Document:

<Page>

                                                                   EXHIBIT 10.32

                 FORM OF 100% QUOTA SHARE RETROCESSION AGREEMENT
                             (NON-TRADITIONAL - B-1)

                                 BY AND BETWEEN

                      ST. PAUL REINSURANCE COMPANY LIMITED

                                  (RETROCEDANT)

                                       and

                     PLATINUM UNDERWRITERS REINSURANCE INC.

                               (RETROCESSIONAIRE)

                           DATED AS OF ________, 2002

<Page>

THIS QUOTA SHARE RETROCESSION AGREEMENT (this "AGREEMENT"), effective as of
12:01 a.m. London time on the later of the Business Day (such term and all other
capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Formation and Separation Agreement) following the Closing
or July 1, 2002 (the "EFFECTIVE TIME", and such date the "EFFECTIVE DATE"), is
made by and between ST. PAUL REINSURANCE COMPANY LIMITED, a United Kingdom
domiciled insurance company ("RETROCEDANT"), and PLATINUM UNDERWRITERS
REINSURANCE INC. (formerly known as USF&G Family Insurance Company), a Maryland
domiciled stock insurance company ("RETROCESSIONAIRE").

WHEREAS, pursuant to a Formation and Separation Agreement dated as of [ ], 2002
(the "FORMATION AND SEPARATION AGREEMENT") between Platinum Underwriters
Holdings, Ltd. ("PLATINUM HOLDINGS"), the ultimate parent of Retrocessionaire,
and The St. Paul Companies, Inc. ("THE ST. PAUL"), the ultimate parent of
Retrocedant, The St. Paul agreed to cause its insurance subsidiaries to cede
specified liabilities under certain reinsured contracts of The St. Paul's
insurance subsidiaries; and Platinum Holdings agreed to cause its insurance
subsidiaries to reinsure such liabilities;

WHEREAS, Retrocedant has agreed to retrocede to Retrocessionaire, and
Retrocessionaire has agreed to assume by indemnity reinsurance, as of the
Effective Time, a one hundred percent (100%) quota share of the liabilities
arising pursuant to the Reinsurance Contracts (as defined hereunder), subject to
the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises and upon
the terms and conditions set forth herein, the parties hereto agree as follows:

1.    BUSINESS COVERED

      Retrocedant hereby obligates itself to retrocede to the Retrocessionaire
      and the Retrocessionaire hereby obligates itself to accept, pursuant to
      the terms of this Agreement, a one hundred percent (100%) quota share of
      any and all liabilities incurred by Retrocedant on or after January 1,
      2002 but not yet paid as of the Effective Time, under all reinsurance and
      retrocession contracts listed in Exhibit A hereto (the "REINSURANCE
      CONTRACTS"), provided that (for the avoidance of doubt) Retrocedant shall
      not retrocede, and Retrocessionaire shall not accept, any liability
      incurred by the Retrocedant under reinsurance and retrocession contracts
      with United Kingdom cedants entered into after the authorisation of
      Platinum Re UK Limited under Part IV of the Financial Services and Markets
      Act 2000 of the United Kingdom to carry on insurance business in the
      United Kingdom.

2.    TERM

      This Agreement shall be continuous as to the Reinsurance Contracts. Except
      as mutually agreed in writing by the Retrocedant and the Retrocessionaire
      or in accordance with the terms of this Agreement, this Agreement shall
      remain continuously in force until all Reinsurance Contracts are
      terminated, expired, cancelled or commuted.

<Page>

                                        2

3.    COVERAGE

3.1   SECTION A (RETROSPECTIVE) COVERAGE PERIOD

      The Section A (Retrospective) Coverage Period will be the period from and
      including January 1, 2002 to but not including the Effective Time.

3.2   SECTION B (PROSPECTIVE) COVERAGE PERIOD

      The Section B (Prospective) Coverage Period will be the period from and
      including the Effective Time through the commutation, expiration or final
      settlement of all liabilities under any of the Reinsurance Contracts.

3.3   COVERAGE LIMITS

      Coverage under this Agreement for a specific Reinsurance Contract shall be
      subject to the aggregate limit specified in the Reinsurance Contract
      reduced by all payments made by either Retrocedant or Retrocessionaire
      pursuant to such Reinsurance Contract.

4.    PREMIUMS AND ADDITIONAL CONSIDERATION

4.1   SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUMS

      (A) On the Effective Date, in respect of the Section A (Retrospective)
          Coverage Period, Retrocedant shall pay to the account of
          Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to
          one hundred percent (100%) of the carrying value on the books of the
          Retrocedant as of June 30, 2002, of the aggregate of all loss and loss
          adjustment expense and ceding commission reserves relating to the
          Reinsurance Contracts with respect to the Section A (Retrospective)
          Coverage Period under this Agreement, determined in accordance with
          statutory accounting principles on a basis consistent in all material
          respects with the methods, principles, practices and policies employed
          in the preparation and presentation of Retrocedant's annual statutory
          financial statement as of [December 31, 2001] as filed with the
          Financial Services Authority and as submitted to The St. Paul, and
          subject to the adjustments as set forth on Exhibit B hereto (the "LOSS
          RESERVE ADJUSTMENTS"), as applicable.

      (B) As soon as reasonably practicable, but in no event later than [75]
          days following the Effective Date, Retrocedant shall prepare and
          deliver to Retrocessionaire an accounting, including the calculation
          of all Loss Reserve Adjustments as provided for herein (the "PROPOSED
          LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense
          reserves and ceding commission reserves relating to the Reinsurance
          Contracts with respect to the Section A (Retrospective) Coverage
          Period under this Agreement, as of the Effective Date, determined in
          accordance with statutory accounting principles on

<Page>

                                        3

          a basis consistent in all material respects with the methods,
          principles, practices and policies employed in the preparation and
          presentation of Retrocedant's annual statutory financial statement as
          of [December 31, 2001] as filed with the Financial Services Authority
          and as submitted to The St. Paul, adjusted to reflect the Loss Reserve
          Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the
          event the Final Section A Premium is greater than the Initial Section
          A Premium, Retrocedant shall promptly pay to the account of
          Retrocessionaire the difference plus interest on such amount of the
          Applicable Rate (as defined below) from and including the Effective
          Date to and including the date of such payment. In the event the
          Initial Section A Premium is greater than the Final Section A Premium,
          Retrocessionaire shall promptly repay to the account of Retrocedant
          the difference (as an adjustment to the amount payable pursuant to
          Section 4.1(A) above) plus interest on such amount at the Applicable
          Rate from and including the Effective Date to and including the date
          of such payment.

4.2   SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS

      (A) On the Effective Date, in respect of the Section B (Prospective)
          Coverage Period, Retrocedant shall transfer to Retrocessionaire an
          amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value
          on the books of Retrocedant as of June 30, 2002 of one hundred percent
          (100%) of the unearned premium reserves relating to the Reinsurance
          Contracts for the Section B (Prospective) Coverage Period under this
          Agreement, determined in accordance with statutory accounting
          principles on a basis consistent in all material respects with the
          methods, principles, practices and policies employed in the
          preparation and presentation of Retrocedant's annual statutory
          financial statement as of [December 31, 2001] as filed with the
          Financial Services Authority and as submitted to The St. Paul, less
          the applicable Ceding Commission, as defined below, and with respect
          to all Reinsurance Contracts, one hundred percent (100%) of all gross
          premiums written on or after the Effective Time, net of premium
          returns, allowances and cancellations and less any applicable Ceding
          Commission, provided, however, that all premiums written arising in
          respect of a Loss Occurrence (as such term is defined in the
          Reinsurance Contract), including reinstatement premiums, loss share
          premiums and penalty premiums [other], shall be for the account of
          Retrocedant.

      (B) As soon as reasonably practicable, but in no event later than [75]
          days following the Effective Date, Retrocedant shall prepare and
          deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM
          RESERVE ACCOUNTING", together with the Proposed Loss Reserve
          Accounting, the "PROPOSED ACCOUNTING") of all unearned premium
          reserves relating to the Reinsurance Contracts for the Section B
          (Prospective) Coverage Period under this Agreement, as of the
          Effective Date, determined in accordance with statutory accounting
          principles on a basis consistent in all material respects with the
          methods, principles, practices and policies employed in the
          preparation and presentation of Retrocedant's

<Page>

                                        4

          annual statutory financial statement as of [December 31, 2001] as
          filed with the Financial Services Authority and as submitted to The
          St. Paul, relating to the Reinsurance Contracts, net of the applicable
          Ceding Commission, all as of the Effective Date (the "FINAL SECTION B
          PREMIUM"). In the event the Final Section B Premium is greater than
          the Initial Section B Premium, Retrocedant shall promptly pay to the
          account of Retrocessionaire the difference plus interest on such
          amount at the Applicable Rate from and including the Effective Date to
          and including the date of such payment. In the event the Initial
          Section B Premium is greater than the Final Section B Premium,
          Retrocessionaire shall promptly repay to the account of Retrocedant
          the difference (as an adjustment to the amount payable pursuant to
          Section 4.2(A) above) plus interest on such amount at the Applicable
          Rate from and including the Effective Date to and including the date
          of such payment.

      (C) Notwithstanding the foregoing, the parties agree that all gross
          estimated premiums written prior to the Effective Date and earned but
          not yet billed ("EBUB", and also referred to as "estimated premiums
          receivable" or "EBNR") as of the Effective Time and relating to the
          Reinsurance Contracts, as determined, on or before ______, 2002, in
          accordance with Retrocedant's customary practices and procedures and
          as submitted to The St. Paul, shall be allocated to Retrocedant. All
          payments received after the Effective Time by Retrocedant or
          Retrocessionaire in respect of EBUB as of the Effective Time shall be
          retained by Retrocedant or held on trust for and paid by
          Retrocessionaire to or to the order of Retrocedant, and all rights to
          collect such amounts shall be retained by or transferred to
          Retrocedant. Any changes made on or after the Effective Time as to the
          amount of EBUB as of the Effective Time shall be for the account of
          Retrocessionaire and shall not affect the amount retained by
          Retrocedant. The parties agree that as of the first anniversary of the
          date hereof, Retrocessionaire shall pay to Retrocedant the difference,
          if any, between the amount of EBUB as of the Effective Time and the
          aggregate amount paid to and/or retained by Retrocedant prior to that
          date with respect to EBUB as of the Effective Time. All amounts, if
          any, in respect of EBUB which are in excess of EBUB as of the
          Effective Time, calculated pursuant to the first sentence of this
          Section 4.2(C), shall be for the account of Retrocessionaire and all
          such amounts shall be retained by or payable to Retrocedant.

4.3   DISPUTE RESOLUTION.

      (A) After receipt of the Proposed Accounting, together with the work
          papers used in preparation thereof, Retrocessionaire shall have 30
          days (the "REVIEW PERIOD") to review such Proposed Accounting. Unless
          Retrocessionaire delivers written notice to Retrocedant on or prior to
          the 30th day of the Review Period stating that it has material
          objections thereto, Retrocessionaire shall be deemed to have accepted
          and agreed to the Proposed Accounting. Retrocessionaire shall not
          object to any method, principle, practice or policy employed in the
          preparation of the Proposed Accounting if such method, principle,
          practice or

<Page>

                                        5

          policy is consistent in all material respects with that employed in
          the preparation and presentation of Retrocedant's annual statutory
          financial statement as of [December 31, 2001] as filed with the
          Financial Services Authority and as submitted to The St. Paul. If
          Retrocessionaire so notifies Retrocedant of its material objections to
          the Proposed Accounting, the parties shall in good faith attempt to
          resolve, within 30 days (or such longer period as the parties may
          agree) following such notice (the "RESOLUTION PERIOD") their
          differences with respect to such material objections and any
          resolution by them as to any disputed amounts shall be final, binding
          and conclusive.

      (B) Any amount remaining in dispute at the conclusion of the Resolution
          Period ("UNRESOLVED CHANGES") shall be submitted to arbitration. One
          arbiter (each arbiter, an "ARBITER") shall be chosen by Retrocedant,
          the other by Retrocessionaire, and an umpire (the "UMPIRE") shall be
          chosen by the two Arbiters before they enter upon arbitration. In the
          event that either party should fail to choose an Arbiter within 30
          days following a written request by the other party to do so, the
          requesting party may choose two Arbiters, but only after providing 10
          days' written notice of its intention to do so and only if such other
          party has failed to appoint an Arbiter within such 10 day period. The
          two Arbiters shall in turn choose an Umpire who shall act as the
          umpire and preside over the hearing. If the two Arbiters fail to agree
          upon the selection of an Umpire within 30 days after notification of
          the appointment of the second Arbiter, the selection of the Umpire
          shall be made by the American Arbitration Association. All Arbiters
          and Umpires shall be active or retired disinterested property/casualty
          actuaries of insurance or reinsurance companies or Lloyd's of London
          Underwriters.

      (C) Each party shall present its case to the Arbiters within 30 days
          following the date of appointment of the Umpire, unless the parties
          mutually agree to an extension of time. The decision of the Arbiters
          shall be final and binding on both parties; but failing to agree, they
          shall call in the Umpire and the decision of the majority shall be
          final and binding upon both parties. Judgment upon the final decision
          of the Arbiters may be entered in any court of competent jurisdiction.

      (D) Each party shall bear the expense of its own Arbiter, and shall
          jointly and equally bear with the other the expense of the Umpire and
          of the arbitration unless otherwise directed by the Arbiters.

      (E) Any arbitration proceedings shall take place in London, England unless
          the parties agree otherwise.

      (F) Arbitration shall not be a condition precedent to any right of action
          hereunder.

      (G) Once the Proposed Accounting has been finalised in accordance with the
          above process, the Final Section A Premium and the Final Section B
          Premium amounts shall be as set forth in the Proposed Accounting, as
          determined by the

<Page>

                                        6

          Arbiters, if applicable. In the event the sum of such amounts is
          greater than the amount paid by Retrocedant to Retrocessionaire on the
          Closing Date, Retrocedant shall promptly pay to the account of
          Retrocessionaire the difference plus interest on such amount at the
          Applicable Rate from and including the Closing Date to and including
          the date of such payment. In the event the aggregate of such amounts
          is lower than the amount paid by Retrocedant to Retrocessionaire on
          the Closing Date, Retrocessionaire shall promptly repay for the
          account of Retrocedant the difference (as an adjustment to the amount
          payable pursuant to Section 4.1(A) and/or 4.2(A) above, as applicable)
          plus interest on such amount at the Applicable Rate from the Effective
          Date to the date of such payment.

5.    CEDING COMMISSION

      With respect to the Reinsurance Contracts, Retrocessionaire shall pay the
      Retrocedant a ceding commission (the "CEDING COMMISSION") with respect to
      the Section B (Prospective) Coverage Period, and such Ceding Commission
      shall equal one hundred percent (100%) of the actual expenses incurred in
      writing each Reinsurance Contract, including actual ceding commissions and
      brokerage paid, as determined in accordance with Retrocedant's customary
      practices and procedures and as submitted to The St. Paul, all as
      allocable pro rata to periods from and after the Effective Time.

6.    ORIGINAL CONDITIONS

      This Agreement shall be subject to the same rates, terms, conditions,
      waivers and interpretations, and to the same modifications and
      alterations, as the respective Reinsurance Contracts.

7.    INURING RETROCESSIONS

7.1   ALLOCATION TO RETROCESSIONAIRE

      Retrocedant agrees that the retrocession contracts purchased from third
      party retrocessionaires ("THIRD PARTY RETROCESSIONAIRES") by or on behalf
      of Retrocedant prior to the Effective Time that are listed on Exhibit C
      hereto shall inure to the benefit of Retrocessionaire to the extent of
      liabilities covered under this Agreement ("INURING RETROCESSIONS"),
      subject to the allocations in Exhibits D, E and F.

7.2   TRANSFER

      Retrocedant and Retrocessionaire shall use their respective commercially
      reasonable efforts to obtain the consent of Third Party Retrocessionaires
      under the Inuring Retrocessions to include Retrocessionaire as a direct
      reinsured with respect to the Reinsurance Contracts or, in the
      alternative, to make all payments, directly to the Retrocessionaire, to
      the extent allocable to the Reinsurance Contracts, in the manner set forth
      in Exhibit D hereto, and to seek all payments, to the extent allocable to
      the

<Page>

                                        7

      Reinsurance Contracts, in the manner set forth in Exhibit E hereto,
      directly from Retrocessionaire, it being understood that Retrocessionaire
      shall bear all risk of non-payment or non-collectibility under the Inuring
      Retrocessions.

7.3   INURING RETROCESSIONS CLAIMS

      (A) Each of the parties agrees to transfer to the other party all
          recoveries or any portion thereof that such party receives on or after
          the Effective Time pursuant to the Inuring Retrocessions and allocable
          to the other party, in the manner set forth in Exhibit F hereto.
          Retrocedant shall use its commercially reasonable efforts to collect
          any recoveries due to Retrocessionaire under the Inuring Retrocessions
          that indemnify the Retrocedant for losses or expenses payable or
          return of premium allocable to the Retrocessionaire and hold them on
          trust for, and pay them to or to the order of, Retrocessionaire. The
          parties agree that Retrocessionaire's obligations to make payments
          pursuant to the Inuring Retrocessions or to reimburse Retrocedant
          pursuant to this Agreement shall not be waived by non-receipt of any
          such amounts. Retrocessionaire shall reimburse Retrocedant for one
          hundred percent (100%) of any expenses reasonably incurred by
          Retrocedant in attempting to make such collection, including all
          allocated expenses, as determined in accordance with St. Paul Re's
          customary practices and procedures. Retrocessionaire shall have the
          right to associate with Retrocedant, at Retrocessionaire's own
          expense, in any actions brought by Retrocedant to make such
          collections.

      (B) In the event claims of Retrocedant and Retrocessionaire aggregate in
          excess of the applicable limit under an Inuring Retrocession, all
          limits applicable to either Retrocedant or Retrocessionaire shall be
          allocated between Retrocedant and Retrocessionaire in the manner set
          forth in Exhibit F hereto.

7.4   INITIAL CONSIDERATION

      On the Effective Date, Retrocessionaire shall reimburse Retrocedant for
      one hundred percent (100%) of any and all unearned premiums paid by
      Retrocedant under such Inuring Retrocessions net of any applicable
      unearned ceding commissions paid to Retrocedant thereunder.

7.5   ADDITIONAL CONSIDERATION

      Retrocessionaire agrees to pay directly to Third Party Retrocessionaires
      under the Inuring Retrocessions all future premiums Retrocedant is
      obligated to pay pursuant to the terms of the Inuring Retrocessions to the
      extent that such premiums are allocable to the Retrocessionaire in the
      manner set forth in Exhibit E and to indemnify Retrocedant for all such
      premiums paid directly by Retrocedant, net of any ceding commissions and
      similar amounts paid by Third Party Retrocessionaires to Retrocedant.

<Page>

                                        8

7.6   CANCELLATION AND COMMUTATION OF INURING RETROCESSIONS

      (A) With respect to any Inuring Retrocessions providing coverage solely
          with respect to the Reinsurance Contracts, Retrocedant agrees, on
          behalf of itself and its affiliates, not to terminate or commute any
          such Inuring Retrocession without the written consent of
          Retrocessionaire.

      (B) With respect to any Inuring Retrocessions providing coverage for both
          Reinsurance Contracts and to business not being transferred, neither
          party shall take any action or fail to take any action that would
          reasonably result in the termination or commutation of any Inuring
          Retrocession, without the prior written consent of the other party,
          such consent not to be unreasonably withheld.

8.    LOSS AND LOSS EXPENSE; SALVAGE AND SUBROGATION; FOLLOW THE FORTUNES

8.1   Retrocessionaire shall be liable for one hundred percent (100%) of all
      future loss, loss adjustment expenses, incurred but not reported losses
      and other payment obligations that arise under the Reinsurance Contracts
      on and after January 1, 2002 and are payable as of or after the Effective
      Time and shall reimburse Retrocedant for any losses, loss adjustment
      expenses and other payment obligations paid by Retrocedant following the
      Effective Time in respect of the Reinsurance Contracts, net of any
      recoveries received by Retrocedant with respect thereto, including
      recoveries under Inuring Retrocessions. Retrocessionaire shall have the
      right to all salvage and subrogation on the account of claims and
      settlements with respect to the Reinsurance Contracts.

8.2   In the event of a claim under a Reinsurance Contract, the Retrocedant will
      assess the validity of the claim and make a determination as to payment,
      consistent with the claims handling guidelines previously provided to
      Retrocedant in writing by Retrocessionaire and Retrocessionaire may
      exercise its rights under Section 10.1 in respect thereof. Retrocedant
      shall provide prompt notice of any claim in excess of $500,000 to
      Retrocessionaire. All payments made by Retrocedant, whether under strict
      contract terms or by way of compromise, shall be binding on
      Retrocessionaire. In addition, if Retrocedant refuses to pay a claim in
      full and a legal proceeding results, Retrocessionaire will be
      unconditionally bound by any settlement agreed to by Retrocedant or the
      adverse judgment of any court or arbitrator (which could include any
      judgment for bad faith, punitive damages, excess policy limit losses or
      extra contractual obligations) and Retrocedant may recover with respect to
      such settlements and judgments under this Agreement. Though Retrocedant
      will settle such claims and litigation in good faith, Retrocessionaire is
      bound to accept the settlements paid by Retrocedant and such settlements
      may be for amounts that could be greater than the amounts that would be
      agreed to by Retrocessionaire if Retrocessionaire were to settle such
      claims or litigation directly. It is the intent of this Agreement that
      Retrocessionaire shall in every case in which this Agreement applies and
      in the proportions specified

<Page>

                                        9

      herein, "follow the fortunes" of Retrocedant in respect of risks
      Retrocessionaire has accepted under this Agreement.

9.    EXTRA CONTRACTUAL OBLIGATIONS

      In the event Retrocedant or Retrocessionaire is held liable to pay any
      punitive, exemplary, compensatory or consequential damages because of
      alleged or actual bad faith or negligence related to the handling of any
      claim under any Reinsurance Contract or otherwise in respect of such
      Reinsurance Contract, the parties shall be liable for such damages in
      proportion to their responsibility for the conduct giving rise to the
      damages. Such determination shall be made by Retrocedant and
      Retrocessionaire, acting jointly and in good faith, and in the event the
      parties are unable to reach agreement as to such determination, recourse
      shall be had to Article 15 hereof.

10.   ADMINISTRATION OF REINSURANCE CONTRACTS

10.1  ADMINISTRATION

      (A) The parties agree that, as of the Effective Time, Retrocedant shall
          have the sole authority to administer the Reinsurance Contract in all
          respects, which authority shall include, but not be limited to,
          authority to bill for and collect premiums, adjust all claims and
          handle all disputes thereunder and to effect any and all amendments,
          commutations and cancellations of the Reinsurance Contract, subject,
          however, in the case of administration of claims, to all claims
          handling guidelines provided in advance in writing by Retrocessionaire
          to Retrocedant. Retrocedant shall not, on its own, settle any claim,
          waive any right, defense, setoff or counterclaim relating to the
          Reinsurance Contracts with respect to amounts in excess of $500,000,
          and shall not amend, commute or terminate any of the Reinsurance
          Contracts without the prior written consent of Retrocessionaire.

      (B) Notwithstanding the foregoing, Retrocessionaire may, at its discretion
          and at its own expense, assume the settlement of any claim upon prior
          written notice to Retrocedant. Upon receipt of such notice,
          Retrocedant shall not compromise, discharge or settle such claim
          except with the prior written consent of Retrocessionaire.
          Retrocessionaire shall not take any action in the administration of
          such claim that would reasonably be expected to adversely affect
          Retrocedant, its business or its reputation, without the prior written
          consent of Retrocedant. Retrocessionaire shall indemnify Retrocedant
          for all Losses, including punitive, exemplary, compensatory or
          consequential damages arising from such assumption of the conduct of
          such settlement pursuant to Article 14 herein.

<Page>

                                       10

10.2  REPORTING AND REGULATORY MATTERS

      Each party shall provide the notices and filings required to be made by it
      to relevant regulatory authorities as a result of this Agreement.
      Notwithstanding the foregoing, each party shall provide to the other party
      any information in its possession regarding the Reinsurance Contracts as
      reasonably required by the other party to make such filings and in a form
      as agreed to by the parties.

10.3  DUTY TO COOPERATE

      Upon the terms and subject to the conditions and other agreements set
      forth herein, each party agrees to use its commercially reasonable efforts
      to take, or cause to be taken, all actions, and to do, or cause to be
      done, and to assist and cooperate with the other party in doing, all
      things necessary or advisable to perform the transactions contemplated by
      this Agreement.

10.4  COMMUNICATIONS RELATING TO THE REINSURANCE CONTRACTS

      Following the Effective Time, Retrocedant and Retrocessionaire shall each
      promptly forward to the other copies of all material notices and other
      written communications it receives relating to the Reinsurance Contracts
      (including, without limitation, all inquiries and complaints from relevant
      insurance regulators, brokers and other service providers and reinsureds
      and all notices of claims, suits and actions for which it receives service
      of process.)

11.   REPORTS AND REMITTANCES

11.1  REPORT FROM RETROCEDANT

      Within thirty days following the end of each month, Retrocedant shall
      provide Retrocessionaire with a summary statement of account for the
      previous month showing all activity relating to each of the Reinsurance
      Contracts, including related administration costs and expenses incurred by
      Retrocedant in the form set forth as Exhibit I. The monthly statement of
      account shall also provide a breakdown of any amounts due to the
      Retrocedant or Retrocessionaire, as the case may be, as reimbursement for
      paid claims, premiums or other amounts due pursuant to the terms of this
      Agreement.

11.2  REMITTANCES

      Within five Business Days after delivery of each monthly report pursuant
      to Section 11.1, Retrocedant and Retrocessionaire shall settle all amounts
      then due under this Agreement for that month.

<Page>

                                       11

11.3  LATE PAYMENTS

      Should any payment due any party to this Agreement be received by such
      party after the due date for such payment under this Agreement, interest
      shall accrue from the date on which such payment was due until payment is
      received by the party entitled thereto, at an annual rate equal to the
      London Interbank Offered Rate quoted for six month periods as reported in
      The Wall Street Journal on the first Business Day of the month in which
      such payment first becomes due plus one hundred basis points (the
      "APPLICABLE RATE").

11.4  COST REIMBURSEMENT

      Retrocessionaire shall reimburse for its allocated share of all costs and
      expenses incurred by Retrocedant in administering the Reinsurance
      Contracts as set forth in Exhibit J hereto.

12.   MAINTENANCE OF LICENSES

      Each of Retrocedant and Retrocessionaire hereby covenants to maintain at
      all times all licences and authorisations required to undertake the
      actions contemplated hereby.

13.   ACCESS TO RECORDS

      From and after the Closing Date, Retrocedant shall afford to
      Retrocessionaire and its respective authorized accountants, counsel and
      other designated representatives (collectively, "REPRESENTATIVES")
      reasonable access (including using commercially reasonable best efforts to
      give access to Persons possessing information) during normal business
      hours to all data and information that is specifically described in
      writing (collectively, "INFORMATION") within the possession of Retrocedant
      relating to the liabilities transferred hereunder, insofar as such
      information is reasonably required by Retrocessionaire. Similarly, from
      and after the Closing Date, Retrocessionaire shall afford to Retrocedant,
      any Post-closing Subsidiary of Retrocedant and their respective
      Representatives reasonable access (including using commercially reasonable
      best efforts to give access to Persons possessing information) during
      normal business hours to Information within Retrocessionaire's possession
      relating to Retrocedant, insofar as such information is reasonably
      required by Retrocedant. Information may be requested under this Article
      13 for, without limitation, audit, accounting, claims, litigation (other
      than any claims or litigation between the parties hereto) and tax
      purposes, as well as for purposes of fulfilling disclosure and reporting
      obligations and for performing this Agreement and the transactions
      contemplated hereby.

      From and after the Closing Date, Retrocessionaire and Retrocedant or their
      designated representatives may inspect, at the place where such records
      are located, any and all data and information that is specifically
      described in writing within the possession of the other party hereto
      reasonably relating to this Agreement, on reasonable prior notice and
      during normal business hours. The rights of the parties under this Article
      13 shall

<Page>

                                       12

      survive termination of this Agreement and shall continue for as long as
      there may be liabilities under the Reinsurance Contracts or reporting or
      retention requirements under applicable law. In addition, each party shall
      have the right to take copies (including electronic copies) of any
      information held by the other party that reasonably relates to this
      Agreement or the Reinsurance Contracts. Each party shall, and shall cause
      its designated representative to, treat and hold as confidential
      information any information it receives or obtains pursuant to this
      Article 13, except (i) to the extent required to be disclosed by law or
      any securities exchange or regulatory or governmental body to which that
      party is subject (whether or not the requirement for information has the
      force of law); or (ii) to the extent that the information has come into
      the public domain through no fault of that party.

14.   INDEMNIFICATION

14.1  INDEMNIFICATION BY RETROCEDANT

      Retrocedant agrees to indemnify, defend and hold harmless
      Retrocessionaire, and its officers, directors and employees with respect
      to any and all Losses arising from any breach by Retrocedant of any
      representation, warranty or covenant herein. Retrocedant further agrees to
      indemnify, defend and hold harmless Retrocessionaire and its officers,
      directors and employees against any and all Losses arising out of
      Retrocedant's administration of the Reinsurance Contracts, including but
      not limited to extracontractual obligations, payments in excess of policy
      limits and settlements made in respect of any such claims to the extent
      arising from the negligence or wilful misconduct of Retrocedant except to
      the extent such actions are taken with the prior consent or direction of
      Retrocessionaire. Such indemnification obligations shall be limited to the
      aggregate of all fees paid to Retrocedant pursuant to Section 11.4 hereof.

14.2  INDEMNIFICATION BY RETROCESSIONAIRE

      Retrocessionaire agrees to indemnify, defend and hold harmless
      Retrocedant, and its officers, directors and employees with respect to any
      and all Losses arising from any breach by Retrocessionaire of any
      representation, warranty or covenant herein. Retrocessionaire further
      agrees to indemnify, defend and hold harmless Retrocedant and its
      officers, directors and employees against any and all Losses arising out
      of Retrocessionaire's administration of the Reinsurance Contracts,
      including but not limited to extracontractual obligations, payments in
      excess of policy limits and settlements made in respect of any such
      claims.

14.3  INDEMNIFICATION PROCEDURES

      (A) If a party seeking indemnification pursuant to this Article 14 (each,
          an "INDEMNITEE") receives notice or otherwise learns of the assertion
          by a Person (including, without limitation, any governmental entity)
          who is not a party to this Agreement or an Affiliate thereof, of any
          claim or of the commencement by any such Person of any Action (a
          "THIRD PARTY CLAIM") with respect to which the

<Page>

                                       13

          party from whom indemnification is sought (each, an "INDEMNIFYING
          PARTY") may be obligated to provide indemnification pursuant to this
          Section 14.1 or 14.2, such Indemnitee shall give such Indemnifying
          Party written notice thereof promptly after becoming aware of such
          Third Party Claim; PROVIDED that the failure of any Indemnitee to give
          notice as provided in this Section 14.3 shall not relieve the
          Indemnifying Party of its obligations under this Article 14, except to
          the extent that such Indemnifying Party is prejudiced by such failure
          to give notice. Such notice shall describe the Third Party Claim in as
          much detail as is reasonably possible and, if ascertainable, shall
          indicate the amount (estimated if necessary) of the Loss that has been
          or may be sustained by such Indemnitee.

      (B) An Indemnifying Party may elect to defend or to seek to settle or
          compromise, at such Indemnifying Party's own expense and by such
          Indemnifying Party's own counsel, any Third Party Claim. Within [30]
          days of the receipt of notice from an Indemnitee in accordance with
          Section 14.3(A) (or sooner, if the nature of such Third Party Claim so
          requires), the Indemnifying Party shall notify the Indemnitee of its
          election whether the Indemnifying Party will assume responsibility for
          defending such Third Party Claim, which election shall specify any
          reservations or exceptions. After notice from an Indemnifying Party to
          an Indemnitee of its election to assume the defense of a Third Party
          Claim, such Indemnifying Party shall not be liable to such Indemnitee
          under this Article 14 for any legal or other expenses (except expenses
          approved in writing in advance by the Indemnifying Party) subsequently
          incurred by such Indemnitee in connection with the defense thereof;
          PROVIDED that, if the defendants in any such claim include both the
          Indemnifying Party and one or more Indemnitees and in any Indemnitee's
          reasonable judgment a conflict of interest between one or more of such
          Indemnitees and such Indemnifying Party exists in respect of such
          claim or if the Indemnifying Party shall have assumed responsibility
          for such claim with reservations or exceptions that would materially
          prejudice such Indemnitees, such Indemnitees shall have the right to
          employ separate counsel to represent such Indemnitees and in that
          event the reasonable fees and expenses of such separate counsel (but
          not more than one separate counsel for all such Indemnitees reasonably
          satisfactory to the Indemnifying Party) shall be paid by such
          Indemnifying Party. If an Indemnifying Party elects not to assume
          responsibility for defending a Third Party Claim, or fails to notify
          an Indemnitee of its election as provided in this Article 14, such
          Indemnitee may defend or (subject to the remainder of this Article 14)
          seek to compromise or settle such Third Party Claim at the expense of
          the Indemnifying Party.

      (C) Neither an Indemnifying Party nor an Indemnitee shall consent to entry
          of any judgment or enter into any settlement of any Third Party Claim
          which does not include as an unconditional term thereof the giving by
          the claimant or plaintiff to such Indemnitee, in the case of a consent
          or settlement by an Indemnifying Party, or the Indemnifying Party, in
          the case of a consent or settlement by the Indemnitee, of a written
          release from all liability in respect to such Third Party Claim.

<Page>

                                       14

      (D) If an Indemnifying Party chooses to defend or to seek to compromise or
          settle any Third Party Claim, the Indemnitee shall make available at
          reasonable times to such Indemnifying Party any personnel or any
          books, records or other documents within its control or which it
          otherwise has the ability to make available that are necessary or
          appropriate for such defense, settlement or compromise, and shall
          otherwise cooperate in a reasonable manner in the defense, settlement
          or compromise of such Third Party Claim.

      (E) Notwithstanding anything in this Article 14 to the contrary, neither
          an Indemnifying Party nor an Indemnitee may settle or compromise any
          claim over the objection of the other; PROVIDED that consent to
          settlement or compromise shall not be unreasonably withheld or
          delayed. If an Indemnifying Party notifies the Indemnitee in writing
          of such Indemnifying Party's desire to settle or compromise a Third
          Party Claim on the basis set forth in such notice (provided that such
          settlement or compromise includes as an unconditional term thereof the
          giving by the claimant or plaintiff of a written release of the
          Indemnitee from all liability in respect thereof) and the Indemnitee
          shall notify the Indemnifying Party in writing that such Indemnitee
          declines to accept any such settlement or compromise, such Indemnitee
          may continue to contest such Third Party Claim, free of any
          participation by such Indemnifying Party, at such Indemnitee's sole
          expense. In such event, the obligation of such Indemnifying Party to
          such Indemnitee with respect to such Third Party Claim shall be equal
          to (i) the costs and expenses of such Indemnitee prior to the date
          such Indemnifying Party notifies such Indemnitee of the offer to
          settle or compromise (to the extent such costs and expenses are
          otherwise indemnifiable hereunder) PLUS (ii) the lesser of (A) the
          amount of any offer of settlement or compromise which such Indemnitee
          declined to accept and (B) the actual out-of-pocket amount such
          Indemnitee is obligated to pay subsequent to such date as a result of
          such Indemnitee's continuing to pursue such Third Party Claim.

      (F) In the event of payment by an Indemnifying Party to any Indemnitee in
          connection with any Third Party Claim, such Indemnifying Party shall
          be subrogated to and shall stand in the place of such Indemnitee as to
          any events or circumstances in respect of which such Indemnitee may
          have any right or claim relating to such Third Party Claim against any
          claimant or plaintiff asserting such Third Party Claim or against any
          other Person. Such Indemnitee shall cooperate with such Indemnifying
          Party in a reasonable manner, and at the cost and expense of such
          Indemnifying Party, in prosecuting any subrogated right or claim.

      (G) Except with respect to claims relating to actual fraud, the
          indemnification provisions set forth in this section are the sole and
          exclusive remedy of the parties hereto for any and all claims for
          indemnification under this Agreement.

<Page>

                                       15

14.4  SURVIVAL

      This Article 14 shall survive termination of this Agreement.

<Page>

                                       16

15.   ARBITRATION

15.1  All disputes and differences arising under or in connection with this
      Agreement shall be referred to arbitration under ARIAS Arbitration Rules.

15.2  The Arbitration Tribunal shall consist of three arbitrators, one to be
      appointed by the claimant party, one to be appointed by the respondent
      party and the third to be appointed by the two appointed arbitrators.

15.3  The third member of the Tribunal shall be appointed as soon as practicable
      (and no later than 28 days) after the appointment of the two
      party-appointed arbitrators. The Tribunal shall be constituted upon the
      appointment of the third arbitrator.

15.4  The Arbitrators shall be persons (including those who have retired) with
      not less than ten years' experience of insurance or reinsurance within the
      industry or as lawyers or other professional advisers serving the
      industry.

15.5  Where a party fails to appoint an arbitrator within 14 days of being
      called upon to do so or where the two party-appointed arbitrators fail to
      appoint a third within 28 days of their appointment, then upon application
      ARIAS (UK) will appoint an arbitrator to fill the vacancy. At any time
      prior to the appointment by ARIAS (UK) the party or arbitrators in default
      may make such appointment.

15.6  The Tribunal may in its sole discretion make such orders and directions as
      it considers to be necessary for the final determination of the matters in
      dispute. The Tribunal shall have the widest discretion permitted under the
      law governing the arbitral procedure when making such orders or
      directions.

15.7  The seat of arbitration shall be London.

15.8  If any matter in difference between the parties is related to a matter of
      difference in the United States of America, such matter will be subject to
      the arbitration procedure set out in Article 14 of the 100 per cent. Quota
      Share Retrocession Agreement [of even date] between St. Paul Fire and
      Marine Insurance Company and Platinum Underwriters Reinsurance, Inc.,
      provided that the panel of arbitrators shall apply English law in respect
      of those aspects of the matter which relate to the United Kingdom.

15.9  This Article 15 shall survive termination of this Agreement.

16.   INSOLVENCY

16.1  On the occurrence of an Insolvency Event affecting Retrocedant, this
      reinsurance shall be payable directly to Retrocedant, or to its
      liquidator, receiver, conservator or statutory successor on the basis of
      the liability of Retrocedant without diminution because of the insolvency
      of Retrocedant or because the liquidator, receiver, conservator or
      statutory successor of Retrocedant has failed to pay all or a portion of
      any claim.

<Page>

                                       17

16.2  It is agreed, however, that the liquidator, receiver, conservator or
      statutory successor of Retrocedant shall give written notice to
      Retrocessionaire of the pendency of a claim against Retrocedant indicating
      the Reinsurance Contract, which claim would involve a possible liability
      on the part of Retrocessionaire within a reasonable time after such claim
      is filed in the conservation or liquidation proceeding or in the
      receivership, and that during the pendency of such claim, Retrocessionaire
      may investigate such claim and interpose, at its own expense, in the
      proceeding where such claim is to be adjudicated any defense or defenses
      that it may deem available to Retrocedant or its liquidator, receiver,
      conservator or statutory successor. The expense thus incurred by
      Retrocessionaire shall be chargeable, subject to the approval of the
      court, against Retrocedant as part of the expense of conservation or
      liquidation to the extent of a pro rata share of the benefit which may
      accrue to Retrocedant solely as a result of the defense undertaken by
      Retrocessionaire.

16.3  As to all reinsurance made, ceded, renewed or otherwise becoming effective
      under this Agreement, the reinsurance shall be payable as set forth above
      by Retrocessionaire to Retrocedant or to its liquidator, receiver,
      conservator or statutory successor, except (i) where the Reinsurance
      Contracts specifically provide another payee on the occurrence of an
      Insolvency Event affecting Retrocedant, and (ii) where Retrocessionaire,
      with the consent of the reinsured or reinsureds under the Reinsurance
      Contracts, has assumed such Reinsurance Contract obligations of
      Retrocedant as direct obligations of Retrocessionaire to the payees under
      such Reinsurance Contracts and in substitution for the obligations of the
      Retrocedant to such payees.

16.4  For the purposes of this Article 16, an Insolvency Event shall occur if:

      (A) (i)  a winding up petition is presented in respect of Retrocedant or a
               provisional liquidator is appointed over it or if Retrocedant
               goes into administration, administrative receivership or
               receivership or if Retrocedant has a scheme of arrangement or
               voluntary arrangement proposed in relation to all or any part of
               its affairs; or

          (ii) Retrocedant goes into compulsory or voluntary liquidation;

          or, in each case, if Retrocedant becomes subject to any other similar
          insolvency process (whether under the laws of England and Wales or
          elsewhere); and

      (B) Retrocedant is unable to pay its debts as and when they fall due
          within the meaning of section 123 of the Insolvency Act 1986 (or any
          statutory amendment or re-enactment of that section).

17.   OFFSET

      Retrocedant and Retrocessionaire shall have the right to offset any
      balance or amounts due form one party to the other under the terms of this
      Agreement. The party asserting

<Page>

                                       18

      the right of offset may exercise such right at any time whether the
      balances due are on account of premiums, losses or otherwise.

18.   ERRORS AND OMISSIONS

      Any inadvertent delay, omission, error or failure shall not relieve either
      party hereto from any liability which would attach hereunder if such
      delay, omission, error or failure had not been made provided such delay,
      omission, error or failure is rectified as soon as reasonably practicable
      upon discovery.

19.   CREDIT FOR REINSURANCE; SECURITY

19.1  CREDIT FOR REINSURANCE

      Retrocessionaire shall take all actions reasonably necessary, if any, to
      permit Retrocedant to obtain full financial statement credit in all
      applicable jurisdictions for all liabilities assumed by the
      Retrocessionaire pursuant to this Agreement, including but not limited to
      loss and loss adjustment expense reserves, unearned premium reserves,
      reserves for incurred but not reported losses, allocated loss adjustment
      expenses and ceding commissions, and to provide the security required for
      such purpose, in a form acceptable to Retrocedant. Any reserves required
      by the foregoing in no event shall be less than the amounts required under
      the law of the jurisdiction having regulatory authority with respect to
      the establishment of reserves relating to the relevant Reinsurance
      Contracts. For purposes of this Article 19, such "actions reasonably
      necessary" may include, without limitation, the furnishing of a letter of
      credit or the establishment of a custodial or trust account, as permitted
      under applicable law, to secure the payment of the amounts due the
      Retrocedant under this Agreement.

19.2  EXPENSES

      All expenses of establishing and maintaining any letter of credit or other
      security arrangement shall be paid by Retrocessionaire.

19.3  SECURITY

      (A) Retrocessionaire shall establish a trust fund for the benefit of
          Retrocedant as security for the obligations of Retrocessionaire under
          this Agreement. The trust fund shall be in a form reasonably
          satisfactory to Retrocedant and shall comply in all material respects
          with the requirements under Maryland Insurance Law applicable to trust
          funds established for credit for reinsurance purposes.

      (B) At the Closing Date, Retrocessionaire shall deposit qualifying assets
          into the trust account equal to all payments and proceeds received by
          Retrocessionaire in respect of the Reinsurance Contracts, including
          but not limited to assets related to transferred reserves, premium
          payments, reinsurance recoverables and other payments. As of the end
          of each calendar quarter, Retrocessionaire

<Page>

                                       19

          shall calculate the balance of the trust fund and the aggregate loss,
          loss adjustment expense reserves, unearned premium reserves, ceding
          commission and other reserves related to the Reinsurance Contracts as
          reported in the statutory financial statements filed by
          Retrocessionaire with the Maryland Insurance Commission for such
          quarter and shall provide such calculation to Retrocedant within five
          days of the filing of such statutory financial statements with the
          Maryland Insurance Commission. If the balance of the trust fund is
          less than the aggregate of the related reserves, Retrocessionaire
          promptly shall deposit sufficient qualifying assets to cause the
          balance of the trust fund to equal at least one hundred percent of
          such aggregate reserves.

      (C) Upon receipt of the quarterly calculation from Retrocessionaire,
          Retrocedant shall have the right to reasonably object to such
          calculation and to offer a reasonable proposal for reserve amounts. If
          the parties in good faith are not able to resolve the disagreement
          within [two weeks] of Retrocedant's indication of disagreement, the
          parties shall mutually agree upon an independent actuarial firm to
          determine an appropriate level of aggregate reserves with respect to
          the Reinsurance Contracts, such level to be no more than the amount
          proposed by Retrocedant and no less than the amount reported by
          Retrocessionaire, and both parties agree to be bound by such
          determination.

      (D) Retrocessionaire shall retain the investment discretion with respect
          to the assets in the trust, provided, however, that all assets held in
          the trust shall qualify as admitted assets under Maryland Insurance
          Law.

      (E) Retrocessionaire shall be permitted to liquidate the trust at the
          earlier of (i) such time as Retrocessionaire's obligations under this
          Agreement have been met or are terminated or waived or (ii) the
          reserves so reported by Retrocessionaire do not exceed $- as of two
          successive calendar year ends.

      (F) Retrocedant shall bear the reasonable costs and expenses of the
          trustee relating to the trust.

20.   MISCELLANEOUS PROVISIONS

20.1  SEVERABILITY

      If any term or provision of this Agreement shall be held void, illegal, or
      unenforceable, the validity of the remaining portions or provisions shall
      not be affected thereby.

20.2  SUCCESSORS AND ASSIGNS

      This Agreement may not be assigned by either party without the prior
      written consent of the other. The provisions of this Agreement shall be
      binding upon and inure to the benefit of and be enforceable by the parties
      hereto and their respective successors and assigns as permitted herein.

<Page>

                                       20

20.3  NO THIRD PARTY BENEFICIARIES

      Except as otherwise specifically provided for in Article 14 of this
      Agreement, nothing in this Agreement is intended or shall be construed to
      give any Person, other than the parties hereto, their successors and
      permitted assigns, any legal or equitable right, remedy or claim under or
      in respect of this Agreement or any provision contained herein, and
      Retrocessionaire shall not be directly liable hereunder to any reinsured
      under any Reinsurance Contract.

20.4  EQUITABLE RELIEF

      Each party hereto acknowledges that if it or its employees or agents
      violate the terms of this Agreement, the other party will not have an
      adequate remedy at law. In the event of such a violation, the other party
      shall have the right, in addition to any other rights that may be
      available to it, to obtain in any court of competent jurisdiction
      injunctive relief to restrain any such violation and to compel specific
      performance of the provisions of this Agreement. The seeking or obtaining
      of such injunctive relief shall not foreclose or limit in any way relief
      against either party hereto for any monetary damage arising out of such
      violation.

20.5  EXECUTION IN COUNTERPARTS

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

20.6  NOTICES

      All notices, requests, claims, demands and other communications hereunder
      shall be in writing and shall be deemed to have been duly given if
      delivered by hand (with receipt confirmed), or by facsimile (with
      transmission confirmed), or by certified mail, postage prepaid and return
      receipt requested, addressed as follows (or to such other address as a
      party may designate by written notice to the others) and shall be deemed
      given on the date on which such notice is received:

      If to Retrocedant:

      [             ]
      Facsimile: [No.     ]
      Attention: [TITLE]

      If to Retrocessionaire:

      [             ]
      Facsimile: [No.     ]

<Page>

                                       21

      Attention: Secretary

20.7  WIRE TRANSFER

      All settlements in accordance with this Agreement shall be made by wire
      transfer of immediately available funds on the due date, or if such day is
      not a Business Day, on the next day which is a Business Day, pursuant to
      the following wire transfer instructions: [ ]. Payment may be made by
      cheque payable in immediately available funds in the event the party
      entitled to receive payment has failed to provide wire transfer
      instructions.

20.8  HEADINGS

      Headings used herein are not a part of this Agreement and shall not affect
      the terms hereof.

20.9  FURTHER ASSURANCES

      Each of the parties shall from time to time, on being reasonably requested
      to do so by the other party to this Agreement, shall do such acts and/or
      execute such documents in a form reasonably satisfactory to the party
      concerned as may be necessary to give full effect to this Agreement and
      securing to that party the full benefit of the rights, powers and remedies
      conferred upon it by this Agreement.

20.10 THIRD PARTY RIGHTS

      (A) Article 14 confers a benefit on the officers, directors and employees
          of Retrocedant and of Retrocessionaire (the "Third Parties") and,
          subject to the remaining provisions of this sub-section 20.10, is
          intended to be enforceable by the Third Parties by virtue of the
          Contracts (Rights of Third Parties) Act 1999.

      (B) The parties to this agreement do not intend that any term of this
          agreement, apart from Article 14, should be enforceable, by virtue of
          the Contracts (Rights of Third Parties) Act 1999, by any person who is
          not a party to this agreement.

      (C) Notwithstanding the provisions of sub-section 20.10(A) above, this
          agreement may be rescinded or varied in any way and at any time by the
          parties to this agreement without the consent of any or all of the
          Third Parties.

20.11 AMENDMENTS; ENTIRE AGREEMENT

      This Agreement may be amended only by written agreement of the parties.
      This Agreement, together with the Formation and Separation Agreement,
      supersedes all prior discussions and written and oral agreements and
      constitutes the sole and entire agreement between the parties with respect
      to the subject matter hereof.

<Page>

                                       22

20.12 GOVERNING LAW

      This Agreement shall be governed by English law.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorised representatives as of the date first above
written.

                                        ST. PAUL REINSURANCE COMPANY LIMITED

                                        By
                                           -------------------------------------

                                        Name:

                                        Title:

                                        PLATINUM UNDERWRITERS REINSURANCE, INC.

                                        By
                                           -------------------------------------

                                        Name:

                                        Title:<Page>

                                                                   EXHIBIT 10.27

                              VISIBLE GENETICS INC.
                              ---------------------

                         COMMON SHARE PURCHASE AGREEMENT
                         -------------------------------

DECEMBER 24, 2001

TO EACH OF THE INVESTORS
WHO ARE SIGNATORIES HERETO

Ladies and Gentlemen:

Visible Genetics Inc., an Ontario corporation (the "COMPANY"), hereby agrees
with each of you as follows:

1.       AGREEMENT TO SELL AND PURCHASE THE SHARES.

         1.1 SALE OF SHARES. Subject to the terms of this Common Share Purchase
Agreement (this "PURCHASE AGREEMENT"), at the Closing (as defined in Section 3.1
hereof), the Company agrees to sell to each of the Investors who has executed a
counterpart execution page to this Purchase Agreement (each, "INVESTOR"), and
each Investor agrees to purchase from the Company, the aggregate number of
common shares, without par value ("COMMON SHARES") set forth above such
Investor's signature on the counterpart execution page hereof, at a purchase
price of $US8.34, PROVIDED, THAT, the aggregate purchase price for the Shares
sold to the Investors pursuant to this Agreement shall be $22 million. The
Common Shares sold hereunder shall be referred to herein as the "SHARES."

         1.2 SEPARATE AGREEMENT. Each Investor shall severally, and not jointly,
be liable for only the purchase of the Shares that appears above such Investor's
signature and that relates to such Investor. The Company's agreement with each
of the Investors is a separate agreement, and the sale of Shares to each of the
Investors is a separate sale. The obligations of each Investor hereunder are
expressly not conditioned on the purchase by any or all of the other Shares such
other Investors have agreed to purchase.

         1.3 ACCEPTANCE OF PROPOSED PURCHASE OF SHARES. Each Investor
understands and agrees that the Company, in its sole discretion, reserves the
right to accept or reject, in whole or in part, any proposed purchase of Shares.
The Company shall have no obligation hereunder with respect to any Investors
until the Company shall execute and deliver to such Investors an executed copy
of this Purchase Agreement. If this Purchase Agreement is not executed and
delivered by the Company or the offering is terminated, this Purchase Agreement
shall be of no further force and effect.

         1.4 USE OF PROCEEDS. The proceeds of the sale of Shares by the Company
may be used for general corporate purposes.

<Page>

2.       CLOSING AND DELIVERY.

         2.1 CLOSING. The closing of the purchase and sale of the Shares
pursuant to this Purchase Agreement (the "CLOSING") shall be held
contemporaneously with the satisfaction or waiver of all conditions to Closing
set forth in Sections 5 and 6 hereof. The Closing shall take place on December
24, 2001 at the offices of Baer Marks & Upham LLP, located at 805 Third Avenue,
New York, New York, or on such other date and place as may be agreed to by the
Company and the Investors. Prior to the Closing, each Investors shall execute
any related agreements or other documents required to be executed hereunder.

         2.2 DELIVERY OF THE SHARES AT THE CLOSING. At the Closing, the Company
shall deliver to each Investor stock certificates registered in the name of such
Investor, or in such nominee name(s) as designated by such Investor,
representing the Shares to be purchased by such Investor at the Closing as set
forth in the Schedule of Investors against payment of the purchase price for
such Shares by means of a wire transfer of same day funds to an account
designated by the Company in a written notice to MPM BioEquities Master Fund,
LLC ("MPM"). The name(s) in which the stock certificates are to be issued to
each Investor are set forth in the Investor's counterpart execution page hereto,
as completed by each Investor.

3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to the Investors that:

         3.1 CORPORATE ORGANIZATION

         (a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the Province of Ontario. True and complete
copies of the Company's Restated Articles of Incorporation, Articles of
Amendment dated July 15, 1999 ("ARTICLES OF AMENDMENT") and By-law No. 3
(collectively, the "ORGANIZATIONAL DOCUMENTS") have been provided to the
Investors.

         (b) The Company has all requisite power and authority and has all
necessary approvals, licenses, permits and authorization to own, operate or
lease its properties and to carry on its business as now conducted, except where
the failure to have any such approval, license, permit or authorization would
not reasonably be expected to have a material adverse effect on the business,
properties, prospects or financial condition of the Company and its subsidiaries
taken as a whole (a "MATERIAL ADVERSE EFFECT"). The Company has all requisite
power and authority to execute and deliver this Purchase Agreement and the
Registration Rights Agreement dated the date hereof between the Company and the
Investors (the "REGISTRATION RIGHTS AGREEMENT" and with the Purchase Agreement,
the "TRANSACTION DOCUMENTS") and to perform its obligations hereunder and
thereunder.

         (c) The Company has filed all necessary documents to qualify to do
business as a foreign corporation in, and the Company is in good standing under
the laws of, each jurisdiction in which the conduct of the Company's business or
the nature of the properties

                                       2
<Page>

owned or leased by the Company requires such qualification, except where the
failure to so qualify would not reasonably be expected to have a Material
Adverse Effect.

         3.2 SUBSIDIARIES

         (a) SCHEDULE 3.2 sets forth; (i) the name of each subsidiary of the
Company, other than subsidiaries that are dormant or that do not carry on
business activities; (ii) the name of each corporation, partnership, joint
venture or other entity (other than such subsidiaries) in which the Company or
any of its subsidiaries has, or pursuant to any agreement has the right or
obligation to acquire at any time by any means, directly or indirectly, an
equity interest or investment; (iii) in the case of each of such corporations
described in clauses (i) and (ii) above, (A) the jurisdiction of incorporation
and (B) the capitalization thereof and the percentage of each class of voting
capital stock owned by the Company or any of its subsidiaries.

         (b) Each subsidiary of the Company listed on SCHEDULE 3.2 has been duly
organized, is validly existing and in good standing under the laws of the
jurisdiction of its organization, has the corporate power and authority to own
and lease its properties and to conduct its business and is duly registered,
qualified and authorized to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the nature of its
properties requires such registration, qualification or authorization, except
where the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect. All of the issued and outstanding equity or other
participating interests of each subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable, and, to the extent owned by the
Company as indicated on SCHEDULE 3.2, are owned free and clear of any mortgage,
pledge, lien, encumbrance, security interest, claim or equity, except as set
forth on SCHEDULE 3.2.

         (c) For purposes of this Purchase Agreement, "SUBSIDIARY" shall mean
any (i) Person (as hereinafter defined in Section 3.5) of which the Company (or
other specified Person) shall own directly or indirectly through a subsidiary, a
nominee arrangement or otherwise (A) at least a majority of the outstanding
voting capital stock (or other outstanding voting shares of beneficial interest)
or (B) at least a majority of the partnership, membership, joint venture or
similar interests, or (ii) in which the Company (or other specified Person) is a
general partner or joint venturer.

         3.3 CAPITALIZATION

         (a) The authorized capital stock of the Company consists of an
unlimited number of shares of Common Shares and an unlimited number of preferred
shares, without par value ("PREFERRED SHARES"). As of the close of business on
December 20, 2001, 16,559,301 Common Shares were issued and outstanding, (ii)
25,153 Series A Convertible Preferred Shares, without par value ("SERIES A
PREFERRED SHARES"), were issued and outstanding, which, including dividends
accrued through October 15, 2001, were convertible into 2,777,880 Common Shares,
(iii) 2,401,639 Common Shares were outstanding under the Company's employee
stock option plans listed on SCHEDULE 3.3(A), (iv) 936,473 Common Shares were
reserved for issuance under the Company's outstanding warrants, and (v) there
were no bonds, debentures, notes or other

                                       3
<Page>

evidences of indebtedness issued or outstanding having the right to vote on any
matters on which the Company's shareholders may vote. From December 20, 2001 to
the date hereof, the Company has not issued any shares or capital stock nor has
the Company issued any instruments convertible into shares of capital stock.

         (b) All of the outstanding Common Shares and Preferred Shares of the
Company have been duly and validly issued and are fully paid and non-assessable,
and were issued in accordance with all applicable United States federal and
state and Canadian federal and provincial securities laws. Upon issuance, sale
and delivery as contemplated by this Purchase Agreement, the Shares will be duly
authorized, validly issued, fully paid and non-assessable shares, free of all
preemptive or similar rights.

         (c) Except for the rights which attach to the outstanding Series A
Preferred Shares as described in the Articles of Amendment of the Company and
the options which are listed on SCHEDULE 3.3(A) and the warrants, options and
convertible securities which are listed on SCHEDULE 3.3(C) hereto, on the
Closing Date, there will be no shares of Common Shares, Preferred Shares or any
other equity security of the Company issuable upon exercise, conversion or
exchange of any security of the Company nor will there be any rights, options or
warrants outstanding or other agreements to acquire shares of Common Shares or
any other equity security of the Company nor will the Company be contractually
obligated to purchase, redeem or otherwise acquire any outstanding shares of
Common Shares. Except as set forth on SCHEDULE 3.3(C), (i) no stockholder of the
Company is entitled to any preemptive or similar rights to subscribe for shares
of capital stock of the Company, (ii) the Company has not agreed to register any
of its securities under the Securities Act (other than pursuant to the
Registration Rights Agreement) and (iii) there are no existing voting trusts or
similar agreements to which the Company or any of its subsidiaries is a party
with respect to the voting of the capital stock of the Company or any of its
subsidiaries.

         3.4 CORPORATE PROCEEDINGS, ETC. The Company has full corporate power to
execute and deliver each Transaction Document, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance of the Transaction
Documents by the Company and each of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of the Company. No other corporate action on the part of the Company is
necessary to authorize the execution, delivery and performance of the
Transaction Documents by the Company and each of the transactions contemplated
hereby and thereby, and upon such execution and delivery (assuming the
Transaction Documents are duly authorized, executed and delivered by the other
parties thereto), each of the Transaction Documents shall constitute a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except that (i) the enforceability hereof and thereof may be
subject to applicable bankruptcy, insolvency or other similar laws, now or
hereinafter in effect, affecting creditors rights generally, (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject to
the discretion of the court before which any proceeding therefor may be brought,
and (iii) the rights

                                       4
<Page>

to indemnity or contribution may be limited by Federal or state securities law
or public policy underlying such laws.

         3.5 CONSENTS AND APPROVALS. Except as set forth in SCHEDULE 3.5, the
execution and delivery by the Company of the Transaction Documents, the
performance by the Company of its obligations hereunder and thereunder and the
consummation by the Company of the transactions contemplated hereby and thereby
do not require the Company or any of its subsidiaries to obtain any consent,
approval or action of, or make any filing with or give any notice to, any
individual, firm, corporation, partnership, limited liability company, trust or
other entity (collectively, "PERSON") or public, governmental or judicial
authority or agency (collectively, "GOVERNMENTAL ENTITY"), including, but not
limited to, pursuant to the Competition Act (Canada) and the Investment Canada
Act, as amended.

         3.6 ABSENCE OF CONFLICTS, ETC. Except as set forth in SCHEDULE 3.6, the
execution and delivery by the Company of the Transaction Documents do not, and,
the fulfillment of the terms hereof and thereof by the Company, and the issuance
of the Shares, will not, result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, or permit the acceleration of
rights under or termination of, the Organizational Documents, any material
agreement to which the Company or its subsidiaries is a party, or any order,
judgment, rule or regulation of any Governmental Entity having jurisdiction over
the Company or any, of its subsidiaries or over their respective properties or
businesses, except for such breaches or defaults that would not reasonably be
expected to have a Material Adverse Effect.

         3.7 SEC REPORTS

         (a) Except to the extent they may have been subsequently amended or
otherwise modified prior to the date hereof by subsequent reporting or filings,
as of their respective dates, the Company and each of the Company's SEC Reports
(as defined below) (as the same may have been amended or otherwise modified)
complied in all material respects with the requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT") or the Exchange Act and the rules and
regulations of the SEC thereunder applicable to such reports and registration
statements, and the Company's SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. "SEC Reports" means
the following Company reports filed or furnished by the Company with or to the
United States Securities and Exchange Commission ("SEC"): (i) Annual Reports on
Form 20-F for the fiscal years ended December 31, 1999 and 2000; (ii) periodic
reports on Form 6-K since January 1, 2000, (iii) all other documents filed by
the Company with the SEC (pursuant to Sections 13, 14(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) since January
1, 2000; and (iv) all registration statements since January 1, 2000. The SEC
Reports are all the documents (other than preliminary material) that the Company
filed or was required to file with the SEC from January 1, 2000 through the date
hereof.

                                       5
<Page>

         (b) The audited consolidated financial statements as at and for the
period ended December 31, 2000 of the Company included in the SEC Reports (the
"2000 FINANCIAL STATEMENTS") comply as to form in all material respects with
accounting requirements of the Securities Act or the Exchange Act, as
applicable, and with the published rules and regulations of the SEC with respect
thereto. The 2000 Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles in the United States of America
("GAAP") applied on a consistent basis (except as may be indicated therein or in
the notes thereto), (ii) present fairly, in all material respects, the financial
position of the Company and its subsidiaries as of the dates thereof and the
results of their operations and cash flows for the periods then ended and (iii)
are in all material respects in agreement with the books and records of the
Company and its subsidiaries.

         (c) The unaudited interim financial statements of the Company as at and
for all periods commencing on or after January 1, 2001 included in the SEC
Reports comply as to form in all material respects with accounting requirements
of the Securities Act or the Exchange Act, as applicable, and with the published
rules and regulations of the SEC with respect thereto. The condensed financial
statements included in the SEC Reports: (i) have been prepared in accordance
with GAAP applied on a consistent basis (except as may be indicated therein or
in the notes thereto); (ii) present fairly, in all material respects, the
financial position of the Company and its subsidiaries as of the dates thereof
and the results of their operations and cash flows for the periods then ended
subject to normal year-end audit adjustments and any other adjustments described
therein and the fact that certain information and notes have been condensed or
omitted in accordance with the Exchange Act and the rules and regulations
promulgated thereunder; and (iii) are in all material respects in agreement with
the books and records of the Company and its subsidiaries.

         (d) The Company and its subsidiaries keep proper accounting records in
which all material assets and liabilities, and all material transactions, of the
Company and its subsidiaries are recorded in conformity with applicable
accounting principles. No part of the Company's or any of its subsidiaries,
accounting system or records, or access thereto, is under the control of a
Person who is not an employee of the Company or such subsidiary.

         3.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as disclosed in the SEC
Reports filed with or furnished to the SEC on or prior to the date hereof or in
SCHEDULE 3.8, and except for the transactions contemplated by this Purchase
Agreement, since December 31, 2000, (i) the Company and each of its subsidiaries
has conducted its business only in the ordinary and usual course in accordance
with past practice, and (ii) there have not occurred any events or changes
(including the incurrence of any liabilities of any nature, whether or not
accrued, contingent or otherwise) that have had, or is reasonably likely in the
future to have, individually or in the aggregate, a Material Adverse Effect.

         3.9 COMPLIANCE WITH LAW

         (a) Neither the Company nor any of its subsidiaries is in violation of
any laws, ordinances, governmental rules or regulations to which it is subject,
except for violations which

                                       6
<Page>

would not reasonably be expected to have a Material Adverse Effect, including
without limitation laws or regulations relating to human therapeutic or
diagnostic products or devices, the environment or to occupational health and
safety and, except as set forth in SCHEDULE 3.9, no material expenditures are or
will be required in order to cause its current operations or properties to
comply with any such law, ordinances, governmental rules or regulations. Neither
the Company nor any of its subsidiaries has received written notice of violation
of any law, ordinance, governmental rule or regulation, which if violated, would
reasonably be expected to have a Material Adverse Effect. No investigation or
review by any Governmental Entity with respect to the Company or any of its
subsidiaries is pending or, to the best of the Company's knowledge, threatened
nor has any Governmental Entity indicated an intention to conduct the same,
except for an investigation or review conducted as a result of an application or
other filing made by the Company.

         (b) Neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any of the officers, directors, employees, agents or other
representatives of the Company or any of its subsidiaries or affiliates (as that
term is defined in Rule 405 promulgated under the Securities Act
("AFFILIATES")), has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, (i) as a kickback or bribe
to any Person or (ii) to any political organization, or the holder of or any
aspirant to any elective or appointive public office, except in each case as
permitted by applicable law and except for personal political contributions not
involving the direct or indirect use of funds of the Company or any of its
subsidiaries.

         (c) The Company and its subsidiaries have all licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
their property or to the conduct of their respective businesses, except for
those which if violated or not obtained would not reasonably be expected to have
a Material Adverse Effect (and except for any of the foregoing relating to
Intellectual Property which are covered by the provisions of Section 3.18).
Neither the Company nor any subsidiary has finally been denied any application
for any such licenses, permits, franchises or other governmental authorizations
necessary to its business.

         3.10 LITIGATION. Except as set forth on SCHEDULE 3.10 or in any SEC
Report, there is no legal action, suit, arbitration or other legal,
administrative or other governmental investigation, inquiry or proceeding
(whether federal, state, local or foreign) pending or, to the Company's
knowledge, threatened, against or affecting the Company or any subsidiary or any
of their respective properties, assets or businesses which, either alone or in
the aggregate, would reasonably be expected to have a Material Adverse Effect or
prevent or delay the consummation of the transactions contemplated by the
Transaction Documents. The Company is not aware of any fact which might result
in or form the basis for any such action, suit, arbitration, investigation,
inquiry or other proceeding. Except as set forth in SCHEDULE 3.10, neither the
Company nor any subsidiary is subject to any order, writ, judgment, injunction,
decree, determination or award of any Governmental Entity against it.

         3.11 MATERIAL CONTRACTS. Neither the Company nor any of its
subsidiaries is in default (or would be in default with notice or lapse of time,
or both) under, is in violation (or

                                       7
<Page>

would be in violation with notice or lapse of time, or both) of, or has
otherwise breached, any indenture, note, credit agreement, loan document, lease,
license or other agreement (unless such default has been waived), which default,
alone or in the aggregate with all other such defaults, would reasonably be
expected to have a Material Adverse Effect. All material agreements to which the
Company or any of its subsidiaries is a party (reflecting all amendments thereto
through the date of filing), which are required to be filed with the SEC, have
been filed by the Company with the SEC pursuant to the requirements of the
Securities Act and the Exchange Act. Except as set forth in SCHEDULE 3.11, each
material agreement to which the Company or any of its subsidiaries is a party is
in full force and effect and is binding upon the Company and, to the best of the
Company's knowledge, is binding upon such other parties, in each case in
accordance with its terms. There are no material unresolved disputes involving
the Company or any of its subsidiaries under any such material agreement.

         3.12 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed on
SCHEDULE 3.12 and except for indebtedness or liabilities that are reflected or
reserved against in the most recent financial statements included in the SEC
Reports, neither the Company nor any of its subsidiaries has any debt,
obligation or liability of a kind required by GAAP to be reflected on a balance
sheet (whether accrued, absolute, contingent, liquidated or otherwise, whether
due or to become due and whether or not known to the Company) arising out of any
transaction entered into at or prior to the Closing, or any act or omission at
or prior to the Closing, or any state of facts existing at or prior to the
Closing, except current liabilities incurred and obligations under agreements
entered into since December 31, 2000, each in the usual and ordinary course of
business none of which (individually or in the aggregate) would reasonably be
expected to have a Material Adverse Effect.

         3.13 LABOR RELATIONS AND EMPLOYMENT

         (a) Except as set forth in SCHEDULE 3.13(A), (i) to the Company's
knowledge, there are no union claims to represent the employees of the Company
or any of its subsidiaries; (ii) neither the Company nor any of its subsidiaries
is a party to or bound by any collective bargaining or similar agreement with
any labor organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of the Company or
any of its subsidiaries; (iii) none of the employees of the Company or any of
its subsidiaries is represented by any labor organization and the Company does
not have any knowledge of any current union organizing activities among the
employees of the Company or any of its subsidiaries, nor to the Company's
knowledge does any question concerning representation exist concerning such
employees; (iv) the Company and its subsidiaries are in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of work, occupational safety and health,
equal opportunity, collective bargaining and payment of social security or
social insurance premiums, as applicable, except where the failure to be in
compliance would not reasonably be expected to have a Material Adverse Effect,
and are not engaged in any discriminatory employment practices or unfair labor
practices under applicable law, ordinance or regulation; (v) there is no unfair
labor practice charge or complaint against the Company or any of its
subsidiaries pending or, to the best of the Company's knowledge, threatened
before any state or foreign agency; (vi) neither the Company

                                       8
<Page>

nor any of its subsidiaries has received written notice of the intent of any
federal, state, local or foreign agency responsible for the enforcement of labor
or employment laws to conduct an investigation with respect to or relating to
the Company or any of its subsidiaries and no such investigation is in progress;
and (vii) there are no complaints, lawsuits or other proceedings pending or, to
the best of the Company's knowledge, threatened in any forum by or on behalf of
any present or former employee of the Company or any of its subsidiaries
alleging breach of any express or implied contract of employment, any law or
regulation governing employment or the termination thereof or other
discriminatory, wrongful or tortious conduct in connection with the employment
relationship, except for any complaints, lawsuits or other proceedings which
would not reasonably be expected to have a Material Adverse Effect.

         (b) Except as set forth in SCHEDULE 3.13(B), the employment of all
Persons and officers employed by the Company or any of its subsidiaries is
terminable at will without any penalty or severance obligation of any kind on
the part of the Company or such subsidiary. All sums due for employee
compensation and benefits, including, without limitation, retiree benefits, and
all vacation time owing to any employees of the Company or any of its
subsidiaries have been duly and adequately accrued in all material respects on
the accounting records of the Company and its subsidiaries in accordance with
GAAP.

         (c) Except as set forth on SCHEDULE 3.13(C), the Company and its
subsidiaries have in force written confidentiality and non-disclosure agreements
and patent/copyright/ invention assignment agreements with, and require as a
condition of employment the execution of such agreements by, all of its
technical research employees, all research consultants, all of its officers and
such other members of its staff as in the regular course of their duties are
reasonably likely to receive material confidential information regarding the
Company, its Intellectual Property (as hereinafter defined) and its current and
prospective business plans.

         (d) The Company is not aware that any of its officers or key employees
or any officers or key employees of its subsidiaries is obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any Governmental
Entity, that would interfere with the use of such employee's best efforts to
promote the interests of the Company or that would conflict with the Company's
business as currently conducted.

         (e) Except as set forth in SCHEDULE 3.13(E), the Company is not aware
that any officer or key employee, or that any group of key employees, intends to
terminate their employment with the Company or any of its subsidiaries, nor does
the Company have a present intention to terminate the employment of any of the
foregoing.

         3.14 EMPLOYEE BENEFIT PLANS.

         (a) With respect to Employee Benefit Plans (as hereinafter defined) of
the Company and its subsidiaries: (i) the fair market value of the assets of
each funded Employee Benefit Plan, if any, the liability of each insurer for any
Employee Benefit Plan funded through insurance or any book reserve established
for any other Employee Benefit Plan to the extent

                                       9
<Page>

required by applicable law, together with any accrued contributions, is
sufficient to procure or provide for the accrued benefit obligations, as of the
date hereof, with respect to all current and former participants in such
Employee Benefit Plan according to the actuarial assumptions and valuations, if
any, most recently used to determine employer contributions to and liabilities
of such Employee Benefit Plan, and no transaction contemplated by this Purchase
Agreement shall cause such assets or insurance obligations or any book reserve
to be less than such benefit obligations; (ii) each Employee Benefit Plan has
been maintained and administered, in all material respects, in accordance with
its terms and with all applicable provisions of law (including rules and
regulations thereunder); and (iii) each Employee Benefit Plan which is required
to be registered with any Governmental Entity has been registered and maintained
in good standing with the appropriate Governmental Entity, except where the
failure to be so registered or to maintain good standing would not reasonably be
expected to have a Material Adverse Effect.

         (b) For purposes of this Purchase Agreement, "EMPLOYEE BENEFIT PLAN"
shall mean all material employee benefit or executive compensation arrangements,
perquisite programs or payroll practices, including, without limitation, any
such arrangements or payroll practices providing severance pay, sick leave,
vacation pay, salary continuation for disability, retirement benefits, deferred
compensation, bonus pay, incentives pay, stock options (including those held by
Directors, employees, and consultants), hospitalization insurance, medical
insurance, life insurance, scholarships or tuition reimbursements, that are
maintained by the Company or any of its subsidiaries or to which the Company or
any subsidiary is obligated to contribute thereunder for current or former
employees of the Company or any subsidiary.

         3.15 REAL PROPERTY

         (a) The Company and its subsidiaries do not own any real property in
whole or in part.

         (b) SCHEDULE 3.15 lists all real property leased by the Company or its
subsidiaries as well as the commencement and expiration dates of all leases
relating thereto (the "LEASED REAL PROPERTY"). The Company or one of its
subsidiaries has a valid and existing lease or sublease for each property
subsumed within the Leased Real Property. All leases covering any of the Leased
Real Property are valid and enforceable by the Company or one of its
subsidiaries, as the case may be, in accordance with their respective terms, are
in full force and effect, except that the enforceability thereof may be subject
to applicable bankruptcy, insolvency or other similar laws, now or hereinafter
in effect, affecting creditors rights generally, and the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought, and have not been
modified, supplemented or terminated in any material respect except as set forth
in SCHEDULE 3.15, and there is not under any such lease any default by the
Company or one of its subsidiaries or, to the best of the Company's knowledge,
by any landlord or lessor under any such lease except for any such default which
would not reasonably be expected to have a Material Adverse Effect. The
facilities and real

                                       10
<Page>

properties covered by the Leased Real Property constitute all of the facilities
and real properties presently used by the Company or its subsidiaries.

         3.16 CONDITION OF PROPERTIES. All facilities, machinery, equipment,
fixtures, vehicles and other properties owned, leased or used by the Company and
its subsidiaries are in good operating condition and repair (normal wear and
tear excepted), are reasonably fit and usable for the purposes for which they
are being used, are adequate and sufficient for the Company's or such
subsidiary's business and conform with all applicable ordinances, regulations
and laws except where the failure to conform with the applicable ordinances,
regulations or laws would not reasonably be expected to have a Material Adverse
Effect.

         3.17 ENVIRONMENTAL MATTERS.

         (a) The Company and its subsidiaries (i) are in compliance with all
Environmental Laws; (ii) have obtained all necessary Environmental Permits, all
of which are in full force and effect; and (iii) are in compliance with all
terms and conditions of such Environmental Permits, except for any failure to
comply or the absence of any such permit which would not reasonably be expected
to have a Material Adverse Effect.

         (b) Neither the Company nor any of its subsidiaries has violated or
done any act which would reasonably be expected to result in liability under, or
have otherwise failed to act in a manner which would reasonably be expected to
expose any of them to liability under, any Environmental Law except for any
liability that would not reasonably be expected to have a Material Adverse
Effect. No event has occurred which, upon the passage of time, the giving of
notice, or failure to act would reasonably be expected to give rise to liability
to the Company or any of its subsidiaries under any Environmental Law except for
any liability that would not reasonably be expected to have a Material Adverse
Effect.

         (c) To the Company's knowledge, no Hazardous Material has been
released, spilled, discharged, dumped, or disposed of, by the Company, or
otherwise come to be located in, at, beneath or near any of the Leased Real
Property as a result of the Company's action including properties formerly
owned, operated or otherwise controlled by the Company or any of its
subsidiaries (i) in violation of any Environmental Law or (ii) in such manner as
would reasonably be expected to result in environmental liability to the Company
or any of its subsidiaries, except in the case of each of the foregoing where
such action or omission is not reasonably believed to have a Material Adverse
Effect.

         (d) To the Company's knowledge, there have been and are no: (i)
aboveground or underground storage tanks; (ii) surface impoundments for
Hazardous Materials; (iii) wetlands as defined under any Environmental Law; or
(iv) asbestos or asbestos containing materials or polychlorinated biphenyl
("PCB") or PCB-containing equipment, located within any portion of the Leased
Real Property.

         (e) No liens currently encumber any Leased Real Property in connection
with any actual or alleged liability of the Company under any Environmental Law.

                                       11
<Page>

         (f) (i) Neither the Company nor any of its subsidiaries has received
any written notice, claim, demand, suit or request for information from any
Governmental Entity or private entity with respect to any liability or alleged
liability under any Environmental Law, nor to the knowledge of the Company, has
any other entity whose liability, in whole or in part, may be attributed to the
Company or any of its subsidiaries, received any such notice, claim, demand,
suit or request for information; (ii) neither the Company nor any of its
subsidiaries has ongoing negotiations with or agreements with any Governmental
Entity or other Person or entity relating to any Remedial Action or other claim
arising under or related to any Environmental Law.

         (g) Neither the Company nor any of its subsidiaries has disposed, or
arranged for the disposal, of any Hazardous Materials at any facility that is or
has ever been the subject of investigation or response action under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss. 9601 ET SEQ. ("CERCLA"), Resource Conservation and Recovery Act, 42 U.S.C.
ss. 6901 ET SEQ. ("RCRA"), or any state or Canadian law of similar effect.

         (h) The Company does not have in its possession any environmental
studies and reports pertaining to any of the Leased Real Property.

      For purposes of this Purchase Agreement, the following terms shall have
the following meanings:

     "ENVIRONMENTAL LAWS" shall mean any statute, regulation, ordinance, order,
decree, treaty, agreement, compact, common law duty or other requirement of
United States, Canadian or international law other than those covered by or
included in Section 3.19 hereof relating to protection of human health, safety
or the environment (including, without limitation, ambient air, surface water,
groundwater, wetlands, soil, surface and subsurface strata).

      "ENVIRONMENTAL PERMITS" shall mean all permits, licenses, approvals,
authorizations, consents or registrations required under any applicable
Environmental Law.

      "HAZARDOUS MATERIALS" shall mean any chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, hazardous materials, hazardous
wastes, radioactive materials, petroleum or petroleum products other than those
covered by or included in Section 3.19 hereof.

      "REMEDIAL ACTION" shall mean any action required to: (i) clean up, remove
or treat Hazardous Materials; (ii) prevent a release or threat of release of any
Hazardous Material; (iii) perform pre-remedial studies, investigations or
post-remedial monitoring and care; or (iv) cure a violation of Environmental Law

         3.18 INTELLECTUAL PROPERTY

         (a) Except as described in SCHEDULE 3.18(A), the Company or one of its
subsidiaries owns or, with respect to Intellectual Property licensed to the
Company, or one of its subsidiaries from third parties, has the valid right to
use, free and clear of all liens and other encumbrances or claims of any nature
("LIENS") which result from or are related to actions or

                                       12
<Page>

omissions of the Company or any of its subsidiaries and, to our knowledge, free
and clear of Liens which result from or are related to the actions or omissions
of third parties, except in each case for Liens that are not material and do not
interfere with the use of such Intellectual Property, all of the Intellectual
Property necessary for the conduct of the business of the Company or any of its
subsidiaries, except where the failure to own or have the right to use any item
of Intellectual Property would not reasonably be expected to have a material
adverse effect on the business, properties and financial conditions of the
Company and its subsidiaries taken as a whole. Except as set forth on SCHEDULE
3.18(A), all Intellectual Property that is material to the Company, is valid,
subsisting, unexpired, in proper form and enforceable and all renewal fees and
other maintenance fees that have fallen due on or prior to the effective date of
this Agreement have been paid; provided that the representation and warranty in
this sentence is made to our knowledge with respect to Intellectual Property
licensed by the Company or one of its subsidiaries from third parties.

         (b) Except as set forth on SCHEDULE 3.18(B), there is no claim, suit,
action or proceeding pending or, to the Company's knowledge, threatened against
the Company or one of its subsidiaries: (i) alleging any conflict or
infringement with any third party's proprietary rights; or (ii) challenging the
Company or one of its subsidiaries, ownership or use, or the validity or
enforceability of any Intellectual Property; and to the Company's knowledge no
listed application or registration/patent of the Company is the subject of any
patent interference proceeding or similar proceeding. Except as set forth on
SCHEDULE 3.18(B), there is no claim, suit, action or proceeding pending or, to
the Company's knowledge, threatened by the Company or one of its subsidiaries,
alleging any third party's intellectual property rights conflict or infringe the
Intellectual Property of the Company or one of its subsidiaries.

         (c) Except as set forth in SCHEDULE 3.18(C), no former or present
employee, officer or director of the Company or any of its subsidiaries holds
any right, title or interest, directly or indirectly, in whole or in part, in or
to any Intellectual Property.

         (d) The Company or one of its subsidiaries owns or has the right to use
all computer software, software systems and databases and all other information
systems currently used in the business of the Company or any of its
subsidiaries, including, without limitation, all computer software used in the
business of the Company on personal computers by employees of the Company or any
of its subsidiaries.

      For purposes of this Purchase Agreement, "INTELLECTUAL PROPERTY" shall
mean all of the following, owned or used in the business of the Company or any
of its subsidiaries: (i) trademarks and service marks (registered or
unregistered), trade dress, trade names and other names and slogans embodying
business or product goodwill or indications of origin, all applications or
registrations in any jurisdiction pertaining to the foregoing and all goodwill
associated therewith; (ii) patents, patentable inventions, discoveries,
improvements, ideas, know-how, formula methodology, processes, technology and
computer programs, software and databases (including source code, object code,
development documentation, programming tools, drawings, specifications and data)
and all applications or registrations in any jurisdiction pertaining to the
foregoing, including all reissues, continuations, divisions,
continuations-in-part,

                                       13
<Page>

renewals or extensions thereof; (iii) trade secrets, including confidential and
other non-public information, and the right in any jurisdiction to limit the use
or disclosure thereof; (iv) copyrights in writings, designs, mask works or other
works, and applications or registrations in any jurisdiction for the foregoing;
(v) database rights; (vi) Internet Web sites, domain names and registrations or
applications for registration thereof; (vii) licenses, immunities, covenants not
to sue and the like relating to any of the foregoing; (viii) books and records
describing or used in connection with any of the foregoing; and (ix) claims or
causes of action arising out of or related to infringement or misappropriation
of any of the foregoing.

         3.19 REGULATORY MATTERS

         (a) As to each product subject to the jurisdiction of the U.S. Food and
Drug Administration ("FDA") under the Federal Food, Drug and Cosmetic Act and
the regulations thereunder ("FDCA") (each such product, a "REGULATED PRODUCT")
that is manufactured, tested, distributed and/or marketed by the Company or any
of its subsidiaries, such Regulated Product is being manufactured, tested,
distributed and/or marketed in substantial compliance with all applicable
requirements under FDCA and similar state and foreign laws and regulations,
including but not limited to those relating to investigational use, premarket
clearance, good manufacturing practices, labeling, advertising, record keeping,
filing of reports and security.

         (b) To the Company's knowledge, there are no rule making or similar
proceedings before the FDA or comparable federal, Canadian, state, provincial,
local or foreign government bodies which involve or, to the Company's knowledge,
affect the Company or any of its subsidiaries which, if the subject of an action
unfavorable to the Company or any of its subsidiaries, would be reasonably
likely to have a Material Adverse Effect.

         (c) Except as set forth on SCHEDULE 3.19, neither the Company nor any
of its subsidiaries has received any written notices or correspondence from the
FDA or any other governmental agency requiring the termination, suspension or
modification of any tests or evaluations conducted on behalf of the Company or
any of its subsidiaries.

         3.20 TAX MATTERS. Except as set forth on SCHEDULE 3.20, there are no
United States or Canadian federal, state, provincial, county, municipal or local
taxes or comparable foreign taxes due and payable by the Company or any of its
subsidiaries which have not been paid other than any unpaid taxes which
individually or in the aggregate are not reasonably expected to have a Material
Adverse Effect and unpaid taxes which are being contested in good faith by the
Company or one of its subsidiaries and for which the Company has recorded
adequate reserves in accordance with GAAP. The provisions for taxes on the
consolidated balance sheet of the Company for the year ended December 31, 2000
are sufficient for the payment of all accrued and unpaid United States and
Canadian federal, state, provincial, county, municipal and local taxes or
comparable foreign taxes of the Company and its subsidiaries whether or not
assessed or disputed as of the date of such balance sheet. The Company and each
of its subsidiaries has duly filed all United States and Canadian federal,
state, provincial, county, municipal and local or comparable foreign tax returns
required to have been filed by it and there are in effect no waivers of
applicable statutes of limitations with respect to taxes for any year. Except as
set forth on

                                       14
<Page>

SCHEDULE 3.20, neither the Company nor any of its subsidiaries has been subject
to a tax audit of any kind, whether in Canada, the United States or other
jurisdiction in which such entity conducts business.

         3.21 INSURANCE. The Company and its subsidiaries and their respective
properties are insured in such amounts, against such losses and with such
insurers as are prudent when considered in light of the nature of the properties
and businesses of the Company and its subsidiaries. SCHEDULE 3.21 sets forth a
complete and accurate list of the insurance policies of the Company and its
subsidiaries as in effect on the date hereof, including in each case the
applicable coverage limits, deductibles and the policy expiration dates. No
written notice of any termination or threatened termination of any of such
policies has been received by the Company or any of its subsidiaries and such
policies are in full force and effect.

         3.22 TRANSACTIONS WITH RELATED PARTIES. Except as set forth in the
Company's Annual Report on Form 20-F for its fiscal year ended December 31,
2000, in any subsequent SEC Report or in SCHEDULE 3.22, neither the Company nor
any subsidiary is a party to any agreement with any of the Company's directors,
officers or shareholders or any Affiliate or family member of any of the
foregoing under which it: (i) leases any real or personal property other than
automobiles (either to or from such Person), (ii) licenses real or personal
property or Intellectual Property (either to or from such Person), (iii) is
obligated to purchase any tangible or intangible asset from or sell such asset
to such Person, (iv) purchases products or services from such Person, or (v) has
borrowed money from or lent money to such Person. Except as set forth in
SCHEDULE 3.22, to the Company's knowledge, there exist no agreements among
shareholders of the Company, except as contemplated by the Transaction
Documents, to act in concert with respect to their voting or holding of Company
securities.

         3.23 INTEREST IN COMPETITORS. Except as set forth in Section 3.18 or
Schedules 3.18(a), (b) or (c), neither the Company, nor any or its subsidiaries,
nor, to the Company's knowledge, any of their respective officers or directors,
has any interest, either by way of contract or by way of investment (other than
as holder of not more than 2% of the outstanding capital stock of a publicly
traded Person) or otherwise, directly or indirectly, in any Person other than
the Company and its subsidiaries that (i) provides any services or designs,
produces or sells any product or product lines or engages in any activity
similar to or competitive with any activity currently conducted by the Company
or any of its subsidiaries or (ii) has any direct or indirect interest in any
asset or property, real or personal, tangible or intangible, of the Company.

         3.24 PRIVATE OFFERING. Neither the Company nor anyone acting on its
behalf shall offer the Shares for issue or sale to, or solicit any offer to
acquire, any of the same from, anyone so as to bring the issuance and sale of
the Shares within the provisions of Section 5 of the Securities Act. Based upon
the representations of the Investors set forth in Section 4, the offer, issuance
and sale of the Shares, are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act, and have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws, and are qualified for distribution or are exempt from such
requirements for qualification under applicable Canadian federal and provincial
securities laws.

                                       15
<Page>

         3.25 MATERIAL FACTS. This Agreement and the other Transaction Documents
do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein or herein, in
light of the circumstances in which they were made, not misleading.

4.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTORS.

         4.1 INVESTMENT REPRESENTATIONS. Each Investor, severally and not
jointly, represents and warrants to, and covenants with, the Company that:

         (a) Investor is knowledgeable, sophisticated and experienced in making,
and is qualified to make, decisions with respect to investments in shares
presenting an investment decision like that involved in the purchase of the
Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information Investor deems
relevant (including but not limited to, the SEC Reports) in making an informed
decision to purchase the Shares.

         (b) Investor is purchasing the Shares in the ordinary course of its
business for its own account for investment only and with no present intention
of distributing the Shares or any arrangement or understanding with any other
persons regarding the distribution of the Shares (except for transfers to
"affiliates," meaning, for purposes of this Section 4.1(b), with respect to an
Investor, any other person directly or indirectly controlling, controlled by or
under direct or indirect common control with such Investors).

         (c) Investor shall not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the securities purchased hereunder
except in compliance with the Securities Act, applicable Blue Sky laws, and the
rules and regulations promulgated thereunder, and any applicable Canadian laws,
rules or regulations.

         (d) Investor has completed or caused to be completed the information
requested on the Investors' counterpart execution page and the Registration
Questionnaire, attached as Appendix I to the Registration Rights Agreement for
use in preparation of the Registration Statement, and the answers thereto are
true and correct in all material respects as of the date hereof and will be true
and correct, in all material respects, as of the effective date of the
Registration Statement (provided that Investors shall be entitled to update such
information by providing notice thereof to the Company prior to the effective
date of such Registration Statement).

         (e) Investor has, in connection with its decision to purchase the
Shares, relied with respect to the Company and its affairs solely upon the SEC
Reports and the representations and warranties of the Company contained herein.

         (f) Investor is an "accredited investor" within the meaning of Rule 501
of Regulation D promulgated under the Securities Act.

                                       16
<Page>

         (g) Investor has full right, power, authority and capacity to enter
into this Purchase Agreement and the Registration Rights Agreement and to
perform the transactions contemplated hereby and thereby. This Purchase
Agreement and the Registration Rights Agreement have been duly authorized,
executed and delivered by the Investor. Assuming due authorization, execution
and delivery by each of the other parties hereto and thereto, this Purchase
Agreement and the Registration Rights Agreement are valid and binding
obligations of Investor, enforceable against it in accordance with their terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles; and

         (h) Investor is a resident of the city and state set forth under its
name on the Counterpart Execution Page hereof and is not a resident of Canada or
any province of Canada.

         4.2 INDEPENDENT ADVICE. Investor understands that nothing in the SEC
Reports, this Purchase Agreement, the Registration Rights Agreement or any other
materials presented to Investors in connection with the purchase and sale of the
Shares constitutes legal, tax or investment advice and that no independent legal
counsel retained by the Company has reviewed these documents and materials on
Investor's behalf. Investor has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares.

         4.3 NO TRANSFERABILITY. Investor understands that: (a) subject to
Section 4.1(b), the Shares shall not be transferable in the absence of
registration under the Securities Act or an exemption therefrom or in the
absence of compliance with any term of this Purchase Agreement; (b) the Company
shall provide stop transfer instructions to its transfer agent with respect to
the Shares in order to enforce the restrictions contained in this Section 4.4;
and (c) each certificate representing Shares shall be in the name of Investor
and shall bear substantially the following legends (in addition to any legends
required under applicable securities laws):

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
            "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER THE SECURITIES
            LAWS OF ANY JURISDICTION, AND MAY ONLY BE SOLD, PLEDGED, TRANSFERRED
            OR OTHERWISE DISPOSED OF BY AN INVESTOR IF SUBSEQUENTLY REGISTERED
            UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER ANY
            APPLICABLE STATE SECURITIES LAWS, UNLESS EXEMPTIONS FROM SUCH
            REGISTRATION AND QUALIFICATION REQUIREMENTS ARE AVAILABLE."

                                       17
<Page>

5.       CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING.

         The Company's obligations to complete the sale and issuance of the
Shares and to deliver Shares to each Investor, individually, as set forth in the
Schedule of Investors shall be subject to the following conditions (to the
extent not waived in writing by the Company):

         5.1 PAYMENT FOR SHARES. Each Investor shall have paid to the Company
the purchase price for the Shares purchased by it, in accordance with provisions
of Section 2.2.

         5.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by such Investors in Section 4 hereof shall be true and correct
as of the Closing.

         5.3 COVENANTS PERFORMED. Each Investor shall have performed and
complied in all material respects with all of its obligations under this
Purchase Agreement which are to be performed or complied with on or prior to
Closing.

         5.4 MINIMUM SALE. The aggregate purchase price for the Shares sold to
Investors pursuant to this Agreement shall not be less than $20 million.

         5.5 APPROVAL OF COMPANY'S BOARD OF DIRECTORS. The Company's Board of
Directors shall have adopted resolutions authorizing the execution, delivery and
performance of the Transaction Documents and the transactions contemplated
therein.

6.       CONDITIONS TO INVESTORS' OBLIGATIONS AT THE CLOSING.

         Each Investor's obligation to accept delivery of the Shares and to pay
for the Shares shall be subject to the following conditions (to the extent not
waived by such Investors):

         6.1 REGISTRATION RIGHTS AGREEMENT. The Company shall have executed and
delivered the Registration Rights Agreement.

         6.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 4 shall be true and correct as of the
Closing.

         6.3 COVENANTS PERFORMED. The Company shall have performed and complied
in all material respects with all of its obligations under this Purchase
Agreement which are to be performed or complied with on or prior to the Closing.

         6.4 LEGAL OPINIONS.

         (a) Investors shall have received from Baer Marks & Upham LLP, counsel
to the Company, an opinion letter addressed to the Investors, dated as of the
date of the Closing, in a form acceptable to the Investors and their counsel,
Goodwin Procter LLP ("GOODWIN PROCTER") subject to customary assumptions and
qualifications.

                                       18
<Page>

         (b) Investors shall have received from Osler, Hoskin & Harcourt LLP,
counsel to the Company, an opinion letter addressed to the Investors, dated as
of the date of the Closing, in a form acceptable to the Investors and Goodwin
Procter, subject to customary assumptions and qualifications.

         6.5 MINIMUM SALE. The aggregate purchase price for the Shares sold to
the Investors pursuant to this Agreement shall not be less than $20 million.

         6.6 APPROVAL OF COMPANY'S BOARD OF DIRECTORS. The Company's Board of
Directors shall have adopted resolutions authorizing the execution, delivery and
performance of the Transaction Documents and the transactions contemplated
therein.

7.       MISCELLANEOUS.

         7.1 WAIVERS AND AMENDMENTS. Neither this Purchase Agreement nor any
provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the written consent of the Company and holders of at least a
majority of the Shares, or, in the case of non-material or ministerial
amendments, upon the written consent of the Company and MPM.

         7.2 HEADINGS. The headings of the various sections of this Purchase
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Purchase Agreement.

         7.3 BROKER'S FEE. The Company and each Investor (severally and not
jointly) hereby represent that there are no brokers or finders entitled to
compensation in connection with the sale of the Shares, and shall indemnify each
other for any such fees for which they are responsible.

         7.4 SEVERABILITY. In case any provision contained in this Purchase
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

         7.5 NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (c) upon receipt or refusal of receipt when sent by
first-class registered or certified mail, return receipt requested, postage
prepaid, or (d) upon receipt or refusal of receipt after deposit with a
nationally recognized overnight express courier, postage prepaid, specifying
next day delivery with written verification of receipt. All communications shall
be sent to the party to be notified at the address as set forth below or at such
other address as such party may designate by ten (10) days advance written
notice to the other party. All communications shall be addressed as follows:

         (a) if to the Company, to:

                  VISIBLE GENETICS INC.
                  700 Bay Street, Suite 1000

                                       19
<Page>

                  Toronto, Ontario
                  M5G 1Z6
                  Telephone: (416) 813-3240
                  Facsimile: (416) 813-3250
                  Attention: Chief Executive Officer

                  with a copy so mailed to:

                  BAER MARKS & UPHAM LLP
                  805 Third Avenue
                  New York, New  York  10022
                  Telephone: (212) 702-5700
                  Facsimile: (212) 702-5941
                  Attention: Steven S.  Pretsfelder

         (b) if to the Investors, at the address as set forth on the Counterpart
Execution Page of this Purchase Agreement with a copy to Goodwin Procter LLP,
Exchange Place, 53 State Street, Boston, Massachusetts 02109, telephone: (617)
570-1000; facsimile: (617) 523-1231; Attention: Laura C. Hodges Taylor, P.C.

         7.6 GOVERNING LAW; EXCLUSIVE JURISDICTION. This Purchase Agreement
shall be governed by and construed in accordance with the laws of the State of
New York as applied to contracts entered into and performed entirely in New York
by New York residents, without regard to conflicts of law principles. The
parties hereto (a) agree that any suit, action or other proceeding arising out
of this Agreement shall be brought only in the courts of the State of New York
or the courts of the United States located within the State of New York, in each
case in the County of New York, (b) consent and submit to the exclusive
jurisdiction of each such court in any such suit, action or proceeding and (c)
waive any objection which they, or any of them, may have to personal
jurisdiction or the laying of venue of any such suit, action or proceeding in
any of such courts, and agree not to seek to change venue.

         7.7 COUNTERPARTS. This Purchase Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.

         7.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Purchase Agreement,
all covenants, agreements, representations and warranties made by the Company
and each Investors herein shall survive the execution of this Purchase
Agreement, the delivery to the Investors of the Shares and the payment therefor
until the expiration of the Registration Period as defined in the Registration
Rights Agreement.

         7.9 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs,

                                       20
<Page>

executors and administrators of the parties hereto. Neither the terms
"successors" nor "assigns" as used herein shall include any Person who purchases
Shares from any Investor after the Closing and is not an affiliate of an
Investor.

         7.10 ENTIRE AGREEMENT. This Purchase Agreement and other documents
delivered pursuant hereto, including the exhibits, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.

         7.11 PAYMENT OF FEES AND EXPENSES. Each of the Company and the
Investors shall bear its own expenses and legal fees incurred on its behalf with
respect to this Purchase Agreement, the Registration Rights Agreement and the
transactions contemplated hereby and thereby; PROVIDED, HOWEVER, that the
Company shall pay the reasonable fees and expenses of one legal counsel for all
Investors in connection with all such agreements and the transactions
contemplated hereby and thereby, FURTHER PROVIDED, THAT, without its prior
written approval, the Company shall have no obligation to pay any such fees and
expenses which exceed $25,000 in the aggregate. The foregoing shall not limit
the obligation of the parties under the indemnification obligations set forth in
Section 2.5 of the Registration Rights Agreement.

         7.12 CONFIDENTIALITY. Each Investor acknowledges and agrees that any
information or data it has acquired or hereafter shall acquire pursuant to this
Agreement or the Registration Rights Agreement from the Company was received and
shall be received by such Investor in confidence except any such information or
data which (a) at the time of disclosure was in the public domain or was readily
available through public sources other than as a result of any breach of the
terms hereof, the Registration Rights Agreement or any other agreement or
fiduciary obligation by which such Investor is bound, or (b) was known to the
Investor prior to receipt from the Company other than as a result of any breach
of any of the terms hereof, the Registration Rights Agreement, or any other
agreement or fiduciary obligation by which such Investor is bound, or (c) was
obtained from a third party not in violation of any confidentiality,
non-disclosure or similar obligations or any fiduciary obligations of such third
party or the Investor (the "CONFIDENTIAL Information"). Except to the extent
authorized by the Company and required by any federal or state law, rule or
regulation or any decision or order of any court or regulatory authority, each
Investor agrees that it will refrain from disclosing any such Confidential
Information to any Person other than to any agent, attorneys, accountants,
employees, officers and directors of Investor (collectively, "AGENTS") who need
to know such information in connection with Investor's purchase of the Shares,
and who agree to be bound by the confidentiality provisions of this Purchase
Agreement. The Investors will be liable for any breach by their agents of the
provisions of this Section 7.12. In the event that an Investor or its agents are
requested or required by law, rule or regulation or any decision or order of any
court or regulatory authority to disclose all or any part of the information
contained in the Confidential Information, each such Investor agrees that: (a)
the Investor will provide the Company with immediate written notice of any such
request or requirement so that the Company may seek an appropriate protective
order or other remedy; (b) the Investor will not oppose, and will cooperate with
the Company in, seeking such order or remedy; and (c) in all events, including,
but not limited to (i) the Company not obtaining a protective order or other
remedy that covers all of such Confidential Information or (ii) the Company
waiving any provision of this Purchase

                                       21
<Page>

Agreement, the Investor will disclose only that portion of the Confidential
Information which in the written opinion of the Investor's counsel the Investor
is legally compelled to disclose, and the Investor will exercise its best
efforts to ensure that confidential treatment will be accorded to that portion
of the Confidential Information that is being disclosed. Each Investor agrees
not to use to the detriment of the Company or for the benefit of any other
Person or Persons, or misuse in any way, any Confidential Information of the
Company.

         KNOWLEDGE. The phrases "KNOWLEDGE," "TO THE COMPANY'S knowledge," "TO
THE COMPANY'S BEST KNOWLEDGE," "OF WHICH THE COMPANY IS aware" and similar
language as used herein shall mean the actual knowledge and current awareness,
or knowledge which a reasonable person would have acquired following a
reasonable investigation, of Richard T. Daly, Thomas J. Clarke or Marguerite
Ethier.

                  [The rest of this page intentionally left blank]

                                       22
<Page>

         If this Purchase Agreement is satisfactory to you, please so indicate
by signing the acceptance on a counterpart execution page to this Purchase
Agreement and return such counterpart to the Company whereupon this Purchase
Agreement will become binding between us in accordance with its terms.

                                       VISIBLE GENETICS INC.

                                       By:
                                          --------------------------------------
                                          Name:  Thomas J. Clarke
                                          Title: Chief Financial Officer

                                       By:
                                          --------------------------------------
                                          Name: Marguerite Ethier
                                          Title: General Counsel

                                       23
<Page>

                         COMMON SHARE PURCHASE AGREEMENT
                           COUNTERPART EXECUTION PAGE

By signing below, the undersigned agrees to the terms of the Visible Genetics
Inc. Common Share Purchase Agreement and to purchase the number of Shares set
forth below.

                                       Number of Shares being purchased:

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

                                       INVESTORS:

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

                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:

                                       Address:
                                               ---------------------------------

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

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

                                       Facsimile:
                                                 -------------------------------

PLEASE COMPLETE THE FOLLOWING:

1.       The exact name that your Shares are
         to be registered in (this is the         ------------------------------
         name that will appear on your Shares
         certificate(s)). You may use a
         nominee name if appropriate:

2.       The relationship between the
         Investors of the Shares and the          ------------------------------
         Registered Holder listed in response
         to item 1 above:

3.       The mailing address and facsimile
         number of the Registered Holder          ------------------------------
         listed in response to item 1 above
         (if different from above):

                                                  Facsimile:
                                                            --------------------
4.       (FOR UNITED STATES INVESTORS:) The
         Social Security Number or Tax            ------------------------------
         Identification Number of the
         Registered Holder listed in the
         response to item 1 above:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]