
          on whom he/she/it may have relied or from whom he/she/it requested
          information or assistance in respect of giving the Warranties,
          preparing the Disclosure Letter or agreeing to any other term of this
          Agreement or any other agreement or documents entered into pursuant to
          this Agreement.

8.2  SELLERS' DISCLOSURES

     8.2.1

          (i)  The Warranties, other than the Core Warranties, are subject to
               the following matters:

               (a)  any matter which is fairly disclosed in this Agreement, the
                    Disclosure Letter or in any of the documents listed in the
                    Data Room Index; and

               (b)  all matters fairly disclosed in the Due Diligence Reports.
                    For the avoidance of doubt any disclaimers or limitations of
                    liability included in the Due Diligence Reports will not
                    constitute fair disclosure.

          (ii) The Core Warranties are subject only to matters fairly disclosed
               in the Disclosure Letter.

                                       30

<PAGE>

     8.2.2 References in the Disclosure Letter to paragraph numbers shall be to
          paragraph numbers in Schedule 4 to which the disclosure is most likely
          to relate. Such references are given for convenience only and shall
          not limit the effect of any of the disclosures, all of which are made
          against the Warranties as a whole. Information set out in the
          Disclosure Letter is included solely to qualify the Warranties, is not
          an admission of liability with respect to the matters covered by the
          information, is not warranted in any respect whatsoever and may not be
          required to be disclosed pursuant to this Agreement. The inclusion of
          any specific item or amount in the Disclosure Letter is not intended
          to imply that such item or amount (or higher or lower amounts) is or
          is not material, and no party shall use the fact of the inclusion of
          any such item or amount in the Disclosure Letter in any dispute as to
          whether any obligation, item, amount or matter not described therein
          is or is not material for the purposes of this Agreement.

     8.2.3 References to matters being "FAIRLY DISCLOSED" means to matters
          fairly disclosed with sufficient detail to identify the nature and
          scope of the same and to provide an understanding of the matters and
          their effects.

8.3  EFFECT OF COMPLETION

     The Warranties and, insofar as the same shall not have been performed at
     Completion, all other provisions of this Agreement shall not be
     extinguished or affected by Completion, or by any other event or matter
     whatsoever (including any satisfaction of the Conditions Precedent), except
     by a specific and duly authorised written waiver or release by the
     Purchaser (in the case of the Warranties) and the beneficiary of such
     provision (in the case of any other provision of this Agreement).

8.4  WARRANTIES BY THE PURCHASER

     The Purchaser warrants to the Sellers in the following terms:

     8.4.1 the Purchaser has the requisite corporate power and authority to
          enter into and perform this Agreement;

     8.4.2 this Agreement will, when executed by the Purchaser, constitute a
          valid and binding obligation on the Purchaser enforceable in
          accordance with its terms subject with respect to enforceability to
          the effect of bankruptcy, insolvency, reorganisation, moratorium or
          similar laws now or hereafter affecting the enforcement of creditors'
          rights generally and to the availability of equitable remedies; and

     8.4.3 except for the consents of the Relevant Regulators specified in the
          Conditions Precedent, no consent, approval, authorisation or order of
          any court or government or local agency or body or any other person is
          required by the Purchaser for the execution or implementation of this
          Agreement and compliance with the terms of this Agreement.

                                       31

<PAGE>

9    WHOLE AGREEMENT AND REMEDIES

9.1  WHOLE AGREEMENT

     This Agreement contains the whole agreement between the parties relating to
     the subject matter of this Agreement at the date hereof to the exclusion of
     any terms implied by law which may be excluded by contract and supersedes
     any previous written or oral agreement between the parties in relation to
     the matters dealt with in this Agreement.

9.2  ACKNOWLEDGEMENT

     9.2.1 The Purchaser acknowledges and agrees (in the absence of fraud or
          wilful default) that it has not been induced to enter into this
          Agreement by any representation, warranty or undertaking not expressly
          incorporated into this Agreement.

     9.2.2 Without prejudice to Clauses 6.4, 9.1, 9.2.1 and 10.3, the Purchaser
          agrees and undertakes that (in the absence of fraud) it has no rights
          against and shall not make any claim, in each case with respect to the
          terms of this Agreement and the purchase of the Shares, against any
          employee, director, agent, officer (other than any Seller solely in
          respect of his/her/its Warranties and other obligations of that Seller
          hereunder, but subject to the terms of this Agreement) of any Group
          Company or of any Seller on whom it may have relied solely in
          connection with its decision to enter into this Agreement and any
          other agreement or document entered into pursuant to this Agreement.

9.3  REMEDIES

     So far as permitted by law and except in the case of fraud or wilful
     default or as otherwise expressly set out in this Agreement, each party
     agrees and acknowledges that its only right and remedy in relation to any
     representation, warranty or undertaking made or given in connection with
     this Agreement or any other breach of this Agreement shall be for damages
     for breach of the terms of this Agreement against the person who breached
     the terms in question to the exclusion of all other rights and remedies
     (including those in tort or arising under statute or any right of
     termination or rescission). Notwithstanding the foregoing, in the event of
     any breach of Clauses 5.6, 10.3 or 10.9, the Purchaser shall be entitled to
     seek an injunction or specific performance as relevant.

9.4  REASONABLENESS OF THIS CLAUSE

     Each party to this Agreement confirms it has received independent legal
     advice relating to all the matters provided for in this Agreement,
     including the provisions of this Clause, and agrees, having considered the
     terms of this Clause and the Agreement as a whole, that the provisions of
     this Clause are fair and reasonable.

9.5  INTERPRETATION

     In Clauses 8.4, 9.1 and 9.4, "THIS AGREEMENT" includes the Disclosure
     Letter, the Confidentiality Agreement, and all documents entered into
     pursuant to this Agreement.

                                       32

<PAGE>

10   OTHER PROVISIONS

10.1 LIMITATIONS ON SELLERS' LIABILITY

     No liability shall attach to any Seller or Warrantor in respect of any
     claims under a Warranty or any other provision of this Agreement other than
     the covenants set out in Clauses 5.1, 5.2, 5.6 and 7 to the extent that a
     limitation set out in Schedule 5 applies. Each provision of Schedule 5
     shall be read and construed without prejudice to each of the other
     provisions of Schedule 5.

10.2 ANNOUNCEMENTS

     No announcement or circular in connection with the existence or the subject
     matter of this Agreement shall be made or issued by or on behalf of the
     Sellers or the Purchaser without the prior written approval of the Sellers
     and the Purchaser (such approval not to be unreasonably withheld or
     delayed). This shall not affect any announcement or circular which, in the
     judgement of the party (acting reasonably) making the announcement or
     releasing the circular, is required by law or any regulatory body or the
     rules of any recognised stock exchange or is otherwise determined by such
     person (acting reasonably) to be required to be made in a registration
     statement filed with the Securities and Exchange Commission provided that a
     copy of such announcement or circular shall, after making such announcement
     or sending such circular, be provided to each of the people listed in
     Clause 10.5. For the purpose of this Clause 10.2 the press releases agreed
     between the parties relating to the announcement of the transaction
     contemplated by this Agreement shall not require any further approval.

10.3 CONFIDENTIALITY

     10.3.1 This Clause 10.3 shall be without prejudice to the Confidentiality
          Agreement, which agreement shall continue notwithstanding Completion.
          In the event of any conflict between the Confidentiality Agreement and
          this Clause 10.3 this Clause shall prevail.

     10.3.2 Subject to Clause 10.3.4, each of the Sellers shall treat (and
          procure that its connected persons treat) as confidential and not
          disclose or use any information received or obtained as a result of
          entering into this Agreement (or any agreement entered into pursuant
          to this Agreement) which relates to:

          (i)  the provisions of this Agreement and any agreement entered into
               pursuant to this Agreement;

          (ii) the negotiations relating to this Agreement (and such other
               agreements); or

          (iii) the Purchaser's Group or any Group Company's business, financial
               or other affairs (including the business, financial or other
               affairs of the Group Companies and including, in each case,
               future plans and targets).

     10.3.3 Subject to Clause 10.3.4, the Purchaser shall treat (and procure
          that its connected persons treat) as confidential and not disclose or
          use any information received or obtained as a result of entering into
          this Agreement (or any agreement entered into pursuant to this
          Agreement) which relates to:

                                       33

<PAGE>

          (i)  the provisions of this Agreement and any agreement entered into
               pursuant to this Agreement;

          (ii) the negotiations relating to this Agreement (and such other
               agreements); or

          (iii) any Seller's business, financial or other affairs (including
               future plans and targets).

     10.3.4 Neither Clause 10.3.2 nor 10.3.3 shall prohibit disclosure or use of
          any information if and to the extent:

          (i)  the disclosure or use is, in the judgement of the party (acting
               reasonably) disclosing or using any such information, required by
               law, any regulatory body or the rules and regulations of any
               recognised stock exchange or is otherwise determined by such
               person acting reasonably to be required or needed to be made in a
               registration statement filed with the Securities and Exchange
               Commission or is required or needed in connection with
               discussions with any rating or similar agency;

          (ii) the disclosure or use is required to vest the full benefit of
               this Agreement in any of the Sellers or the Purchaser, as the
               case may be;

          (iii) the disclosure or use is required for the purpose of any
               judicial proceedings arising out of this Agreement or any other
               agreement entered into under or pursuant to this Agreement or the
               disclosure is reasonably required to be made to a Taxation
               Authority in connection with the Taxation affairs of the
               disclosing party;

          (iv) the disclosure is made to professional advisers of the Purchaser
               or any of the Sellers on terms that such professional advisers
               undertake to comply with the provisions of Clause 10.3.2 or
               10.3.3 in respect of such information as if they were a party to
               this Agreement;

          (v)  the disclosure is made by the Purchaser to its directors,
               shareholders or capital providers;

          (vi) the disclosure is made by any Institutional Seller to:

               (a)  any general partner, limited partner, trustee, nominee or
                    manager of, any Institutional Seller or to any group
                    undertaking of any Institutional Seller, or any investor or
                    potential investor in any of them; or

               (b)  any employee or officer of any Institutional Seller;

          (vii) the information is or becomes publicly available (other than by
               breach of the Confidentiality Agreement or of this Agreement);

          (viii) the other party has given prior written approval to the
               disclosure or use; or

          (ix) the information is independently developed after Completion,

          provided that prior to disclosure or use of any information pursuant
          to Clause 10.3.4(i) or (iii) (except in the case of disclosure to a
          Taxation Authority or a registration statement or other filing filed
          with the Securities and Exchange Commission or a disclosure to any
          stock exchange, rating or similar agency or capital provider), the
          party concerned shall promptly notify the other party of such

                                       34

<PAGE>

          requirement with a view to providing the other party with a reasonable
          opportunity to agree the content of such disclosure or use. In
          relation to a registration statement or other filing filed with the
          Securities and Exchange Commission or a disclosure to any stock
          exchange, rating or similar agency or capital provider, a copy of such
          statement or other filing shall, after filing or making such statement
          or other filing, be provided to each of the people listed in Clause
          10.5.

10.4 SUCCESSORS AND ASSIGNS

     10.4.1 Subject to Clause 10.4.2, this Agreement is personal to the parties
          to it. Accordingly, neither the Purchaser nor the Sellers may assign,
          hold on trust or otherwise transfer the benefit of all or any of the
          other's obligations under this Agreement, or any benefit arising under
          or out of this Agreement nor shall the Purchaser be entitled to make
          any claim against the Sellers in respect of any loss which it does not
          suffer in its own capacity as beneficial owner of the Shares except as
          contemplated by Clause 10.4.2.

     10.4.2 Subject to Clause 10.4.3 and except as otherwise expressly provided
          in this Agreement, either the Sellers or the Purchaser may, without
          the consent of the other, assign to a connected company the benefit of
          all or any of the other party's obligations under this Agreement,
          provided, however, that such assignment shall not be absolute but
          shall be expressed to have effect only for so long as the assignee
          remains a connected company and that immediately before ceasing to be
          a connected company, the assignee shall assign the benefit to a
          connected company of the party concerned. For the purposes of this
          sub-clause a connected company is a company which is a subsidiary of
          the party concerned or which is a holding company of such party or a
          subsidiary of such holding company.

     10.4.3 In no circumstances shall the liability of a party under this
          Agreement to an assignee be greater than it would have been in if no
          assignment had been made.

10.5 ACTION BY THE SELLERS

     Where this Agreement or any other documents, agreements or arrangements
     contemplated hereby or delivered in connection herewith provides or
     requires consent, approval or agreement to be obtained from the Sellers (or
     any relevant group of them), such provision or requirement will be
     satisfied by obtaining the approval and agreement of the following people:

     10.5.1 MEA Carpenter and CNR Atkin jointly in respect of the Employee
          Sellers, PC Churchill, DK Newbigging, DP Redhead, the Ashdown Trust,
          the Dynevor Trust and the Rams Hill Trust;

     10.5.2 Heidi Hutter in respect of the Non-Employee Sellers holding Common
          Shares;

     10.5.3 Jim Quinn in respect of the Non-Employee Sellers holding A
          Preference Shares (other than those referred to in Clause 10.5.1); and

     10.5.4 Craig Huff in respect of the Non-Employee Sellers holding B
          Preference Shares,

     and all of the parties to this Agreement shall be entitled to rely on any
     consent, approval or agreement of the people listed in 10.5.1 to 10.5.4
     above as the consent, approval or agreement of all of the Employee Sellers
     and/or Non-Employee Sellers, as the case may

                                       35

<PAGE>

     be, (or any relevant group of them) for the purposes of this Agreement
     without further enquiry.

10.6 THIRD PARTY RIGHTS

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

10.7 VARIATION

     No variation of this Agreement shall be effective unless in writing and
     signed by or on behalf of each of the Purchaser and the Sellers. Any
     amendment to this Agreement which disproportionately affects any one or
     more of the Sellers shall require the specific consent of such Seller(s).

10.8 TIME OF THE ESSENCE

     Time shall be of the essence of this Agreement both as regards any dates
     and periods mentioned and as regards any dates and periods which may be
     substituted for them in accordance with this Agreement or by agreement in
     writing between the parties.

10.9 FURTHER ASSURANCE

     At any time after the date of this Agreement, each Seller shall and shall
     use all reasonable endeavours to procure that any necessary third party
     shall execute such documents and do such acts and things as the Purchaser
     may reasonably require for the purpose of vesting title to the Shares in
     the Purchaser.

10.10 COSTS

     Except for the amount referred to in sub-paragraph (m) of the definition of
     Leakage in Clause 1.1, the Sellers (and, for the avoidance of doubt, not
     any Group Company) shall bear all costs incurred by them in connection with
     the preparation negotiation and entering into this Agreement and the sale
     of the Shares, including the preparation of the Due Diligence Reports. The
     Purchaser shall bear all such costs incurred by it.

10.11 METHOD OF PAYMENT

     Wherever in this Agreement provision is made for the payment by one party
     to the other, such payment shall be effected by crediting for same day
     value the account specified by the payee to the payer reasonably in advance
     and in sufficient detail (including name, account number, sort code and
     account location) to enable payment by telegraphic or other electronic
     means to be effected on or before the due date for payment.

10.12 STAMP DUTY, FEES AND TAXES

     The Purchaser shall bear the cost of all UK, Bermuda, US and Cayman Island
     stamp duty and registration and transfer taxes payable as a result of the
     acquisition by the Purchaser of the Shares.

                                       36

<PAGE>

10.13 INTEREST

     If any Seller or the Purchaser defaults in the payment when due of any sum
     payable under this Agreement (howsoever determined), the liability of the
     relevant Seller or the Purchaser (as the case may be) shall be increased to
     include interest on such sum from the date when such payment is due until
     the date of actual payment (as well after as before judgment) at the
     Interest Rate. Such interest shall accrue from day to day.

10.14 NOTICES

     10.14.1 Any notice, claim or demand in connection with this Agreement shall
          be in writing in English (a "NOTICE") and shall be sufficiently given
          or served if delivered or sent:

<TABLE>
<S>                                  <C>
In the case of any of the Sellers:   To the address shown next to their name in
                                     Schedule 1 provided that, for the purposes
                                     of Clauses 5.3, 10.2 and 10.3.4 only,
                                     delivery by the Purchaser of any such
                                     notice, claim or demand to the people
                                     listed in 10.5.1 to 10.5.4 above at their
                                     respective addresses shall be deemed to be
                                     delivery of such notice, claim or demand to
                                     all Employee Sellers and/or Non Employee
                                     Sellers, as the case may be, (or any
                                     relevant group of them) for the purposes of
                                     this Agreement

In the case of the Purchaser:        Validus Holdings, Ltd.
                                     19 Par-La-Ville Road
                                     Hamilton HM11 Bermuda,
                                     Attention: Chief Financial Officer and
                                                General Counsel
                                     (Facsimile: (441) 278-9090)

                                     with copies to:

                                     Kendall Freeman
                                     One Fetter Lane
                                     London EC4A 1JB
                                     Attention: Richard Spiller and
                                                Ashwani Kochhar
                                     Reference: RXS/AKK/01143617
                                     (Facsimile: +44 (0)20 7353 7377)

                                     Cahill Gordon & Reindel LLP
                                     80 Pine St.
                                     New York, New York 10005
                                     Attention: Michael A. Becker, Esq. and
                                                Christopher T. Cox, Esq.
                                     (Facsimile: (212) 269-5420)
</TABLE>

          or (in any of the above cases) to such other address or fax number in
          the United Kingdom as the relevant party may have notified to the
          other in accordance with this Clause.

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<PAGE>

     10.14.2 Any Notice may be delivered by hand or sent by fax or prepaid post
          (first class in the case of service in the United Kingdom and airmail
          in the case of international service). Notices may not be sent by
          email. Without prejudice to the foregoing, any Notice shall
          conclusively be deemed to have been received on the next working day
          in the place to which it is sent, if sent by fax (provided no notice
          of non-delivery or non-receipt has been received by the sender), or 48
          hours from the time of posting (if sent by first class post to an
          address in the United Kingdom) or 96 hours from the time of posting
          (if sent by post to an address outside of the United Kingdom), or at
          the time of delivery, if delivered by hand.

10.15 INVALIDITY

     If any term in this Agreement shall be held to be illegal, invalid or
     unenforceable, in whole or in part, under any enactment or rule of law,
     such term or part shall to that extent be deemed not to form part of this
     Agreement, but the legality, validity or enforceability of the remainder of
     this Agreement shall not be affected.

10.16 COUNTERPARTS

     This Agreement may be entered into in any number of counterparts, all of
     which taken together shall constitute one and the same instrument. Any
     party may enter into this Agreement by executing any such counterpart.

10.17 GOVERNING LAW AND SUBMISSION TO JURISDICTION

     10.17.1 This Agreement and the documents to be entered into pursuant to it
          shall be governed by and construed in accordance with English law.

     10.17.2 All the parties irrevocably agree that the courts of England are to
          have exclusive jurisdiction to settle any dispute which may arise out
          of or in connection with this Agreement and the documents to be
          entered into pursuant to it. All the parties irrevocably submit to the
          jurisdiction of such courts and waive any objection to proceedings in
          any such court on the ground of venue or on the ground that
          proceedings have been brought in an inconvenient forum.

10.18 APPOINTMENT OF PROCESS AGENT

     10.18.1 Each of OGF III (Caymans 1), L.P., OGF IV (Caymans 1), L.P. and
          Olympus Executive Fund, L.P. irrevocably appoints Hackwood Secretaries
          Limited at its registered office for the time being, (being at the
          date hereof at One Silk Street, London EC2Y 8HQ) as its agent to
          accept service of process in England and Wales in any legal action or
          proceedings arising out of or in connection with this Agreement,
          service upon which shall be deemed completed whether or not forwarded
          to or received by the other parties.

     10.18.2 Each of Reservoir Capital Partners and Reservoir Master Fund
          irrevocably appoints Ashurst (attention Mark Vickers/Shawn Er) of
          Broadwalk House, 5 Appold Street, London EC2A 2HA as its agent to
          accept service of process in England and Wales in any legal action or
          proceedings arising out of or in connection with this Agreement,
          service upon whom shall be deemed completed whether or not forwarded
          to or received by the other parties.

                                       38

<PAGE>

     10.18.3 Each of the US Sellers irrevocably appoints Reed Smith Richards
          Butler LLP of Minerva House, 5 Montague Close, London SE1 9BB or any
          successor firm as his/her/its agent to accept service of process in
          England and Wales in any legal action or proceedings arising out of or
          in connection with this Agreement, service upon which shall be deemed
          completed whether or not forwarded to or received by the other
          parties.

     10.18.4 Intermediate Capital GP Limited irrevocably appoints Intermediate
          Capital Investments Limited at its registered office for the time
          being, (being at the date hereof at 20 Old Broad Street, London EC2N
          1DP) as its agent to accept service of process in England and Wales in
          any legal action or proceedings arising out of or in connection with
          this Agreement, service upon which shall be deemed completed whether
          or not forwarded to or received by the other parties.

     10.18.5 Codan irrevocably appoints Hackwood Secretaries Limited at its
          registered office for the time being, (being at the date hereof at One
          Silk Street, London EC2Y 8HQ) as its agent to accept service of
          process in England and Wales in any legal action or proceedings
          arising out of or in connection with this Agreement, service upon whom
          shall be deemed completed whether or not forwarded to or received by
          the other parties.

     10.18.6 The Purchaser hereby irrevocably appoints Fetter Secretaries
          Limited of One Fetter Lane, London EC4A 1JB as its agent to accept
          service of process in England in any legal action or proceedings
          arising out of this Agreement, service upon whom shall be deemed
          completed whether or not forwarded to or received by the Purchaser.

     10.18.7 Each party that has a process agent appointed agrees to inform the
          other parties, in writing, of any change in the address of such
          process agent within 28 days.

     10.18.8 If such process agent ceases to be able to act as such or to have
          an address in England, each of the parties irrevocably agrees to
          appoint a new process agent in England acceptable to the other parties
          and to deliver to the other parties within 14 days a copy of a written
          acceptance of appointment by the process agent.

     10.18.9 Nothing in this Agreement shall affect the right to serve process
          in any other manner permitted by law or the right to bring proceedings
          in any other jurisdiction for the purposes of the enforcement or
          execution of any judgement or other settlement in any other courts.

10.19 SHARE AWARDS

     Validus undertakes to the Employee Sellers to comply with the terms set out
     in Annex A of its offer letter dated 18 April 2007 in respect of the issue
     of US$15,000,000.00 of Validus Common Shares to Employees in accordance
     with the terms of that Annex A (subject to such amendments as may be agreed
     between Validus and the Employee Sellers) (the "SHARE AWARDS"). The
     allocations of Share Awards that have already been provided for in the term
     sheets referred to in Recital (D) shall form part of the US$15,000,000.00
     of Validus Common Shares referred to above.

                                       39

<PAGE>

IN WITNESS whereof this Agreement has been duly executed.

SIGNED by VALIDUS HOLDINGS, LTD.:   )
                                    )
                                    )
                                    )

SIGNED by MEA CARPENTER:            )
                                    )
                                    )
                                    )

SIGNED by CNR ATKIN:                )
                                    )
                                    )
                                    )

SIGNED by ND WACHMAN:               )
                                    )
                                    )
                                    )

SIGNED by GAM BONVARLET:            )
                                    )
                                    )
                                    )

SIGNED by NJ HALES:                 )
                                    )
                                    )
                                    )

SIGNED by MS JOHNSON:               )
                                    )
                                    )
                                    )

SIGNED by JS CLOUTING:              )
                                    )
                                    )
                                    )

SIGNED by JG ROSS:                  )
                                    )
                                    )
                                    )

                                       40

<PAGE>

SIGNED by RI FAULKNER:              )
                                    )
                                    )
                                    )

SIGNED by MEA Carpenter as          )
attorney for the following: WM      )
ABSOLOM, M APICELLA, J BAMFORD,     )
SEH BARR, JP BOSWORTH, RM           )
BOULTWOOD, DG BURNS, S CALLAGHAN,   )
JG CUTTS, PJ DANIEL, KF DOWNEY,     )
TM EDWARDS, PC FERGUSON, A FOORD,   )
TM FRENCH, P FURLONG, N HASSAM, S   )
HOUSE, D HUGHES, A KEOGAN, SF       )
LLOYD, M LUCAS PJ MILLER, SJ        )
MORRITT, AP OAKLEY, N PATEL, DI     )
WATSON, A WEST, LJ WILEY AND JC     )
WILLIAMS                            )

SIGNED by C.N. Rupert Atkin as      )
attorney for the following: M       )
ALCOTT, R BEAN, G COOKE, J          )
COURTNEY, JD EWINGTON, RW           )
FIELDER, SA FORBES, CJ GRANT, R     )
HARRIS, C KOSTIS, JAJA MCDONALD,    )
M PERRY, JE SKINNER, S TEBBUTT      )
AND DK NEWBIGGING                   )

SIGNED by RI Faulkner as attorney   )
for the following: G LANGFORD, LE   )
NEVILL, PC CHURCHILL                )
AND DARREN REDHEAD                  )

                                       41

<PAGE>

SIGNED by Peter AS Pearman on       )
behalf of Codan Trust Company       )
Limited in its capacity as          )
trustee of the ASHDOWN TRUST        )
(BEING A TRUST OF CNR ATKIN &       )
FAMILY)                             )

SIGNED by Peter AS Pearman on       )
behalf of Codan Trust Company       )
Limited in its capacity as          )
trustee of the DYNEVOR TRUST        )
(BEING A TRUST OF MEA CARPENTER &   )
FAMILY)                             )

SIGNED by Peter AS Pearman on       )
behalf of Codan Trust Company       )
Limited in its capacity as          )
trustee of the RAMS HILL TRUST      )
(BEING A TRUST OF JE SKINNER &      )
FAMILY)                             )

                                       42

<PAGE>

SIGNED by HE HUTTER                 )
                                    )
                                    )
                                    )

SIGNED by HE HUTTER                 )
in her capacity as trustee of       )
HE HUTTER IRREVOCABLE TRUST 1       )
                                    )

SIGNED by HE HUTTER                 )
in her capacity as trustee of HE    )
HUTTER IRREVOCABLE TRUST 2          )
                                    )

SIGNED by J SLATTERY                )
                                    )
                                    )
                                    )

SIGNED by J SLATTERY ON BEHALF OF   )
JPS & CO. LLC                       )
                                    )

SIGNED by BP REICH                  )
                                    )
                                    )
                                    )

SIGNED by JA NOVIK                  )
                                    )
                                    )
                                    )

SIGNED by EF LEMIEUX                )
                                    )
                                    )
                                    )

                                       43

<PAGE>

SIGNED by DJ GROSS                  )
                                    )
                                    )
                                    )

SIGNED by Andrew Lerner on behalf   )
of INTER ATLANTIC ADVISERS LTD,     )
the general partner of              )
INTER-ATLANTIC FUND, LP.            )

                                       44

<PAGE>

SIGNED by James J. Quinn on         )
behalf of OGF III (Caymans) Ltd,    )
a general partner, on behalf of     )
OGF III (CAYMANS 1), L.P.           )

SIGNED by James J. Quinn on         )
behalf of OGF IV (Caymans Ltd), a   )
general partner, on behalf of OGF   )
IV (CAYMANS 1), L.P.                )

SIGNED by James A. Conroy, acting   )
by JAC, L.L.C. on behalf of OEF,    )
L.P., a general partner, on         )
behalf of OLYMPUS EXECUTIVE FUND,   )
L.P.                                )

                                       45

<PAGE>

SIGNED by Craig Huff being a        )
person who in accordance with the   )
law of Delaware, United States of   )
America is acting under the         )
authority of Reservoir Capital      )
Group, L.L.C. as general partner    )
of RESERVOIR CAPITAL PARTNERS,      )
L.P. AND RCP GP, LLC AS GENERAL     )
PARTNER OF RESERVOIR CAPITAL        )
MASTER FUND, L.P.                   )

                                       46

<PAGE>

SIGNED by MEA Carpenter as          )
attorney for INTERMEDIATE CAPITAL   )
GP LIMITED                          )
                                    )

SIGNED by MEA Carpenter as          )
attorney for INTERMEDIATE CAPITAL   )
INVESTMENTS LIMITED                 )
                                    )

                                       47
<PAGE>
                                   Schedule 1
                    Particulars of Sellers, Shares Sold etc.
Part 1 - Employee Sellers
                                     Shares
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                  1                                               2

                           NAME OF SHAREHOLDER                            SHAREHOLDER ADDRESS
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>
WM Absolom                                               113 Kensington Road, Southend of Sea, Essex, SS1 2SY

M Alcott                                                 Croft House, 30 Halstead Road, Earls Colne, Colchester, Essex CO6 2NG

M Apicella                                               88 Rayleigh Road, Eastwood, Leigh on Sea, Essex, SS9 5UX

CNR Atkin                                                Shepherds Gate, Colemans Hatch, Hartfield, East Sussex, TN7 4HF

Codan Trust Company Limited as trustee of the Ashdown
Trust (being a trust of CNR Atkin & family)              Richmond House, 12 Par le Ville Road, Hamilton, Bermuda

J Bamford                                                20 Granard Road, London SW12 8UL

SEH Barr                                                 Hammonds Farm, Hemps Green, Fordham, Colchester, Essex, CO6 3LS

R Bean                                                   42 St John's Road, Westcliffe on Sea, Essex SS0 7JZ

G Bonvarlet                                              11 Acfold Road, London SW6 2AJ

JP Bosworth                                              Hillcroft, Heaverham Road, Kemsing, Kent, TN15 6NE

RM Boultwood                                             Tower House, 229 Ongar Road, Writtle, Chelmsford, Essex, CM1 3NS

D Burns                                                  46 Leamington Road, Harold Hill, Essex, RM3 9TT

S Callaghan                                              14 St Barnabas Court, Cambridge, CB1 2BZ

MEA Carpenter                                            14 Dynevor Road, Richmond, Surrey TW10 6PF

Codan Trust Company Limited as trustee of the Dynevor
Trust (being a trust of MEA Carpenter & family)          Richmond House, 12 Par le Ville Road, Hamilton, Bermuda

PC Churchill                                             4 Woodpeckers Park Road, Winchester, Hants, SO23 7BQ

JS Clouting                                              19 Prusom's Island, 135 Wapping High St, London E1W 3NH

G Cooke                                                  5 The Bridle Path, East Ewell, Epsom, Surrey, KT17 3EE

J Courtney                                               13 Riverside Drive, Earlsfield, London SW18 4UR

JG Cutts                                                 45 Kenneth Road, Benfleet, Essex, SS7 3AU

P Daniel                                                 27 Junction Road, South Croydon, CR2 6RB

KP Downey                                                57 Bailey Road, Leigh on Sea, Essex, SS9 3PJ

TM Edwards                                               6 Ives Road, Bengeo, Herts, SG14 3AU

JD Ewington                                              26b London Fields Eastside, London E8 3SA

RI Faulkner                                              60 Christchurch Road, Tring, Herts, HP23 4EJ

PC Ferguson                                              151 Pump Lane, Rainham, Gillingham, Kent, ME8 7AP

RW Fielder                                               80 Copers Cope Road, Beckenham, Kent, BR3 1RJ

A Foord                                                  171 Melrose Avenue, Willesden Green, London NW2 4NA

S Forbes                                                 Marley, 128 St Stephens Road, Canterbury, Kent, CT2 7JS
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                       1                   3        4          5          6            7

                                                                    A          B                    CLASS B
                                                         COMMON PREFERENCE PREFERENCE EBT COMMON    COMMON
                           NAME OF SHAREHOLDER           SHARES   SHARES     SHARES     SHARES      SHARES
------------------------------------------------------------------------------------------------------------
<S>                                                    <C>      <C>        <C>        <C>        <C>
WM Absolom                                              125,000

M Alcott                                                                               75,000       75,000

M Apicella                                                                                          50,000

CNR Atkin                                             5,000,000                                  1,250,000

Codan Trust Company Limited as trustee of the Ashdown
Trust (being a trust of CNR Atkin & family)                       502,000

J Bamford                                                                             100,000      150,000

SEH Barr                                                500,000

R Bean                                                                                100,000      100,000

G Bonvarlet                                                       317,000                        1,750,000

JP Bosworth                                             125,000

RM Boultwood                                            125,000

D Burns                                                                                            150,000

S Callaghan                                                                                         62,500

MEA Carpenter                                         5,000,000                                    500,000

Codan Trust Company Limited as trustee of the Dynevor
Trust (being a trust of MEA Carpenter & family)                   502,000

PC Churchill                                            625,000

JS Clouting                                           1,500,000

G Cooke                                                 500,000

J Courtney                                                                                          50,000

JG Cutts                                                125,000                       125,000

P Daniel                                                125,000

KP Downey                                               125,000

TM Edwards                                              250,000

JD Ewington                                             125,000                        75,000

RI Faulkner                                             125,000

PC Ferguson                                             125,000

RW Fielder                                              500,000

A Foord                                                                               125,000

S Forbes                                                                                           125,000
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                    1                           8                                9

                                                      EMPLOYEE SELLER CASH    EMPLOYEE SELLER CASH CONSIDERATION (EBT
                                                      CONSIDERATION (COMMON             COMMON SHARES AND
                                                       SHARES, A PREFERENCE                CLASS B COMMON
                                                      SHARES AND B PREFERENCE           SHARES OF EXERCISE OF
                           NAME OF SHAREHOLDER               SHARES)                         OPTIONS)
----------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                     <C>
WM Absolom                                                $261,885.16                              $0.00

M Alcott                                                        $0.00                        $406,597.99

M Apicella                                                      $0.00                        $135,532.66

CNR Atkin                                               $9,949,465.26                      $3,388,247.57

Codan Trust Company Limited as trustee of the Ashdown
Trust (being a trust of CNR Atkin & family)             $1,577,581.81                              $0.00

J Bamford                                                       $0.00                        $677,663.31

SEH Barr                                                $1,047,540.63                              $0.00

R Bean                                                          $0.00                        $542,130.65

G Bonvarlet                                               $996,202.06                      $4,743,551.19

JP Bosworth                                               $261,885.16                              $0.00

RM Boultwood                                              $261,885.16                              $0.00

D Burns                                                         $0.00                        $406,597.99

S Callaghan                                                     $0.00                        $177,460.08

MEA Carpenter                                           $9,949,465.26                      $1,355,303.63

Codan Trust Company Limited as trustee of the Dynevor
Trust (being a trust of MEA Carpenter & family)         $1,577,581.81                              $0.00

PC Churchill                                            $1,964,120.78                              $0.00

JS Clouting                                             $3,142,598.88                              $0.00

G Cooke                                                 $1,047,540.63                              $0.00

J Courtney                                                      $0.00                        $135,532.66

JG Cutts                                                  $261,885.16                        $338,843.16

P Daniel                                                  $261,885.16                              $0.00

KP Downey                                                 $261,885.16                              $0.00

TM Edwards                                                $523,770.31                              $0.00

JD Ewington                                               $261,885.16                        $203,310.49

RI Faulkner                                               $261,885.16                              $0.00

PC Ferguson                                               $261,885.16                              $0.00

RW Fielder                                              $1,047,540.63                              $0.00

A Foord                                                         $0.00                        $338,843.16

S Forbes                                                        $0.00                        $330,333.16
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------
                                  1                            10

                                                        SHARE CONSIDERATION
                                                       (NUMBER OF VALIDUS
                           NAME OF SHAREHOLDER           COMMON SHARES)
---------------------------------------------------------------------------
<S>                                                   <C>
WM Absolom                                                   5,693

M Alcott                                                     2,817

M Apicella                                                     939

CNR Atkin                                                  274,065

Codan Trust Company Limited as trustee of the Ashdown
Trust (being a trust of CNR Atkin & family)                      0

J Bamford                                                    4,695

SEH Barr                                                    22,772

R Bean                                                       3,756

G Bonvarlet                                                 32,869

JP Bosworth                                                  5,693

RM Boultwood                                                 5,693

D Burns                                                      2,817

S Callaghan                                                    824

MEA Carpenter                                              259,978

Codan Trust Company Limited as trustee of the Dynevor
Trust (being a trust of MEA Carpenter & family)                  0

PC Churchill                                                     0

JS Clouting                                                 68,317

G Cooke                                                     22,772

J Courtney                                                     939

JG Cutts                                                     8,040

P Daniel                                                     5,693

KP Downey                                                    5,693

TM Edwards                                                  11,386

JD Ewington                                                  7,101

RI Faulkner                                                  5,693

PC Ferguson                                                  5,693

RW Fielder                                                  22,772

A Foord                                                      2,347

S Forbes                                                     2,717
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                 1                                                2

                           NAME OF SHAREHOLDER                            SHAREHOLDER ADDRESS
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>
TM French                                                 Columba, The Street, Wormshall, Sittingbourne, Kent, ME9 0TU

P Furlong                                                 1 D'Arcy Road, North Cheam, Surrey, SM3 8NH

CJ Grant                                                  115 Westfields Avenue, Barnes, London, SW13 0AY

NJ Hales                                                  Coldhams Fee, Draycott Rise, Palgrave, Diss, Norfolk IP22 1AJ

R Harris                                                  10 Rectory Close, Guildford, Surrey, GU4 7AR

N Hassam                                                  2 Ladygrove, Pixton Way, Croydon, CR0 9LR

S House                                                   3 The Maltings, Oxted, Surrey, RH8 9DZ

D Hughes                                                  Flat 23, 11 Kidbrooke Grove, Blackheath, London SE3 0PP

MS Johnson                                                Holmbury, South View Road, Wadhurst, East Sussex TN5 6TN

A Keogan                                                  289 Perrysfiled Road, Cheshunt, Waltham Cross, Herts, EN8 0TP

C Kostis                                                  72 Palace Gates Road, London, N22 7BL
G Langford                                                Kingsholm, Hedgerow Walk, Cheshunt, Herts EN8 9DT

S Lloyd                                                   35 Lewes Road, Haywards Heath, West Sussex, RH17 7SY

M Lucas                                                   138 Tilkey Road, Coggeshall, Colchester, Essex, CO6 1QN

JAJA McDonald                                             May Stables, Park Farm, Queen Street, Paddock Wood, Kent, TN12 6NS

P Miller                                                  Hawthorns, Ulley Road, Kennington, Ashford, Kent, TN24 9HX

SJ Morritt                                                20 Southborough Road, Surbiton, KT6 6JN

D Newbigging                                              119 Old Church Street, London SW3 6EA

AP Oakley                                                 112 Wingletye Lane, Hornchurch, Essex, RM11 3AU

N Patel                                                   13 Coppice Way, South Woodford, London, E18 2DU

LE Patterson                                              Beech Corner, 21 Cayton Road, Netherene on the Hill, Surrey, CR5 1LT

M Perry                                                   174 Great George, Lee Chapel South, Basildon, Essex, SS16 5DF

DP Redhead                                                31A Forest View, North Chingford, London, E4 7AU

JG Ross                                                   Beechy Lees, Row Dow, Otford, Sevenoaks, Kent TN14 5RY

JE Skinner                                                Rams Hill, Maidstone Road, Horsmonden, Kent, TN12 8DB

Codan Trust Company Limited as trustee of Rams Hill
Trust (being a trust of JE Skinner & family)              Richmond House, 12 Par le Ville Road, Hamilton, Bermuda

S Tebbutt                                                 123 Thomas More Street, Hermitage Waterside, Wapping, London E1W 1YD

ND Wachman                                                71 Brodrick Road, London SW17 7DX

DI Watson                                                 35 Ditton Road, Surbiton, Surrey, KT6 6RE

A West                                                    85 Powers Hall End, Witham, Essex, CM8 1NH

LJ Wiley                                                  138 London Road, Abridge, Romford, Essex, RM4 1XX

JC Williams                                               26A Quinton Street, London, SW18 3QS
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                   1                      3        4          5          6            7

                                                                   A          B                    CLASS B
                                                        COMMON PREFERENCE PREFERENCE EBT COMMON    COMMON
                           NAME OF SHAREHOLDER          SHARES   SHARES     SHARES     SHARES      SHARES
---------------------------------------------------------------------------------------------------------------
<S>                                                  <C>       <C>        <C>        <C>        <C>
TM French                                              125,000

P Furlong                                                                                       62,500

CJ Grant                                               500,000

NJ Hales                                               625,000

R Harris                                                                                        62,500

N Hassam                                                                                        62,500

S House                                                                                         62,500

D Hughes                                                                                        87,500

MS Johnson                                           1,000,000

A Keogan                                                                                        62,500

C Kostis                                               125,000

G Langford                                                                                     500,000

S Lloyd                                                                                        625,000

M Lucas                                                                                         62,500

JAJA McDonald                                          500,000

P Miller                                               250,000                                  250,000

SJ Morritt                                             125,000

D Newbigging                                                                                    500,000

AP Oakley                                              125,000

N Patel                                                125,000

LE Patterson                                           125,000                         75,000

M Perry                                                                                         125,000

DP Redhead                                           1,500,000

JG Ross                                                625,000                        125,000   500,000

JE Skinner                                           1,000,000

Codan Trust Company Limited as trustee of Rams Hill
Trust (being a trust of JE Skinner & family)                      265,000

S Tebbutt                                                                              75,000   75,000

ND Wachman                                           1,500,000

DI Watson                                              500,000

A West                                                                                          62,500

LJ Wiley                                               125,000

JC Williams                                            250,000
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                   1                           8                                9

                                                     EMPLOYEE SELLER CASH    EMPLOYEE SELLER CASH CONSIDERATION (EBT
                                                     CONSIDERATION (COMMON             COMMON SHARES AND
                                                       SHARES, A PREFERENCE                CLASS B COMMON
                                                     SHARES AND B PREFERENCE           SHARES OF EXERCISE OF
                           NAME OF SHAREHOLDER               SHARES)                         OPTIONS)
---------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                     <C>
TM French                                              $261,885.16                               $0.00

P Furlong                                                    $0.00                         $177,460.08

CJ Grant                                             $1,047,540.63                               $0.00

NJ Hales                                             $1,309,425.78                               $0.00

R Harris                                                     $0.00                         $177,460.08

N Hassam                                                     $0.00                         $177,460.08

S House                                                      $0.00                         $177,460.08

D Hughes                                                     $0.00                         $507,770.23

MS Johnson                                           $2,095,081.25                               $0.00

A Keogan                                                     $0.00                         $177,460.08

C Kostis                                               $261,885.16                               $0.00
G Langford                                                   $0.00                       $1,321,286.63

S Lloyd                                                      $0.00                       $1,660,106.78

M Lucas                                                      $0.00                         $177,460.08

JAJA McDonald                                        $1,047,540.63                               $0.00

P Miller                                               $523,770.31                         $660,643.31

SJ Morritt                                             $261,885.16                               $0.00

D Newbigging                                                 $0.00                       $1,571,296.63

AP Oakley                                              $261,885.16                               $0.00

N Patel                                                $261,885.16                               $0.00

LE Patterson                                           $261,885.16                         $203,310.49

M Perry                                                      $0.00                         $330,333.16

DP Redhead                                           $4,713,889.88                               $0.00

JG Ross                                              $1,309,425.78                       $1,668,616.78

JE Skinner                                           $1,817,471.25                               $0.00

Codan Trust Company Limited as trustee of Rams Hill
Trust (being a trust of JE Skinner & family)           $832,787.21                               $0.00

S Tebbutt                                                    $0.00                         $406,597.99

ND Wachman                                           $3,142,598.88                               $0.00

DI Watson                                            $1,047,540.63                               $0.00

A West                                                       $0.00                         $177,460.08

LJ Wiley                                               $261,885.16                               $0.00

JC Williams                                            $523,770.31                               $0.00
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------
                                   1                        10

                                                     SHARE CONSIDERATION
                                                    (NUMBER OF VALIDUS
                           NAME OF SHAREHOLDER        COMMON SHARES)
------------------------------------------------------------------------
<S>                                                  <C>
TM French                                                   5,693

P Furlong                                                     824

CJ Grant                                                   22,772

NJ Hales                                                   28,465

R Harris                                                      824

N Hassam                                                      824

S House                                                       824

D Hughes                                                    3,542

MS Johnson                                                 45,544

A Keogan                                                      824

C Kostis                                                    5,693
G Langford                                                 10,870

S Lloyd                                                    13,218

M Lucas                                                       824

JAJA McDonald                                              22,772

P Miller                                                   16,821

SJ Morritt                                                  5,693

D Newbigging                                                    0

AP Oakley                                                   5,693

N Patel                                                     5,693

LE Patterson                                                7,101

M Perry                                                     2,717

DP Redhead                                                      0

JG Ross                                                    41,313

JE Skinner                                                 57,614

Codan Trust Company Limited as trustee of Rams Hill
Trust (being a trust of JE Skinner & family)                    0

S Tebbutt                                                   2,817

ND Wachman                                                 68,317

DI Watson                                                  22,772

A West                                                        824

LJ Wiley                                                    5,693

JC Williams                                                11,386
</TABLE>

Part 2 - US Sellers

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                   1                                            2

                           NAME OF SHAREHOLDER                          SHAREHOLDER ADDRESS
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>

HE Hutter                                                 11209 Solitary Fawn Trail, Austin, Texas, 78735, USA

HE Hutter Irrevocable Trust 1                             11209 Solitary Fawn Trail, Austin, Texas, 78735, USA

HE Hutter Irrevocable Trust 2                             11209 Solitary Fawn Trail, Austin, Texas, 78735, USA

J Slattery and JPS & Co LLC                               67 Fable Farms Road, New Canaan, Connecticut 06840, USA

BP Reich                                                  42 Cowdin Circle, Chappaqua, New York, NY 10514, USA

JA Novik                                                  2528 Harris Boulevard, Austin, Texas, 78703, USA

EF Lemieux                                                75 Half Mile Road, Guilford, Connecticut 06437 USA

DJ Gross                                                  50 Central Park West, Apt 10B, New York, NY 10023, USA

Inter Atlantic Fund L.P.                                  400 Madison Avenue, 16th Floor, New York, NY 10017, USA
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                   1                      3         4           5       6           7               8

                                                                                                                   EBT
                                                        COMMON                        COMMON     CLASS B     NON-EMPLOYEE CASH
                           NAME OF SHAREHOLDER          SHARES    A PREF     B PREF   SHARES      SHARES       CONSIDERATION
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>       <C>        <C>        <C>        <C>        <C>

HE Hutter                                             3,950,000                                               $12,413,243.35

HE Hutter Irrevocable Trust 1                           500,000                                                $1,571,296.63

HE Hutter Irrevocable Trust 2                           500,000                                                $1,571,296.63

J Slattery and JPS & Co LLC                           4,950,000                                               $15,555,836.60

BP Reich                                              2,834,500                                                $8,907,680.57

JA Novik                                              4,950,000                                               $15,555,836.60

EF Lemieux                                            4,950,000                                               $15,555,836.60

DJ Gross                                                250,000                                                  $785,648.31

Inter Atlantic Fund L.P.                              2,115,500                                                $6,648,156.03
</TABLE>

Part 3 - Institutional Sellers

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                   1                                           2

                           NAME OF SHAREHOLDER                         SHAREHOLDER ADDRESS
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>
OGF III (Caymans 1), L.P.                                PO Box 1350 GT, The Huntlaw Building, Fort Street,
                                                         George Town, Grand Cayman, Cayman Islands

OGF IV (Caymans 1), L.P.                                 PO Box 1350 GT, The Huntlaw Building, Fort Street, George Town,
                                                         Grand Cayman, Cayman Islands

Olympus Executive Fund, L.P.                             Metro Centre, One Station Place, Stamford, Connecticut,
                                                         CT 06-902, USA

Reservoir Capital Partners, L.P.                         650 Madison Avenue, 26th Floor, New York, NY 10022, USA

Reservoir Capital Master Fund, L.P.                      650 Madison Avenue, 26th Floor, New York, NY 10022, USA

Intermediate Capital Investments Limited                 20 Old Broad Street, London, EC2N 1DP

Intermediate Capital GP Limited                          PO Box 76, Wests Centre, St Hellier, Jersey JE4 8PQ, Channel Islands
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                   1                      3         4           5       6           7               8
                                                                                                                   EBT
                                                        COMMON                        COMMON     CLASS B     NON-EMPLOYEE CASH
                           NAME OF SHAREHOLDER          SHARES    A PREF     B PREF   SHARES      SHARES       CONSIDERATION
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>       <C>        <C>        <C>        <C>        <C>
OGF III (Caymans 1), L.P.
                                                                 20,967,500                                    $65,892,324.02

OGF IV (Caymans 1), L.P.
                                                                 31,451,000                                    $98,837,700.39

Olympus Executive Fund, L.P.
                                                                 449,500                                        $1,412,595.67

Reservoir Capital Partners, L.P.                                  5,181,000  5,352,000                         $33,100,934.73

Reservoir Capital Master Fund, L.P.                                 869,000    897,500                          $5,551,390.98

Intermediate Capital Investments Limited                                     4,999,500                         $15,711,394.97

Intermediate Capital GP Limited                                              1,250,000                          $3,928,241.57
</TABLE>
<PAGE>

                              SCHEDULE 2
              PARTICULARS OF THE COMPANY AND SUBSIDIARIES

                                PART 1
                      PARTICULARS OF THE COMPANY

<TABLE>
<S>                                       <C>
TALBOT HOLDINGS LTD

REGISTERED NUMBER:                        31149

REGISTERED OFFICE:                        Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda

DATE AND PLACE OF INCORPORATION:          15 October 2001, Bermuda

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          GB Collis
                                          HE Hutter
                                          A Goodfellow
                                          C Huff
                                          DK Newbigging
                                          JA Novik
                                          JJ Quinn
                                          P A Rubin
                                          ND Wachman
                                          GAM Bonvarlet
                                          BP Reich

SECRETARY:                                TW Hall

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Audit plc

AUTHORISED SHARE CAPITAL:                 Common shares of US$0.002 each           405,350,000
                                          Class B common shares of US$0.002 each    10,000,000
                                          A preference shares of US$0.002 each      70,400,000
                                          B preference shares of US$0.002 each      14,250,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Common shares of US$0.002 each            50,000,000
                                          Class B common shares of US$0.002 each            --
                                          A preference shares of US$0.002 each      60,504,000
                                          B preference shares of US$0.002 each      12,499,000

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Refer to Schedule 1
</TABLE>

                                  49

<PAGE>

                                PART 2
                    PARTICULARS OF THE SUBSIDIARIES
                    SECTION A - ACTIVE SUBSIDIARIES

1    TALBOT UNDERWRITING HOLDINGS LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        02180028

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch Street, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          19 October 1987, England and Wales

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          GAM Bonvarlet
                                          JS Clouting
                                          HE Hutter
                                          AJ Keys
                                          DK Newbigging
                                          JA Novik
                                          JJ Quinn
                                          DP Redhead
                                          JG Ross
                                          VG Southey
                                          ND Wachman

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Audit plc

AUTHORISED SHARE CAPITAL:                 Ordinary L1 Shares                         4,620,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary L1 Shares                         1,255,100

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Holdings Ltd                       1,255,100
</TABLE>

                                  50

<PAGE>

2    TALBOT INSURANCE (BERMUDA) LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        33308

REGISTERED OFFICE:                        Clarendon House, 2 Church Street, Hamilton HM11, Bermuda

DATE AND PLACE OF INCORPORATION:          Bermuda, 3 March 2003

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          GAM Bonvarlet
                                          JS Clouting
                                          GB Collis
                                          A Goodfellow
                                          R Spencer-Arscott
                                          ND Wachman

SECRETARY:                                TW Hall

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Audit plc

AUTHORISED SHARE CAPITAL:                 Common shares of US$1 each                   120,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Common shares of US$1 each                   120,000

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Holdings Ltd                       120,000
</TABLE>

                                  51

<PAGE>

3    TALBOT 2002 UNDERWRITING CAPITAL LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        04257249

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch Street, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          23 July 2001, England and Wales

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          JS Clouting
                                          GAM Bonvarlet
                                          ND Wachman

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Audit plc

AUTHORISED SHARE CAPITAL:                 Ordinary L1 shares                            50,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary L1 shares                                 1

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Holdings Ltd                       1
</TABLE>

                                  52

<PAGE>

4    TALBOT CAPITAL LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        31148

REGISTERED OFFICE:                        Clarendon House, 2 Church Street, Hamilton HM11, Bermuda

DATE AND PLACE OF INCORPORATION:          15 October 2001, Bermuda

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          JS Clouting
                                          GB Collis
                                          C Garrod
                                          ND Wachman
                                          GAM Bonvarlet

SECRETARY:                                TW Hall

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Auditors plc

AUTHORISED SHARE CAPITAL:                 Common shares of US$1 each                    12,000
                                          Class A shares of Bermuda $0.01 each             100
ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Common shares of US$1 each                    12,000
                                          Class A shares of Bermuda $0.01 each              --

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Holdings Ltd                       12,000
</TABLE>

                                  53

<PAGE>

5    TALBOT UNDERWRITING LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        02202362

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch Street, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          3 December 1987, England and Wales

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          GAM Bonvarlet
                                          JS Clouting
                                          HE Hutter
                                          MS Johnson
                                          AJ Keys
                                          GS Langford
                                          DK Newbigging
                                          JJ Quinn
                                          DP Redhead
                                          JG Ross
                                          VG Southey
                                          ND Wachman

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Audit plc

AUTHORISED SHARE CAPITAL:                 Ordinary L1 shares                           400,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary L1 shares                           400,000

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Underwriting Holdings Ltd          400,000
</TABLE>

                                  54

<PAGE>

6    UNDERWRITING RISK SERVICES LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        03260112

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch Street, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          08 October 1996, England and Wales

DIRECTORS:                                CNR Atkin
                                          GAM Bonvarlet
                                          JP Bosworth
                                          MEA Carpenter
                                          JS Clouting
                                          NJ Hales
                                          AJ Keys
                                          PJ Miller
                                          ND Wachman

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Audit plc

AUTHORISED SHARE CAPITAL:                 Ordinary L1 shares                         2,500,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary L1 shares                            25,000

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Underwriting Holdings Ltd          25,000
</TABLE>

                                  55

<PAGE>

7    TALBOT UNDERWRITING SERVICES LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        03043304

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch Street, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          7 April 1995, England and Wales

DIRECTORS:                                CNR Atkin
                                          GAM Bonvarlet
                                          JS Clouting
                                          MEA Carpenter
                                          ND Wachman

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 KPMG Audit plc

AUTHORISED SHARE CAPITAL:                 Ordinary L1 shares                               100

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary L1 shares                                 1

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Underwriting Holdings Ltd          1
</TABLE>

                                  56

<PAGE>

                   SECTION B - DORMANT SUBSIDIARIES

1    TALBOT UNDERWRITING CAPITAL LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        3439486

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch Street, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          19 September 1997, England and Wales

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          JS Clouting
                                          ND Wachman

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 Dormant - not audited

AUTHORISED SHARE CAPITAL:                 Ordinary L1 shares                         1,000,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary L1 shares                           956,560

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Holdings Ltd                       956,560
</TABLE>

                                  57

<PAGE>

2    MARINASURE LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        2745324

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch St, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          England and Wales, 7 September 1992

DIRECTORS:                                MEA Carpenter

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 Dormant - not audited

AUTHORISED SHARE CAPITAL:                 Ordinary shares of L1 each                       100

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary shares of L1 shares                       2

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Underwriting Holdings Ltd          2
</TABLE>

                                  58

<PAGE>

3    YACHTSURE LTD

<TABLE>
<S>                                       <C>
REGISTERED NUMBER:                        2978236

REGISTERED OFFICE:                        Gracechurch House, 55 Gracechurch St, London EC3V 0JP

DATE AND PLACE OF INCORPORATION:          England and Wales, 6 October 1994

DIRECTORS:                                CNR Atkin
                                          MEA Carpenter
                                          NJ Hales
                                          PJ Miller

SECRETARY:                                JS Clouting

ACCOUNTING REFERENCE DATE:                31 December

AUDITORS:                                 Dormant - not audited

AUTHORISED SHARE CAPITAL:                 Ordinary shares of L0.01 each                100,000

ISSUED AND FULLY PAID-UP SHARE CAPITAL:   Ordinary shares of L0.01 shares                   10

INDIVIDUAL SHAREHOLDERS                   NO. OF SHARES

Talbot Underwriting Holdings Ltd          10
</TABLE>

                                  59
<PAGE>

                                   SCHEDULE 3
                             COMPLETION OBLIGATIONS

1    SELLERS' OBLIGATIONS

1.1  GENERAL

     On Completion each Seller shall, in accordance with Clause 6, exercise
     his/her/its votes as a shareholder in and/or (where applicable) as a
     director of the Company (or any Group Company as appropriate) to procure
     the delivery to the Purchaser of, and, in the case of paragraph 1.1.1,
     shall deliver to the Purchaser:

     1.1.1 transfers of his/her/its Shares duly executed by the registered
          holders in favour of the Purchaser or as it may direct accompanied by
          the relevant share certificates (or an express indemnity in a form
          reasonably satisfactory to the Purchaser in the case of any
          certificate found to be missing) save that no share certificates shall
          have been issued, and accordingly none shall be delivered, in respect
          of the Class B Common Shares issued to the Optionholders in respect of
          the exercise of their Options;

     1.1.2 the Termination Agreements duly executed by those Sellers who are
          parties to them and in relation to the Management Fee Agreements by
          all parties thereto;

     1.1.3 evidence of the due fulfilment of the Condition Precedent set out in
          Clause 4.1.2;

     1.1.4 evidence of the consummation of the Options Transactions; and

     1.1.5 a duly certified copy of any power of attorney under which any person
          who executes this Agreement, the Disclosure Letter and/or any transfer
          of Shares on behalf of any Seller is authorised to do so.

1.2  RESIGNATIONS

     On Completion, the Sellers shall procure the delivery to the Purchaser of:

     1.2.1 (if so required by the Purchaser) signed resignation letters from the
          auditors of each Group Company other than the Dormant Subsidiaries
          resigning their office as such, to take effect immediately upon
          Completion, and acknowledging that they have no claim against any
          Group Company and, in the case of each Group Company incorporated in
          England and Wales, containing a statement pursuant to section 394(1)
          of the Companies Act 1985 that there are no circumstances connected
          with their ceasing to hold office which they consider should be
          brought to the attention of any members or creditors; and

     1.2.2 signed resignation letters from each of the following directors
          resigning from each Group Company of which he/she is a director:

          (i)  DK Newbigging;

          (ii) HE Hutter;

          (iii) JA Novik;

          (iv) JJ Quinn;

          (v)  DP Redhead;

                                       60

<PAGE>

          (vi) C Huff;

          (vii) PA Rubin; and

          (viii) BP Reich.

1.3  BOARD RESOLUTIONS OF THE GROUP COMPANIES

     On Completion each Seller who is a director of any Group Company shall
     exercise his/her votes as a director of the relevant Group Company to
     procure the passing of Board Resolutions of each Group Company inter alia:

     1.3.1 (if so required by the Purchaser) revoking all existing authorities
          to bankers in respect of the operation of its bank accounts and giving
          authority in favour of such persons as the Purchaser may nominate to
          operate such accounts;

     1.3.2 approving the registration of the share transfers referred to in
          paragraph 1.1.1 of this Schedule;

     1.3.3 appointing each of the persons notified by the Purchaser to the
          Seller not more than 48 hours before Completion as a director of each
          of the Group Companies identified by the Purchaser in such notice,
          such appointments to take effect immediately upon Completion, subject
          to FSA and Lloyd's approval of such appointments having been obtained;

     1.3.4 accepting each of the resignations referred to in paragraph 1.2
          above;

     1.3.5 (if so required by the Purchaser) appointing PricewaterhouseCoopers
          to replace the existing auditors of each Group Company other than the
          Dormant Subsidiaries,

     1.3.6 in the case of the Company, approving the transfers of the Shares for
          registration and the updating of the Company's statutory books to
          reflect the same; and

     1.3.7 approving the delivery of the statutory books (which shall be written
          up to but not including the date of Completion) to or to the order of
          the Purchaser, and shall hand to the Purchaser duly certified copies
          of such Resolutions.

1.4  ADOPTION OF NEW BYELAWS

     On Completion the Sellers shall, if requested by the Purchaser, procure
     that new Byelaws of the Company, in the form notified to the Sellers by the
     Purchaser, are adopted conditional upon and with effect from Completion.

2    PURCHASER'S OBLIGATIONS

     On Completion the Purchaser shall deliver to the Sellers:

                                       61

<PAGE>

2.1  evidence of the due fulfilment of the Conditions Precedent set out in
     Clauses 4.1.1;

2.2  evidence that the Purchaser is authorised to execute this Agreement and the
     Disclosure Letter; and

2.3  a duly certified extract of Validus' share register showing the Share
     Consideration issued to each of the relevant Employee Sellers in accordance
     with Clause 3.1.6(i).

                                       62

<PAGE>

                                   SCHEDULE 4
          WARRANTIES GIVEN BY THE SELLERS AND WARRANTORS UNDER CLAUSE 8

1    WARRANTIES BY THE SELLERS

     Each Seller severally warrants to the Purchaser in the following terms:

1.1  CAPACITY AND AUTHORITY OF THE SELLERS

     He/she/it has the requisite capacity and authority to enter into and
     perform this Agreement.

1.2  TITLE

     He/she/it is, and on Completion will be, the sole legal and beneficial
     owner of the Shares listed against his/her/its name in Schedule 1.

1.3  EFFECT OF COMPLETION

     This Agreement will, when executed by him/her/it, constitute a valid and
     binding obligation on him/her/it enforceable in accordance with its terms,
     subject with respect to enforceability to the effect of bankruptcy,
     insolvency, reorganisation, moratorium or similar laws now or hereafter
     affecting the enforcement of creditors' rights generally and to the
     availability of equitable remedies.

1.4  CONSENTS AND AUTHORISATIONS

     No consent, approval, authorisation or order of any court or government or
     local agency or body or any other person is required by him/her/it for the
     execution or implementation of this Agreement and compliance with the terms
     of this Agreement, other than the consents of the Relevant Regulators
     specified in the conditions precedent set out in Clause 4.1.1.

1.5  THE SHARES

     There are, and on Completion will be, no Encumbrances on, over or affecting
     the Shares listed against his/her/its name in Schedule 1.

1.6  DIVIDENDS AND DISTRIBUTION

     Since the Accounts Date, except for the Accrued Preference Dividend and the
     amounts provided for in the Accounts or fairly disclosed in the Disclosure
     Letter, no dividend or other payment or distribution has been, or prior to
     Completion will be, received by him/her/it from the Company or any of the
     Group Companies.

2    WARRANTIES BY THE WARRANTORS

     Each Warrantor severally warrants to the Purchaser in the following terms:

                                       63

<PAGE>

2.1  INCORPORATION, AUTHORITY AND NON-CONTRAVENTION

     Each Group Company is duly incorporated and validly existing under its
     respective laws of incorporation.

2.2  GROUP COMPANIES

     2.2.1 The information set out in Schedule 2 is accurate in all material
          respects.

     2.2.2 The Shares will represent and constitute the entire issued and
          outstanding share capital (including options or rights to acquire
          additional share capital) of the Company as at the date of Completion.

     2.2.3 The Company is not directly or indirectly, including through any
          Group Company the holder or beneficial owner of any shares or
          securities of any other person (whether incorporated in the United
          Kingdom or elsewhere) other than the Subsidiaries and has not agreed
          to acquire any such shares or securities.

     2.2.4 The Company, directly or indirectly, legally and beneficially owns,
          and on Completion will own, free from Encumbrances the whole of the
          issued share capital of the Subsidiaries and all such shares are fully
          paid or credited as fully paid and no other person or entity has any
          rights, entitlements, claims, options or warrants with respect to any
          share in any of the Subsidiaries.

2.3  PRE-EMPTION ETC.

     Except in respect of the A Preference Shares, the B Preference Shares and
     the Options currently in issue, no person has the right (whether
     exercisable now or in the future and whether contingent or not) to call for
     the allotment, conversion or issue of any share or loan capital or any
     other security giving rise to a right over the capital of any Group Company
     under any option or other agreement (including conversion rights and rights
     of pre-emption) or otherwise and there are no Encumbrances on the shares of
     any Subsidiary or any arrangements or obligations to create any
     Encumbrances.

2.4  STATUTORY BOOKS AND RECORDS

     2.4.1 The statutory books, books of accounts and other records of a
          material nature of each Group Company are up-to-date and accurately
          reflect what is required by law to be dealt with in such books.

     2.4.2 So far as the Warrantors are aware no notice or allegation that any
          is incorrect or should be rectified has been received.

     2.4.3 All accounts, documents and returns required by law to be delivered
          or made to the Registrar of Companies or any other authority in any
          relevant jurisdiction in respect of the Group Companies have been duly
          delivered or made.

2.5  LICENCES AND CONSENTS

     2.5.1 LICENCES AND CONSENTS OBTAINED

          All material licences, consents and registrations ("LICENCES")
          necessary for the carrying on of the business of the Group as now
          carried on have been obtained

                                       64

<PAGE>

     and are in full force and effect and do not contain conditions which would
     hinder the ordinary and usual course of its business or are affected by the
     transactions contemplated by this Agreement except for the consents
     required under Clause 4 and have been and are being complied with in all
     material respects necessary for the carrying on of the business of the
     Group.

2.5.2 NO INVESTIGATION AS TO LICENCES

     There is no investigation, enquiry or proceeding outstanding or, so far as
     the Warrantors are aware, anticipated which is likely to result in the
     suspension, cancellation, modification, revocation or non-renewal of any
     Licence, and so far as the Warrantors are aware, no facts or circumstances
     exist which are likely to give rise to any such investigation, enquiry or
     proceeding.

2.6  COMPLIANCE WITH LAWS

     2.6.1 BUSINESS CONDUCTED IN COMPLIANCE WITH LAWS

          Each of the Group Companies is conducting its business in compliance
          with applicable laws and regulations (including the regulations from
          time to time issued by the Lloyd's Franchise Board) and no entity has
          been in material breach of any such laws and regulations.

     2.6.2 NO COMMUNICATION AS TO NON COMPLIANCE WITH LAWS

          No Group Company has received any notice or other communication
          (official or otherwise) from any court, tribunal, arbitrator,
          governmental agency or regulatory body with respect to an alleged,
          actual or potential violation and/or failure to comply with any
          applicable law or regulation, or requiring it to take or omit any
          action.

2.7  LITIGATION

     Save as disclosed in the information in the Data Room or in the Disclosure
     Letter and save for claims under inwards and outwards insurance and
     reinsurance policies and broker and coverholder disputes in Syndicate
     1183's ordinary course of business, there are not, nor have there been in
     the two years prior to the date hereof, nor, so far as the Warrantors are
     aware, are there threatened, any disputes, claims, proceedings, suits or
     actions directly involving a Group Company or, so far as the Warrantors are
     aware, pending or threatened against any officer or director of any Group
     Company with respect to the business of any Group Company, including in
     relation to the conduct of the underwriting of Syndicates 376 and 1183 by
     Talbot Underwriting Ltd or to any agreement or arrangement with any broker,
     agent or intermediary in respect of the placing of insurance or reinsurance
     business with Syndicates 376 or 1183.

2.8  VENDOR DUE DILIGENCE REPORT

     2.8.1 The Warrantors are not aware of any material inaccuracy in any of the
          factual information contained in the Vendor Due Diligence Report.

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     2.8.2 The Warrantors are not aware of any facts or circumstances relating
          to the Group not stated in the Vendor Due Diligence Report, the
          omission of which makes any statements contained therein misleading in
          any material respect.

2.9  TAX DUE DILIGENCE REPORT

     2.9.1 The Warrantors are not aware of any material inaccuracy in any of the
          factual information contained in the Tax Due Diligence Report.

     2.9.2 The Warrantors are not aware of any facts or circumstances relating
          to the Group not stated in the Tax Due Diligence Report, the omission
          of which makes any statements contained therein misleading in any
          material respect.

2.10 ACTUARIAL RESERVES REVIEW

     2.10.1 The Warrantors are not aware of any material inaccuracy in any of
          the factual information contained in the Actuarial Reserves Review.

     2.10.2 The Warrantors are not aware of any facts or circumstances relating
          to the Group not stated in the Actuarial Reserves Review, the omission
          of which makes any statements contained therein misleading in any
          material respect.

2.11 LATEST ACCOUNTS

     2.11.1 The Accounts and the 2005 Accounts have been prepared:

          (i)  in accordance with applicable law and in accordance with US GAAP
               applied on a consistent basis throughout the periods presented;
               and

          (ii) subject to paragraph 2.11.1(i), on a basis consistent with that
               adopted in preparing the audited accounts of the Company for the
               previous two financial years.

     2.11.2 The Accounts and the 2005 Accounts each present fairly, in all
          material respects, the financial position of the Group as at the
          Accounts Date and 31 December 2005 (as the case may be) and the
          results of their operations and their cash flows for the years then
          ended in conformity with US GAAP.

     2.11.3

          (i)  The public accountants whose report is attached to the Accounts
               are independent within the meaning of both the Auditing Practices
               Board guidance and the Independent Federation of Accountants (the
               relevant guidance for Bermuda) and that report has not been
               withdrawn or modified.

          (ii) The public accountants are, as at the date of this Agreement,
               independent within the meaning of the US Securities Act of 1933.

     2.11.4 The estimated 30 June 2007 consolidated balance sheet of the Group
          Companies, a true and accurate copy of which is contained as Document
          4.11.1 in the Data Room Index, was prepared (i) on a basis consistent
          with the Accounts and (ii) in good faith and based on assumptions
          which, on the date such balance sheet was prepared, were believed by
          the Warrantors to be reasonable and to fairly present in all material
          respects the consolidated estimated financial position of all entities
          and persons required by US GAAP to be included therein.

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     2.11.5 The 2008 quarterly financial projection materials, a true and
          accurate copy of which is contained as Document 4.11.2 in the Data
          Room Index were prepared (i) on a basis consistent with the Accounts
          and (ii) in good faith and based on assumptions which on the date such
          projection materials were prepared were believed by the Warrantors to
          be reasonable and to fairly present in all material respects the data
          they purported to present.

     2.11.6 The forecasted financial and operating data contained in the
          Information Memorandum have each been prepared in good faith based
          upon assumptions that, as at the date of preparation of the
          Information Memorandum, were believed by the Warrantors to be
          reasonable and to fairly present the data it purported to present.

2.12 OWNERSHIP OF ASSETS

     Other than as set forth in the Accounts or the notes thereto, all assets
     included in the Accounts or acquired by any of the Group Companies or which
     have otherwise arisen since the Accounts Date, other than any assets
     disposed of or realised in the ordinary and usual course of business:

     2.12.1 are legally and beneficially owned by the Group Companies; and

     2.12.2 are free from Encumbrances, other than those arising by operation of
          law or in the ordinary and usual course of business and, for the
          avoidance of doubt, Encumbrances in the ordinary and usual course of
          business shall include all Encumbrances over:

          (i)  assets of the Group Companies which relate to the Group's Funds
               at Lloyd's arrangements which Encumbrances arise because of such
               arrangements;

          (ii) the assets of Syndicate 1183, which Encumbrances arise pursuant
               to Lloyd's premium trust deeds; and

          (iii) the designated insurer trust accounts of Underwriting Risk
               Services Ltd, which Encumbrances arise pursuant to regulatory
               requirements and contractual obligations in relation to client
               money.

2.13 SUFFICIENCY OF ASSETS

     So far as the Warrantors are aware, the property, rights and assets owned,
     leased or otherwise used by the Group Companies comprise all the property,
     rights and assets necessary for the carrying on of the business of each
     Group Company in the manner in, and to the extent to, which it is presently
     conducted.

2.14 LIABILITIES

     2.14.1 So far as the Warrantors are aware, there are no liabilities,
          whether actual or contingent, of any of the Group Companies other than
          (i) liabilities disclosed or provided for in the Accounts; (ii)
          liabilities incurred in the ordinary and usual course of business
          since the Accounts Date, none of which has had or, so far as the
          Warrantors are aware, may have a material adverse effect on the
          financial or

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          trading position of the Group; or (iii) liabilities disclosed
          elsewhere in this Agreement.

     2.14.2 No Group Company has any liability in relation to insurance business
          written by it into years of account prior to 2002.

     2.14.3 Except as expressly stated in the Accounts or in the Disclosure
          Letter, no Group Company is subject to any material exposure,
          individually or in the aggregate, under any futures or option
          contracts, swaps, hedges or similar instruments to which any Group
          Company is a party.

2.15 IMPORTANT BUSINESS SINCE THE ACCOUNTS DATE

     2.15.1 Since the Accounts Date, save as disclosed in the information
          contained in the Data Room or in the Disclosure Letter, there has not
          been any material adverse change in the business, assets, liabilities,
          operations, employee or customer relations or financial or trading
          position of any Group Company to an extent which is material in the
          context of the Group taken as a whole and the Warrantors are not aware
          of any event which is likely to give rise to any such change.

     2.15.2 Since the Accounts Date:

          (i)  no loan or loan capital has been repaid by any Group Company in
               whole or in part or has become liable to be so repaid; and

          (ii) no shareholders' resolution of any Group Company has been passed
               other than resolutions relating to the routine business of annual
               shareholders' meetings.

     2.15.3 Other than as disclosed in the Disclosure Letter, between the
          Accounts Date and the date of this Agreement, no Group Company has
          taken any of the actions set out in Clauses 5.2.1 to 5.2.3, 5.2.5,
          5.2.11, 5.2.13, 5.2.14, 5.2.17, 5.2.18, 5.2.21, 5.2.22 and 5.2.25 to
          5.2.27 which would have been a breach of such covenants if they were
          deemed to have been given for the period between Accounts Date and the
          date of this Agreement.

2.16 INTELLECTUAL PROPERTY

     2.16.1 OWNERSHIP OF INTELLECTUAL PROPERTY

          So far as the Warrantors are aware, each of the Group Companies owns
          or possesses, or has the right to use or can acquire on reasonable
          terms, all know-how (including proprietary or confidential
          information, systems or procedures), trade marks, trade names, logos
          or other intellectual property (including the "Talbot", "Marinasure"
          and "Yachtsure" trade names and logos) (collectively, "INTELLECTUAL
          PROPERTY") or valid and enforceable licences of Intellectual Property
          necessary for the Group to carry on its business in the manner and to
          the extent to which it is presently conducted.

     2.16.2 NO INFRINGEMENT OF INTELLECTUAL PROPERTY

          No Group Company has received any notice and the Warrantors are not
          otherwise aware of any actual or potential infringement of, or
          conflict with, asserted rights of

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          others with respect to any Intellectual Property or any licences of
          Intellectual Property owned by the Group or necessary for the Group to
          carry on its business.

2.17 INSURANCE

     2.17.1 The Data Room contains details of all outwards reinsurance treaties
          and other reinsurance arrangements incepting on or after 1 January
          2007 which are material to the Group, together with details as at the
          date hereof of any material claims made by any Group Company under
          them which are outstanding.

     2.17.2 Each Group Company has complied with its payment obligations under
          all outstanding outwards reinsurance treaties to which it is a party.

     2.17.3 No Group Company is a party to any contracts designed to obscure or
          conceal the true financial position of the Group.

     2.17.4 So far as the Warrantors are aware there is no material commission
          nor any material termination or compensation payment due under any
          reinsurance contract which will become payable by any Group Company as
          a result of the acquisition contemplated by this Agreement.

     2.17.5 Copies of all of the material insurance policies of each Group
          Company, currently in effect, (excluding all inwards and outwards
          insurance contracts and all other insurance or reinsurance contracts
          entered into by Syndicate 1183 and/or Talbot 2002) and details of
          related premiums are contained in the Data Room or in the Disclosure
          Letter.

     2.17.6 Such insurances are in effect and, so far as the Warrantors are
          aware, there are no circumstances which might lead to any liability
          under such insurance being avoided by the insurers.

     2.17.7 In respect of all such insurances, there is no insurance claim
          pending or outstanding for loss or damage in excess of L100,000 and,
          as far as the Warrantors are aware, there are no circumstances likely
          to give rise to any such claim.

2.18 EMPLOYMENT

     2.18.1 The Data Room contains materially accurate details as at 1 April
          2007 in relation to each Group Company of:

          (i)  the total number of Employees (including those who are on
               maternity, paternity, adoption or parental leave, secondment or
               absent on the grounds of disability or other long-term leave of
               absence, and have or may have a statutory or contractual right to
               return to work in a Group Company);

          (ii) the salary of each such Employee;

          (iii) the terms of the contract of employment of each Senior Employee;

          (iv) the standard terms and conditions of employment applicable to all
               other Employees of the Group and any non-standard terms and
               conditions of employment; and

          (v)  the benefits provided to each category of Employee.

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     2.18.2 No Group Company has made any proposal to terminate the employment
          of any Employee or to vary or amend the terms of employment of any
          Employee (whether to their detriment or benefit).

     2.18.3 Save to the extent to which provision or allowance has been made in
          the Accounts or save as disclosed in the Data Room or in the
          Disclosure Letter:

          (i)  there are no amounts owing or promised to any present or former
               directors or Employees of any Group Company other than
               remuneration accrued due or for reimbursement of business
               expenses; and

          (ii) no liability has been incurred by any Group Company for breach of
               any employment contract or consultancy agreement, for redundancy
               payments (including protective awards) or for compensation for
               wrongful dismissal or unfair dismissal or discrimination (of any
               kind) or breach of statutory duty or for failure to comply with
               any order for the reinstatement or re-engagement of any Employee
               or for the actual or proposed termination or suspension of
               employment or variation of any terms of employment of any
               Employee or former employee of any Group Company or for any other
               employment-related claim, right of action or liability.

     2.18.4 Except as disclosed in the Data Room or in the Disclosure Letter, no
          material employment problem, dispute, disturbance or litigation
          involving any of the Employees or former employees of any Group
          Company exists or, so far as the Warrantors are aware, is current,
          outstanding and/or imminent.

     2.18.5 Save as disclosed in the Data Room or in the Disclosure Letter,
          there is not in existence nor has any Group Company proposed to
          introduce any share incentive, share option, profit sharing, bonus or
          other incentive arrangements for or affecting any Employees.

     2.18.6 There is no notice outstanding that terminates the contract of any
          Senior Employee (whether given by the Senior Employee or the relevant
          Group Company).

     2.18.7 No offer of a contract of employment or a consultancy agreement has
          been made by any Group Company to any individual which has not yet
          been accepted or which has been accepted but where the individual's
          employment or engagement has not yet started.

     2.18.8 No trade union, staff association or any other body representing
          workers is recognised by any Group Company and no request for such
          recognition has been received and there are no collective agreements
          relating to workers of any Group Company.

     2.18.9 Save as disclosed in the Data Room, no Group Company has within the
          three years preceding the date hereof entered into any agreement which
          involved any Group Company acquiring or disposing of any undertaking
          or part of one such that the Transfer of Undertakings (Protection of
          Employment) Regulations 2006 (or equivalent provisions in any relevant
          jurisdiction) applied thereto.

     2.18.10 Save as disclosed in the Disclosure Letter or in the documents
          listed in the Data Room Index, no Group Company has entered into any
          material outsourcing agreement or arrangement for the management or
          operation of its business or any part thereof other than with its
          Employees.

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     2.18.11 All salaries, fees and wages and other remuneration and benefits of
          all workers or any Group Company have, to the extent due, been paid or
          discharged in full together with all related payments to third party
          providers and the relevant authorities.

2.19 COMPANY PENSION SCHEME

     2.19.1 The Company Pension Scheme is the only pension scheme or pension
          arrangements and/or commitments operated or sponsored by the Group or
          to which any Group Company may be required to make any pension related
          payment.

     2.19.2 The Data Room contains a copy of the rules currently governing the
          Company Pension Scheme, the latest explanatory booklet and any
          relevant and material announcements relating to the Company Pension
          Scheme.

     2.19.3 The Data Room contains details of the rate at which contributions to
          the Company Pension Scheme are being paid.

     2.19.4 All contributions due to the Company Pension Scheme have been paid
          within any relevant time limits and details of all and any commitments
          (whether contractual or otherwise) relating to employer pension
          contributions have been fairly disclosed in the Data Room.

     2.19.5 Save as disclosed in the Data Room or the Disclosure Letter, no
          Group Company has received notice of any material dispute about the
          benefits payable under the Company Pension Scheme in respect of any
          present or former employee or director of any Group Company and, so
          far as the Warrantors are aware, there are no circumstances which
          might give rise to any such dispute.

     2.19.6 So far as the Warrantors are aware, the Company Pension Scheme
          complies with, and has been managed in all material respects in
          accordance with, all applicable laws and no Employee has been excluded
          from the Company Pension Scheme or provided with different benefits
          under the Company Pension Scheme directly or indirectly because of
          their sex or because they were employed on a part-time basis.

2.20 THE PROPERTIES

     2.20.1 In addition to Clause 1 of this Agreement, in this paragraph 2.20 of
          Schedule 4, unless the context otherwise requires:

          "ENVIRONMENTAL LAWS" means all applicable laws, statutes, regulations,
          secondary legislation, bye-laws, common law, directives, treaties and
          other measures, judgments and decisions of any court or tribunal,
          codes of practice and guidance notes which are legally binding and in
          force as at the date of this Agreement in so far as they relate to or
          apply to the Environment, including Part IIA of the Environmental
          Protection Act 1990 and any regulations and guidance made or issued
          thereunder;

     2.20.2 The Properties comprise all of the premises and land owned, occupied
          or otherwise used in connection with the businesses of the Group or in
          which any Group Company has an interest or obligation.

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     2.20.3 No Group Company or any company which was previously a Subsidiary of
          the Company has any continuing liability in respect of any leasehold
          property other than the Properties.

     2.20.4 The requisite details in relation to the Properties set out in
          Schedule 6 are true, complete and accurate in all material respects.

     2.20.5 In relation to each Property:

          (i)  so far as the Warrantors are aware, there is no material
               subsisting breach, nor any material non-observance of any
               covenant, condition or agreement contained in the Lease on the
               part of any Group Company or the relevant landlord;

          (ii) no landlord has refused to accept rent or made any complaint or
               objection and the receipt for the payment of rent which fell due
               immediately prior to the date of this Agreement is unqualified;
               and

          (iii) the Warrantors are not aware of any liabilities arising from
               Environmental Laws affecting any Group Company which are not set
               out in the Disclosure Letter.

2.21 CONTRACTS

     2.21.1 Other than insurance and reinsurance contracts entered into by
          Syndicate 1183 and/or Talbot 2002 in the ordinary course of business
          with persons who are not connected to the Group as at the date of this
          Agreement, each contract which is of material importance to the
          business of the Group has been included in the Data Room.

     2.21.2 Save as in respect of Talbot 2002's membership of Syndicate 1183,
          none of the Group Companies is a member of any joint venture,
          consortium, partnership or other unincorporated association (other
          than a recognised trade association) which is material to the
          operation of the business of the Group.

     2.21.3 Other than insurance and reinsurance contracts entered into by
          Syndicate 1183 and/or Talbot 2002 in the ordinary course of business,
          all contracts to which any Group Company is a party and which are of
          material importance to the business of the Group as now carried on are
          binding obligations of that Group Company and, so far as the
          Warrantors are aware:

          (i)  the terms thereof have been complied with in all material
               respects by that Group Company;

          (ii) there are no grounds for rescission, avoidance or repudiation of
               any such contracts including upon giving effect to Completion
               (except for such consents as are identified in the Disclosure
               Letter); and

          (iii) no notices of termination or of intention to terminate have been
               received or sent by any Group Company.

     2.21.4 No Group Company has any liability or obligation to any broker,
          investment banker, financial adviser or other person, including any
          Seller, or any of its connected persons with respect to fees,
          expenses, commissions or other amounts that arise solely in relation
          to the sale of the Shares.

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     2.21.5 There are no powers of attorney or other authorities (express or
          implied) which are still outstanding or effective to or in favour of
          any person to enter into any contract or commitment on behalf of any
          Group Company (other than any power of attorney or other authority
          given to directors or employees in the normal course or given pursuant
          to ordinary course binder and lineslip business).

2.22 AGREEMENTS WITH CONNECTED PARTIES

     2.22.1 Save as disclosed in the Data Room or the Disclosure Letter, there
          is not outstanding:

          (i)  any loan made by any Group Company to, or debt owing to any Group
               Company by, any director, officer, secretary or shareholder of
               the Company, or any of their connected persons; or

          (ii) any agreement or arrangement to which any Group Company is a
               party and in which any director, officer, secretary or
               shareholder of the Company or any such connected person is
               interested (other than employment contracts, the Profit Share
               Plan, directors service contracts, the Shareholders' Agreement,
               the Employee Shareholders' Agreement and the various agreements
               included in the Data Room whereby shareholders provide Funds at
               Lloyd's to the Group).

     2.22.2 Syndicate 1183 has not paid any commissions or other incentives to a
          broker for business offered by that broker to Syndicate 1183 which the
          Warrantors know to be illegal or contrary to any relevant rule or
          regulation.

     2.22.3 During the two years prior to the date of this Agreement no Group
          Company has entered into an agreement with any broker whereby
          additional commissions were payable but not disclosed on the slip.

2.23 INDEBTEDNESS

     2.23.1 No outstanding indebtedness of any Group Company has become
          repayable before its stated maturity, nor has any security in respect
          of such indebtedness become enforceable by reason of default by any
          Group Company (except that the indebtedness under each of the Group's
          $25,000,000 facility with Lloyds TSB and the Group's $30,000,000
          letter of credit arrangements shall become repayable upon a change of
          control of the Company and the Reservoir Letters of Credit impose an
          obligation on the Company, upon request from the Reservoir Agent, to
          use best endeavours to procure that Talbot 2002 uses best endeavours
          to procure that the letters of credit are redelivered by Lloyd's and
          dealt with in the same way as Released Funds as set out in the FAL
          Providers' Agreement on a change of control (both Released Funds and
          change of control used in relation to the Reservoir Letter of Credit,
          have the meanings set out in the FAL Providers' Agreement)).

     2.23.2 No Group Company has received notice from any person demanding or
          threatening to demand repayment of, or to take any steps to enforce
          any security for, any indebtedness of any Group Company which is
          repayable on demand.

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     2.23.3 All the Group Companies' borrowing facilities have been duly
          executed on behalf of the relevant Group Company and are in full force
          and effect and as far as the Warrantors are aware (save as specified
          in paragraph 2.23.1 above):

          (i)  all undrawn amounts under such borrowing facilities are or will
               be capable of drawdown; and

          (ii) there is nothing which could cause any undrawn amounts under any
               such borrowing facilities to be unavailable for drawing as
               required.

     2.23.4 The amounts borrowed by each Group Company do not exceed any
          limitation on its borrowing contained in its bye-laws or articles of
          association, any debenture or other deed or document binding upon it.

     2.23.5 No Group Company is engaged in financing of a type which would not
          require to be shown or reflected in audited accounts.

2.24 INSOLVENCY

     2.24.1 No order has been made, members resolution passed or meeting
          convened for the winding up (or other process whereby the business is
          terminated and the assets of the company concerned are distributed
          amongst the creditors and/or shareholders or other contributors) of
          any Group Company and no cases or proceedings under any applicable
          insolvency, reorganisation, or similar laws in any jurisdiction have
          been brought against or notified to any Group Company and, so far as
          the Warrantors are aware, no events have occurred which, under
          applicable laws, would justify any such cases or proceedings.

     2.24.2 As far as the Warrantors are aware, no petition has been presented
          or other proceedings commenced for an administration order to be made
          (or any other order to be made by which during the period it is in
          force, the affairs, business and assets of the Group Company concerned
          are managed by a person appointed for the purpose by a court,
          governmental agency or similar body) in relation to any Group Company,
          nor has any such order been made.

     2.24.3 No receiver (including an administrative receiver), liquidator,
          trustee, administrator, custodian or similar official has been
          appointed in any jurisdiction in respect of the whole or any part of
          the business or assets of any Group Company and, so far as the
          Warrantors are aware, no step has been taken for or with a view to the
          appointment of such a person.

     2.24.4 No Group Company is insolvent (which shall include being unable to
          pay its debts as they fall due and/or its assets being less than the
          amount of its liabilities, taking into account its contingent and
          prospective liabilities).

2.25 TAXATION

     2.25.1 All returns and computations of the Group for Taxation purposes have
          been made within the requisite period and are complete and correct in
          all material respects. None of such returns or computations is the
          subject of any dispute with the Group or any claim against the Group
          by any Taxation Authority. Each Group Company has timely paid all
          Taxes due and payable by it, including any US federal excise tax or
          premium tax imposed by any Taxation Authority, and has timely withheld
          and

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          paid to the appropriate Taxation Authority all Taxes required to be
          withheld and paid by it.

     2.25.2 No action, suit, proceeding or audit or any notice of inquiry of any
          of the foregoing is pending, or has, so far as the Warrantors are
          aware, been threatened, against or with respect to any Group Company
          regarding Taxes.

     2.25.3 So far as the Warrantors are aware, each Group Company is, and has
          at all times been, resident for all Taxation purposes in the country
          of its incorporation including for the purposes of any double taxation
          arrangements. No claim has ever been made against a Group Company by a
          Taxation Authority in a jurisdiction where any Group Company does not
          file tax returns that such company is or may be subject to Taxes in
          such jurisdiction. No Group Company, excluding for these purposes
          Syndicate 1183, has, nor has it any time ever had, a branch agency,
          permanent establishment or any person with a binding authority outside
          the United Kingdom or Bermuda. So far as the Warrantors are aware, no
          Group Company has any liability, direct or indirect, absolute or
          contingent, for the Taxes of any other person (other than another
          Group Company). No extension for the period of assessment or
          collection of any Tax is currently in effect.

     2.25.4 Each Group Company has complied in all material respects with all
          statutory requirements, orders, provisions, directions or conditions
          relating to VAT, including (for the avoidance of doubt) the terms of
          any agreement reached with any Taxation Authority.

     2.25.5 No Group Company has at any time been a member of a group
          registration made pursuant to Sections 43 to 43C VATA (other than a
          group registration of which all of the other members of which were
          Group Companies).

     2.25.6 Each document in the possession or under the control of a Group
          Company, or to the production of which the Group Company is entitled
          and on which the Group Company relies, and which in the UK, Bermuda or
          elsewhere requires any stamp or mark to denote that:

          (i)  any duty, tax or fee required to be paid by law has been paid; or

          (ii) a duty, tax or fee referred to in paragraph 2.25.7(i) is not
               required to be paid, or that the document in question or the
               event evidenced by it qualifies from a relief or exemption from
               such duty, tax or fee; or

          (iii) the document has been produced to the appropriate authority,

          has been properly stamped or marked as appropriate and no such
          document which is outside the UK or Bermuda would attract stamp duty
          if it were to be brought into the UK or Bermuda respectively.

     2.25.7 So far as the Warrantors are aware, except for the Subsidiaries that
          are Non-U.S. Corporate Underwriters, within the meaning of the Closing
          Agreement between the Council of Lloyd's and the Internal Revenue
          Service, dated 1 January 2005, as amended (the "CLOSING AGREEMENT"),
          no Group Company has been engaged in a trade or business in the United
          States during the last ten years. So far as the Warrantors are aware,
          each Subsidiary that is a Non-U.S. Corporate Underwriter is an
          Eligible Corporate Underwriter, as defined in the Closing Agreement,
          and the only income of each such Subsidiary that is effectively
          connected with a trade or

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          business in the United States is such Subsidiary's taxable USCI or
          USCL (as such terms are defined in the Closing Agreement).

     2.25.8 So far as the Warrantors are aware, no Group Company or Syndicate
          1183 has been a party to or otherwise involved in a transaction or
          series of transactions where the main purpose, or one of the main
          purposes, was the avoidance of Taxation or obtaining increased
          benefits under the UK/US income tax treaty and no Group Company or
          Syndicate 1183 has been required to disclose any transactions,
          arrangements or schemes to any Taxation Authority pursuant to any
          Taxation statute, law, rule or regulation. So far as the Warrantors
          are aware, no Group Company or Syndicate 1183 has been the subject of
          any notification to the Internal Revenue Service pursuant to section
          11 of the 2005 FET Closing Agreement between Lloyd's, certain
          underwriters at Lloyd's and the United States Commissioner of Internal
          Revenue. No syndicate level or member level reinsurance ceded has been
          reported to Lloyd's as having been entered into as part of a conduit
          arrangement.

     2.25.9 So far as the Warrantors are aware, each Group Company has correctly
          deducted all income tax which is deductible and payable under the PAYE
          system and/or any Taxation statute, law, rule or regulation and all
          such amounts due to be paid to the relevant Taxation Authority prior
          to the date of this Agreement have been so paid, including all
          Taxation chargeable on benefits provided for directors, employees or
          former employees of the Company or any persons required to be treated
          as such.

     2.25.10 So far as the Warrantors are aware, all material transactions
          entered into between a Group Company and another member or any former
          member of the Group, with effect from 1 January 2002 where one of the
          entities involved was resident in a jurisdiction other than the UK and
          with effect from 1 January 2005 where both of the entities involved
          were resident in the UK, in the last two years have been entered into
          on an arm's length basis and the consideration (if any) charged,
          received or paid by each Group Company on all transactions entered
          into by them has been equal to the consideration which might have been
          expected to be charged, received or paid (as appropriate) between
          independent persons dealing at arm's length. So far as the Warrantors
          are aware, no Taxation Authority has made any claim that any such
          transactions have been entered into other than on an arms length
          basis.

     2.25.11 No shares in or assets of a Group Company are subject to any charge
          by any Taxation Authority or any power of sale, charge or mortgage in
          connection with any inheritance tax or similar tax or estate duty and,
          so far as the Warrantors are aware, no Taxation Authority has made any
          claim to charge, or order the power of sale, charge or mortgage of,
          the shares or assets of a Group Company with an unsatisfied liability
          to inheritance tax or similar tax or estate duty.

     2.25.12 No Group Company has agreed, undertaken or arranged, and nor is any
          Group Company under any obligation, to reimburse, indemnify, discharge
          or make good, any Taxation or any amount in respect of Taxation which
          is the primary liability of another person other than a Group Company.

                                       76

<PAGE>

2.26 RELEVANT REGULATORS

     2.26.1 Syndicate 1183 and each Group Company which is regulated by a
          Relevant Regulator (a "REGULATED COMPANY") has obtained all necessary
          consents, registrations and approvals from the Relevant Regulator and
          the Registrar of Companies in Bermuda, if applicable.

     2.26.2 No Regulated Company in the last three years has been notified of
          any actual or proposed complaint, disciplinary inquiry or proceeding
          by a Relevant Regulator and/or the Registrar of Companies in Bermuda,
          if applicable, against any Regulated Company, or any directors,
          officers or employees of any Regulated Company and no Regulated
          Company or any directors, officers or employees of a Regulated Company
          is or are currently a party to such proceedings and the Warrantors are
          not aware of any grounds for any such complaint, disciplinary inquiry
          or proceeding.

     2.26.3 So far as the Warrantors are aware, nothing has been done or omitted
          to be done by any Regulated Company in the last three years which
          would constitute a material failure to comply with any applicable law
          or any bye-law or other rule, regulation, requirement or code of
          conduct of any Relevant Regulator and/or the Registrar of Companies in
          Bermuda, if applicable, and no Regulated Company has any outstanding
          liabilities in respect of any such failure.

     2.26.4 No guarantee, indemnity or undertaking currently in force, apart
          from in the ordinary course of business, has been given to any
          Relevant Regulator by or in respect of any Regulated Company.

     2.26.5 The audited accounts for Syndicate 1183 for the year ended 31
          December 2006 have been prepared by Talbot Underwriting Ltd in
          accordance with the requirements of the Insurance Accounts Directive
          (Lloyd's Syndicate and Aggregate Accounts) Regulations 2004
          (S.2004/3319) and the Syndicate Accounting Bye-Law (No.8 of 2005).

     2.26.6 The Ring-Fencing Letters are true, complete and accurate copies of
          the originals, represent all of the material provided to any Group
          Company by Lloyd's in connection with the subject matter thereof, the
          Company has received no intimation from Lloyd's that Lloyd's would act
          in a manner contrary to that stated in the Ring-Fencing Letters in
          relation to the subject matter of the letters, the arrangements
          contemplated therein have not been rescinded by Lloyd's and, so far as
          the Warrantors are aware, there is no reason to believe that they
          would be rescinded in the future.

     2.26.7 No Group Company in the last three years has received any notice
          from Lloyd's including the Lloyd's Franchise Board limiting, or
          indicating the possibility of a limitation of, the scope or quantum of
          any of the Group's business activities and, so far as the Warrantors
          are aware, no such notice is likely or expected.

2.27 UNDERWRITING

     2.27.1 All minutes of the Group's Independent Review Committee in respect
          of meetings of the same held in the one year period prior to the date
          of this Agreement are in the Data Room.

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<PAGE>

     2.27.2 All actuarial reports, actuarial certificates and loss and loss
          adjustment expense reports prepared by EMB Consulting in respect of
          Syndicate 1183 in the last 12 months have been made available to the
          Purchaser upon the execution, by the Purchaser of an appropriate
          release letter addressed to EMB Consulting.

2.28 SHREWSBURY TRANSACTIONS AND THE TRANSFER OF SYNDICATE 376

     There have been no claims (i) under the warranties given by the Company in
     respect of the Shrewsbury Transactions or the indemnities given by Talbot
     Underwriting Ltd in respect of the transfer of Syndicate 376; and (ii) made
     against the Company in respect of any transaction associated with the
     Shrewsbury Transactions or against Talbot Underwriting Ltd in respect of
     any transaction associated or connected with the transfer of Syndicate 376.

2.29 LLOYD'S

     2.29.1 Other than those persons who are party to agreements entered into by
          Talbot 2002 in relation to the Group's Capital Stack which are
          contained in the documents in the Data Room Index, no person currently
          provides (or has procured the provision of) Funds at Lloyd's for the
          benefit of Talbot 2002 in respect of the 2007 or prior underwriting
          years of account or is entitled to any fee or payment in respect of
          the provision of Funds at Lloyd's for the benefit of Talbot 2002.

     2.29.2 No current or past provider of Funds at Lloyd's for the benefit of
          Talbot 2002 has any right to participate in or share profits in
          relation to any Funds at Lloyd's for the benefit of Talbot 2002 for
          the 2008 or any subsequent year of account without the prior agreement
          of Talbot 2002 and no such agreement currently exists.

     2.29.3 No person who currently provides (or procures the provision of)
          Funds at Lloyd's for the benefit of Talbot 2002 (whether for the 2007
          or any prior year of account) is entitled to any premium fee or other
          payment in respect thereof, save as set out in the agreement by virtue
          of which that person assumed the obligation to provide such Funds at
          Lloyd's.

     2.29.4 The 2002, 2003 and 2004 years of account of Syndicate 1183 have
          closed, all fees due to any person in respect of the provision of
          Funds at Lloyd's for the benefit of Talbot 2002 in its underwriting at
          Lloyd's during those years of account have been, or shortly will be,
          paid and the Group has complied with all agreements entered into with
          the providers of Funds at Lloyd's in respect of those years of
          account.

     2.29.5 No member of the Group, other than Talbot 2002, has underwritten at
          Lloyd's in the 2002 or subsequent years of account and no agreements
          or arrangements for the provision of Funds at Lloyd's in respect of
          the underwriting of any other member of the Group in the 2001 or prior
          years of account remain in effect.

     2.29.6 Talbot 2002 has not at any time underwritten insurance at Lloyd's
          other than on Syndicate 1183.

     2.29.7 Talbot 2002 is not currently and, so far as the Warrantors are
          aware, has not at any time been in breach of, or given notice of any
          intention to change the terms of, its agreement(s) with any provider
          of Funds at Lloyd's which agreement remains in effect. So far as the
          Warrantors are aware, none of the other parties to such agreement(s)
          is currently or has at any time been in breach of it.

                                       78

<PAGE>

     2.29.8 All fees, expenses and other monies payable by the Group Companies
          to The Law Debenture Trust Corporation plc under the terms of the
          various trust deeds relating to the Group's Funds at Lloyd's and/or
          assets replacing the its Funds at Lloyd's have been paid when due and
          no Group Company which is a party to any of those trust arrangements
          or, so far as the Warrantors are aware, any other party thereto has at
          any time been in breach of them.

     2.29.9 No member of the Group is or has at any time during the last three
          years been in dispute with any person who has provided or procured the
          provision of Funds at Lloyd's for the benefit of Talbot 2002.

     2.29.10 No person other than National Indemnity Company has any option,
          right of first refusal or other legal entitlement to provide
          reinsurance to close or any other reinsurance to Syndicate 1183 as a
          result of its current or previous participation as a provider of Funds
          at Lloyd's to Talbot 2002.

     2.29.11 Other than as contained in the Data Room, there are no agreements
          (whether written or otherwise) between any member of the Group and any
          third party who is not a member of the Group relating to the provision
          of the Funds at Lloyd's for Talbot 2002 (or any other member of the
          Group).

2.30 COMPETITION

     2.30.1 So far as the Warrantors are aware, there is, and has in the last
          three years been, no aspect of the conduct of the business of the
          Group:

          (i)  which infringes, or has infringed, any applicable competition
               law;

          (ii) in respect of which any filing, registration or notification is,
               was or will be required by any applicable competition law
               (whether or not the same has in fact been made);

          (iii) which is, or was, the subject of an investigation under any
               applicable competition law; or

          (iv) in connection with which any Group Company has been subject to an
               order or directions or has given any undertaking or commitments
               or assurances under any applicable competition law.

     2.30.2 No Group Company has knowingly, in the last three years, been put on
          notice by a competition authority of any action or investigation under
          any applicable competition law that will be taken against any of them
          in relation to any of the current activities of the Group.

     2.30.3 For the purposes of paragraphs 2.30.1 and 2.30.2, the term
          "APPLICABLE COMPETITION LAW" means all competition laws applicable to
          the business of the Group, whether of the United Kingdom, the European
          Union, Bermuda or any other jurisdiction.

2.31 FOREIGN PRIVATE ISSUER

     The Company is a "foreign private issuer" within the meaning of the
     definition set out in Part 1 of Schedule 10.

3    EMPLOYEE SELLER WARRANTIES (made severally by the Employee Sellers only)

                                       79

<PAGE>

     Each Employee Seller on its own behalf acknowledges, agrees, represents and
     warrants and is aware that:

     3.1.1 the Validus Securities have not been registered under the Securities
          Act or under any federal, foreign, state or other jurisdiction's
          securities laws; the transfer thereof is restricted by the Securities
          Act and applicable securities laws; and Validus is under no obligation
          to, and currently does not intend to, register or qualify the Validus
          Securities for resale by the Employee Seller or assist the Employee
          Seller in complying with any exemption under the Securities Act or the
          securities laws of any such jurisdiction or any other jurisdiction. An
          offer or sale directly or indirectly of Validus Securities by the
          Employee Seller will be subject to the terms and provisions of this
          Agreement, the Validus Bye-laws and any employment agreement that such
          Employee Seller may be subject to and, in the absence of registration
          under the Securities Act, will require the availability of an
          exemption thereunder. Subject to the Validus Bye-laws, this Agreement
          and any applicable employment agreements, certificates representing
          Validus Securities will contain a restrictive legend reflecting such
          restrictions for so long as such restrictions apply;

     3.1.2 such Employee Seller confirms that he or she is not a "U.S. person"
          within the meaning of Regulation S of the Securities Act (a portion of
          which is for convenience purposes only attached hereto in Part 2 of
          Schedule 10); and

     3.1.3 such Employee Seller is acquiring the Validus Securities for his or
          her own account, for investment only and not with a view toward the
          transfer, resale or distribution thereof in violation of applicable
          law.

                                       80
<PAGE>

                                   SCHEDULE 5
                    LIMITATION OF LIABILITY UNDER CLAUSE 8.1

1    LIMITATION OF LIABILITY

     For the avoidance of doubt:

     (i)  the Sellers (other than the Warrantors) shall have no liability
          whatsoever under this Agreement for any breach of Warranty other than
          a breach of the Title and Capacity Warranties and then each Seller
          shall only be severally liable for his/her/its own breach of the Title
          and Capacity Warranties given by him/her/it; and

     (ii) only the Warrantors shall have any liability for any breach of the
          Management Warranties and their liability for any such breach shall be
          several.

     Furthermore, notwithstanding any other provision of this Agreement, a
     Seller shall not have any liability for any breach of the Title and
     Capacity Warranties and a Warrantor shall not have any liability for any
     breach of the Management Warranties:

1.1  TIME LIMITS

     in respect of any claim, unless notice of such claim is given in writing by
     the Purchaser to the relevant Seller or the Warrantors (as the case may be)
     setting out reasonable details so far as practicable of the specific matter
     in respect of which the claim is made including (if feasible) an estimate
     of the amount of such claim within 12 months of the date of Completion, and
     any such claim shall (if it has not been previously satisfied, settled or
     withdrawn) be deemed to be withdrawn nine months after the date of
     notification of the relevant claim in accordance with this paragraph 1.1
     unless legal proceedings in respect of it have been served and are being
     pursued with reasonable diligence (except that the time limits in this
     paragraph 1.1 shall not apply to any claim for a breach of the Title and
     Capacity Warranties);

1.2  MINIMUM CLAIMS

     save for a claim for any breach of the Title and Capacity Warranties to
     which this paragraph 1.2 shall not apply, in respect of any claim unless
     and until the amount of the claim against all Warrantors (before the
     application of paragraphs 1.3 and 1.4 below) exceeds L100,000 ("MINIMUM
     CLAIM") (save that a series of claims arising from the same facts or
     circumstances shall be aggregated for this purpose) but none of the
     Warrantors shall be liable for a claim in excess of that amount unless the
     liability determined in respect of any such claim (excluding interest,
     costs and expenses) also exceeds that amount;

1.3  AGGREGATE MINIMUM CLAIMS

     save for a claim for any breach of the Title and Capacity Warranties to
     which this paragraph 1.3 shall not apply, in respect of any claim unless
     the aggregate amount of all claims against all Warrantors (before the
     application of paragraph 1.4 below) for breach of the Management Warranties
     (taking no account of any claims for less than L100,000) exceeds L2,500,000
     but if the aggregate liability in respect of all Minimum Claims exceeds
     that figure then all Minimum Claims, including all Minimum Claims
     previously notified, shall accrue against and be recoverable from the
     Warrantors (and not just the excess over L2,500,000);

                                       81

<PAGE>

1.4  MAXIMUM CLAIMS

     1.4.1 in respect of a claim for breach of any of the Title and Capacity
          Warranties, to the extent that the total aggregate amount of the
          liability of the relevant Seller against whom the claim has been made
          for all claims made against him/her/it under this Agreement (including
          for breach of Warranty) would exceed (in the case of each Non-Employee
          Seller) the total Non-Employee Seller Cash Consideration received by
          him/her/it in respect of his/her/its Shares or (in the case of each
          Employee Seller) the total Employee Seller Cash Consideration received
          by him/her/it in respect of his/her/its Shares;

     1.4.2 in respect of a claim for breach of any of the Management Warranties,
          without prejudice to the final two sentences of this paragraph 1.4.2,
          to the extent that the total aggregate amount of the liability of the
          relevant Warrantor in respect of all claims made against him/her for
          breaches of the Management Warranties would exceed the amount set out
          against his/her name below:

<TABLE>
<S>                    <C>
(i)    MEA Carpenter   $  985,978

(ii)   CNR Atkin       $1,050,777

(iii)  ND Wachman      $  282,833

(iv)   GAM Bonvarlet   $  210,971

(v)    JS Clouting     $  282,833

(vi)   NJ Hales        $  117,847

(vii)  GS Langford     $   50,004

(viii) MS Johnson      $  188,556

(ix)   DP Redhead      $  282,833

(x)    JG Ross         $  176,950
</TABLE>

          and claims under the Management Warranties shall be borne by the
          Warrantors as to the percentage set out against his/her name below,
          with each Warrantor only being liable for his/her relevant percentage
          amount of any claim:

<TABLE>
<S>                    <C>
(i)    MEA Carpenter   4.22%

(ii)   CNR Atkin       4.79%

(iii)  ND Wachman      1.15%

(iv)   GAM Bonvarlet   1.58%

(v)    JS Clouting     1.15%

(vi)   NJ Hales        0.48%

(vii)  GS Langford     0.38%

(viii) MS Johnson      0.77%

(ix)   DP Redhead      1.15%

(x)    JG Ross         0.96%
</TABLE>

                                       82

<PAGE>

          Notwithstanding any other provision of this Agreement, the total
          aggregate amount of the liability of each of the Warrantors for all
          breaches of the Title and Capacity Warranties, the Management
          Warranties and any other provision of this Agreement shall not exceed
          the total consideration received by him/her in respect of his/her
          Shares. Accordingly, to the extent that any claim has been brought
          against a Warrantor for breach of any of the Title and Capacity
          Warranties or otherwise, the amount set out against his/her name in
          the first table of this paragraph 1.4.2 shall be reduced down to such
          amount (including to zero) as shall be necessary to ensure that
          his/her total aggregate liability under this Agreement shall not
          exceed the total consideration received by him/her;

1.5  CONTINGENT LIABILITIES

     in respect of any liability which is contingent or otherwise not capable of
     being quantified (a "CONTINGENT LIABILITY") unless and until such
     Contingent Liability becomes an actual liability or becomes capable of
     being quantified and is due and payable but this paragraph 1.5 shall not
     operate to avoid a claim made in respect of a Contingent Liability within
     the applicable time limit specified in paragraph 1.1 above if the requisite
     details of such claim have been delivered before the expiry of such period
     and legal proceedings served within nine months of such Contingent
     Liability becoming an actual liability (or becoming capable of being
     quantified) (even if this does not occur until after the expiry of the
     relevant period) provided that if such Contingent Liability has not become
     an actual liability or become capable of being quantified within four years
     of the date of Completion, the Warrantors shall have no liability in
     respect of such claim;

1.6  PROVISIONS IN THE ACCOUNTS

     in respect of any claim if and to the extent that:

     1.6.1 provision or reserve is made specifically for the matter giving rise
          to the claim, or it is otherwise included as a liability or fairly
          disclosed, in the Accounts; or

     1.6.2 any sum is received specifically in respect of the matter giving rise
          to the claim by any Group Company which has previously been written
          off or provided against as irrecoverable in the Accounts;

1.7  ADJUSTMENTS

     in respect of any claim if and to the extent that the subject matter
     thereof is taken into account in the determination of the Consideration;

1.8  CIRCUMSTANCES ARISING

     in respect of any matter, act, omission or circumstance (or any combination
     thereof) (including, for the avoidance of doubt, the aggravation of a
     matter or circumstance) to the extent that the same would not have occurred
     or arisen but for:

     1.8.1 ACTS OF PURCHASER:

          (i)  any act, omission, transaction or arrangement carried out at the
               written request of or with the written consent of the Purchaser
               or any other member of the Purchaser's Group before Completion or
               in accordance with

                                       83

<PAGE>

               the terms of this Agreement or any of the other documents entered
               into pursuant to this Agreement (including any such act,
               omission, transaction or arrangement which has any impact or
               effect on the tax structure, arrangements, residency or
               efficiency of any Group Company); or

          (ii) any act, omission, admission of fact or liability, transaction or
               arrangement of the Purchaser or any member of the Purchaser's
               Group, or their respective directors, employees or agents or
               successors in title, after Completion (including any such act,
               omission, admission of fact or liability, transaction or
               arrangement which has any impact or effect on the tax structure,
               arrangement, residency or efficiency of any Group Company);

     1.8.2 CHANGES IN LEGISLATION: the passing of, withdrawal of, or any change
          in, after the date of this Agreement, any law, rule, regulation or
          administrative practice (or any generally accepted interpretation or
          application of any of the foregoing) of any government, governmental
          department, agency or regulatory body including (without prejudice to
          the generality of the foregoing) any increase in the rates of Taxation
          or any imposition of Taxation or any withdrawal of relief from
          Taxation not actually (or prospectively) in effect at the date of this
          Agreement;

     1.8.3 ACCOUNTING AND TAXATION CHANGES: any change in accounting or Taxation
          policy, bases or practice of the Purchaser or any of the Group
          Companies introduced or having effect after Completion,

     or to the extent that it relates to any liability for Tax arising out of
     the ordinary course of business of the Group after the Accounts Date;

1.9  INSURANCE

     in respect of any claim to the extent of any net recovery under any policy
     of insurance of any Group Company of a type that was in place at or prior
     to the date of this Agreement, for any Losses arising from such claim;

1.10 NET BENEFIT

     in respect of any claim for Losses suffered by the Purchaser or any of the
     Group Companies to the extent of any corresponding savings by or net
     benefit to the Purchaser or any other member of the Purchaser's Group or
     any Group Company arising directly therefrom;

1.11 EQUAL TREATMENT OF THE WARRANTORS

     notwithstanding any other provision of this Agreement, in respect of any
     claim for breach of any of the Management Warranties unless the Purchaser
     seeks to recover at the same time and to the same degree (taking into
     account the financial caps and percentage amounts set out in paragraph
     1.4.2, the several liability of each Warrantor and the other limitations of
     liability set out in this Agreement) against each and every Warrantor and
     treats all Warrantors equally. If the Purchaser withdraws a claim against
     any of the Warrantors, the Purchaser shall also withdraw that claim against
     each of the other Warrantors. If the Purchaser settles a claim against a
     Warrantor, the Purchaser shall offer to the other Warrantors settlement
     terms which are the same (taking into account the financial caps and
     percentage amounts set out in paragraph 1.4.2 and the other limitations

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<PAGE>

     of liability set out in this Agreement) as those agreed with that Warrantor
     with whom the Purchaser has settled; and

1.12 LOSS OF PROFITS

     in respect of any claims for any losses suffered by the Purchaser or any of
     the Group Companies to the extent that the losses relate to indirect or
     consequential loss or loss of profit.

2    SELLERS LIABILITY

2.1  The liability of each Seller and Warrantor under or pursuant to this
     Agreement shall be several only and such liability shall be limited to the
     amounts set out in paragraph 1.4 of this Schedule 5. None of the Sellers or
     Warrantors shall be liable under this Agreement in respect of any claim for
     breach of this Agreement (or any of the other documents to be entered into
     pursuant to this Agreement) by another Seller or Warrantor.

2.2  Each Seller shall only be liable in respect of any breach of a Title and
     Capacity Warranty or any other claim under this Agreement and the
     Warrantors shall only be liable in respect of any breach of a Management
     Warranty if and to the extent that, in each case, such claim is admitted by
     the relevant Seller or the Warrantors (as the case may be) or determined by
     a court of competent jurisdiction.

2.3  Without prejudice to Clause 8 (Warranties), Clause 9 (Whole Agreement and
     Remedies) and Schedule 4 (Warranties given by the Sellers and Warrantors
     under Clause 8) of this Agreement, the Purchaser acknowledges and agrees
     that, except for the specific Warranties set out in paragraphs 2.8, 2.9 and
     2.10 of Schedule 4, none of the Sellers or Warrantors gives or makes, nor
     shall there be implied, any warranty as to the accuracy of any information
     (whether in writing, verbal or howsoever provided), including the
     forecasts, estimates, projections, statements of intent, statements of
     opinion, or other forward looking statements provided to the Purchaser
     (howsoever provided) on or prior to the date of this Agreement, including
     any information in the Information Memorandum, the Management
     Presentations, the Data Room, the Disclosure Letter, the Due Diligence
     Reports, any other due diligence report prepared by or on behalf of the
     Purchaser or the information supplied to or made available to the Purchaser
     during its due diligence exercise nor, apart from the specific Warranties
     set out in paragraphs 2.8, 2.9 and 2.10 of Schedule 4, is any warranty
     given or shall any warranty be implied as to the accuracy or completeness
     of, or otherwise in respect of, the contents of any of the foregoing, nor
     is there any obligation on any Group Company, Seller or Warrantor or their
     respective advisers to update any of the foregoing or to correct any
     inaccuracies therein which may become apparent. For the avoidance of doubt,
     (in the case of the Warrantors only, solely in respect of the specific
     Warranties on the Due Diligence Reports set out in paragraphs 2.8, 2.9 and
     2.10 of Schedule 4), none of the Warrantors or the Sellers shall have any
     liability or responsibility whatsoever in respect of any of the foregoing
     information or documents mentioned in this paragraph 2.3.

3    LIABILITY OF THE TRUSTEES

     Notwithstanding anything else herein contained, the Trustees have entered
     into this Agreement solely in their capacity as trustee of each of the
     relevant Trusts and the benefits of this Agreement are held by the Trustees
     subject to the provisions of such Trusts.

                                       85

<PAGE>

     Notwithstanding any other provision of this Agreement, any and all
     liabilities of the Trustees under this Agreement shall be limited to the
     extent such liability can be met from and out of the property from time to
     time subject to the trust funds of the relevant Trust or Trusts and,
     accordingly:

     3.1.1 the obligations of, and rights against, the Trustees under this
          Agreement and any and all liability of the Trustees that may otherwise
          arise in connection with this Agreement and the matters contained in
          this Agreement shall be performed, satisfied and paid only out of, and
          enforced only against and recourse under this Agreement shall be had
          only against, the property from time to time subject to the trust
          funds of the relevant Trust or Trusts; and

     3.1.2 no obligation of the Trustees under this Agreement or that otherwise
          may arise in connection with the matters contained in this Agreement
          is binding upon, nor in respect thereof shall any resort or recourse
          be had, judgment issued, or execution or other process levied against,
          any other property of any Trustee held in its capacity as trustee of
          any other trust (other than the relevant Trust or Trusts).

4    MITIGATION OF LOSS

     Nothing in this Agreement shall or shall be deemed to abrogate or relieve
     the Purchaser of any common law or other duty to mitigate any loss or
     damage.

5    CONDUCT OF CLAIMS

5.1  NOTIFICATION

     If the Purchaser or any Group Company becomes aware of any matter that may
     give rise to a claim against any Seller or the Warrantors (as the case may
     be) under this Agreement written notice of that fact setting out reasonable
     details of the specific matter in respect of which the claim is made
     including (if feasible) an estimate of the amount of such claim shall be
     given as soon as reasonably practicable to the relevant Seller or the
     Warrantors.

5.2  INVESTIGATION BY THE SELLERS

     Without prejudice to the validity of the claim or alleged claim in
     question, the Purchaser shall allow, and shall procure that the relevant
     Group Companies allow, the Warrantors and their accountants and
     professional advisers reasonably to investigate the matter or circumstance
     alleged to give rise to such claim and whether and to what extent any
     amount is payable in respect of such claim and for such purpose the
     Purchaser shall give, and shall procure that the relevant Group Companies
     give, subject to their being paid all reasonable costs and expenses, all
     such reasonable information and assistance, including reasonable access to
     premises and personnel, and the right to examine and copy or photograph any
     assets, accounts, documents and records, as the Warrantors or their
     accountants or professional advisers may reasonably request. The Warrantors
     agree to keep all information obtained in relation to such investigation
     confidential and to use it only for the purpose of the claim in question.

                                       86

<PAGE>

5.3  THIRD PARTY CLAIM/LIABILITY

     If the claim in question is a result of or in connection with a claim by or
     liability to a third party then no admission of liability shall be made by
     or on behalf of the Purchaser or any Group Company and the claim shall not
     be compromised, disposed of or settled without the consent of the
     Warrantors (such consent not to be unreasonably withheld or delayed).

6    PRIOR RECEIPT

     If, before any Seller or the Warrantors (as the case may be) pay(s) an
     amount in discharge of any claim under this Agreement, the Purchaser or any
     member of the Purchaser's Group recovers or is entitled to recover (whether
     by payment, discount, credit, relief or otherwise) from a third party a sum
     which is directly referable to the subject matter of the claim, the
     Purchaser shall procure that, before steps are taken against that Seller or
     the Warrantors under this Agreement, reasonable steps are taken to enforce
     such recovery (and none of the Sellers or the Warrantors shall have any
     liability to pay any amount by way of damages in respect of any claim
     unless and until the Purchaser shall have taken such reasonable steps to
     enforce such recovery) and any actual recovery (less any reasonable costs
     and expenses incurred in such recovery) shall pro tanto reduce or satisfy,
     as the case may be, such claim.

7    SUBSEQUENT RECOVERY

     If any Seller pays an amount in discharge of any claim under this Agreement
     and the Purchaser or any member of the Purchaser's Group subsequently
     recovers from a third party a sum which is directly referable to the
     subject matter of the claim, the Purchaser shall pay, or shall procure that
     the relevant member of the Purchaser's Group pays, promptly to that Seller
     an amount equal to (i) the sum recovered from the third party or (ii) if
     less, the amount previously paid by that Seller to the Purchaser, in each
     case less any reasonable costs and expenses incurred in obtaining such
     recovery.

8    DOUBLE CLAIMS

     The Purchaser shall not be entitled to recover from any Seller or the
     Warrantors under this Agreement more than once in respect of the same Loss
     or Losses suffered.

9    FRAUD AND WILFUL DEFAULT

     None of the limitations contained in this Schedule 5 shall apply to any
     claim against a Seller or the Warrantors (as the case may be) which arises
     as a result of the fraud or wilful default of that Seller or the Warrantors
     (as relevant).

10   NO RIGHT OF SET-OFF

     No Seller shall be liable to make any payment under this Agreement nor
     shall the Purchaser exercise any right of set off or counter claim against
     or otherwise withhold payment of any sum stated to be payable by the
     Purchaser to any Seller under the terms of this Agreement or under any
     other agreement subsisting between them unless and until such liability has
     been agreed between the Purchaser and the relevant Seller or adjudged
     payable by that Seller by a court of competent jurisdiction.

                                       87

<PAGE>

     In all circumstances, save to the extent of any deduction or withholding
     required by law, the Purchaser hereby waives and relinquishes any right of
     set off or counterclaim, deduction, withholding or retention which the
     Purchaser might otherwise have in respect of any claim under this
     Agreement.

11   OPPORTUNITY TO REMEDY BREACHES

     Where a matter or default giving rise, or potentially giving rise, to any
     claim is capable of remedy, the Purchaser shall provide written notice of
     the claim in respect of such matter or default to the relevant person
     against which such claim would be made as soon as reasonably practicable
     and the relevant person shall only be liable to the extent the matter or
     default is not remedied to the satisfaction of the Purchaser (acting
     reasonably) without cost to the Purchaser within 30 Business Days after the
     date on which such notice is served.

12   TAX

12.1 In calculating the liability of any Seller or the Warrantors for any breach
     of this Agreement, there shall be taken into account the amount (if any) by
     which any Taxation for which the Purchaser or any member of the Purchaser's
     Group (including any Group Company) would otherwise have been accountable
     or liable to be assessed is actually reduced or extinguished directly as a
     result of the matter giving rise to such liability or any repayment of
     Taxation directly attributable to the matter giving rise to such liability
     and for the avoidance of any doubt such calculation shall only be performed
     and taken into account at the time the Taxation is actually reduced and
     extinguished and the benefit has been realised by the Purchaser or any
     member of the Purchaser's Group (including any Group Company) in money or
     money's worth.

12.2 The Purchaser shall procure that where any member of the Purchaser's Group
     is entitled to relief from Taxation as referred to in paragraph 12.1, the
     Purchaser's Group will take all reasonable steps (such steps being taken at
     the cost and expense of the Sellers or the Warrantors as the case may be)
     to obtain such relief, provided that such steps shall not include
     disclaiming other reliefs that might be available, claiming such relief
     ahead of any other relief that might be available to that member of the
     Purchaser's Group, utilising that relief ahead of other reliefs surrendered
     to it by other members of the Purchaser's Group or requiring the Purchaser
     or any member of the Purchaser's Group (including any Group Company) to
     arrange its Tax affairs in any way, or to do any matter or thing, which is
     unduly onerous.

                                       88
<PAGE>

                                   SCHEDULE 6
                                   PROPERTIES

<TABLE>
<S>                             <C>
LEASEHOLD

Description:                    Fourth Floor, and car park stacker 3, Gracechurch
                                House, 55 Gracechurch Street, London, EC3

Date of and parties to lease:   Lease between 55 Gracechurch Street (NO. 1) Limited
                                and 55 Gracechurch Street (NO. 2) Limited and Talbot
                                Underwriting Services Ltd.

Legal owner:                    Talbot Underwriting Services Ltd.

Beneficial owner                Talbot Underwriting Services Ltd. for and on behalf
                                of itself and the names of Syndicate 1183 from time
                                to time

Term:                           10 years and 62 days from 23 October 2003

Rent:                           L314,525 per annum during the first five years of
                                the Term, thereafter the rent determined by the rent
                                review

Next rent review:               25 December 2008

Present use:                    A suite of offices

LEASEHOLD

Description:                    Fifth Floor, Gracechurch House, 55 Gracechurch
                                Street, London, EC3

Date of and parties to lease:   Lease dated 23 October 2003 between 55 Gracechurch
                                Street (NO. 1) Limited and 55 Gracechurch Street
                                (NO. 2) Limited and Talbot Underwriting Services Ltd.

Legal owner:                    Talbot Underwriting Services Ltd.

Beneficial owner                Talbot Underwriting Services Ltd. for and on behalf
                                of itself and the names of Syndicate 1183 from time
                                to time

Term:                           10 years and 25 days from 30 November 2003

Rent:                           Up to and including 29 March 2008 a peppercorn (if
                                demanded), thereafter L267,085 per annum subject to
                                the rent review

Next rent review:               25 December 2008

Present use:                    A suite of offices
</TABLE>

                                       89

<PAGE>

<TABLE>
<S>                             <C>
LEASEHOLD

Description:                    Sixth Floor, Gracechurch House, 55 Gracechurch
                                Street, London, EC3

Date of and parties to lease:   Lease dated 23 October 2003 between 55 Gracechurch
                                Street (NO. 1) Limited and 55 Gracechurch Street
                                (NO. 2) Limited and Talbot Underwriting Services Ltd.

Legal owner:                    Talbot Underwriting Services Ltd.

Beneficial owner                Talbot Underwriting Services Ltd. for and on behalf
                                of itself and the names of Syndicate 1183 from time
                                to time

Term:                           10 years and 25 days from 30 November 2003

Rent:                           Up to and including 28 March 2008 a peppercorn, if
                                demanded, thereafter L176,855 per annum subject to
                                the rent review

Next rent review:               25 December 2008

Present use:                    A suite of offices

LEASEHOLD

Description:                    Part Basement, 55 Gracechurch Street, EC3

Date of and parties to lease:   Lease dated 13 January 1997 between the City of
                                London Real Property Company Limited and Venton
                                Services Limited (now known as Talbot Underwriting
                                Services Ltd (the reversion of the lease was
                                subsequently vested in 55 Gracechurch Street (NO. 1)
                                Limited and 55 Gracechurch Street (NO. 2) Limited))

Legal owner:                    Talbot Underwriting Services Ltd.

Beneficial owner                Talbot Underwriting Services Ltd. for and on behalf
                                of itself and the names of Syndicate 1183 from time
                                to time

Term:                           10 years from 29 September 1996

                                Lease expired on 28 September 2006

Rent:                           L2,520 per annum

Next rent review:               Uncertain

Present use:                    Storage
</TABLE>

                                         90

<PAGE>

<TABLE>
<S>                             <C>
LEASEHOLD

Description:                    Sub-basement Stores 1 and 12, 51 to 54 Gracechurch
                                Street, EC3

Date of and parties to lease:   lease between 51-54 Gracechurch Street (NO. 1)
                                Limited and 51-54 Gracechurch Street (NO. 2)
                                Limited) and Talbot Underwriting Services Ltd

Legal owner:                    Talbot Underwriting Services Ltd.

Beneficial owner                Talbot Underwriting Services Ltd. for and on behalf
                                of itself and the names of Syndicate 1183 from time
                                to time

Term:                           1 year from 23 January 2007

Rent:                           L5,535 per annum

Next rent review:               N/A

Present use:                    Storage

LICENCE

Description:                    Car Park Stacker 3, 55 Gracechurch Street, EC3

Date of and parties to lease:   Licence dated 20 March 1997 between the City of
                                London Real Property Company Limited and Venton
                                Services Limited (now known as Talbot Underwriting
                                Services Ltd)

                                The use of this Car Park Stacker is invoiced under
                                the lease of the 4th Floor of 55 Gracechurch Street.

Legal owner:                    Talbot Underwriting Services Ltd.

Beneficial owner                Talbot Underwriting Services Ltd. for and on behalf
                                of itself and the names of Syndicate 1183 from time
                                to time

Term:                           Indefinite

Rent:                           L5,500 per annum

Next rent review:               N/A

Present use:                    Parking
</TABLE>

                                         91

<PAGE>

<TABLE>
<S>                             <C>
LICENCE

Description:                    Car Park Stacker 2, 55 Gracechurch Street, EC3

Date of and parties to lease:   Unwritten licence from LS City & West End Limited

                                The use of this Car Park Stacker is invoiced
                                separately on a quarterly basis.

Legal owner:                    Talbot Underwriting Services Ltd.

Beneficial owner                Talbot Underwriting Services Ltd. for and on behalf
                                of itself and the names of Syndicate 1183 from time
                                to time

Term:                           Rolling on a quarterly basis

Rent:                           L1,615.62 per quarter

Next rent review:               N/A

Present use:                    Parking

LEASEHOLD

Description:                    Lloyd's Box 39, Lloyd's Building, One Lime Street,
                                London EC3M 7HA

Date of and parties to Lease:   Oral lease arrangement made on 1 January 2002
                                between Lloyd's and  Talbot Underwriting Services
                                Ltd.

Term:                           1 year rolling term from 1 January 2002

Rent:                           L189,823 per annum

Next rent review:               1 January 2008

LEASEHOLD

Description:                    Lloyd's Box 172, Lloyd's Building, One Lime Street,
                                London EC3M 7HA

Date of and parties to Lease:   Oral lease arrangement made on 1 January 2003
                                between Lloyd's and  Talbot Underwriting Services
                                Ltd.

Term:                           1 year rolling term from 1 January 2003

Rent:                           L60,853 per annum

Next rent review:               1 January 2008
</TABLE>

                                         92

<PAGE>

<TABLE>
<S>                             <C>
LEASEHOLD

Description:                    Lloyd's Box 173, Lloyd's Building, One Lime Street,
                                London EC3M 7HA

Date of and parties to Lease:   Oral lease arrangement made on 1 January 2003
                                between Lloyd's and  Talbot Underwriting Services
                                Ltd.

Term:                           1 year rolling term from 1 January 2003

Rent:                           L87,404 per annum

Next rent review:               1 January 2008

LEASEHOLD

Description:                    Lloyd's Box 176, Lloyd's Building, One Lime Street,
                                London EC3M 7HA

Date of and parties to Lease:   Oral lease arrangement made on 1 January 2003
                                between Lloyd's and  Talbot Underwriting Services
                                Ltd.

Term:                           1 year rolling term from 1 January 2003

Rent:                           L51,575 per annum

Next rent review:               1 January 2008

LEASEHOLD

Description:                    Lloyd's Box 112, Lloyd's Building, One Lime Street,
                                London EC3M 7HA

Date of and parties to Lease:   Oral lease arrangement made on 1 January 2007
                                between Lloyd's and  Talbot Underwriting Services
                                Ltd.

Term:                           1 year rolling term from 1 January 2007

Rent:                           L69,750 per annum

Next rent review:               1 January 2007
</TABLE>

                                         93
<PAGE>

                                   SCHEDULE 7
                                  OPTIONHOLDERS

<TABLE>
<CAPTION>
                             (2)
                           OPTIONS         (3)
          (1)                OVER       EXERCISE
  NAME OF OPTIONHOLDER      SHARES        PRICE
  --------------------    ---------   ------------
<S>                       <C>         <C>
CLASS B SHARE OPTIONHOLDERS

OPTIONS GRANTED IN 2003
Julian Ross                 375,000   L    112,500
Stuart Forbes               125,000   L     37,500
Derren Hughes               125,000   L     37,500
Gillian Langford            500,000   L    150,000
Stephen Lloyd               500,000   L    150,000
Mark Perry                  125,000   L     37,500
Paul Miller                 250,000   L     75,000
David Newbigging            500,000   US$  473,000

OPTIONS GRANTED IN 2004
Gilles Bonvarlet          1,250,000   US$1,182,500
Michael Carpenter           500,000   US$  473,000
Rupert Atkin              1,250,000   US$1,182,500

OPTIONS GRANTED IN 2005
James Bamford               150,000   US$  141,900
Danny Burns                 150,000   US$  141,900
Stephen Lloyd               125,000   US$  118,250
Mario Apicella               50,000   US$   47,300
Marc Alcott                  75,000   US$   70,950
Russell Bean                100,000   US$   94,600
Jamie Courtney               50,000   US$   47,300
Steven Tebbutt               75,000   US$   70,950
</TABLE>

                                       94

<PAGE>

<TABLE>
<CAPTION>
                             (2)
                           OPTIONS         (3)
          (1)                OVER       EXERCISE
  NAME OF OPTIONHOLDER      SHARES        PRICE
  --------------------    ---------   ------------
<S>                       <C>         <C>
OPTIONS GRANTED IN 2006
Gilles Bonvarlet            500,000   US$  473,000
Julian Ross                 125,000   US$  118,250
Sean Callaghan               62,500   US$  100,000
Phil Furlong                 62,500   US$  100,000
Rod Harris                   62,500   US$  100,000
Nick Hassam                  62,500   US$  100,000
Susan House                  62,500   US$  100,000
Derren Hughes                62,500   US$  100,000
Martyn Lucas                 62,500   US$  100,000
Andrew West                  62,500   US$  100,000
Andrew Keogan                62,500   US$  100,000

EBT SHARE OPTIONHOLDERS
Julian Ross                 125,000   US$  118,250
James Bamford               100,000   US$   94,600
Mark Alcott                  75,000   US$   70,950
Russell Bean                100,000   US$   94,600
John Cutts                  125,000   US$  118,250
John Ewington                75,000   US$   70,950
Alex Foord                  125,000   US$  118,250
Louise Patterson             75,000   US$   70,950
Steven Tebbutt               75,000   US$   70,950
</TABLE>

                                       95

<PAGE>

                                   SCHEDULE 8
                               EMPLOYMENT PARTIES

                                  MEA Carpenter

                                    CNR Atkin

                                   ND Wachman

                                  GAM Bonvarlet

                                   JS Clouting

                                    NJ Hales

                                   GS Langford

                                   MS Johnson

                                     JG Ross

                                   JE Skinner

                                    SF Lloyd

                                   RW Fielder

                                   JRA Bamford

                                    SEH Barr

                                     G Cooke

                                   JA McDonald

                                    LE Nevill

                                    DG Burns

                                  JAA Colquhoun

                                    I Fordham

                                    JG Cutts

                                    PJ Miller

                                       96

<PAGE>

                                   SCHEDULE 9
                TERMS APPLICABLE TO THE BASE SHARE CONSIDERATION

1    Prior to the end of the Restricted Period (as defined below), the Base
     Share Consideration may not be Transferred (as defined below) by an
     Employee Seller.

2    If an Employee Seller's employment with the Group Companies terminates,
     Validus may repurchase, at a price per share equal to $0.01, such Base
     Share Consideration which at the time of such termination remains subject
     to a Restricted Period (and, for the avoidance of doubt, termination of the
     Restricted Period pursuant to the provisions of paragraphs 3, 4 and 5 below
     shall be deemed to have occurred prior to the termination of an Employee
     Seller's employment).

3    The Restricted Period shall begin on the date of Completion and end with
     respect to each Employee Seller's Base Share Consideration as follows: as
     to 25% of his/her Base Share Consideration, on the first anniversary of the
     date of Completion; as to 25% of his/her Base Share Consideration, on the
     second anniversary of the date of Completion; as to 25% of his/her Base
     Share Consideration, on the third anniversary of the date of Completion;
     and as to 25% of his/her Base Share Consideration, on the fourth
     anniversary of the date of Completion; in each case, so long as the
     Employee Seller remains an employee of one of the Group Companies through
     the applicable anniversary, except that, notwithstanding the foregoing, the
     Restricted Period will terminate immediately in the circumstances set out
     in paragraph 5 below.

4    Notwithstanding paragraph 3, the Restricted Period with respect to the Base
     Share Consideration to be received by Michael Carpenter will terminate as
     to 100% of his Base Share Consideration on the first anniversary of the
     date of Completion, so long as Michael Carpenter remains an employee of one
     of the Group Companies through such anniversary, except that,
     notwithstanding the foregoing, the Restricted Period will terminate
     immediately in the circumstances set out in paragraph 5 below.

5    The Restricted Period for each Employee Seller, with respect to that
     Employee Seller's Base Share Consideration will terminate immediately with
     respect to all of the Base Share Consideration of that Employee Seller:

5.1  at the time of termination of employment of that Employee Seller if the
     Employee Seller is a "Good Leaver", which means the Employee Seller's
     employment has terminated due to one of the following reasons:

     5.1.1 agreed termination of employment;

     5.1.2 injury, ill-health, disability or redundancy;

     5.1.3 his/her death;

     5.1.4 wrongful or unfair dismissal by the relevant Group Company;

     5.1.5 the company in which he/she is employed ceasing to be a Validus Group
          Company (as defined below);

     5.1.6 the entire or substantially the whole of the business carried on by
          Validus being transferred to a person other than a Validus Group
          Company; or

                                       97

<PAGE>

     5.1.7 retirement at the normal retirement age of the relevant Group Company
          or early retirement on the grounds of ill health or with the consent
          of the board of the relevant Group Company and in accordance with the
          terms of the pension plan of which the Employee Seller is a member; or

5.2  on the occurrence of any transaction that constitutes a Change of Control
     of Validus or on any sale or disposal by Validus after Completion of the
     Company, Talbot Insurance (Bermuda) Ltd, Talbot Underwriting Ltd, Talbot
     Underwriting Services Ltd or Talbot 2002 or of a majority of the business
     or assets held by any such Group Company.

6    Upon Completion, the Base Share Consideration (notwithstanding the
     Transfer/forfeiture restrictions set out in paragraphs 1 and 2 above) shall
     be validly issued, fully paid and non-assessable (meaning that no further
     sums are required to be paid by holders thereof in connection with the
     issue thereof) and shall be entitled to vote and participate in
     distributions and dividends, pari passu with all other Validus Common
     Shares then in issue, in accordance with the Validus Bye-Laws.

7    For the avoidance of doubt, on termination of the Restricted Period in
     accordance with any of paragraphs 3, 4 or 5 above, the Transfer and
     forfeiture restrictions set out in paragraphs 1 and 2 above shall cease to
     apply and shall have no further effect.

8    In this Schedule 9, the following definitions shall apply:

     "CHANGE OF CONTROL OF VALIDUS" means a change of control of Validus (as
     defined in the Validus 2005 Long Term Incentive Plan) where that change of
     control also involves Rupert Atkin and either one of Ed Noonan or George
     Reeth no longer continuing in a senior management role equivalent to, or of
     greater responsibility than, the role they held prior to the change of
     control.

     "RESTRICTED PERIOD" shall be for the duration and have the meaning set out
     in paragraphs 3 and 4 (as applicable);

     "TRANSFER" means, with respect to Validus Common Shares, to sell, assign,
     dispose of, exchange or otherwise transfer such shares or any participation
     interest therein (including, without limitation, voting and/or economic
     rights with respect thereto), whether directly or indirectly, or agreeing
     to do any of the foregoing; provided, however, that (i) Transfers to the
     shareholder's spouse or partner or lineal relatives, or any custodian or
     trust for the benefit of any of the foregoing or the estate of such
     shareholder, shall be permitted but the transferee shall agree to be bound
     by such transfer restrictions, and (ii) Transfers pursuant to a transaction
     approved by either a majority of the directors of Validus or by holders of
     a majority of the outstanding Validus Common Shares (or pursuant to any
     offer made to all holders of Validus Common Shares and accepted by holders
     of a majority thereof) or in a transaction that constitutes a change in
     control of Validus (as defined in the Validus 2005 Long Term Incentive
     Plan) shall be permitted; and

     "VALIDUS GROUP COMPANY" means Validus or any of its subsidiaries.

                                       98

<PAGE>

                                   SCHEDULE 10
            RULE 3B-4 OF THE EXCHANGE ACT AND DEFINITION OF US PERSON

                                     PART 1
                          RULE 3B-4 OF THE EXCHANGE ACT

"FOREIGN PRIVATE ISSUER" means a corporation or entity organised under the laws
of a country other than the United States, except that such corporation or
entity will not be considered a Foreign Private Issuer if more than 50 percent
of its outstanding voting securities are directly or indirectly held by
residents of the United States and any of the following apply: (i) the majority
of the executive officers or directors are United States citizens or residents;
(ii) more than 50 percent of the assets of such corporation or entity are
located in the United States; or (iii) the business of such corporation or
entity is administered principally in the United States.

                                     PART 2
                                    US PERSON

Set forth below is the definition of the term "U.S. PERSON" as used within the
meaning of Regulation S under the United States Securities Act of 1933, as
amended.

a.   U.S. person.

     1.   "U.S. person" means:

          i.   Any natural person resident in the United States;

          ii.  Any partnership or corporation organized or incorporated under
               the laws of the United States;

          iii. Any estate of which any executor or administrator is a U.S.
               person;

          iv.  Any trust of which any trustee is a U.S. person;

          v.   Any agency or branch of a foreign entity located in the United
               States;

          vi.  Any non-discretionary account or similar account (other than an
               estate or trust) held by a dealer or other fiduciary for the
               benefit or account of a U.S. person;

          vii. Any discretionary account or similar account (other than an
               estate or trust) held by a dealer or other fiduciary organized,
               incorporated, or (if an individual) resident in the United
               States; and

          viii. Any partnership or corporation if:

               A.   Organized or incorporated under the laws of any foreign
                    jurisdiction; and

               B.   Formed by a U.S. person principally for the purpose of
                    investing in securities not registered under the Act, unless
                    it is organized or incorporated, and owned, by accredited
                    investors (as defined in Rule 501(a)) who are not natural
                    persons, estates or trusts.

     2.   The following are not "U.S. persons":

                                       99

<PAGE>

          i.   Any discretionary account or similar account (other than an
               estate or trust) held for the benefit or account of a non-U.S.
               person by a dealer or other professional fiduciary organized,
               incorporated, or (if an individual) resident in the United
               States;

          ii.  Any estate of which any professional fiduciary acting as executor
               or administrator is a U.S. person if:

               A.   An executor or administrator of the estate who is not a U.S.
                    person has sole or shared investment discretion with respect
                    to the assets of the estate; and

               B.   The estate is governed by foreign law;

          iii. Any trust of which any professional fiduciary acting as trustee
               is a U.S. person, if a trustee who is not a U.S. person has sole
               or shared investment discretion with respect to the trust assets,
               and no beneficiary of the trust (and no settlor if the trust is
               revocable) is a U.S. person;

          iv.  An employee benefit plan established and administered in
               accordance with the law of a country other than the United States
               and customary practices and documentation of such country;

          v.   Any agency or branch of a U.S. person located outside the United
               States if:

               A.   The agency or branch operates for valid business reasons;
                    and

               B.   The agency or branch is engaged in the business of insurance
                    or banking and is subject to substantive insurance or
                    banking regulation, respectively, in the jurisdiction where
                    located; and

          vi.  The International Monetary Fund, the International Bank for
               Reconstruction and Development, the Inter-American Development
               Bank, the Asian Development Bank, the African Development Bank,
               the United Nations, and their agencies, affiliates and pension
               plans, and any other similar international organizations, their
               agencies, affiliates and pension plans.

                                       100

<PAGE>

                                   SCHEDULE 11
                               SHARE ELECTION FORM

Reference is hereby made to that certain Share Sale Agreement dated May [ ],
2007 among Validus Holdings Ltd., a company organised under the laws of Bermuda
("VALIDUS"), and the sellers identified therein relating to the acquisition by
Validus of all of the issued share capital of Talbot Holdings Ltd, a company
organised under the laws of Bermuda (as the same may be amended, supplemented,
restated or otherwise modified from time to time, the "SHARE SALE AGREEMENT").
Capitalised terms used but not defined herein have the meaning ascribed to such
terms in the Share Sale Agreement.

Pursuant and subject to Clause 3.1.4 of the Share Sale Agreement, the
undersigned Employee Seller hereby makes a Share Election to receive ___% of the
Employee Seller Cash Consideration due to the undersigned in Validus Common
Shares. To the extent that the percentage amount referred to in the preceding
sentence would result in the Cash Component payable to the undersigned Employee
Seller being less than his/her Minimum Cash Amount, such percentage amount shall
be reduced such that the amount of the Cash Component received by the
undersigned Employee Seller is not less than the Minimum Cash Amount. This Share
Election, once duly made in accordance with the terms of the Share Sale
Agreement, is irrevocable.

The undersigned Employee Seller hereby acknowledges, agrees and reaffirms
his/her warranties set forth in Part 3 of Schedule 4 of the Share Sale
Agreement.

This Share Election Form will only be effective if executed and completed and
delivered to Validus before the earlier of the expiration of the period of two
weeks of the date of the Share Sale Agreement and the Business Day preceding the
day on which the Conditions Precedent shall first have been fulfilled at the
following address:

Validus Holdings, Ltd.
19 Par-La-Ville Road
Hamilton HM11 Bermuda,
Attention: Chief Financial Officer and General Counsel
(Facsimile: (441) 278-9090)

with a copy to the Company Secretary of Talbot Holdings Ltd

                                        Name (in block capitals):
                                                                  --------------

                                        Signature:
                                                   -----------------------------

                                        Date:                               2007
                                              -----------------------------

                                      101

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