Document:

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                                                                Exhibit 10.14.27

02.24.00 [Unsecured LC Agreement]

                  FIRST AMENDMENT TO LETTER OF CREDIT FACILITY
                           AND REIMBURSEMENT AGREEMENT

            THIS FIRST AMENDMENT TO LETTER OF CREDIT FACILITY AND REIMBURSEMENT
AGREEMENT, dated as of February 25, 2000 (this "Amendment"), by and among XL
Insurance Ltd, XL Capital Ltd and XL Mid Ocean Reinsurance Ltd (collectively,
the "XL Parties"), MELLON BANK, N.A., DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES, FIRST UNION NATIONAL BANK, FLEET NATIONAL BANK and BANK ONE,
NA (MAIN OFFICE CHICAGO) as Issuing Banks (the "Issuing Banks") and MELLON BANK,
N.A., as Agent (the "Agent").

                              W I T N E S S E T H:

            WHEREAS, the XL Parties, the Issuing Banks and the Agent are parties
to a Letter of Credit Facility and Reimbursement Agreement, dated as of December
30, 1999 (the "Reimbursement Agreement"), pursuant to which the Issuing Banks
have agreed, on the terms and subject to the conditions described therein, to
extend credit to certain of the XL Parties by issuing letters of credit for the
account of such XL Parties; and

            WHEREAS, the XL Parties have requested the Issuing Banks to make
certain additional changes to the Reimbursement Agreement;

            WHEREAS, the Issuing Banks are willing to amend the Reimbursement
Agreement as set forth below; and

            WHEREAS, capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Reimbursement Agreement;

            NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:

            SECTION 1. Amendments to Reimbursement Agreement.

<PAGE>

            (a) Section 1.01 of the Reimbursement Agreement is hereby amended by
      adding thereto, in appropriate alphabetical sequence, the following
      definitions:

                        "Asset Accumulation Lien" means a Lien on amounts
                  received, and on actual and imputed investment income on such
                  amounts received, relating and identified to specific
                  insurance payment liabilities or to liabilities arising in the
                  ordinary course of any Credit Party's or Subsidiary's business
                  as an insurance or reinsurance company or corporate member of
                  Lloyd's or as a provider of financial services or contracts,
                  or the proceeds thereof, in each case held in a segregated
                  trust or other account and securing such liabilities;
                  provided, that in no case shall an Asset Accumulation Lien
                  secure Indebtedness and any Lien which secures Indebtedness
                  shall not be an Asset Accumulation Lien.

                              "Total Adjusted Funded Debt" shall have the
                  meaning given that term in Section 6.06 hereof.

            (b) Section 5.01 of the Reimbursement Agreement is hereby amended by
      adding at the end thereof a new paragraph (j) thereof to read as follows:

                              (j) Information Regarding Asset Accumulation
                  Liens. At the time of furnishing each certificate furnished
                  pursuant to paragraph (c) of this Section 5.01, a statement,
                  certified as true and correct by a principal financial officer
                  of XL Capital, setting forth on a consolidated basis for XL
                  Capital and its consolidated Subsidiaries as of the end of the
                  fiscal year or quarter to which such certificate relates (A)
                  the aggregate book value of assets which are subject to Asset
                  Accumulation Liens and the aggregate book value of liabilities
                  which are secured by Asset Accumulation Liens (it being
                  understood that the reports required by paragraphs (a) and (b)
                  of this Section 5.01 shall satisfy the requirement of this
                  clause (A) of this paragraph

                      Unsecured LC Facility-First Amendment

                                      -2-
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                  (j) if such reports set forth separately, in accordance with
                  GAAP, line items corresponding to such aggregate book values)
                  and (B) a calculation showing the portion of each of such
                  aggregate amounts which portion is attributable to
                  transactions among wholly-owned Subsidiaries of XL Capital.

            (c) Section 6.03 of the Reimbursement Agreement is hereby amended by
      deleting the period at the end of paragraph (f) thereof and replacing it
      with the phrase "; or" and by adding at the end of such Section a new
      paragraph (g) to read as follows:

                              (g) Asset Accumulation Liens.

            (d) Section 6.06 of the Reimbursement Agreement is hereby amended as
      follows:

                        6.06. Ratio of Total Adjusted Funded Debt to
                  Consolidated Capital. XL Capital will not permit its ratio of
                  (i) Total Adjusted Funded Debt to (ii) the sum of Total
                  Adjusted Funded Debt plus Consolidated Net Worth to be greater
                  than 0.35 at any time. As used herein, the term "Total
                  Adjusted Funded Debt" shall mean, at any time, the sum of (x)
                  Total Funded Debt at such time plus (y) the aggregate undrawn
                  face amount of all letters of credit (as to which
                  reimbursement obligations are not secured by marketable
                  securities with a value at least equal to the face amount of
                  such letters of credit) issued for the account of, or
                  guaranteed by, XL Capital or any of its Consolidated
                  Subsidiaries at such time (irrespective of whether the
                  beneficiary thereof is an Affiliate).

            SECTION 2. Conditions to Effectiveness. This First Amendment shall
become effective upon the execution and delivery hereof by the XL Parties, the
Required Issuing Banks and the Agent.

                      Unsecured LC Facility-First Amendment

                                      -3-
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            SECTION 3. Effect of Amendment. The Reimbursement Agreement, as
amended by this Amendment, is in all respects ratified, approved and confirmed
and shall, as so amended, remain in full force and effect.

            SECTION 4. Governing Law. This Amendment shall be deemed to be a
contract under the laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and construed and enforced in accordance with the laws of
said Commonwealth.

            SECTION 5. Counterparts. This Amendment may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.

            IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.

XL INSURANCE LTD, as an Account Party and a Guarantor

By: /s/ Clive R. Tobin
    --------------------------
      (Signature)
Name: Clive R. Tobin
      ------------------------
Title: President
       -----------------------

XL MID OCEAN REINSURANCE LTD, as an Account Party and a Guarantor

By: /s/ Henry C.V. Keeling
    --------------------------
      (Signature)
Name: Henry C.V. Keeling
      ------------------------
Title: President
       -----------------------

XL CAPITAL LTD, as a Guarantor

By: /s/ Brian M. O'Hara
    --------------------------
      (Signature)
Name: Brian M. O'Hara
      ------------------------
Title: President & CEO
       -----------------------

                      Unsecured LC Facility-First Amendment

                                      -4-
<PAGE>

MELLON BANK, N.A., as an Issuing Bank and as Agent

By: /s/ Karla Maloof
    --------------------------
      (Signature)
Name: Karla Maloof
      ------------------------
Title: Vice President
       -----------------------

DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES,
as an Issuing Bank

By: /s/ John S. McGill
    --------------------------
      (Signature)
Name: John S. McGill
      ------------------------
Title: Director
       -----------------------

By: /s/ Alan Krouk
    --------------------------
      (Signature)
Name: Alan Krouk
      ------------------------
Title: Assitant Vice President
       -----------------------

FIRST UNION NATIONAL BANK, as an Issuing Bank

By: /s/ Robert C. Mayer, Jr.
   -------------------------
      (Signature)
Name: Robert C. Mayer, Jr.
      --------------------
Title: Senior Vice President
       --------------------

FLEET NATIONAL BANK, as an Issuing Bank

By: /s/ Anson Harris
    --------------------------
      (Signature)
Name: Anson Harris
      ------------------------
Title: Vice President
       -----------------------

BANK ONE, NA (MAIN OFFICE CHICAGO), as an Issuing Bank

By: /s/ Gretchen Roetzer
    --------------------------
      (Signature)
Name: Gretchen Roetzer
      ------------------------
Title: Corporate Banking Officer
       -----------------------

                      Unsecured LC Facility-First Amendment

                                      -5-<PAGE>

                                                                Exhibit 10.14.28

================================================================================

                                     [LOGO]

                                U.S. $100,000,000

                           LETTER OF CREDIT AGREEMENT

                                   dated as of

                                December 17, 1999

                                     Between

               XL INSURANCE LTD AND XL MID OCEAN REINSURANCE LTD,

                                  as Applicants

                                       and

                            THE CHASE MANHATTAN BANK,

                                  Issuing Bank

================================================================================

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                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I

                                   Definitions

SECTION 1.01. Defined Terms...............................................     1
SECTION 1.03. Terms Generally ............................................     1
SECTION 1.04. Accounting Terms; GAAP......................................     4

                                   ARTICLE II

                              The Letters of Credit

SECTION 2.01. Commitment..................................................     5
SECTION 2.02. Notice of Issuance, Amendment, Renewal,
               Extension; Certain Conditions..............................     5
SECTION 2.03. Termination and Reduction of Commitments....................     7
SECTION 2.04. Fees........................................................     7
SECTION 2.05. Interest....................................................     8
SECTION 2.06. Increased Costs.............................................     8
SECTION 2.07  Taxes.......................................................     9
SECTION 2.08. Payments Generally..........................................    10

                                   ARTICLE III

                         Representations and Warranties

SECTION 3.01. Representations and Warranties..............................    10

                                   ARTICLE IV

                                   Conditions

SECTION 4.01. Effective Date..............................................    11
SECTION 4.02. Each Credit Event...........................................    11

                                    ARTICLE V

                                    Covenants

SECTION 5.01. Covenants...................................................    12

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                                   ARTICLE VI

                                 Events of Default........................    12

                                   ARTICLE VII

                                  Miscellaneous

SECTION 7.01. Notices.....................................................    14
SECTION 7.02. Waivers; Amendments.........................................    14
SECTION 7.03. Expenses; Indemnity; Damage Waiver..........................    14
SECTION 7.04. Successors and Assigns......................................    15
SECTION 7.05. Survival....................................................    16
SECTION 7.06. Counterparts; Integration; Effectiveness....................    16
SECTION 7.07. Severability................................................    17
SECTION 7.08. Right of Setoff.............................................    17
SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process..    17
SECTION 7.10. WAIVER OF JURY TRIAL........................................    18
SECTION 7.11. Headings....................................................    18
SECTION 7.12. Confidentiality.............................................    18

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      LETTER OF CREDIT AGREEMENT dated as of December 17, 1999, among XL
INSURANCE LTD ("XL Insurance"), a Bermuda limited liability corporation, and XL
MID OCEAN REINSURANCE LTD ("XL Mid Ocean"), a Bermuda limited liability
corporation (XL Mid Ocean, together with XL Insurance, the "Applicants"), and
THE CHASE MANHATTAN BANK, as Issuing Bank (as defined herein).

      The parties hereto agree as follows:

                                    ARTICLE I

                                   Definitions

      SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

      "Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

      "Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Rate shall be effective
from and including the effective date of such change in the Prime Rate, the Base
CD Rate or the Federal Funds Rate, respectively.

      "Application" has the meaning assigned to it in Section 2.02 hereof.

      "Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by the Federal Deposit Insurance Corporation of time deposits made in dollars at
the offices of such member in the United States.

      "Availability Period" means the period from and including the Effective
Date to but excluding the earlier of the Commitment Termination Date and the
date of termination of the Commitment.

      "Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.

      "Basic Documents" means this Agreement and any Application.

      "Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
remain closed.

<PAGE>

      "Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Official Body after the
date of this Agreement or (c) compliance by the Issuing Bank or the Issuing Bank
(or, for purposes of Section 2.06(b), by any lending office of the Issuing Bank
or the Issuing Bank's holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Official Body made or
issued after the date of this Agreement.

      "Commitment" means the commitment of the Issuing Bank to issue Letters of
Credit, as such commitment may be (a) reduced from time to time pursuant to
Section 2.03 and (b) reduced or increased from time to time pursuant to
assignments by the Issuing Bank pursuant to Section 7.04. The initial amount of
the Issuing Bank's Commitment is $100,000,000.

      "Commitment Termination Date" means December 16, 2000.

      "Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

      "Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

      "dollars" or "$" refers to lawful money of the United States of America.

      "Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 7.02).

      "Events of Default" has the meaning assigned to such term in Article VI.

      "Excluded Taxes" means, with respect to the Issuing Bank, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which the Issuing Bank is
organized or in which its principal office is located and (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Applicants are located.

      "Existing Revolver" means that certain $500,000,000 Short Term Revolving
Credit Agreement dated as of June 30, 1999 among the Applicants, XL Capital Ltd,
the Banks party thereto, Mellon Bank, N. A., as Administrative Agent, and the
Issuing Bank, as Syndication Agent, as in effect on the date hereof.

      "Federal Funds Rate" means, with respect to any amount, the rate per annum
at which U. S. Dollar deposits with an overnight maturity and in a comparable
amount are offered by the Bank in the Federal funds market at approximately 2:00
p.m. New York City time.

      "Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of an Applicant.

      "GAAP" means generally accepted accounting principles in the United States
of America.

      "Indemnified Taxes" means Taxes other than Excluded Taxes.

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<PAGE>

      "Indemnitee" has the meaning ascribed to such term in Section 7.03(b).

      "Issuing Bank" means The Chase Manhattan Bank. The Issuing Bank may, in
its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

      "LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.

      "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Applicants at such time.

      "Letter of Credit" means any standby or commercial letter of credit issued
pursuant to this Agreement.

      "Material Adverse Effect" means, with respect to an Applicant, a material
adverse effect on (a) the business, assets, operations, prospects or condition,
financial or otherwise, of such Applicant and its Subsidiaries taken as a whole,
(b) the ability of such Applicant to perform any of its obligations under this
Agreement or (c) the rights of or benefits available to the Issuing Banks under
the Basic Documents.

      "Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.

      "Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.

      "Participant " has the meaning ascribed to such term in Section 7.04(c).

      "Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Official Body or other
entity.

      "Prime Rate" means the rate of interest per annum publicly announced from
time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

      "Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.

      "SAP" means, as to each Applicant, the statutory accounting practices
prescribed or permitted by the relevant Official Body for such Applicant's
domicile for the preparation of such Applicant's financial statements and other
default reports by insurance corporations of the same type as such Applicant in
effect on the date such statements or reports are to be prepared.

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<PAGE>

      "subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

      "Subsidiary" means any subsidiary of an Applicant.

      "Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Official Body.

      "Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board of Governors of the Federal Reserve System of the United States of
America through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of such Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Issuing Bank from three negotiable certificate of deposit dealers of recognized
standing selected by it.

      "Transactions" means the execution, delivery and performance by the
Applicants of this Agreement and the issuance of Letters of Credit hereunder.

      SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement.

      SECTION 1.03. Accounting Terms; GAAP and SAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed, as the context requires, in accordance with GAAP or SAP, as the
context may require, as in effect from time to time; provided that, if the
Applicants notify the Issuing Bank that the Applicants request an amendment to
any provision hereof to eliminate the effect of any change occurring after the
date hereof in GAAP or SAP or in the application thereof on the operation of
such provision (or if the Issuing Bank notifies the Applicants that the Issuing
Bank requests an amendment to any provision hereof for such purpose), regardless
of whether any such notice is given before or after such change in GAAP or SAP
or in the

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<PAGE>

application thereof, then such provision shall be interpreted on the basis of
GAAP or SAP as in effect and applied immediately before such change shall have
become effective until such notice shall have been withdrawn or such provision
shall have been amended in accordance herewith.

                                   ARTICLE II

                              The Letters of Credit

      SECTION 2.01. Commitment. Subject to the terms and conditions set forth
herein, the Issuing Bank agrees to issue (or extend, modify or amend) Letters of
Credit for the accounts of the Applicants from time to time during the
Availability Period in an aggregate principal amount not to exceed the
Commitment. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Applicants may reduce or cancel Letters of Credit or
request the renewal of Letters of Credit or the issuance of new Letters of
Credit. The Letters of Credit shall be used for general corporate purposes.

      SECTION 2.02. Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. (a) To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), an Applicant shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank (reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance (which shall be a Business Day), amendment, renewal or extension, the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (b) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. An Applicant
also shall submit a letter of credit application (an "Application") on the
Issuing Bank's standard form in connection with any request for a Letter of
Credit; provided that in the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any Application,
the terms and conditions of this Agreement shall control. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the relevant Applicant
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension the LC Exposure shall not exceed the
Commitment.

      (b) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Commitment Termination Date.

      (c) Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Applicant thereof shall reimburse such LC
Disbursement by paying to the Issuing Bank an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if such Applicant shall have received notice of
such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or,
if such notice has not been received by such Applicant prior to such time on
such date, then not later than 12:00 noon, New York City time, on (i) the
Business Day that such Applicant receives such notice, if such notice is
received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii)
the Business Day immediately following the day that

                                       5
<PAGE>

such Applicant receives such notice, if such notice is not received prior to
such time on the day of receipt.

      (d) Obligations Absolute. The Applicants' obligations to reimburse LC
Disbursements as provided in paragraph (c) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank in good faith under
a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, an Applicant's obligations
hereunder. Neither the Issuing Bank, nor any of its Related Parties, shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Applicants to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Applicants to the extent permitted by applicable law) suffered by the Applicants
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

      (e) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
relevant Applicant by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve such Applicant of its obligation to reimburse the Issuing Bank
with respect to any such LC Disbursement.

      (g) Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless the relevant Applicant shall reimburse such LC Disbursement in full
on the date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that such Applicant reimburses such LC Disbursement,
at the Alternative Base Rate; provided that, if such Applicant fails to
reimburse such LC Disbursement when due pursuant to paragraph (c) of this
Section, then Section 2.05 shall apply.

                                       6
<PAGE>

      (h) Cash Collateralization. If any Event of Default shall occur and be
continuing, then on or prior to the Business Day following the Business Day on
which the Applicants receive notice from the Issuing Bank demanding the deposit
of cash collateral pursuant to this paragraph, the Applicants shall deposit in
an account with the Issuing Bank an amount in cash equal to the LC Exposure as
of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Applicants described in clause (e) of Article VI. Such deposit
shall be held by the Issuing Bank as collateral for the payment and performance
of the obligations of the Applicants under this Agreement. The Issuing Bank
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Issuing Bank and at the Applicants' risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Issuing Bank to reimburse the Issuing Bank for LC Disbursements
for which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Applicants for
the LC Exposure at such time. If the Applicants are required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount, including interest or any profits thereon, if any, (to the
extent not applied as aforesaid) shall be returned to the Applicants within
three Business Days after all Events of Default have been cured or waived.

      SECTION 2.03. Termination and Reduction of Commitment. (a) Unless
previously terminated, the Commitment shall terminate on the Commitment
Termination Date.

      (b) The Applicants may at any time terminate, or from time to time reduce,
the Commitment; provided that (i) each reduction of the Commitment shall be in
an amount that is an integral multiple of $1,000,000 and not less than
$10,000,000 and (ii) the Applicants shall not terminate or reduce the Commitment
if the sum of the LC Exposure would exceed the Commitment.

      (c) The Applicants shall notify the Issuing Bank of any election to
terminate or reduce the Commitment under paragraph (b) of this Section at least
two Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.

      SECTION 2.04. Fees. (a) The Applicants jointly and severally agree to pay
to the Issuing Bank a facility fee, which shall accrue at a rate per annum equal
to 0.07% on the daily amount of the Commitment (used or unused) of the Issuing
Bank during the period from and including the Effective Date to but excluding
the date on which the Commitment terminates. Accrued facility fees shall be
payable in arrears on the last day of March, June, September and December of
each year and on the date on which the Commitment terminates, commencing on the
first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

      (b) Each Applicant agrees to pay to the Issuing Bank a commission with
respect to each Letter of Credit issued for its account, which shall accrue at
the a rate per annum equal to 0.35% on the average daily amount of the Issuing
Bank's LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which the Commitment terminates and the date
on which the Issuing Bank ceases to have any LC Exposure, as well as the Issuing
Bank's standard reasonable fees with respect to the issuance, amendment, renewal
or extension of any Letter of Credit or processing of

                                       7
<PAGE>

drawings thereunder. Commissions accrued through and including the last day of
March, June, September and December of each year shall be payable on the third
Business Day following such last day, commencing on the first such date to occur
after the Effective Date; provided that all such fees shall be payable on the
date on which the Commitment terminates and any such fees accruing after the
date on which the Commitment terminates shall be payable on demand. Any other
fees payable to the Issuing Bank pursuant to this paragraph shall be payable
within 10 Business Days after demand. Commissions shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

      (c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds. Fees paid shall not be refundable under any
circumstances.

      SECTION 2.05. Interest. If any principal of or interest on any LC
Disbursement or any fee or other amount payable by the Applicants hereunder is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at a
rate per annum equal to 2% plus the Alternative Base Rate and be payable upon
demand. All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

      SECTION 2.06. Increased Costs. (a) If any Change in Law shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
the Issuing Bank, and the result of any of the foregoing shall be to increase
the cost to the Issuing Bank of issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by the Issuing Bank
hereunder (whether of principal, interest or otherwise), then the Applicants
jointly and severally agree to pay to the Issuing Bank on demand such additional
amount or amounts as will compensate the Issuing Bank, as the case may be, for
such additional costs incurred or reduction suffered.

      (b) If the Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on the Issuing Bank's capital or on the capital of the Issuing Bank's holding
company, if any, as a consequence of this Agreement, or the Letters of Credit
issued by the Issuing Bank, to a level below that which the Issuing Bank or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration the Issuing Bank's policies and the policies of the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time the Applicants jointly and severally agree to pay to the Issuing Bank on
demand such additional amount or amounts as will compensate the Issuing Bank or
the Issuing Bank's holding company for any such reduction suffered.

      (c) A certificate of the Issuing Bank setting forth the amount or amounts
determined in good faith as necessary to compensate the Issuing Bank or its
holding company, as specified in paragraph (a) or (b) of this Section, and
containing a reasonable description of the facts and circumstances regarding the
demand shall be delivered to the Applicants and shall be conclusive absent
manifest error. The Applicants shall pay the Issuing Bank the amount shown as
due on any such certificate within 10 days after receipt thereof.

      (d) Failure or delay on the part of the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of the
Issuing Bank's right to demand such compensation; provided

                                       8
<PAGE>

that the Applicants shall not be required to compensate the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that the Issuing Bank notifies the Applicants of
the Change in Law giving rise to such increased costs or reductions and of the
Issuing Bank's intention to claim compensation therefor; provided further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.

      SECTION 2.07. Taxes. (a) Subject to the immediately succeeding sentence,
any and all payments by or on account of any obligation of any Applicant
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes imposed by Bermuda or any other jurisdiction in
which such Applicant conducts its business; provided that if such Applicant
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Issuing Bank receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Applicant shall make such deductions and (iii) such Applicant shall pay the full
amount deducted to the relevant Official Body in accordance with applicable law.
No additional sums will be payable pursuant to the immediately preceding
sentence by an Applicant hereunder to the Issuing Bank with respect to any
Indemnified Tax or Other Tax which would not have been imposed, payable or due:
(i) but for the existence of any present or former connection between the
Issuing Bank and Bermuda or any other jurisdiction in which such Applicant
conducts its business (including, without limitation, the Issuing Bank being or
having or maintaining or having maintained a permanent establishment or being or
having been engaged in business in, Bermuda or any other jurisdiction in which
such Applicant conducts its business); or (ii) but for the failure of the
Issuing Bank to promptly comply with a request by the Applicant to satisfy any
certification, identification or other reporting requirements, whether imposed
by statute, treaty, regulation or administrative practices, concerning
nationality, residence or connection with any applicable taxing jurisdiction.
The obligation to pay additional sums in respect of Indemnified Taxes or Other
Taxes shall not apply to any Tax which is payable otherwise than by deduction or
withholding.

      (b) If the Issuing Bank determines in its sole discretion in good faith
that it has received a refund in respect of any Indemnified Taxes as to which it
has been idemnified by an Applicant, or with respect to which an Applicant has
paid additional amounts pursuant to this Section 2.07, the Issuing Bank shall
promptly after the date of such receipt pay over the amount of such refund to
such Applicant (but only to the extent of indemnity payments made, or additional
amounts paid, by such Applicant under this Section 2.07 with respect to
Indemnified Taxes giving rise to such refund and only to the extent that the
Issuing Bank has determined that the amount of any such refund is directly
attributable to payments made under this Agreement), net of all reasonable
expenses of the Issuing Bank (including additional Indemnified Taxes
attributable to such refund, as determined by the Issuing Bank) and without
interest (other than interest, if any, paid by the relevant Official Body with
respect to such refund). An Applicant receiving any such payment from the
Issuing Bank shall, upon demand, pay to the Issuing Bank any amount paid over to
such Applicant by the Issuing Bank (plus penalties, interest or other charges)
in the event the Issuing Bank is required to repay any portion of such refund to
such Official Body. Nothing in the Section 2.07 shall entitle an Applicant to
have access to the records of the Issuing Bank including, without limitation,
tax returns.

      (c) In addition, each Applicant shall pay any Other Taxes to the relevant
Official Body in accordance with applicable law.

      (d) Each Applicant shall indemnify the Issuing Bank, promptly after
receipt of written demand

                                       9
<PAGE>

therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Issuing Bank on to the relevant Official Body in accordance with applicable
law or with respect to any payment by or on account of any obligation of such
Applicant hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.07) and any
penalties and interest arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Official Body. A certificate as to the amount of such
payment or liability delivered to an Applicant by the Issuing Bank shall be
conclusive absent manifest error.

      (e) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by an Applicant or by the Issuing Bank, as the case may be, to an Official
Body, such Applicant or Issuing Bank shall deliver to the other party hereto the
original or a certified copy of a receipt issued by such Official Body
evidencing such payment, a copy of the return reporting such payment or other
reasonable evidence of such payment.

      SECTION 2.08. Payments Generally. (a) The Applicants shall make each
payment required to be made by them hereunder prior to 12:00 noon, New York City
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Issuing Bank, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. All such
payments shall be made to the Issuing Bank at its offices at 270 Park Avenue,
New York, New York 10017. If any payment hereunder shall be due on a day that is
not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

      (b) If at any time insufficient funds are received by and available to the
Issuing Bank to pay fully all amounts of unreimbursed LC Disbursements, interest
and fees then due hereunder, such funds shall be applied (i) first, towards
payment of interest and fees then due hereunder and (ii) second, towards payment
of unreimbursed LC Disbursements then due hereunder.

                                   ARTICLE III

                         Representations and Warranties

      Section 3.01. Representations and Warranties. Each Applicant represents
and warrants that each of the representations and warranties contained in
Article III of the Existing Revolver, which provisions, together with the
related definitions, as in effect on the date hereof are hereby incorporated in
this Section 3.01 by reference (mutatis mutandis) for the benefit of the Issuing
Bank and shall continue for the purposes of this Agreement regardless of the
termination of the Existing Revolver or the Issuing Bank's participation
therein, or any amendment of, or consent to any deviation from or other
modification of, the Existing Revolver; provided that for the purposes of this
Section 3.01 references in Article III of the Existing Revolver to (a) the
"Borrower" shall be deemed to be references to each Applicant hereunder, (b)
"this Agreement", the "Loan Documents," the "Notes" and "hereunder" or other
words of similar import shall be deemed to be references to this Agreement and
any other Basic Document, (c) the "Administrative Agent," "any Agent" and the
"Banks" shall be deemed to be references to the Issuing Bank, (d) "borrowing"
shall be deemed to be references to the Letters of Credit and (e) "Closing Date"
shall be deemed to be a reference to the Effective Date; provided further that
for the purposes of this Section 3.01, references in Section 3.01 of the
Existing Revolver to Schedule 3.01 shall be disregarded.

                                       10
<PAGE>

                                   ARTICLE IV

                                   Conditions

      SECTION 4.01. Effective Date. The obligation of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 7.02):

      (a) The Issuing Bank (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Issuing Bank (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.

      (b) The Issuing Bank shall have received a favorable written opinion(s)
(addressed to the Issuing Bank and dated the Effective Date) of counsel for the
Applicants, in form and substance satisfactory to the Issuing Bank and covering
such other matters relating to the Applicants, this Agreement or the
Transactions as the Issuing Bank may reasonably request. The Applicants hereby
request such counsel to deliver such opinion.

      (c) The Issuing Bank shall have received such documents and certificates
as the Issuing Bank or its counsel may reasonably request relating to the
organization, existence and good standing of each Applicant, the authorization
of the Transactions and any other legal matters relating to such Applicant, this
Agreement or the Transactions, all in form and substance satisfactory to the
Issuing Bank and its counsel.

      (d) The Issuing Bank shall have received a certificate, dated the
Effective Date and signed by the President, any Vice President or the Financial
Officer of each Applicant, confirming compliance as of the Effective Date with
the conditions set forth in paragraphs (a) and (b) of Section 4.02.

      (e) The Issuing Bank shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Applicants hereunder.

The Issuing Bank shall notify the Applicants promptly of the Effective Date, and
such notice shall be conclusive and binding. Notwithstanding the foregoing, the
obligation of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 8.02) at or prior to 3:00 p.m., New York City time, on
December 31, 1999 (and, in the event such conditions are not so satisfied or
waived, the Commitment shall terminate at such time).

      SECTION 4.02. Each Credit Event. The obligation of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:

      (a) The representations and warranties of the Applicants set forth in this
Agreement shall be true and correct on and as of the date of the date of
issuance, amendment, renewal or extension of such Letter of Credit.

      (b) At the time of and immediately after giving effect to the issuance,
amendment, renewal or extension of such Letter of Credit, no Default shall have
occurred and be continuing.

                                       11
<PAGE>

Unless the Issuing Bank receives notice from the applicable Applicant to the
contrary before any such issuance, amendment, renewal or extension is made, each
issuance, amendment, renewal or extension of a Letter of Credit shall be deemed
to constitute a representation and warranty by the Applicants on the date
thereof as to the matters specified in paragraphs (a) and (b) of this Section.

                                    ARTICLE V

                                    Covenants

      Section 5.01. Covenants. So long as any amount owing under this Agreement
shall remain unpaid, the Issuing Bank shall have any Commitment thereunder, or
any Letter of Credit shall remain outstanding, the Applicants shall comply with
and be bound by each of the covenants applicable to them contained in Articles V
and VI of the Existing Revolver, which provisions, together with the related
definitions, as in effect on the date hereof are hereby incorporated in this
Section 5.01 by reference (mutatis mutandis) for the benefit of the Issuing Bank
and shall continue for the purposes of this Agreement regardless of the
termination of the Existing Revolver or the Issuing Bank's participation
therein, or any amendment of, or consent to any deviation from or other
modification of, the Existing Revolver; provided that for the purposes of this
Section 5.01 references in Articles V and VI of the Existing Revolver to (a) the
"Borrower" shall be deemed to be references to each Applicant hereunder, (b) the
"Required Banks," the, each or any "Bank," "Agent," or the "Administrative
Agent" shall be deemed to be references to the Issuing Bank hereunder, (c) "this
Agreement" or "hereunder" or other words of similar import shall be deemed to be
references to this Agreement and any other Basic Documents, (d) the "Loans" or
the "Notes" shall be deemed to be references to the Letters of Credit and (e)
"Event of Default" and "Potential Default" shall be deemed to be references to
an Event of Default and Default, respectively.

                                   ARTICLE VI

                                Events of Default

      If any of the following events ("Events of Default") shall occur:

      (a) any Applicant shall fail to pay any principal of any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable;

      (b) any Applicant shall fail to pay any interest, fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under
this Agreement, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three days from the due date
thereof;

      (c) any representation or warranty made or deemed made by or on behalf of
any Applicant in or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with this Agreement or any amendment or modification hereof or waiver hereunder,
shall prove to have been false or misleading when made or deemed made in any
material respect;

      (d) any Applicant shall fail to observe or perform (i) any covenant,
condition or agreement contained in Section 5.01 hereof, or (ii) any other term,
covenant or agreement contained in this Agreement or incorporated herein by
reference on its part to be performed or observed if the failure to

                                       12
<PAGE>

perform or observe such other term, covenant or agreement shall remain
unremedied for thirty days after written notice thereof shall have been given to
the Applicants by the Issuing Bank;

      (e) any Applicant or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on or any other obligation for borrowed
money in a principal amount of at least $10,000,000 in the aggregate or any
obligation for borrowed money under the Existing Revolver or the Revolving
Credit Agreement dated as of June 6, 1997, as amended, to which each Applicant
is party, in each case when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such borrowed money obligations or
the Existing Revolver or such Revolving Credit Agreement; or any other event
shall occur or condition shall exist under an agreement or instrument relating
to any obligation for borrowed money in the principal amount of $10,000,000 or
more or contained in the Existing Revolver or such Revolving Credit Agreement
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, the Existing Revolver or such Revolving Credit
Agreement if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the scheduled maturity of any such obligations; or
any such obligations shall be declared due and payable, or required to be
prepaid (other than by scheduled required prepayment), prior to the stated
maturity thereof;

      (f) any Applicant shall admit in writing its inability to pay its debts
generally as they become due, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against any Applicant
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of its or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against any Applicant (but not instituted by any
Applicant), either such proceeding shall remain undismissed or unstayed for a
period of 60 days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, any Applicant
or for any substantial part of its property) shall occur;

      (g) XL Capital Ltd. shall cease to own, beneficially and of record,
directly or indirectly, all of the outstanding voting shares of capital stock
either Applicant, except for nominal number of shares owned by nominee
shareholders required by the Bermuda Companies Law;

      (h) any judgment or order for the prepayment of money in excess of
$50,000,000 in the aggregate shall be rendered against any Applicant and such
judgment or order shall remain undischarged or uncontested or appealed in good
faith for a period of 30 consecutive days;

      (i) a Change of Control (as defined in the Existing Revolver) shall occur;

then, and in every such event (other than an event with respect to any Applicant
described in clause (f) of this Article), and at any time thereafter during the
continuance of such event, the Issuing Bank may by notice to the Applicants,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitment, and thereupon the Commitment shall terminate
immediately, and (ii) declare all fees and other obligations of the Applicants
accrued hereunder to be due and payable, and thereupon all such fees and other
obligations shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Applicants; and in case of any event with respect to the Applicants
described in clause (f) of this Article,

                                       13
<PAGE>

the Commitment shall automatically terminate and all fees and other obligations
of the Applicants accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Applicants.

                                   ARTICLE VII

                                  Miscellaneous

      SECTION 7.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

      (a) if to XL Insurance, to it at Cumberland House, One Victoria Street,
      P.O. Box HM 2245, Hamilton, HMJX Bermuda, Attention of William Robbie
      (Telecopy No. (441) 292-8618, with a copy to Paul Giordano, Esq. at the
      same address and telecopy number);

      (b) if to XL Mid Ocean, to it at Cumberland House, One Victoria Street,
P.O. Box HM 2245, Hamilton, HMJX Bermuda, Attention of William Robbie (Telecopy
No. (441) 292-8618, with a copy to Paul Giordano, Esq. at the same address and
telecopy number);

      (b) if to the Issuing Bank, to The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017, Attention of Donald Rands (Telephone No. (212)
270-5528; Telecopy No. (212) 270-1001), with a copy to Daniel Serrao, Chase
Securities Inc. 270 Park Avenue, New York, New York 10017 (Telephone No. (212)
270-6565; Telecopy No. (212) 270-1001);

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

      SECTION 7.02. Waivers; Amendments. (a) No failure or delay by the Issuing
Bank in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Issuing Bank hereunder are
cumulative and are not exclusive of any rights or remedies that it would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Applicants therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the issuance
of a Letter of Credit shall not be construed as a waiver of any Default,
regardless of whether the Issuing Bank may have had notice or knowledge of such
Default at the time.

      (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Applicants and the Issuing Bank.

      SECTION 7.03. Expenses; Indemnity; Damage Waiver. (a) The Applicants
jointly and severally agree to pay (i) all reasonable out-of-pocket expenses
incurred by the Issuing Bank and its

                                       14
<PAGE>

Affiliates, including the reasonable fees (or internal cost allocations, in the
case of internal legal counsel for the Issuing Bank), charges and disbursements
of counsel for the Issuing Bank, in connection with the preparation and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all reasonable out-of-pocket expenses incurred by the Issuing Bank,
including the reasonable fees, charges and disbursements of any counsel for the
Issuing Bank in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or in
connection with the Letters of Credit issued hereunder, including all such
reasonable out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Letters of Credit.

      (b) The Applicants jointly and severally agree to indemnify the Issuing
Bank and each Related Party of the Issuing Bank (each such Person being called
an "Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Letter of
Credit or the use of the proceeds therefrom (including any refusal by the
Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), or (iii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.

      (c) To the extent permitted by applicable law, the Applicants shall not
assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Letter of Credit or the use of the proceeds thereof.

      (d) All amounts due under this Section shall be payable promptly after
written demand therefor.

      SECTION 7.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that no Applicant may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Issuing Bank (and any attempted assignment or
transfer by such Applicant without such consent shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of the Issuing Bank) any legal or equitable right, remedy or claim under
or by reason of this Agreement.

                                       15
<PAGE>

      (b) The Issuing Bank may, in the ordinary course of its commercial banking
business and in accordance with applicable law, assign to one or more assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment or LC Exposure); provided that, except in the
case of an assignment to an Affiliate of the Issuing Bank, the Applicants must
give their prior written consents to such assignment (which consents shall not
be unreasonably withheld).

      (c) The Issuing Bank may, in the ordinary course of its commercial banking
business and in accordance with applicable law, without the consent of the
Applicants, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of the Issuing Bank's rights and obligations
under this Agreement (including all or a portion of its Commitment and the LC
Exposure owing to it); provided that (i) the Issuing Bank's obligations under
this Agreement shall remain unchanged, (ii) the Issuing Bank shall remain solely
responsible to the Applicants for the performance of such obligations and (iii)
the Applicants shall continue to deal solely and directly with the Issuing Bank
in connection with the Issuing Bank's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which the Issuing Bank sells
such a participation shall provide that the Issuing Bank shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that the Issuing Bank will not, without the consent of
the Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 7.02(b) that affects such Participant. Subject to
paragraph (d) of this Section, the Applicants agree that each Participant shall
be entitled to the benefits of Sections 2.06 and 2.07 to the same extent as if
it were the Issuing Bank and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 7.08 as though it were the
Issuing Bank.

      (d) A Participant shall not be entitled to receive any greater payment
under Section 2.06 or 2.07 than the Issuing Bank would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Applicants' prior
written consents.

      (e) The Issuing Bank may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of the Issuing Bank, including any pledge or assignment to secure obligations to
a Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release the Issuing Bank from any of its obligations
hereunder or substitute any such pledgee or assignee for the Issuing Bank as a
party hereto.

      SECTION 7.05. Survival. All covenants, agreements, representations and
warranties made by the Applicants herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the Issuing Bank and shall survive the
execution and delivery of this Agreement and the issuance of any Letters of
Credit, and shall continue in full force and effect as long as any amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitment has not expired or terminated. The
provisions of Sections 2.06 and Article VII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the expiration or termination of the Letters of Credit and the
Commitment or the termination of this Agreement or any provision hereof.

                                       16
<PAGE>

      SECTION 7.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement constitutes
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the Issuing
Bank and when the Issuing Bank shall have received counterparts hereof which,
when taken together, bear the signature of the Applicants, and thereafter shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

      SECTION 7.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

      SECTION 7.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, the Issuing Bank and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by the Issuing Bank or such Affiliate to or for the credit or the account
of any Applicant against any of and all the obligations of such Applicant now or
hereafter existing under this Agreement held by the Issuing Bank, irrespective
of whether or not the Issuing Bank shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of the
Issuing Bank under this Section are in addition to other rights and remedies
(including other rights of setoff) which the Issuing Bank may have.

      SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

      (b) Each Applicant hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Issuing Bank may otherwise have to bring any action or
proceeding relating to this Agreement against any Applicant or its properties in
the courts of any jurisdiction.

      (c) Each Applicant hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent

                                       17
<PAGE>

permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

      (d) Each Applicant irrevocably consents to service of process in the
manner provided for notices in Section 7.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

      SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      SECTION 7.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

      SECTION 7.12. Confidentiality. The Issuing Bank agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Applicant or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Issuing Bank on a
nonconfidential basis from a source other than an Applicant. For the purposes of
this Section, "Information" means all information received from any Applicant
relating to such Applicant or its business, other than any such information that
is available to the Issuing Bank on a nonconfidential basis prior to disclosure
by such Applicant; provided that, in the case of information received from such
Applicant after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of

                                       18
<PAGE>

Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

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

                                         XL INSURANCE LTD

                                         By: /s/ Christopher Coelho
                                             -----------------------------------
                                         Name: Christopher Coelho
                                         Title: Chief Financial Officer

                                         XL MID OCEAN REINSURANCE LTD

                                         By: /s/ Henry C.V. Keeling
                                             -----------------------------------
                                         Name: Henry C.V. Keeling
                                         Title: President & Chief Executive
                                                Officer

                                         THE CHASE MANHATTAN BANK

                                         By: /s/ Donald Rands
                                             -----------------------------------
                                         Name: Donald Rands
                                         Title: Vice President

                                       19

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