Document:

<PAGE>

                                                                   Exhibit 10.61

                                                                  CONFORMED COPY

                      ACE LIMITED EMPLOYEE RETIREMENT PLAN

                    (As Amended and Restated July 1, 2001 and
                 as further amended through the First Amendment)

                              Mayer, Brown & Platt
                                     Chicago

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                                TABLE OF CONTENTS

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SECTION 1     GENERAL ..............................................................  1

     1.1   History, Purpose and Effective Date .....................................  1

     1.2   Related Companies and Employers .........................................  1

     1.3   Trust Agreement, Plan Administration and Fiduciary Responsibility .......  1

     1.4   Plan Year ...............................................................  1

     1.5   Applicable Laws .........................................................  1

     1.6   Gender and Number .......................................................  2

     1.7   Notices .................................................................  2

     1.8   Form and Time of Elections and Signature ................................  2

     1.9   Evidence ................................................................  2

     1.10  Action by Employers .....................................................  2

     1.11  No Reversion to Employers ...............................................  2

     1.12  Plan Supplements ........................................................  2

     1.13  Defined Terms ...........................................................  3

     1.14  Accounting Date .........................................................  3

SECTION 2     PARTICIPATION IN THE PLAN ............................................  3

     2.1   Eligibility for Participation ...........................................  3

     2.2   Inactive Participation ..................................................  3

     2.3   Plan Not Guarantee of Employment ........................................  3

     2.4   Leased Employees ........................................................  3

SECTION 3     VESTING SERVICE ......................................................  4

     3.1   Years of Vesting Service ................................................  4

     3.2   One Year Break in Vesting Service .......................................  5

     3.3   Special Rule for Maternity and Paternity Absences .......................  5

SECTION 4     PARTICIPANT BEFORE-TAX AND ROLLOVER CONTRIBUTIONS ....................  5

     4.1   Before-Tax Contributions ................................................  5

     4.2   Payment of Before-Tax Contributions .....................................  6

     4.3   Variation, Discontinuance and Resumption of Before-Tax Contributions ....  6

     4.4   Rollover Contributions ..................................................  6

     4.5   Veterans' Rights ........................................................  7
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     4.6   Eligible Compensation ...................................................  7

SECTION 5     EMPLOYER CONTRIBUTIONS ...............................................  7

     5.1   Matching Contributions ..................................................  7

     5.2   Discretionary Matching Contributions ....................................  7

     5.3   Qualified Matching Contributions ........................................  8

     5.4   Employer Core Contributions .............................................  8

     5.5   Payment of Employer Contributions .......................................  8

     5.6   Forfeiture of Matching Contributions ....................................  8

     5.7   Allocating and Crediting Employee and Employer Contributions ............  8

SECTION 6     THE TRUST FUND, INVESTMENT FUNDS AND INVESTMENT ELECTIONS ............  9

     6.1   Trust Fund ..............................................................  9

     6.2   Plan Investment .........................................................  9

     6.3   Liability of Trustee, Committees and Company ............................ 10

SECTION 7     PARTICIPANTS' ACCOUNTS ............................................... 11

SECTION 8     PLAN ACCOUNTING ...................................................... 11

     8.1   Adjustment for Investment Experience .................................... 11

     8.2   Valuation ............................................................... 12

     8.3   Statement of Accounts ................................................... 12

     8.4   Correction of Errors .................................................... 12

SECTION 9     LIMITATIONS ON COMPENSATION, CONTRIBUTIONS AND ALLOCATIONS ........... 12

     9.1   Reduction of Contribution Rates ......................................... 12

     9.2   Compensation for Limitation/Testing Purposes ............................ 12

     9.3   Limitations on Annual Additions ......................................... 13

     9.4   Excess Annual Additions ................................................. 13

     9.5   402(g) Limitation ....................................................... 14

     9.6   Section 401(k)(3) Testing ............................................... 14

     9.7   Correction Under Section 401(k) Test .................................... 16

     9.8   Section 401(m)(2) Testing ............................................... 16

     9.9   Correction Under Section 401(m) Test .................................... 17
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                                      -ii-

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                               TABLE OF CONTENTS
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     9.10  Multiple Use of Alternative Limitation .................................  18

     9.11  Highly Compensated .....................................................  18

SECTION 10    LOANS TO PARTICIPANTS ...............................................  18

SECTION 11    TERMINATION DATES ...................................................  20

     11.1  Regular Termination Date ...............................................  20

SECTION 12    VESTING AND TERMINATION DATES .......................................  20

     12.1  Determination of Vested Interest .......................................  21

     12.2  Accelerated Vesting ....................................................  21

SECTION 13    DISTRIBUTIONS .......................................................  21

     13.1  Distributions to Participants After Termination of Employment ..........  21

     13.2  Distributions to Beneficiaries .........................................  22

     13.3  Limits on Commencement and Duration of Distributions ...................  23

     13.4  Beneficiary Designations ...............................................  23

     13.5  Direct Rollover Option .................................................  24

     13.6  Forfeitures and Restorations of Unvested Contributions .................  24

     13.7  Application of Forfeitures .............................................  24

     13.8  Facility of Payment ....................................................  24

     13.9  Interests Not Transferable .............................................  25

     13.10 Absence of Guaranty ....................................................  25

     13.11 Missing Participants or Beneficiaries ..................................  25

SECTION 14    THE COMMITTEE .......................................................  25

     14.1  Membership and Authority ...............................................  25

     14.2  Allocation and Delegation of Committee Responsibilities and Powers .....  26

     14.3  Uniform Rules ..........................................................  27

     14.4  Information to be Furnished to Committee ...............................  27

     14.5  Committee's Decision Final .............................................  27

     14.6  Exercise of Committee's Duties .........................................  27

     14.7  Remuneration and Expenses ..............................................  27

     14.8  Indemnification of the Committee .......................................  27

     14.9  Resignation or Removal of Committee Member .............................  28
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                               TABLE OF CONTENTS
                                   (continued)

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     14.10  Appointment of Successor Committee Members ............................  28

     14.11  Interested Committee Member ...........................................  28

SECTION 15     AMENDMENT OR TERMINATION ...........................................  29

     15.1   Amendment or Termination ..............................................  29

     15.2   Termination ...........................................................  29

     15.3   Merger and Consolidation of Plan, Transfer of Plan Assets .............  29

     15.4   Notice of Amendment, Termination or Partial Termination ...............  29

SUPPLEMENT A ...................................................................... A-1
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                                      -iv-

<PAGE>

                      ACE LIMITED EMPLOYEE RETIREMENT PLAN

                                   CERTIFICATE

         I, Keith P.White, Chief Administration Officer ACE Limited, hereby
certify that the attached document is a full, true and complete copy of ACE
LIMITED EMPLOYEE RETIREMENT PLAN as in effect on July 1, 2001.

         Dated this ___ day of July, 2001.

                                       _________________________________________
                                       Chief Administration Officer as Aforesaid

                                                       (Seal)

<PAGE>

                      ACE LIMITED EMPLOYEE RETIREMENT PLAN
                     (As Amended and Restated July 1, 2001)

                                    SECTION 1
                                    ---------
                                     General
                                     -------

         1.1 History, Purpose and Effective Date. Effective October 1, 1987, ACE
             -----------------------------------
Limited, a corporation organized and existing under the laws of the Cayman
Islands, having its principal place of business in Hamilton, Bermuda,
established the ACE Limited Employee Retirement Plan (the "Plan") for the
exclusive benefit of its employees and their beneficiaries. The Plan was
previously amended and restated effective as of October 1, 1989, was further
amended from time to time, and is now amended, restated and continued effective
July 1, 2001, the "Effective Date" of the Plan as set forth herein. The Plan is
intended to qualify as a profit-sharing plan under section 401(a) of the
Internal Revenue Code of 1986 of the United States, as amended (the "Code").

         1.2 Related Companies and Employers. The term "Related Company" means
             -------------------------------
any corporation or trade or business during any period during which it is, along
with the Company, a member of a controlled group of corporations or a controlled
group of trades or businesses, as described in sections 414(b) and 414(c),
respectively, of the Code. The Company and each Related Company, which, with the
Company's consent, adopts the Plan are referred to below collectively as the
"Employers" and individually as an "Employer".

         1.3 Trust Agreement, Plan Administration and Fiduciary Responsibility.
             -----------------------------------------------------------------
All contributions made under the Plan will be held, managed and controlled by
one or more trustees (the "Trustee") acting under a Trust which forms a part of
the Plan. The terms of the Trust as in effect on the Effective Date are set
forth in a Trust Agreement known as the ACE Limited Employee Retirement Trust.
The authority to control and manage the operation and administration of the Plan
is vested in an administrative committee (the "Committee"), as more fully
described in subsection 14.1. Except as otherwise expressly provided in
subsection 14.1, the Company shall have the rights, duties and obligations of a
"plan administrator" as that term is defined in section 414(g) of the Code. With
respect to the investment of the Plan's assets, the Committee has the authority
and responsibility set forth in the Trust Agreement (defined below). The Company
and the Committee shall be named fiduciaries with respect to their authority
under the Plan.

         1.4 Plan Year. The term "Plan Year" means the twelve-consecutive month
             ---------
period beginning on each January 1.

         1.5 Applicable Laws. The Plan shall be construed and administered in
             ----------------
accordance with the laws of Bermuda. The Plan is intended to comply by its terms
with the applicable provisions of the Code.

         1.6 Gender and Number. Where the context admits, words in any gender
             -----------------
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

<PAGE>

         1.7   Notices. Any notice or document required to be filed with the
               -------
Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the ACE Limited Employee Retirement Savings
Plan Committee, in care of the Company at its principal executive offices. Any
notice required under the Plan may be waived by the person entitled to notice.

         1.8   Form and Time of Elections and Signature. Unless otherwise
               ----------------------------------------
specified herein, any election or consent permitted or required to be made or
given by any Participant or other person entitled to benefits under the Plan,
and any permitted modification or revocation thereof, shall be made in writing
or shall be given by means of such interactive telephone system as the Committee
may designate from time to time as the sole vehicle for executing regular
transactions under the Plan (referred to generally herein as the "Phone
System"). Each Participant shall have a personal identification number or "PIN"
for purposes of executing transactions through the Phone System, and entry by a
Participant of his PIN shall constitute his valid signature for purposes of any
transaction the Committee determines may or should be executed by means of the
Phone System, including but not limited to enrolling in the Plan, electing
contribution rates, making investment choices, executing loan documents, and
consenting to a distribution. Any election made through the Phone System shall
be considered submitted to the Committee on the date it is electronically
transmitted.

         1.9   Evidence. Evidence required of anyone under the Plan may be by
               --------
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

         1.10  Action by Employers. Any action required or permitted to be taken
               -------------------
by any Employer which is a corporation shall be by resolution of its Board of
Directors, or by a duly authorized officer of the Employer. Any action required
or permitted to be taken by any Employer which is a partnership shall be by a
general partner of such partnership or by a duly authorized officer thereof.

         1.11  No Reversion to Employers. No part of the corpus or income of the
               -------------------------
Trust shall revert to the Employers or be used for, or diverted to, purposes
other than for the exclusive benefit of Participants and other persons entitled
to benefits under the Plan, except as specifically provided in the Trust
Agreement.

         1.12  Plan Supplements. The provisions of the Plan may be modified or
               ----------------
supplemented from time to time by the adoption of one or more Supplements. Each
Supplement shall form a part of the Plan as of the Supplement's effective date.
In the event of any inconsistency between a Supplement and the Plan document,
the terms of the Supplement shall govern.

         1.13  Defined Terms. Terms used frequently with the same meaning are
               -------------
indicated by initial capital letters, and are defined throughout the Plan.

         1.14  Accounting Date. Except as otherwise designated by the Committee,
               ---------------
the term "Accounting Date" means the last day of each calendar quarter.

                                      -2-

<PAGE>

                                    SECTION 2
                                    ---------

                            Participation in the Plan
                            -------------------------

         2.1   Eligibility for Participation. Each individual who was a
               -----------------------------
participant in the Plan immediately prior to the Effective Date will continue as
a Participant in the Plan on and after that date, subject to the conditions and
limitations of the Plan. Subject to the conditions and limitations of the Plan,
each individual who was not a participant in the Plan immediately prior to the
Effective Date shall become a "Participant" in the Plan on the later of the
Effective Date or the date on which he is first employed by an Employer.
Notwithstanding the foregoing, an employee of an Employer who is a member of a
collective bargaining unit as to which retirement benefits have been the subject
of good faith bargaining shall not be eligible to become a Participant unless
the Plan has been extended to the applicable collective bargaining unit under a
currently effective collective bargaining agreement.

         Notwithstanding any other provision of the Plan to the contrary, no
individual shall be eligible to participate in the Plan for any period during
which such individual provides services under a contract or arrangement between
an Employer and either such individual himself or an agency or leasing
organization, that purports to treat the individual as either an independent
contractor or an employee of such agency or leasing organization, even if the
individual is later determined (by judicial action or otherwise) to have been a
common law employee of an Employer during such period rather than an independent
contractor or an employee of such agency or leasing organization.

         2.2   Inactive Participation. Once an eligible employee becomes a
               ----------------------
Participant in the Plan, he will remain a Participant as long as he continues to
have an Account balance under the Plan for all purposes under the Plan except
the contribution provisions of Sections 4 and 5 and the loan provisions of
Section 10.

         2.3   Plan Not Guarantee of Employment. The Plan does not constitute a
               --------------------------------
contract of employment, and participation in the Plan will not give any employee
or Participant the right to be retained in the employ of any Employer nor any
right or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan.

         2.4   Leased Employees. An individual who is not an employee of an
               ----------------
Employer or a Related Company shall be considered a `Leased Employee' if
pursuant to an agreement between the Employer or Related Company and any other
person (`leasing organization') he has performed services for the Employer or
Related Company on a substantially full-time basis for a period of at least one
year and such services are performed under the primary direction or control of
the Employer or Related Company. Such Leased Employee shall not be eligible to
participate in this Plan or in any other plan maintained by an Employer or a
Related Company which is qualified under section 401(a) of the Code, but shall
be treated as if the services performed by him in such capacity were performed
by him as an employee of an Employer to the extent required by section 414(n) of
the Code and applicable Treasury regulations; provided, however, that no such
service shall be credited:

                                      -3-

<PAGE>

     (a)  for any period during which less than 20% of the non-Highly
          Compensated workforce of the Employers and the Related Companies
          consists of Leased Employees and the Leased Employee is a participant
          in a money purchase pension plan maintained by the leasing
          organization which (i) provides for a nonintegrated employer
          contribution of at least 10 percent of compensation, (ii) provides for
          full and immediate vesting, and (iii) covers all employees of the
          leasing organization (beginning with the date they become employees),
          other than those employees excluded under section 414(n)(5) of the
          Code; or

     (b)  for any other period unless the Leased Employee provides satisfactory
          evidence to the Employer or Related Company that he meets all of the
          conditions of this subsection 2.4 and applicable law required for
          treatment as a Leased Employee.

     For purposes of paragraph (a) above, `Highly Compensated' shall have the
meaning set forth in Section 9.11.

                                    SECTION 3
                                    ---------

                                 Vesting Service
                                 ---------------

     3.1  Years of Vesting Service. The term "Years of Vesting Service" means,
          ------------------------
with respect to any employee or Participant, the number of years, computed to
fractional portions thereof, with fractional weeks and months being credited as
an additional month, elapsed since the first date for which he was paid, or
entitled to payment, for the performance of duties for an Employer or a Related
Company, subject to the following:

     (a)  If an employee's or Participant's employment with the Employers and
          the Related Companies is terminated and he incurs a One Year Break in
          Vesting Service (as defined in subsection 3.2), he shall not be
          credited with service for the period between the date his employment
          is terminated and the date, if any, of his reemployment by an Employer
          or a Related Company.

     (b)  When a Related Company becomes an Employer, each employee of such
          Related Company shall be credited with Years of Vesting Service to the
          extent provided by the Committee or the Board of Directors uniformly
          for all similarly situated employees, subject to the limitations of
          section 401(a)(4) of the Code, or as otherwise required by law, for
          employment by such Related Company prior to the date on which it
          becomes an Employer for which each such employee is not otherwise
          credited with Years of Vesting Service.

     (c)  Each employee of the Employers who was a Participant in the Plan
          immediately prior to the Effective Date shall be credited with Years
          of Vesting Service as of the Effective Date equal to the number of
          whole and fractional years of service with which such Participant had
          been credited under the terms of the Plan as in effect immediately
          prior to the Effective Date.

     3.2  One Year Break in Vesting Service. The term "One Year Break in Vesting
          ---------------------------------
Service" means, with respect to any employee or Participant, the
12-consecutive-month period

                                      -4-

<PAGE>

commencing on the earlier of his Termination Date or the first anniversary of
the first date of a period in which the employee or Participant remains absent
from service with the Employers and Related Companies for any reason other than
a quit, retirement, discharge or death or a Maternity or Paternity Absence (as
defined below) if he is not paid or entitled to payment for the performance of
duties for an Employer or a Related Company.

     3.3  Special Rule for Maternity and Paternity Absences. With respect to an
          -------------------------------------------------
individual whose absence from employment constitutes a Maternity or Paternity
Absence, a One Year Break in Vesting Service will commence on the second
anniversary of the first day of such absence, and the period between the first
and second anniversaries of the first day of a Maternity or Paternity Absence
shall not constitute a Year of Vesting Service. The term "Maternity or Paternity
Absence" means an employee's or Participant's absence from active employment
with an Employer or Related Company by reason of the employee's pregnancy, the
birth of a child of the employee, the placement of a child with the employee in
connection with the employee's adoption of such child, or for purposes of caring
for such child immediately after its birth or placement. The Committee may
require the employee or Participant to furnish such information as it considers
necessary to establish that such individual's absence was a Maternity or
Paternity Absence.

                                    SECTION 4
                                    ---------

                Participant Before-Tax and Rollover Contributions
                -------------------------------------------------

     4.1  Before-Tax Contributions. Subject to the following provisions of this
          ------------------------
Section 4 and the limitations set forth in Section 9 and such additional rules
as the Committee may establish on a uniform and nondiscriminatory basis, for any
Plan Year, a Participant may elect to have his salary or wage reduced, and a
corresponding amount contributed on his behalf to the Plan by his Employer as a
"Before-Tax Contribution." Any such reductions shall be made in such manner as
is permitted by the Committee, and shall be subject to the following:

     (a)  With respect to a Participant who during the relevant period is not
          also an active participant in any retirement plan maintained by the
          Company or an Employer to comply with the requirements of the Bermuda
          National Pension Scheme (Occupation Pensions) Act 1998, as amended,
          any successor thereto, or any other relevant Bermuda pension
          legislation (an "ACE Bermuda Pension Plan"), for the period beginning
          on the Effective Date and ending on December 31, 2001, the Before-Tax
          Contribution amount elected by such Participant shall be a whole
          percentage of not less than 1 percent and not more than 6 percent of
          his Eligible Compensation, as defined in subsection 4.6, for that
          period; and for any Plan Year beginning on or after January 1, 2002,
          the "Before-Tax Contribution" amount elected by such Participant shall
          be a whole percentage of not less than 1 percent and not more than 10
          percent of his Eligible Compensation for that Plan Year.

     (b)  With respect to a Participant who during the relevant period is also
          an active participant in an ACE Bermuda Pension Plan:

                                      -5-

<PAGE>

          (i)  for the period beginning on the Effective Date and ending on
               December 31, 2001, the Before-Tax Contribution Amount elected by
               such Participant shall be a whole percentage of not less than 1
               percent and not more than 4% of his Eligible Compensation, as
               defined in subsection 4.6, for that period;

          (ii) for the Plan Year beginning January 1, 2002, the "Before-Tax
               Contribution" amount elected by such Participant shall be a whole
               percentage of not less than 1 percent and not more than 7 percent
               of his Eligible Compensation for that Plan Year.

          (iii) for the Plan Year beginning January 1, 2003, the "Before-Tax
               Contribution" amount elected by such Participant shall be a whole
               percentage of not less than 1 percent and not more than 6 percent
               of his Eligible Compensation for that Plan Year.

          (iv) for any Plan Year beginning on or after January 1, 2004, the
               "Before-Tax Contribution" amount elected by such Participant
               shall be a whole percentage of not less than 1 percent and not
               more than 5 percent of his Eligible Compensation for that Plan
               Year.

     4.2 Payment of Before-Tax Contributions. Before-Tax Contributions shall
         -----------------------------------
be made in equal amounts each payroll period, subject to the restrictions of
Section 9, and shall be paid to the Trustee by the Employer on the earliest date
on which such contributions can reasonably be segregated from the Employer's
general assets, but not later than the 15th business day of the month following
the date on which such amounts would otherwise have been payable to the
Participant.

     4.3 Variation, Discontinuance and Resumption of Before-Tax Contributions.
         --------------------------------------------------------------------
Subject to such rules and restrictions as the Committee may establish on a
uniform and nondiscriminatory basis, a Participant may elect to change his
Before-Tax Contribution rate (but not retroactively) within the limits specified
in this Section 4, or elect to discontinue or resume such contributions.

     4.4 Rollover Contributions. A Participant may, with the consent of the
         ----------------------
Committee, make a Rollover Contribution to the Plan, to the extent permitted by
the following provisions of subsection 4.4:

The term "Rollover Contribution" means

     (a)  a cash contribution to the Plan by the employee of amounts distributed
          from a qualified plan described in section 401(a) of the Code and made
          within 60 days of receipt of such amount, or

     (b)  a cash payment made to the Plan by another qualified plan described in
          section 401(a) of the Code as a direct rollover (as contemplated under
          Code section 401(a)(31)) on behalf of and at the direction of the
          employee,

                                      -6-

<PAGE>

         provided such distributed or directly rolled over amounts are permitted
         to be rolled over to a qualified plan under applicable provisions of
         the Code as then in effect. The Committee may request from the employee
         such documents as it considers necessary or desirable to establish that
         the rollover contribution satisfies the foregoing requirements.

         4.5   Veterans' Rights. Notwithstanding any other provision of the Plan
               ----------------
to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with section 414(u) of
the Code.

         4.6   Eligible Compensation. For purposes of this Section 4 and Section
               ---------------------
5, a Participant's "Eligible Compensation" for any shall mean his base salary or
wage plus any overtime pay or bonus, shift differential, commission, beeper pay,
catastrophe pay, and any elective pretax contributions made on the Participant's
behalf for the applicable period to a plan sponsored by an Employer or a Related
Company pursuant to Section 402(g) or Section 125 of the Code; provided,
however, that the compensation of any Participant taken into account under the
Plan for any Plan Year shall not exceed the maximum amount permitted to be taken
into account for such Plan Year under Section 401(a)(17) of the Code and
applicable United States Treasury regulations thereunder.

                                    SECTION 5
                                    ---------

                             Employer Contributions
                             ----------------------

         5.1   Matching Contributions. Subject to the following provisions of
               ----------------------
this Section 5, subsection 4.6 and Section 9, as soon as practicable after the
completion of each pay period, the Employer shall contribute to the Trustee, in
cash, a "Matching Contribution" on behalf of each Participant who is employed by
the Employer on the last day of such payroll period in an amount equal to one
hundred percent of the Before-Tax Contribution made by the Employer on behalf of
such Participant for that period; provided, however, that the Matching
Contribution on behalf of a Participant with respect to any Plan Year shall not
exceed six percent of the Participant's Eligible Compensation for that Plan Year
(and for the period beginning on the Effective Date and ending on December 31,
2001, shall not exceed six percent of the Participant's Eligible Compensation
for such period).

         5.2   Discretionary Matching Contributions. Subject to the following
               ------------------------------------
provisions of this Section 5, subsection 4.6 and Section 9, each Employer shall
make a "Discretionary Matching Contribution" for a Plan Year in the amount, if
any, determined by the Company in its sole discretion, on behalf of each
Participant who has made a Before-Tax Contribution for such Plan Year and who is
employed by an Employer on the last day of that year. Such Discretionary
Matching Contribution shall be expressed as a percentage of the Before-Tax
Contribution made by the Employer on behalf of such Participant for that Plan
Year; provided, however, that the Discretionary Matching Contribution with
respect to any Plan Year shall not exceed fifty percent of that portion of the
Participant's Before-Tax Contribution which does not exceed six percent of the
Participant's Eligible Compensation for that Plan Year (and for the period
beginning on the Effective Date and ending December 31, 2001, shall not exceed
fifty percent of that portion of the Participant's Before-Tax Contribution which
does not exceed six percent of the Participant's Eligible Compensation for such
period).

                                      -7-

<PAGE>

     5.3   Qualified Matching Contributions. For each Plan Year each Employer
           --------------------------------
shall make a "Qualified Matching Contribution" on behalf of each Participant
employed by that Employer who is not Highly Compensated (as defined in
subsection 9.11) in an amount equal to such percentage, if any, of the
Before-Tax Contributions made on behalf of such non-Highly Compensated
Participant as the Company shall determine in its sole discretion.

     5.4   Employer Core Contributions. Subject to the following provisions of
           ---------------------------
this Section 5, subsection 4.6, and Section 9, as soon as practicable after the
completion of each payroll period, and in any event no later than the time
prescribed by subsection 5.5, each Employer shall make a "Core Contribution" in
an amount equal to 6% of the Eligible Compensation of each Participant who is
employed by such Employer during such pay period.

     5.5   Payment of Employer Contributions. Each Employer's contributions
           ---------------------------------
under the Plan (other than Before-Tax Contributions) for any Plan Year shall be
paid to the Trustee, without interest, no later than 30 days after the end of
the Plan Year; Before-Tax Contributions shall be paid to the Trustee in
accordance with Section 4.2.

     5.6   Forfeiture of Matching Contributions. Notwithstanding any other
           ------------------------------------
provision of the Plan, any portion of a Matching Contribution (or Discretionary
Matching Contribution) that is an excess Matching Contribution (or an excess
Discretionary Matching Contribution) distributed in accordance with subsection
9.9, and any portion of a Matching Contribution (or Discretionary Matching
Contribution) that is attributable to an excess Before-Tax Contribution (or
portion thereof) distributed in accordance with subsections 9.5 or 9.7 shall be
forfeited and applied in accordance with subsection 9.9 and subsection 13.6.

     5.7   Allocating and Crediting Employee and Employer Contributions. Subject
           ------------------------------------------------------------
to the provisions of Section 9:

     (a)   Before-Tax, Matching, Core and Rollover Contributions made by or on
           behalf of a Participant for any payroll period shall be credited to
           that Participant's appropriate Accounts as of the Accounting Date
           coinciding with or immediately following the end of such payroll
           period; and

     (b)   As of the last day of each Plan Year, each Employer's Discretionary
           Matching Contributions, if any, made under the Plan for that year
           will be allocated among and credited to the Discretionary Matching
           Contribution Accounts of Participants who are employed by that
           Employer on the last day of that year; and

     (c)   As of the last day of each Plan Year, each Employer's Qualified
           Matching Contributions, if any, made under the Plan for that year on
           behalf of a non-Highly Compensated Participant employed by the
           Employer will be allocated among and credited to the Qualified
           Matching Account of each such Participant.

                                   SECTION 6
                                   ---------

           The Trust Fund, Investment Funds and Investment Elections
           ---------------------------------------------------------

                                      -8-

<PAGE>

     6.1    Trust Fund. The Trust Fund as at any date will consist of all
            ----------
property of any kind then held by the Trustee. The Committee shall direct the
Trustee to establish and maintain one or more "Investment Funds" from time to
time for the investment of Participants' Accounts. The Investment Committee
shall also cause the Trustee to maintain a "Loan Account" to reflect any loans
to Participants pursuant to subsection 10.1. The Committee in its discretion may
add additional Investment Funds, may delete any Investment Fund or may change
the investment strategy of any Investment Fund without prior notice to
Participants.

     6.2    Plan Investment. To the extent provided by the Committee, a
            ---------------
Participant may direct investment of the portion of his Account balances that
are not invested in the Loan Fund in accordance with the following:

     (a)    A Participant's Accounts may only be invested in those Investment
            Funds as permitted by the Committee from time to time; provided,
            however, that a Participant may not have any portion of his Accounts
            invested in a manner prohibited under section 4975 of the Code or in
            a manner that would result in the Trust earning taxable income.

     (b)    The portion of a Participant's Accounts invested in the Loan Fund
            shall be invested in promissory notes in accordance with Section 10.

     (c)    Any election by a Participant as to the investment of amounts
            contributed by or on behalf of the Participant, or as to investment
            of amounts held in the Participant's Accounts, shall be made at such
            time and in such form as the Committee shall provide.

     (d)    Except as provided by paragraph (b) next above, any portion of a
            Participant's Accounts as to which he has not elected a form of
            investment shall be invested in the Investment Fund designated by
            the Committee, consisting of a money market fund.

     (e)    Any costs or expenses (including, without limitation, taxes,
            interest and penalties) incurred by the Trust Fund on account of the
            investment, or change of investment, of an Account of any
            Participant shall be charged against that Account, except that no
            such costs or expenses shall be charged against any Account to the
            extent that they are paid by the Employers.

     (f)    A Participant may change the investment of the balances in his
            Accounts or of the amounts thereafter credited to his Accounts
            effective as of any date permitted by the Committee, by making an
            election in such form and at such time as the Committee requires,
            including by using the Phone System.

     6.3    Liability of Trustee, Committees and Company. None of the Trustee,
            --------------------------------------------
the Committee, the Company or the other Employers are liable or responsible for
any loss resulting to an Account by reason of any investment or reinvestment at
the direction of a Participant, and none of the Trustee, the Committee, the
Company or the other Employers shall have any duty to review from time to time
any investment made at the direction of a Participant.

                                      -9-

<PAGE>

                                    SECTION 7
                                    ---------

                             Participants' Accounts
                             ----------------------

     On and after the Effective Date, the Committee will maintain or cause to be
maintained the following Accounts which shall be adjusted from time to time as
required by Section 8:

     (a)    a "Before-Tax Account" in the name of each Participant which shall
reflect Before-Tax Contributions, if any, made on his behalf and the income,
losses, appreciation and depreciation attributable thereto;

     (b)    a "Matching Account" in the name of each Participant which shall
reflect Matching Contributions, if any, made on his behalf and forfeitures, if
any, and the income, losses, appreciation and depreciation attributable thereto;

     (c)    a "Discretionary Matching Account" in the name of each Participant
which shall reflect Discretionary Matching Contributions, if any, made on his
behalf and forfeitures, if any, and the income, losses, appreciation and
depreciation attributable thereto;

     (d)    a "Core Account" in the name of each Participant which shall reflect
Core Contributions, if any, made on his behalf and forfeitures, if any, and the
income, losses, appreciation and depreciation attributable thereto;

     (e)    a "Qualified Matching Account" in the name of each Participant which
shall reflect Qualified Matching Contributions, if any, made on his behalf, and
the income, losses, appreciation and depreciation attributable thereto; and

     (f)    a "Rollover Account" in the name of each Participant which shall
reflect Rollover Contributions, if any, made by him and the income, losses,
appreciation and depreciation attributable thereto.

The "balance" in any Account maintained in the name of a Participant as of any
date shall be equal to the sum of the cash balance and the value of each type of
property held in that Account on that date. In addition, the Committee may
maintain subaccounts within any of a Participant's Accounts to reflect portions
of the Account that are subject to special withdrawal or distribution rights or
are otherwise subject to special rules. The Accounts and subaccounts provided
for in this Section 7 shall be for accounting purposes only, and there shall be
no segregation of assets within the Trust Fund or any of the Investment Funds
among the separate Accounts.

                                   SECTION 8
                                   ---------

                                 Plan Accounting
                                 ---------------

     8.1    Adjustment for Investment Experience. Amounts credited to a
            ------------------------------------
Participant's Accounts shall share in earnings and losses for the period
commencing on the date they are transferred to the Trustee, without regard to
the date as of which they are credited to the Participant's Accounts.

                                      -10-

<PAGE>

     8.2    Valuation. For purposes of the Plan, the value of any property held
            ---------
under or distributed from the Plan as of any date shall be the fair market value
(as determined by the Trustee) of the property on that date, or as of the most
recent prior date it was valued by the Trustee. The Trustee shall value property
held under the Plan in accordance with rules established by him, provided that
all property held under the Plan on the last day of each Plan Year shall be
valued by the Trustee as of that date.

     8.3    Statement of Accounts. As soon as practicable after the last day of
            ---------------------
each Plan Year and at such other intervals as the Committee may determine, the
Committee will cause to be delivered to each Participant a statement of his
Account balances as of such date. Each Participant is responsible for reviewing
his statement and any Participant who discovers an error shall bring it to the
attention of the Committee within 90 days of receipt of the statement. If a
Participant does not bring errors in his statement to the attention of the
Committee within 90 days of receipt of his statement, the Participant will be
deemed to have confirmed the accuracy of the statement.

     8.4    Correction of Errors. In the event of an error in the adjustment of
            --------------------
a Participant's Accounts, the Committee, in its sole discretion, may correct
such error by either crediting or charging the adjustment required to make such
correction to or against income and expenses of the Trust for the Plan Year in
which the correction is made or the Company may make an additional contribution
to permit correction of the error. In the event a contribution that should have
been credited to a Participant's Accounts is incorrectly credited to another
Participant's Accounts, such contribution shall be charged against the incorrect
Participant's Accounts and credited to the proper Participant's Accounts, and
interest shall be credited or debited from the affected Participants' Accounts,
as applicable, in the sole discretion of the Committee. Except as provided in
this subsection 8.4, the Accounts of other Participants shall not be readjusted
on account of an error.

                                   SECTION 9
                                   ---------

           Limitations on Compensation, Contributions and Allocations
           ----------------------------------------------------------

     9.1    Reduction of Contribution Rates. To conform the operation of the
            -------------------------------
Plan to sections 401(a)(4), 401(k)(3), 401(m), 402(g) and 415(c) of the Code,
the Committee may unilaterally modify or revoke any Before-Tax Contribution
election made by a Participant pursuant to Section 4 and may reduce the level of
Matching Contributions, Discretionary Matching Contributions or Core
Contributions (even to zero) otherwise allocable to any Participant.

     9.2    Compensation for Limitation/Testing Purposes. "Compensation" for
            --------------------------------------------
purposes of this Section 9 shall mean:

     (a)    the Participant's wages, salaries, commissions, bonuses and other
            amounts received during the Plan Year from any Employer or Related
            Company for personal services actually rendered, including taxable
            fringe benefits, amounts taxable under a section 83(b) election and
            nondeductible moving expenses, but excluding distributions from any
            deferred compensation plan (qualified or

                                      -11-

<PAGE>

            nonqualified), amounts realized from the exercise of (or disposition
            of stock acquired under) any nonqualified stock option or other
            benefits given special tax treatment; plus

     (b)    any amounts contributed on the Participant's behalf for the Plan
            Year to a plan sponsored by an Employer or Related Company pursuant
            to a salary reduction agreement which are not includable in gross
            income under sections 125, 402(e)(3), 402(h) or 403(b) of the Code,

up to a maximum limit of $170,000 or such other amount as may be permitted for
any Plan Year under Code section 401(a)(17), taking into account for purposes of
such limitation any proration of such amount required under applicable Treasury
regulations on account of a short Plan Year.

     9.3    Limitations on Annual Additions. Notwithstanding any other
            -------------------------------
provisions of the Plan to the contrary, a Participant's Annual Additions (as
defined below) for any Plan Year shall not exceed an amount equal to the lesser
of:

     (a)    $35,000 (indexed for cost-of-living adjustments under section 415(d)
            of the Code); or

     (b)    25 percent of the Participant's Compensation for that Plan Year
            (determined without regard to the limitation under section
            401(a)(17) of the Code), calculated as if each Section 415 Affiliate
            (defined below) were a Related Company,

reduced by any Annual Additions for the Participant for the Plan Year under any
other defined contribution plan of an Employer or a Related Company or Section
415 Affiliate, provided that, if any other such plan has a similar provision,
the reduction shall apply under such other plan prior to being applied under
this Plan; and provided further that if such other plan has a provision
identical to the immediately foregoing clause, then the reduction shall be
applied pro rata between the two plans. The term "Annual Additions" means, with
respect to any Participant for any Plan Year, the sum of all contributions
(excluding Rollover Contributions) and forfeitures allocated to a Participant's
Accounts under the Plan for such year, regardless of whether any such amounts
(or portions thereof) are subsequently distributed in accordance with
subsections 9.5, 9.7, 9.9, or 9.10. The term Annual Additions shall also include
employer contributions allocated for a Plan Year to any individual medical
account (as defined in section 415(l) of the Code) which is maintained for a
Participant under a defined benefit plan and any amount allocated for a Plan
Year to the separate account of a Participant for payment of post-retirement
medical benefits under a funded welfare benefit plan (as described in section
419A(d)(2) of the Code) which is maintained by an Employer or a Related Company
or a Section 415 Affiliate. "Section 415 Affiliate" means any entity that would
be a Related Company if the ownership test of Section 414 of the Code was "more
than 50%" rather than "at least 80%".

     9.4    Excess Annual Additions. If, as a result of the allocation of
            -----------------------
forfeitures, a reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of Before-Tax Contributions that may
be made with respect to a Participant under the limits of Section 415 of the
Code or such other mitigating circumstances as the Commissioner of Internal
Revenue shall prescribe, the Annual Additions for a Participant for a Plan Year
exceed

                                      -12-

<PAGE>

the limitations set forth in subsection 9.3, the excess amounts shall be
treated, as necessary, in accordance with Treas. Reg. ss. 1.415-6(b)(6)(ii),
after any Before-Tax Contributions (and any gains or losses attributable
thereto) are first returned. Any Before-Tax Contributions returned to the
Participant in accordance with this subsection 9.4 shall be disregarded for
purposes of subsections 9.5, 9.6, 9.8, and 9.10.

     9.5    402(g) Limitation. In no event shall the Before-Tax Contributions
            -----------------
for a Participant under the Plan and any other elective deferrals (as defined in
Section 402(g)(3) of the Code) under any other cash-or-deferred arrangement
maintained by an Employer or a Related Company for any taxable year exceed
$10,500 or such other amount as may be permitted under Section 402(g) of the
Code. If during any taxable year a Participant is also a participant in another
cash-or-deferred arrangement not sponsored by an Employer or a Related Company,
and if his elective deferrals under such other arrangement together with his
Before-Tax Contributions exceed the maximum amount permitted for the Participant
for that year under section 402(g) of the Code, the Participant, not later than
March 1 following the close of such taxable year, may request the Committee to
direct the Trustee to distribute all or a portion of such excess to him, with
any gains or losses allocable thereto for that Plan Year determined in
accordance with any reasonable method adopted by the Committee for that Plan
Year that either (i) conforms to the accounting provisions of Section 8 and is
consistently applied to the corrective distributions under this subsection 9.5
and under subsections 9.7, 9.9 and 9.10 to all affected Participants or (ii)
satisfies any alternative method set forth in applicable Treasury regulations.
Any such request shall be in writing and shall include adequate proof of the
existence of such excess, as determined by the Committee in its sole discretion,
taking into account any Before-Tax Contributions previously distributed to the
Participant pursuant to subsection 9.7. If the Committee is so notified, such
excess amount shall be distributed to the Participant no later than the April 15
following the close of the Participant's taxable year. In addition, if the
applicable limitation for a Plan Year happens to be exceeded with respect to
this Plan alone, or this Plan and another plan or plans of the Employers and
Related Companies, the Committee shall direct such excess Before-Tax
Contributions (with allocable gains or losses) to be distributed to the
Participant as soon as practicable after the Committee is notified of the excess
deferrals by the Company, an Employer or the Participant, or otherwise discovers
the error (but no later than April 15 following the close of the Participant's
taxable year.) Notwithstanding the foregoing provisions of this subsection 9.5,
the dollar amount of any distribution hereunder shall be reduced by the dollar
amount of any Before-Tax Contribution previously distributed to the same
Participant pursuant to subsection 9.7, provided, however that for purposes of
subsections 9.3 and 9.6, the correction under this subsection 9.5 shall be
deemed to have occurred before the correction under subsection 9.7.

     9.6    Section 401(k)(3) Testing. For any Plan Year, the amount by which
            -------------------------
the average of the Deferral Percentages (as defined below) for the Plan Year for
the group of eligible employees who are Highly Compensated (the "Highly
Compensated Group Deferral Percentage") exceeds the average of the Deferral
Percentages for the preceding Plan Year for the group of eligible employees who
are not Highly Compensated (the "Non-Highly Compensated Group Deferral
Percentage"), shall be less than or equal to either (i) a factor of 1.25 or (ii)
both a factor of 2 and a difference of 2 (or, with respect to the Plan Year
ending December 31, 2001, the lesser factor permitted by the Multiple Use
Limitation referenced in subsection 9.10). The "Deferral Percentage" for any
eligible employee for a Plan Year shall be determined by dividing

                                      -13-

<PAGE>

his Before-Tax Contributions, and, as elected by the Employer, all or part
of his Qualified Matching Contributions, for the year by his Compensation for
the year subject to the following special rules:

     (a)    any employee eligible to participate in the Plan at any time during
            a Plan Year shall be counted, regardless of whether any Before-Tax
            Contributions are made on his behalf for the year; excluding,
            however, to the extent permitted under section 401(k) of the Code
            and applicable Treasury regulations, an employee who is a
            nonresident alien who received no earned income (within the meaning
            of section 911(d)(2)) from the Employers or the Related Companies
            which constitutes income from sources within the United States
            (within the meaning of section 861(a)(3) of the Code), as described
            in section 410(b)(3)(C) (a "Nonresident Alien Participant").

     (b)    the Deferral Percentage for any Highly Compensated Participant who
            is eligible to participate in the Plan and who is also eligible to
            make other elective deferrals under one or more other plans
            described in section 401(k) of the Code maintained by an Employer or
            a Related Company for a plan year that ends with or within the same
            calendar year as the Plan Year (other than a plan subject to
            mandatory disaggregation under applicable Treasury regulations),
            shall be determined as if all such elective deferrals were made on
            his behalf under the Plan;

     (c)    excess Before-Tax Contributions distributed to a Participant under
            subsection 9.5 shall be counted in determining such Participant's
            Deferral Percentage, except in a case of amounts distributable to a
            Non-Highly Compensated Participant as required to comply with
            section 401(a)(30) of the Code;

     (d)    if this Plan is aggregated with one or more other plans for purposes
            of section 410(b) of the Code (other than the average benefit
            percentage test), this subsection 9.6 shall be applied as if all
            such plans were a single plan, provided, however, that such
            aggregated plans must all have the same plan year; and

     (e)    for the period beginning on the Effective Date and ending December
            31, 2001, which is the first period during which Before-Tax
            Contributions are permitted under the Plan, the amount taken into
            account as the Non-Highly Compensated Group Deferral Percentage for
            the preceding Plan Year shall be the actual Non-Highly Compensated
            Group Deferral Percentage for such period.

Application of the provisions of this subsection 9.6 and subsection 9.7 shall be
made in accordance with the requirements of section 401(k)(3) of the Code and
the regulations thereunder, which are hereby incorporated herein by reference.

     9.7    Correction Under Section 401(k) Test. In the event that the Highly
            ------------------------------------
Compensated Group Deferral Percentage for any Plan Year does not initially
satisfy one of the tests referred to in subsection 9.6, the Committee shall
direct the Trustee to distribute the "Excess Contributions" (as defined below)
for such year, with any gains or losses allocable thereto for the Plan Year. The
"Excess Contributions" for any Plan Year shall mean the excess of the aggregate
amount of

                                      -14-

<PAGE>

Before-tax Contributions taken into account in computing the Deferral
Percentages of Highly Compensated Participants for such year over the maximum
amount of Before-Tax Contributions permitted under the test set forth in
subsection 9.6, determined by reducing the amount of Before-Tax Contributions
made on behalf of Highly Compensated Participants in order of the Deferral
Percentages, beginning with the highest of such percentages. Distribution of the
Excess Contributions for a Plan Year shall be made to Highly Compensated
Participants making the largest dollar amount of contributions, in the manner
required under section 401(k)(8)(C) of the Code. The gain or loss allocable to
Excess Contributions shall be determined in accordance with any reasonable
method adopted by the Committee for that Plan Year that either (i) conforms to
the accounting provisions of Section 8 and is consistently applied to making
corrective distributions under this subsection 9.7 and subsections 9.5, 9.9 and
9.10 to all affected Participants or (ii) satisfies any alternative method set
forth in applicable regulations. The amounts to be distributed to any
Participant pursuant to this subsection 9.7 shall be reduced by the amount of
any Before-Tax Contributions distributed to him for the taxable year ending with
or within such Plan Year pursuant to subsection 9.5. The Committee shall take
such actions and cause any distribution to be made no later than the close of
the Plan Year following the Plan Year for which the Excess Contributions were
made.

     9.8  Section 401(m)(2) Testing. For any Plan Year, the amount by which the
          -------------------------
average of the Contribution Percentages (as defined below) for the Plan Year for
the group of eligible employees who are Highly Compensated (the "Highly
Compensated Group Contribution Percentage") exceeds the average of the
Contribution Percentages for the preceding Plan Year for the group of eligible
employees who are not Highly Compensated (the "Non-Highly Compensated Group
Contribution Percentage") shall be less than or equal to either (i) a factor of
1.25, or (ii) both a factor of 2 and a difference of 2 (or, with respect to the
Plan Year ending December 31, 2001, the lesser factor permitted by the Multiple
Use Limitation referenced in subsection 9.10). The "Contribution Percentage" for
any eligible employee for a Plan Year shall be determined by dividing his total
Matching Contributions and Discretionary Matching Contributions (excluding those
Qualified Matching Contributions included in the testing under subsection 9.6)
for that Plan Year by his Compensation for that Plan Year, subject to the
following special rules:

     (a)  any employee who is eligible to participate in the Plan at any time
          during a Plan Year in accordance with subsection 2.1 (without regard
          to any suspension imposed by any other provision hereunder) shall be
          counted, regardless of whether any Matching Contributions or
          Discretionary Matching Contributions are made on his behalf for the
          year; excluding, however, to the extent permitted under section 401(m)
          of the Code and applicable Treasury regulations, an employee who is a
          Nonresident Alien Participant, as defined in subsection 9.6(a);

     (b)  the Contribution Percentage for any Highly Compensated employee who is
          eligible to participate in the Plan and who is also eligible to
          participate in one or more other qualified plans maintained by an
          Employer or a Related Company with a plan year that ends with or
          within the Plan Year (other than a plan subject to mandatory
          disaggregation under applicable Treasury regulations) with after-tax
          or matching contributions shall be determined as if all such
          contributions were made under the Plan; and

                                      -15-

<PAGE>

     (c)  if this Plan is aggregated with one or more other plans for purposes
          of section 410(b) of the Code (other than the average benefit
          percentage test). This subsection 9.8 shall be applied as if all such
          plans were a single plan, provided, however, that such aggregated
          plans must all have the same Plan Year.

     (d)  for the period beginning on the Effective Date and ending December 31,
          2001, which is the first period during which Matching Contributions
          and Discretionary Matching Contributions are made under the Plan, the
          amount taken into account as the Non-Highly Compensated Group
          Contribution Percentage for the preceding Plan Year shall be the
          actual Non-Highly Compensated Group Contribution Percentage for such
          period.

Application of the provisions of this subsection 9.8 and subsection 9.9 shall be
made in accordance with the requirements of section 401(m) of the Code and the
regulations thereunder, which are hereby incorporated herein by reference.

     9.9  Correction Under Section 401(m) Test. In the event that the Highly
          ------------------------------------
Compensated Group Contribution Percentage for any Plan Year does not initially
satisfy one of the tests referred to in subsection 9.8, the Committee shall
direct the Trustees to distribute the Excess Aggregate Contributions (as defined
below) for such year, with any gains or losses allocable thereto for that Plan
Year. The "Excess Aggregate Contributions" for any Plan Year shall mean the
excess of the aggregate amount of Matching Contributions and Discretionary
Matching Contributions taken into account in computing the Contribution
Percentages of Highly Compensated Participants for such year over the maximum
amount of Matching Contributions and Discretionary Matching Contributions
permitted under the test set forth in subsection 9.8, determined by reducing the
amount of such contributions made on behalf of Highly Compensated Participants
in order of the Contribution Percentages, beginning with the highest of such
percentages. Distribution of the Excess Aggregate Contributions for a Plan Year
shall be made to Highly Compensated Participants on the basis of the amount of
contributions made on behalf of each such Participant for such year beginning
with the Highly Compensated Participants on behalf of whom the largest dollar
amount of contributions were made, in the manner and required under section
401(m)(6)(C) of the Code. The gain or loss allocable to Excess Aggregate
Contributions shall be determined in accordance with any reasonable method
adopted by the Committee for that Plan Year that either (i) conforms to the
accounting provisions of Section 8 and is consistently applied to making
corrective distributions under this subsection 9.9 and subsections 9.5, 9.7 and
9.10 to all affected Participants or (ii) satisfies any alternative method set
forth in applicable Treasury regulations. Notwithstanding the foregoing
provisions of this subsection 9.9, any Matching Contributions and Discretionary
Matching Contributions distributable as Excess Aggregate Contributions that are
not yet vested in accordance with subsection 12.1 or are attributable to excess
Before-Tax Contributions distributed in accordance with subsection 9.5 or 9.7 or
this subsection 9.9 shall be forfeited as of the end of the Plan Year to which
such corrective distributions relate (and treated in the same manner as any
other forfeiture under the Plan). The Committee shall make any necessary
distribution no later than the close of the Plan Year following the Plan Year in
which such Excess Aggregate Contributions were contributed.

                                      -16-

<PAGE>

     9.10   Multiple Use of Alternative Limitation. Notwithstanding any other
            --------------------------------------
provisions of this Section 9, if the 1.25 factors referred to in subsections 9.6
and 9.8 are both exceeded for a Plan Year, the corrective distributions
prescribed in subsection 9.9 shall be continued until the aggregate limit set
forth in Treas. Reg. ss. 1.401(m)-2(b) is satisfied for such Plan Year. For Plan
Years beginning on and after January 1, 2002, the foregoing provisions of
subsection 9.10 shall not apply.

     9.11   Highly Compensated. An active employee (that is, an employee who
            ------------------
performs services for the Employer or any Related Company during the year in
question) or Participant shall be "Highly Compensated" for any Plan Year if:

     (a)  he was at any time during that Plan Year or the preceding Plan Year a
          5 percent owner of an Employer or a Related Company; or

     (b)  he received Compensation for the preceding Plan Year in excess of
          $80,000 (indexed for cost-of-living adjustments under section 415(d)
          of the Code), and was in the top-paid group of employees (as defined
          below) for such year.

The determination of who is a Highly Compensated Employee shall be made in
accordance with section 414(q) of the Code and the regulations thereunder.

                                   SECTION 10
                                   ----------

                              Loans to Participants
                              ---------------------

     The Committee, upon written request by a Participant who is an employee of
an Employer or who otherwise is required to be given the opportunity to borrow
under applicable regulations, shall authorize a loan to be made from the Trust
Fund to the Participant, but only for the purpose of either paying educational
expenses for himself or one or more of his dependents or acquiring a home,
subject to the following:

     (a)  No loan shall be made to a Participant if, immediately after such
          loan, the sum of the outstanding balances (including principal and
          interest) of all loans made to him under this Plan and under any other
          qualified retirement plans maintained by the Related Companies would
          exceed the lesser of:

          (i)   $50,000, reduced by the excess, if any, of:

          (ii)  the highest outstanding balance of loans to the Participant
                during the one-year period ending on the day immediately before
                the date on which the loan is made; over

          (iii) the outstanding balance of loans from the Plan to the
                Participant on the date on which such loan is made; or

          (iv)  one-half of the total vested balance of the Participant's
                Accounts under the Plan as of the date the loan is made.

                                      -17-

<PAGE>

     (b)  Each loan shall be evidenced by a written note (except as otherwise
          permitted by subsection 1.8) providing for:

          (i)   a reasonable repayment period of not more than 5 years from the
                date of the loan (or 10 years for a loan used to acquire a
                dwelling which, within a reasonable period of time, will be used
                as the Participant's principal residence);

          (ii)  a reasonable rate of interest;

          (iii) substantially equal payments of principal and interest over the
                term of the loan no less frequently than quarterly; and

          (iv)  such other terms and conditions as the Committee shall
                determine.

     (c)  Payments of principal and interest to the Trustee with respect to any
          loan to a Participant:

          (i)   shall reduce the outstanding balance with respect to that loan;

          (ii)  shall reduce the balance of the Loan Fund holding the promissory
                note reflecting that loan; and

          (iii) shall be credited to the Participant's Account from which the
                loan was made.

     (d)  A participant's obligation to repay a loan (or loans) from the Plan
          shall be secured by the Participant's vested interest in the Plan.

     (e)  Promissory notes shall be held by the Trustee in the Loan Fund. If,
          within 90 days, or such other time period established by the
          Committee, of a Participant's Termination Date, any loan or portion of
          a loan made to him, together with the accrued interest thereon,
          remains unpaid, an amount equal to such loan or any part thereof,
          together with the accrued interest thereon, shall be charged to the
          Loan Fund under the Participant's Accounts after all other adjustments
          required under the Plan have been made, before any payment or
          distribution is made to any person pursuant to the provisions of
          Section 13.

     (f)  Generally, during the Participant's employment with an Employer or
          Related Company, loan repayments will be made by payroll deductions,
          or by such other method as is determined by the Committee. During any
          period when payroll deduction is not possible or is not permitted
          under applicable law, repayment will be made by personal check.

     (g)  The loan may be prepaid in full at any time without penalty.

     (h)  If the outstanding balance of principal and interest on any loan is
          not paid when due, a default shall occur and the Trustee shall apply
          all or a portion of the

                                      -18-

<PAGE>

           Participant's vested interest in the Plan in satisfaction of such
           outstanding obligation, but only to the extent such vested interest
           (or portion thereof) is then distributable under applicable
           provisions of the Code. If necessary to satisfy the entire
           outstanding obligation, such application of the Participant's vested
           interest may be executed in a series of actions as amounts credited
           to the Participant's Account become distributable under applicable
           provisions of the Code.

     (i)   If distribution is to be made to a Participant or his Beneficiary in
           accordance with Section 13, each outstanding promissory note of the
           Participant shall be canceled and the unpaid balance of the loan,
           together with any accrued interest thereon, shall be treated as a
           distribution to or on behalf of the Participant immediately prior to
           commencement of such distribution under Section 13.

     (j)   The Committee shall establish uniform procedures for the
           administration of the loan program, including but not limited to
           restrictions on the availability of loans applying for a loan,
           evaluating loan applications, and setting reasonable rates of
           interest. Such procedures shall be communicated to Participants by
           means of separate written documents, the relevant portions of which
           are incorporated herein by reference. The Committee in its discretion
           from time to time may also set a fee to be charged in connection with
           future loans.

                                   SECTION 11
                                   ----------

                                Termination Dates
                                -----------------

     11.1  Regular Termination Date. A Participant's "Termination Date" will be
           ------------------------
the date on which his employment by the Employer and the Related Companies is
terminated for any reason; provided, however, that except as provided at Section
13.3, a Participant may not commence distribution of his Before-Tax Account or
Qualified Matching Account pursuant to Section 14, unless and until the
occurrence of an event described in section 401(k)(2)(B)(i) of the Code.

                                   SECTION 12
                                   ----------

                          Vesting and Termination Dates
                          -----------------------------

     12.1  Determination of Vested Interest. A Participant shall have a fully
           --------------------------------
vested, nonforfeitable interest in his Matching Account, Discretionary Matching
Account and Core Account upon his completion of one Year of Vesting Service. A
Participant shall at all times have a nonforfeitable interest in his Before-Tax
Account, Qualified Matching Account and Rollover Account.

     12.2  Accelerated Vesting. Notwithstanding the foregoing provisions of this
           -------------------
Section 12, a Participant shall have a fully vested, nonforfeitable interest in
all his Accounts when he attains age 65 or dies while employed by the Employer
or a Related Company. In addition, in the event of the Plan's termination (in
accordance with subsection 15.2) or partial termination (as

                                      -19-

<PAGE>

determined under applicable law and regulations), each Participant shall be
fully vested in all his Accounts.

                                   SECTION 13
                                   ----------

                                  Distributions
                                  -------------

     13.1 Distributions to Participants After Termination of Employment. If a
          -------------------------------------------------------------
Termination Date occurs with respect to a Participant (for a reason other than
his death), the vested portions of his Accounts shall be distributed in
accordance with the following provisions of this subsection 13.1, subject to the
rules of subsection 13.3:

     (a)  If the value of the vested portions of the Participant's Accounts does
          not exceed $5,000, determined as of his Distribution Date, such vested
          portions, less any outstanding loan balance distributable in
          accordance with paragraph 10(i), shall be distributed to the
          Participant as soon as practicable after such Distribution Date, in a
          lump sum cash payment; provided, however, that the distribution shall
          not commence earlier than 30 days after the Participant is given the
          direct rollover notice required under section 402(f) of the Code
          unless the Participant has been informed of his right to a period of
          at least 30 days to consider the decision of whether or not to elect a
          direct rollover, and the Participant, after receiving such notice,
          affirmatively elects the distribution.

     (b)  If the value of the vested portions of the Participant's Accounts
          exceeds $5,000, determined as of his Termination Date, such vested
          portions, less any outstanding loan balance distributable in
          accordance with paragraph 10(i), shall be distributed (or shall begin
          to be distributed) to the Participant on (or as soon as practicable
          after) the Distribution Date he elects in one lump sum cash payment.

     (c)  A Participant's "Distribution Date" for purposes of paragraph (a)
          above shall mean the Participant's Termination Date, and for purposes
          of paragraph (b) above shall mean the date as of which a payment is
          made pursuant to this Section 13. If the Participant has not yet
          attained age 65 and the value of the vested portion of his Accounts
          exceeds $5,000, he must consent in writing to the distribution of his
          Accounts. A Participant may elect that his Distribution Date with
          respect to any of his Accounts occur as of any day occurring on or
          after his Termination Date (but not later than the last day of the
          Plan Year coincident with or next following the later of the date on
          which he attains age 65 or his Termination Date). A Participant's
          election form must be received by the Committee prior to the day which
          the Participant elects as his Distribution Date, in accordance with
          uniform procedures established by the Committee or its delegate. No
          election of a Distribution Date will be valid if it is made more than
          90 days prior to such date and the distribution shall not commence
          earlier than 30 days after the Participant is given the direct
          rollover notice required under section 402(f) of the Code and the
          notice required under Treasury regulation section 1.411(a)-11(c)
          unless the Participant has been informed of his right to a period of
          at least 30 days to

                                      -20-

<PAGE>

           consider the decision of whether or not to elect a distribution, and
           the Participant, after receiving such notices, affirmatively elects
           the distribution.

     (d)   Notwithstanding the foregoing provisions of this subsection 13.1, the
           provisions of paragraph 6.2(a) of the Plan as in effect immediately
           prior to the Effective Date (regarding the election to receive a
           distribution in one lump sum or in installments) shall continue in
           effect with respect to any distribution to a Participant for which
           Distribution Date occurs before the earlier of (i) January 1, 2003 or
           (ii) the date that is the 90th day after such Participant receives a
           summary that reflects the amendment of the Plan to eliminate the
           installment form of payment, which summary satisfies the requirements
           of 29 CFR 2520.104b-3.

     (e)   A Participant who had begun to receive a distribution of his Accounts
           under the Plan on or before the Effective Date shall have a one-time
           opportunity to elect to receive the remaining balance of his Accounts
           in the form of a single lump sum payment rather than to continue to
           receive installment payments. Such election shall be made at such
           time and in such form as the Committee or its delegate requires,
           provided that such election is made on or after the Effective Date
           and no later than December 31, 2001. Payment shall be made of the
           remainder of the Participant's Account to the Participant in a single
           lump sum as soon as administratively practicable following such
           election; provided, however, that the distribution shall be made
           within 90 days of such election; and provided further that the
           distribution shall not commence earlier than 30 days after the
           Participant is given the direct rollover notice required under
           section 402(f) of the Code and the notice required under Treasury
           regulation section 1.411(a)-11(c) unless the Participant has been
           informed of his right to a period of at least 30 days to consider
           the decision of whether or not to elect a distribution, and the
           Participant, after receiving such notices, affirmatively elects the
           distribution.

     13.2  Distributions to Beneficiaries. Subject to the provisions of
           ------------------------------
subsection 13.3, the following rules shall apply if a Participant dies while any
vested portions of his Accounts remain undistributed:

     (a)   If the Participant dies before benefit payments to him have
           commenced, the vested balance of his Accounts, less any outstanding
           loan balance distributable in accordance with paragraph 10.1(i) shall
           be distributed as soon as practicable after the day following the
           date of his death, to his Beneficiary (as defined in subsection 13.4)
           in a lump sum payment.

     (b)   If a Participant dies after benefit payments to him have commenced,
           the remaining portion, if any, of his Accounts shall be distributed
           as soon as practicable following the date of his death, to his
           Beneficiary in a lump sum payment.

     13.3  Limits on Commencement and Duration of Distributions. The following
           ----------------------------------------------------
distribution rules shall be applied in accordance with sections 401(a)(9) and
401(a)(14) of the

                                      -21-

<PAGE>

Code and applicable regulations thereunder, and shall supersede any other
provision of the Plan to the contrary:

          (a)  In no event shall distribution commence later than 60 days after
               the close of the Plan Year in which the latest of the following
               events occurs: the Participant's attainment of age 65; the 10th
               anniversary of the year in which the Participant began
               participating in the Plan; or the Participant's Termination Date.

          (b)  Notwithstanding any other provision herein to the contrary,
               distribution of the Participant's Accounts shall commence no
               later than his "Required Beginning Date", that is, the April 1 of
               the calendar year following the later of (i) the calendar year in
               which he attains age 70-1/2, or (ii) the calendar year in which
               the Participant terminates employment with an Employer or Related
               Company; provided, however, that (ii) shall not apply to any
               Participant who is a 5-percent owner (as defined in section 416
               of the Code) of any Employer or Related Company. For purposes of
               this paragraph 13.3, any Participant who attains age 70-1/2
               before the later of: December 31, 1998 or the Effective Date
               shall have a "Required Beginning Date" of April 1 of the calendar
               year following the calendar year in which the Participant attains
               age 70-1/2, regardless of whether the Participant's Termination
               Date has occurred.

          (c)  If a Participant dies before distribution of his vested interest
               in the Plan has been made, distribution of such vested interest
               to his Beneficiary shall be completed by December 31 of the
               calendar year in which the fifth anniversary of the Participant's
               death occurs; provided, however, that if the Beneficiary of the
               Participant is the Participant's surviving spouse, distribution
               shall be made no later than the date on which the Participant
               would have attained age 70-1/2 years and, if the surviving spouse
               dies before distribution commences, distribution shall be applied
               under this paragraph (c) as if the surviving spouse were a
               Participant.

          (d)  For purposes of paragraph (c), distribution of a Participant's
               vested interest in the Plan is considered to begin on his
               Required Beginning Date.

         With respect to distributions under the Plan made for calendar years
beginning on or after January 1, 2002, the Plan will apply the minimum
distribution requirements of section 401(a)(9) of the Code in accordance with
the regulations under section 401(a)(9) that were proposed on January 17, 2001,
notwithstanding any provision of the Plan to the contrary. This provision shall
continue in effect until the end of the last calendar year beginning before the
effective date of final regulations under section 401(a)(9) or such other date
as may be specified in guidance published by the Internal Revenue Service.

          13.4 Beneficiary Designations. The term "Beneficiary" shall mean the
               ------------------------
Participant's surviving spouse. However, if the Participant is not married, or
if the Participant is married but his spouse consents to the designation of a
person other than the spouse, the term Beneficiary shall mean such person or
persons as the Participant designates to receive the vested portion of his
Accounts upon his death. Such designation may be made, revoked or changed
(without the consent of any previously-designated Beneficiary except his spouse)
only by an instrument

                                      -22-

<PAGE>

signed by the Participant and received by the Committee prior to his death. A
spouse's consent to the designation of a Beneficiary other than the spouse shall
be in writing, shall acknowledge the effect of such designation, shall be
witnessed by a Plan representative or a notary public and shall be effective
only with respect to such consenting spouse. In default of such designation, or
at any time when there is no surviving spouse and no surviving Beneficiary
designated by the Participant, his Beneficiary shall be his surviving children
(per capita) or, if he has no children, the estate of the last to die of the
Participant or his designated Beneficiary. For purposes of the Plan, "spouse"
means the person to whom the Participant is legally married at the relevant
time.

        13.5  Direct Rollover Option. To the extent required under the
              ----------------------
applicable provisions of section 401(a)(31) of the Code and regulations issued
thereunder, any person receiving an "eligible rollover distribution" (as defined
in Code section 401(a)(31)) may direct the Committee to transfer such
distributable amount, or a portion thereof, to an "eligible retirement plan" (as
defined in Code section 401(a)(31)) as a direct rollover, in accordance with
uniform rules established by the Committee.

        13.6  Forfeitures and Restorations of Unvested Contributions. If a
              ------------------------------------------------------
Termination Date occurs with respect to a Participant before he is credited with
one Year of Vesting Service under the Plan, his Matching Account, Discretionary
Matching Account and Core Account shall be forfeited as of the Accounting Date
next following such Termination Date, and the Participant shall be deemed to
have received a distribution of the vested portion of such Accounts, equal to
zero. If, however, the Participant is reemployed by an Employer or a Related
Company before he incurs five consecutive One Year Breaks in Vesting Service,
the amount forfeited (without adjustment for gains or losses after the
forfeiture) shall be restored to his Matching Account, Discretionary Matching
Account and Core Account, as applicable, as soon as practicable after the date
of his reemployment and shall not be considered an Annual Addition for purposes
of subsection 9.3. Any such restoration shall be made first from current
forfeitures, if any, under the Plan and then, if necessary, from a special
Employer contribution. If, instead, the Participant is reemployed by the
Employer after he incurs five consecutive One Year Breaks in Vesting Service,
his reemployment shall have no effect on the forfeiture under this subsection
13.6.

        13.7  Application of Forfeitures. Any forfeiture of Matching
              --------------------------
Contributions, Discretionary Matching Contributions, and Core Contributions and
earnings thereon during a Plan Year pursuant to subsection 13.6 first shall be
used to restore any prior forfeitures as required by subsection 13.6 and then
shall be treated as a Matching Contribution, Discretionary Matching
Contribution, or Core Contribution and used to reduce the Employer Matching
Contributions, Discretionary Matching Contributions and Core Contributions.

        13.8  Facility of Payment. Notwithstanding the provisions of subsections
              -------------------
13.1 and 13.2, if, in the Committee's opinion, a Participant or Beneficiary is
under a legal disability or is in any way incapacitated so as to be unable to
manage his financial affairs, the Committee may direct the Trustee to make
payment to a relative or friend of such person for his benefit until claim is
made by a conservator or other person legally charged with the care of his
person or his estate. Thereafter, any benefits under the Plan to which such
Participant or Beneficiary is entitled shall be paid to such conservator or
other person legally charged with the care of his person or his estate.

                                      -23-

<PAGE>

         13.9  Interests Not Transferable. The interests of Participants and
               --------------------------
other persons entitled to benefits under the Plan are not subject to the claims
of their creditors and may not be voluntarily or involuntarily assigned,
alienated or encumbered, except in the case of (a) loans made under the Plan;
(b) qualified domestic relations orders that relate to the provision of child
support, alimony or marital property rights of a spouse, child or other
dependent of the Participant and which meet such other requirements as may be
imposed by section 414(p) of the Code or regulations issued thereunder; and (c)
judgments, orders, decrees or settlement agreements providing for an offset of a
Participant's benefits as a result of the Participant's breach of fiduciary duty
to the Plan or commission of a criminal act against the Plan, which meet such
requirements as may be imposed by Section 401(a)(13)(B) and Section
401(a)(13)(C) of the Code or regulations issued thereunder. Notwithstanding any
other provision of the Plan to the contrary, a domestic relations order
described in clause (b), above, may permit distribution of the entire portion of
the vested Account balance of a Participant awarded to his alternate payee, in a
lump sum payment as soon as practicable after the Committee determines that such
order is qualified, without regard to whether the Participant would himself be
entitled under the terms of the Plan to withdraw or receive a distribution of
such vested amount at that time.

         13.10 Absence of Guaranty. None of the Trustees, the Committee, or the
               -------------------
Employers in any way guarantees the Trust Fund from loss or depreciation. The
Employers do not guarantee any payment to any person. The liability of the
Trustee to make any payment is limited to the available assets of the Trust
Fund.

         13.11 Missing Participants or Beneficiaries. Each Participant and each
               -------------------------------------
designated Beneficiary must file with the Committee from time to time in writing
his post office address and each change of post office address. Any
communication, statement or notice addressed to a Participant or designated
Beneficiary at his last post office address filed with the Committee, or, in the
case of a Participant, if no address is filed with the Committee, then at his
last post office address as shown on the Company's records, will be binding on
the Participant and his designated Beneficiary for all purposes of the Plan.
None of the Committee, the Employers nor the Trustee will be required to search
for or locate a Participant or designated Beneficiary.

                                   SECTION 14
                                   ----------

                                  The Committee
                                  -------------

         14.1  Membership and Authority. The Committee referred to in subsection
               ------------------------
1.3 shall consist of one or more members who shall be appointed by the Company.
Except as otherwise specifically provided in this Section 14, in controlling and
managing the operation and administration of the Plan, the Committee shall act
by a majority of its then members, by meeting or by writing filed without
meeting, and shall have the following discretionary authority, powers, rights
and duties in addition to those invested in it elsewhere in the Plan or Trust,
and any decision made by the Committee pursuant to this subsection 14.1 (or any
other provision of the Plan granting it such authority) shall be final:

         (a)   To adopt such rules of procedure and regulations as, in its
               opinion, may be necessary for the proper and efficient
               administration of the Plan and as are consistent with the
               provisions of the Plan.

                                      -24-

<PAGE>

          (b)  To enforce the Plan in accordance with its terms and with such
               applicable rules and regulations as may be adopted by the
               Committee.

          (c)  To determine conclusively all questions arising under the Plan,
               including the power to determine the rights or eligibility of
               employees, and the rights of Participants and other persons
               entitled to benefits under the Plan and their respective
               benefits, and to remedy any ambiguities, inconsistencies or
               omissions of whatever kind.

          (d)  To maintain and keep adequate records concerning the Plan and
               concerning its proceedings and acts in such form and detail as
               the Committee may decide.

          (e)  To direct all payments of benefits under the Plan.

          (f)  To perform the functions of a "plan administrator" (as defined in
               section 414(g) of the Code) for purposes of subsection 13.4 and
               for purposes of establishing and implementing procedures to
               determine the qualified status of domestic relations orders (in
               accordance with the requirements of section 414(p) of the Code)
               and to administer distributions under such qualified orders.

          (g)  To employ agents, attorneys, accountants or other persons (who
               may also be employed by or represent the Employers) for such
               purposes as the Committee considers necessary or desirable to
               discharge its duties.

          (h)  To establish a claims procedure.

The certificate of a majority of the members of the Committee that the Committee
has taken or authorized any action shall be conclusive in favor of any person
relying on the certificate.

         14.2  Allocation and Delegation of Committee Responsibilities and
               -----------------------------------------------------------
Powers. In exercising its authority to control and manage the operation and
------
administration of the Plan, the Committee may allocate all or any part of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked at any time.
Any member or delegate exercising Committee responsibilities and powers under
this subsection shall periodically report to the Committee on its exercise
thereof and the discharge of such responsibilities.

         14.3  Uniform Rules. In managing the Plan, the Committee will uniformly
               -------------
apply rules and regulations adopted by it to all persons similarly situated.

         14.4  Information to be Furnished to Committee. The Employers shall
               ----------------------------------------
furnish the Committee such data and information as may be required. The records
of the Employers as to any employee's or Participant's period of employment,
termination of employment and the reason therefore, leave of absence,
reemployment and Compensation will be conclusive on all persons unless
determined to be incorrect. Participants and other persons entitled to benefits
under the Plan must furnish to the Committee such evidence, data or information
as the Committee considers desirable to carry out the Plan.

                                      -25-

<PAGE>

         14.5  Committee's Decision Final. Any interpretation of the Plan and
               --------------------------
any decision on any matter within the discretion of the Committee made by the
Committee is binding on all persons. Benefits under the Plan will be paid only
if the Committee decides in its discretion that the applicant is entitled to
them under the terms of the Plan. A misstatement or other mistake of fact shall
be corrected when it becomes known, and the Committee shall make such adjustment
on account thereof as it considers equitable and practicable.

         14.6  Exercise of Committee's Duties. Notwithstanding any other
               ------------------------------
provisions of the Plan, the Committee shall discharge its duties hereunder
solely in the interests of the Participants and other persons entitled to
benefits under the Plan, and:

          (a)  for the exclusive purpose of providing benefits to Participants
               and other persons entitled to benefits under the Plan; and

          (b)  with the care, skill, prudence and diligence under the
               circumstances then prevailing that a prudent man acting in a like
               capacity and familiar with such matters would use in the conduct
               of an enterprise of a like character and with like aims.

         14.7  Remuneration and Expenses. No remuneration shall be paid to any
               -------------------------
Committee member as such. However, the reasonable expenses (including the fees
and expenses of persons employed by it in accordance with paragraph 13.1(g)) of
a Committee member incurred in the performance of a Committee function shall be
reimbursed by the Employers.

         14.8  Indemnification of the Committee. The Committee and the
               --------------------------------
individual members thereof shall be indemnified by the Employers against any and
all liabilities, losses, costs, and expenses (including legal fees and expenses)
of whatsoever kind and nature which may be imposed on, incurred by or asserted
against the Committee or its members by reason of the performance of a Committee
function if the Committee or such members did not act dishonestly or in willful
violation of the law or regulation under which such liability, loss, cost or
expense arises.

         14.9  Resignation or Removal of Committee Member. A Committee member
               ------------------------------------------
may resign at any time by giving ten days' advance written notice to the
Employers, the Trustee and the other Committee members. The Company may remove a
Committee Member effective upon written notice to him, the Trustee and the other
Committee members.

         14.10 Appointment of Successor Committee Members. The Company may
               ------------------------------------------
increase the number of Committee members and shall fill any vacancy in the
membership of the Committee. The Committee shall give prompt written notice of
any action taken by it in accordance with the foregoing sentence to the other
Committee members and the Trustee.

         14.11 Interested Committee Member. A member of the Committee may not
               ---------------------------
decide or determine any matter or question concerning his own benefits under the
Plan or as to how they are to be paid to him unless such decision could be made
by him under the Plan if he were not a member of the Committee.

                                      -26-

<PAGE>

                                   SECTION 15
                                   ----------

                            Amendment or Termination
                            ------------------------

         15.1 Amendment or Termination. While the Company expects to continue
              ------------------------
the Plan, it must necessarily reserve and reserves the right, subject to the
provisions of the Trust Agreement, to amend the Plan from time to time, except
that no amendment or termination will reduce a Participant's interest in the
Plan to less than an amount equal to the amount he would have been entitled to
receive if his employment with the Employers and the Related Companies as an
employee had terminated on the date of the amendment and no amendment will
eliminate an optional form of benefit with respect to a Participant or
Beneficiary except as otherwise permitted by law.

         15.2 Termination. The Plan will terminate as to all of the Employers on
              -----------
any day specified by the Company if advance written notice of the termination is
given to the other Employers. Employees of any Employer shall cease active
participation in the Plan (and will be treated as inactive Participants in
accordance with subsection 2.2) on the first to occur of the following:

          (a) the date on which that Employer, by appropriate action
              communicated in writing to the Company, ceases to be a
              contributing sponsor of the Plan;

          (b) the date that Employer is judicially declared bankrupt or
              insolvent; or

          (c) the dissolution, merger, consolidation, reorganization or sale of
              that Employer, or the sale by that Employer of all or
              substantially all of its assets, except that, subject to the
              provisions of subsection 15.3, with the consent of the Company,
              in any such event arrangements may be made whereby the Plan will
              be continued by any successor to that Employer or any purchaser
              of all or substantially all of that Employer's assets, in which
              case the successor or purchaser will be substituted for the
              Employer under the Plan.

         15.3 Merger and Consolidation of Plan, Transfer of Plan Assets. In the
              ---------------------------------------------------------
case of any merger or consolidation with, or transfer of assets and liabilities
to, any other plan, provisions shall be made so that each affected Participant
in the Plan on the date thereof (if the Plan, as applied to that Participant,
then terminated) would receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately prior to the merger, consolidation or
transfer if the Plan, as applied to him, had then terminated.

         15.4 Notice of Amendment, Termination or Partial Termination. Affected
              -------------------------------------------------------
Participants will be notified of an amendment, termination or partial
termination of the Plan as required by law.

                                      -27-

<PAGE>

                                  SUPPLEMENT A
                                       TO
                      ACE Limited Employee Retirement Plan

                               (Top-heavy Status)

Application                 A1. This Supplement A to the ACE Limited Employee
-----------
                            Retirement Plan (the "Plan") shall be applicable on
                            and after the date on which the Plan becomes
                            Top-heavy (as described in subsection A).

Definitions                 A2. Unless the context clearly implies or indicates
-----------
                            the contrary, a word, term or phrase used or defined
                            in the Plan is similarly used or defined for
                            purposes of this Supplement A.

Affected Participant        A3. For purposes of this Supplement A, the term
--------------------
                            "Affected Participant" means each Participant who is
                            employed by an Employer or a Related Company during
                            any Plan Year for which the Plan is Top-heavy.

Top-Heavy                   A4. The Plan shall be "Top-Heavy" for any Plan Year
---------
                            if, as of the Determination Date for that year (as
                            described in paragraph (a) next below), the present
                            value of the benefits attributable to Key Employees
                            (as defined in subsection A) under all Aggregation
                            Plans (as defined in subsection A) exceeds 60% of
                            the present value of all benefits under such plans.
                            The foregoing determination shall be made in
                            accordance with the provisions of section 416 of the
                            Code. Subject to the preceding sentence:

                            (a)    The Determination Date with respect to any
                                   plan for purposes of determining Top-Heavy
                                   status for any plan year of that plan shall
                                   be the last day of the preceding plan year
                                   or, in the case of the first plan year of
                                   that plan, the last day of that year. The
                                   present value of benefits as of any
                                   Determination Date shall be determined as of
                                   the accounting date or valuation date
                                   coincident with or next preceding the
                                   Determination Date. If the plan years of all
                                   Aggregation Plans do not coincide, the
                                   Top-Heavy status of the Plan on any
                                   Determination Date shall be determined by
                                   aggregating the present value of Plan
                                   benefits on that date with the present value
                                   of the benefits under each other Aggregation
                                   Plan determined as of the Determination Date
                                   of such other Aggregation Plan which occurs
                                   in the same calendar year as the Plan's
                                   Determination Date.

                            (b)    Benefits under any plan as of any
                                   Determination Date shall include the amount
                                   of any distributions from that plan made
                                   during the plan year which includes the
                                   Determination Date or during any of the
                                   preceding four plan years, but shall not
                                   include any amounts attributable to employee
                                   contributions

                                      A-1

<PAGE>

                                   which are deductible under section 219 of the
                                   Code, any amounts attributable to
                                   employee-initiated rollovers or transfers
                                   made after December 31, 1983 from a plan
                                   maintained by an unrelated employer, or, in
                                   the case of a defined contribution plan, any
                                   amounts attributable to contributions made
                                   after the Determination Date unless such
                                   contributions are required by section 412 of
                                   the Code or are made for the plan's first
                                   plan year. Subject to the foregoing
                                   provisions of this paragraph (b), the present
                                   value of a Participant's benefits under a
                                   defined contribution plan as of any date
                                   shall be the balance of the Participant's
                                   account under that plan as of that date.

                            (c)    Benefits attributable to a participant shall
                                   include benefits paid or payable to a
                                   beneficiary of the participant, but shall not
                                   include benefits paid or payable to any
                                   participant who has not been employed by an
                                   Employer or Related Company during any of the
                                   five plan years ending on the applicable
                                   Determination Date.

Key Employee                A5. The term "Key Employee" means an employee or
------------
                            deceased employee (or beneficiary of such deceased
                            employee) who is a key employee within the meaning
                            ascribed to that term by section 416(i) of the Code.
                            Subject to the preceding sentence, the term Key
                            Employee includes any employee or deceased employee
                            (or beneficiary of such deceased employee) who at
                            any time during the plan year which includes the
                            Determination Date or during any of the four
                            preceding plan years was:

                            (a)    an officer of any Employer or Related Company
                                   with Compensation in excess of 50 percent of
                                   the amount in effect under section
                                   415(b)(1)(A) of the Code for the calendar
                                   year in which that year ends; provided,
                                   however, that the maximum number of employees
                                   who shall be considered Key Employees under
                                   this paragraph (a) shall be the lesser of 50
                                   or 10% of the total number of employees of
                                   any Employer or Related Company (disregarding
                                   excludible employees under Code section
                                   414(q)(5));

                            (b)    one of the 10 employees owning the largest
                                   interests in any Employer or Related Company
                                   (disregarding any ownership interest which is
                                   less than 1/2 of one percent);

                            (c)    a 5% owner of any Employer or Related
                                   Company; or

                            (d)    a 1% owner of any Employer or Related Company
                                   having Compensation in excess of $150,000.

                                      A-2

<PAGE>

Compensation                A6. The term "Compensation" for purposes of this
------------
                            Supplement A generally means compensation within the
                            meaning of section 415(c)(3) for that year, not
                            exceeding such amount as may be permitted for any
                            year under Code section 401(a)(17). However, solely
                            for purposes of determining who is a Key Employee,
                            the term "Compensation" means compensation as
                            defined in Code section 414(q)(7).

Non-Key Employee            A7. The term "Non-Key Employee" means any employee
----------------
                            (or beneficiary of a deceased employee) who is not a
                            Key Employee.

Aggregation Plan            A8. The term "Aggregation Plan" means the Plan and
------------------
                            each other retirement plan maintained by an Employer
                            or Related Company which is qualified under section
                            401(a) of the Code and which:

                            (a)    during the plan year which includes the
                                   applicable Determination Date, or during any
                                   of the preceding four plan years, includes a
                                   Key Employee as a participant;

                            (b)    during the plan year which includes the
                                   applicable Determination Date or, during any
                                   of the preceding four plan years, enables
                                   the Plan or any plan in which a Key Employee
                                   participates to meet the requirements of
                                   section 401(a)(4) or 410 of the Code; or

                            (c)    at the election of the Employer, would meet
                                   the requirements of sections 401(a)(4) and
                                   410 if it were considered together with the
                                   Plan and all other plans described in
                                   paragraphs (a) and (b) next above.

Required Aggregation        A9. The term "Required Aggregation Plan" means a
--------------------
Plan                        plan described in either paragraph (a) or (b) of
----
                            subsection A-8.

Permissive Aggregation      A10. The term "Permissive Aggregation Plan" means a
----------------------
Plan                        plan described in paragraph(c) of subsection A-8.
----

Minimum Contribution        A11. For any Plan Year during which the Plan is
--------------------
                            Top-Heavy, the minimum amount of Employer
                            contributions and forfeitures, excluding elective
                            contributions as defined in Code section 401(k) and
                            employer matching contributions as defined in Code
                            section 401(m) allocated to the Accounts of each
                            Affected Participant who is employed by or
                            associated with an Employer or Related Company on
                            the last day of that year, who is a Non-Key Employee
                            and who is not entitled to a minimum benefit for
                            that year under any defined benefit Aggregation
                            Plan, nor is entitled to a minimum benefit for that
                            year under any other defined contribution
                            Aggregation Plan maintained by the Employer which is
                            top-heavy shall, when expressed as a percentage of
                            the Affected Participant's

                                      A-3

<PAGE>

                            Compensation, be equal to the lesser of:

                            (a)    3%; or

                            (b)    the percentage at which Employer
                                   contributions are allocated to the
                                   Accounts of the Key Employee for
                                   whom such percentage (when expressed
                                   as a percentage of Compensation) is
                                   greatest.

                            Paragraph (b) next above shall not be applicable
                            for any plan year if the Plan enables a defined
                            benefit plan described in paragraph A8(a) or A8(b)
                            to meet the requirements of section 401(a)(4) or
                            410 for that year. Employer Contributions for any
                            Plan Year during which the Plan is top-heavy shall
                            be allocated first to Non-Key Employees until the
                            requirements of this subsection A11 have been met
                            and, to the extent necessary to comply with the
                            provisions of this subsection A11, additional
                            contributions shall be required of the Employer.

Aggregate Benefit Limit     A12. For any Plan Year during which the Plan
-----------------------
                            is Top-Heavy, paragraphs (2)(B) and (3)(B) of
                            section 415(e) of the Code shall be applied
                            by substituting "1.0" for "1.25"

                                      A-4<PAGE>

                                                                   Exhibit 10.62

C L I F F O R D                                    LIMITED LIABILITY PARTNERSHIP

C H A N C E
                                                                  EXECUTION COPY

                             DATED 21 NOVEMBER 2001

                                  ACE LIMITED
                                AS ACCOUNT PARTY

                            ACE BERMUDA INSURANCE LTD
                                  AS GUARANTOR

                                 CITIBANK, N.A.
                                AS LEAD ARRANGER

                                BARCLAYS BANK PLC
                                   AS ARRANGER

                                   ING BARINGS
                                 AS CO-ARRANGER

                           CITIBANK INTERNATIONAL PLC
                          AS AGENT AND SECURITY TRUSTEE

                                       AND

                                     OTHERS

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

                   SECOND AMENDMENT AND RESTATEMENT AGREEMENT
                    RELATING TO A LETTER OF CREDIT FACILITY
                        AGREEMENT DATED 19 NOVEMBER 1999
              (as amended and restated pursuant to an amendment and
          restatement agreement dated 17 November 2000 and as amended
           pursuant to an amendment agreement dated 23 October 2001)

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

<PAGE>

                                    CONTENTS

Clause                                                                      Page

1.  Interpretation .........................................................   1

2.  Amendment And Restatement Of The Facility Agreement ....................   2

3.  Release Of Security ....................................................   2

4.  Agreement Supplemental .................................................   2

5.  Representations ........................................................   2

6.  Costs And Expenses .....................................................   2

7.  Governing Law ..........................................................   2

8.  Incorporation Of Terms .................................................   3

9.  Counterparts ...........................................................   3

<PAGE>

THIS SECOND AMENDMENT AND RESTATEMENT AGREEMENT is made the 21st day of November
2001

BETWEEN

(1)      ACE LIMITED (the "Account Party");

(2)      ACE BERMUDA INSURANCE LTD. (the "Guarantor");

(3)      CITIBANK, N.A. (the "Lead Arranger");

(4)      BARCLAYS BANK PLC (the "Arranger");

(5)      ING BARINGS (the "Co-Arranger")((3) ,(4) and (5) together the
         "Arrangers");

(6)      CITIBANK INTERNATIONAL plc (the "Agent" and "Security Trustee"); and

(7)      THE FINANCIAL INSTITUTIONS listed in the signature pages hereof as
         Banks (the "Banks").

WHEREAS

(A)      By a letter of credit facility agreement dated 19 November 1999 as
         amended and restated by an amendment agreement dated 17 November 2001
         and as amended by an amendment agreement dated 23 October 2001 (the
         "Facility Agreement") made between (1) the Account Party, (2) the
         Guarantor, (3) the Arrangers, (4) the Agent and (5) the Banks, such
         Banks granted to the Borrower a letter of credit facility in an
         aggregate amount of (pounds)390,000,000.

(B)      The parties hereto wish to release the security under the existing
         Charge Agreement dated on or about 24 November 1998, increase the
         amount of the Facility to (pounds)440,000,000 and to amend the Facility
         Agreement upon the terms and subject to the conditions set out below.

NOW IT IS AGREED as follows:

1.       INTERPRETATION

1.1      Terms defined in the Facility Agreement and not otherwise defined
         herein shall have the same meaning in this Agreement. Any reference to
         a Clause, an Exhibit or a Schedule shall be construed as references to
         a Clause hereof or an Exhibit or a Schedule hereto unless the contrary
         is expressed.

1.2      In this agreement:

         "Amended Agreement" means the Facility Agreement as amended by this
         Agreement;

         "Commencement Date" means the date which is the later of 21 November
         2001 and the date on which the Agent confirms in writing to the
         Obligors and the Banks that it has received in form and substance
         satisfactory to it each of the documents and other items specified in
         Schedule 3 (Conditions Precedent) of the Exhibit hereto.

                                       -1-

<PAGE>

2.       AMENDMENT AND RESTATEMENT OF THE FACILITY AGREEMENT

         With effect from the Commencement Date the Facility Agreement shall be
         amended and restated so that it shall be read and construed for all
         purposes as set forth in the Exhibit hereto.

3.       RELEASE OF SECURITY

         On the Commencement Date, the Security Trustee agrees that all existing
         security under the Existing Charge Agreement will be released.

4.       AGREEMENT SUPPLEMENTAL

         This Agreement is and shall be construed as supplemental to the
         Facility Agreement and the Facility Agreement and every clause thereof
         shall continue to be in full force and effect and binding on the
         parties thereto save as expressly amended and supplemented by this
         Agreement.

5.       REPRESENTATIONS

         On the Commencement Date, the Obligors shall make the Representations
         set out in Clause 14 (Representations) of the Amended Agreement as if
         each reference in those Representations to "this Agreement" and "the
         Finance Documents" includes a reference to (a) this Agreement and (b)
         the Amended Agreement.

6.       COSTS AND EXPENSES

6.1      Transaction Expenses

         The Account Party shall promptly on demand pay the Banks the amount of
         all costs and expenses (including legal fees) reasonably incurred by
         the Banks in connection with the negotiation, preparation, printing and
         execution of this Agreement and any other documents referred to in this
         Agreement.

6.2      Enforcement Costs

         The Account Party shall, within three Business Days of demand, pay to
         each Bank the amount of all costs and expenses (including legal fees)
         incurred by that Bank in connection with the enforcement of, or the
         preservation of any rights under this Agreement.

6.3      Stamp Taxes

         The Account Party shall pay and, within three Business Days of demand,
         indemnify each Bank against any costs, loss or liability that each such
         Bank incurs in relation to all stamp duty, registration and other
         similar taxes payable in respect of this Agreement.

7.       GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
         English law.

                                       -2-

<PAGE>

8.       INCORPORATION OF TERMS

         The provisions of Clause 30.2 (Partial Invalidity) and Clause 35
         (Jurisdiction) of the Facility Agreement shall apply, mutatis mutandis,
         hereto.

9.       COUNTERPARTS

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

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.

                                       -3-

<PAGE>

The Account Party

ACE LIMITED

By:

Address:          ACE Global Headquarters
                  17 Woodbourne Avenue
                  Hamilton HM08
                  Bermuda

Telefax:          +1 441 296 0087

The Guarantor

ACE BERMUDA INSURANCE LTD.

By:

Address:          ACE Global Headquarters
                  17 Woodbourne Avenue
                  Hamilton HM08
                  Bermuda

Telefax:          +1 441 296 0087

The Lead Arranger

CITIBANK, N.A.

By:

The Arranger

BARCLAYS BANK PLC

By:

The Co-Arranger

ING BARINGS

By:

                                       -4-

<PAGE>

The Agent and Security Trustee

EXECUTED AS A DEED                  )
BY CITIBANK INTERNATIONAL PLC       )

______________________________      Director

______________________________      Director/Secretary

Address:          Riverdale House
                  3/rd/ Floor
                  68 Molesworth Street
                  London  SE13 7EU

Telefax:          +44 20 7500 4482/3
Attention:        Loans Agency

The Banks

ABN AMRO BANK N.V., LONDON BRANCH

By:

BARCLAYS BANK PLC

By:

CITIBANK, N.A.

By:

CREDIT LYONNAIS NEW YORK BRANCH

By:

ING BANK N.V., LONDON BRANCH

By:

LLOYDS TSB BANK PLC

By:

NATIONAL WESTMINSTER BANK PLC

By:

                                       -5-

<PAGE>

C L I F F O R D                                    LIMITED LIABILITY PARTNERSHIP
C H A N C E

                                     EXHIBIT

                             DATED 19 NOVEMBER 1999
         (as (i) amended and restated pursuant to the First Restatement
         Agreement dated 17 November 2000, (ii) amended pursuant to the
         Amendment Agreement dated 23 October 2001 and (iii) amended and
              restated pursuant to the Second Restatement Agreement
                            dated 21 November 2001)

                                   ACE LIMITED
                                as Account Party

                           ACE BERMUDA INSURANCE LTD.
                                  as Guarantor

                                 CITIBANK, N.A.
                                as Lead Arranger

                                BARCLAYS BANK PLC
                                   as Arranger

                                   ING BARINGS
                                 as Co-Arranger

                           CITIBANK INTERNATIONAL plc
                          as Agent and Security Trustee

                                       and

                                     OTHERS

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

                               (Pounds)440,000,000
                       LETTER OF CREDIT FACILITY AGREEMENT

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

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
Clause                                                                      Page
<S>                                                                         <C>
1.    Definitions And Interpretation ....................................      1

2.    The Facility ......................................................     17

3.    Utilisation Of The Facility .......................................     17

4.    Extension Of Letters Of Credit ....................................     19

5.    Increase Of The Facility ..........................................     22

6.    Notification ......................................................     24

7.    The Account Party's Liabilities In Relation To Letters Of Credit ..     24

8.    Cancellation And Collateralisation ................................     26

9.    Taxes .............................................................     27

10.   Tax Receipts ......................................................     27

11.   Increased Costs ...................................................     29

12.   Illegality ........................................................     29

13.   Mitigation ........................................................     30

14.   Representations ...................................................     30

15.   Covenants .........................................................     34

16.   Events Of Default .................................................     41

17.   Commission And Fees ...............................................     46

18.   Costs And Expenses ................................................     47

19.   Default Interest And Break Costs ..................................     48

20.   Indemnities .......................................................     49

21.   Currency Of Account And Payment ...................................     50

22.   Payments ..........................................................     50

23.   Set-Off ...........................................................     52

24.   Sharing ...........................................................     52

25.   The Agent, The Arrangers And The Banks ............................     53

26.   Assignments And Transfers .........................................     62

27.   Economic And Monetary Union .......................................     64

28.   Calculations And Evidence Of Debt .................................     65

29.   Guarantee And Indemnity ...........................................     66

30.   Remedies And Waivers, Partial Invalidity ..........................     69

31.   Notices ...........................................................     69
</TABLE>

                                      -1-

<PAGE>

<TABLE>
<S>                                                                          <C>
32.   Counterparts ......................................................    71

33.   Amendments ........................................................    71

34.   Governing Law .....................................................    72

35.   Jurisdiction ......................................................    72

Schedule 1 The Banks ....................................................    74

Schedule 2 Form Of Transfer Certificate .................................    75

Schedule 3 Conditions Precedent .........................................    77

Schedule 4 Utilisation Request ..........................................    79

Schedule 5 Form Of Extension Request ....................................    81

Schedule 6 Form Of Letter Of Credit .....................................    84

Schedule 7 Mandatory Liquid Asset Costs Rate ............................    91

Schedule 8 Form Of Confidentiality Undertaking ..........................    93

Schedule 9 Pricing Schedule .............................................    96

Schedule 10 Existing Liens ..............................................    97

Schedule 11 Form Of Charge Agreement ....................................    98
</TABLE>

                                      -2-

<PAGE>

THIS AGREEMENT originally dated 19 November 1999, as (i) amended and restated
pursuant to the First Restatement Agreement dated 17 November 2000, (ii) amended
by an Amendment Agreement dated 23 October 2001 and (iii) further amended and
restated as of the Commencement Date referred to in the Second Restatement
Agreement dated 21 November 2001.

BETWEEN

(1)    ACE LIMITED as account party (the "Account Party");

(2)    ACE BERMUDA INSURANCE LTD. as guarantor (the "Guarantor");

(3)    CITIBANK, N.A. as lead arranger of the Facility (the "Lead Arranger");

(4)    BARCLAYS BANK PLC as arranger of the Facility (the "Arranger");

(5)    ING BARINGS as co-arranger of the Facility (the "Co-Arranger");

(6)    CITIBANK INTERNATIONAL plc as agent and trustee for the banks (when
       acting in such capacities the "Agent" and the "Security Trustee"
       respectively); and

(7)    THE BANKS as defined below.

IT IS AGREED as follows.

1.     DEFINITIONS AND INTERPRETATION

1.1    Definitions

       In this Agreement:

       "ACE INA" means ACE INA Holdings Inc., a Delaware company and its
       successors.

       "ACE US" means ACE US Holdings, Inc., a Delaware company and its
       successors.

       "Adjusted Consolidated Debt" means, at any time, an amount equal to (i)
       the then outstanding Consolidated Debt of the Account Party and its
       Subsidiaries plus (ii) to the extent exceeding an amount equal to 15% of
       Total Capitalisation, the then issued and outstanding amount of Preferred
       Securities (other than any Mandatorily Convertible Preferred Securities).

       "Affiliate" means, as to any Person, any other Person that, directly or
       indirectly, controls, is controlled by or is under common control with
       such Person or is a director or officer of such Person. For the purposes
       of this definition, the term "control" (including the terms
       "controlling", "controlled by" and "under common control with") of a
       Person means the possession, direct or indirect, of the power to vote 5
       per cent. or more of the Voting Interests of such Person or to direct or
       cause the direction of the management and policies of such Person,
       whether through the ownership of Voting Interests, by contract or
       otherwise.

       "Amendment Agreement" means the amendment agreement dated 23 October 2001
       which amends the First Restatement Agreement.

                                      -1-

<PAGE>

       "Applicant" means each of ACE Capital Limited, ACE Capital IV Limited,
       ACE Capital V Limited, ACE Capital VI Limited and ACE Capital VII Limited
       and their successors and substitutes within the Group from time to time.

       "Approved Credit Institution" means a credit institution within the
       meaning of the First Council Directive on the co-ordination of laws,
       regulations and administrative provisions relating to the taking up and
       pursuit of the business of credit institutions (No. 77/780/EEC) which has
       been approved by the Council of Lloyd's for the purpose of providing
       guarantees and issuing or confirming letters of credit comprising a
       member's Funds at Lloyd's.

       "Approved Investment" means any Investment that was made by the Account
       Party or any of its Subsidiaries pursuant to investment guidelines set
       forth by the board of directors of the Account Party which guidelines are
       consistent with past practices.

       "Arrangers" means the Lead Arranger, the Arranger and the Co-Arranger.

       "Authorised Signatory" means, in relation to an Obligor, any person who
       is duly authorised (in such manner as may be reasonably acceptable to the
       Agent) and in respect of whom the Agent has received a certificate signed
       by a director or another Authorised Signatory of such Obligor setting out
       the name and signature of such person and confirming such person's
       authority to act.

       "Available Commitment" means, in relation to a Bank at any time and save
       as otherwise provided herein its Commitment less its share of the
       Sterling Amount of Outstandings at such time provided that such amount
       shall not be less than zero.

       "Available Facility" means, at any time, the aggregate of the Available
       Commitments adjusted, in the case of a proposed utilisation pursuant to a
       Utilisation Request, so as to take into account:-

       (a)    any reduction in the Commitment of a Bank pursuant to the terms
              hereof; and

       (b)    any Letter of Credit which pursuant to any other Utilisation
              Request, is to be issued;

       on or before the proposed Utilisation Date relating to such utilisation.

       "Availability Period" means the period from the Commencement Date to the
       Commitment Termination Date (or such other date which Lloyd's may specify
       as the Funds Date for 2001) inclusive.

       "Bank" means any financial institution:

       (a)    named in Schedule 1 (The Banks); or

       (b)    which has become a party hereto in accordance with Clause 26.4
              (Assignments by Banks) or Clause 26.5 (Transfers by Banks),

       and which has not ceased to be a party hereto in accordance with the
       terms hereof.

                                      -2-

<PAGE>

       "Bermuda Companies Law" means The Companies Act 1981 of Bermuda, as
       amended, and the regulations promulgated thereunder.

       "Bermuda Insurance Law" means The Insurance Act 1978 of Bermuda, as
       amended, and the regulations promulgated thereunder.

       "Business Day" means a day (other than a Saturday or Sunday) on which
       banks generally are open for business in London and Bermuda and, in the
       case of payments to be made in dollars, New York.

       "Capitalised Leases" means all leases that have been or should be, in
       accordance with GAAP, recorded as capitalised leases.

       "Cash Collateral" means, in relation to any Bank's L/C Proportion of any
       Letter of Credit, a deposit in such interest-bearing account or accounts
       as such Bank or, as the case may be, the Agent may specify, such deposit
       and account to be secured in favour of, and on terms and conditions
       acceptable to, such Bank.

       "Charge Agreement" means the charge agreement dated on or about the date
       of the Second Restatement Agreement, in substantially the form set out in
       Schedule 11 (Form of Charge Agreement).

       "Charged Portfolio" has the meaning ascribed to it in the Charge
       Agreement.

       "Commencement Date" has the meaning given to it in the Second Restatement
       Agreement.

       "Commitment" means, in relation to a Bank at any time and save as
       otherwise provided herein, the amount set opposite its name under the
       heading "Commitment" in Schedule 1 (The Banks).

       "Commitment Termination Date" means 29 November 2001.

       "Consolidated" refers to the consolidation of accounts in accordance with
       GAAP.

       "Consolidated Debt" means at any date the Debt of the Account Party and
       its Consolidated Subsidiaries, determined on a Consolidated basis as of
       such date.

       "Consolidated Net Income" means, for any period, the net income of the
       Account Party and its Consolidated Subsidiaries, determined on a
       Consolidated basis for such period.

       "Consolidated Subsidiary" means at any date any Subsidiary or other
       entity the accounts of which would be consolidated with those of the
       Account Party in its consolidated financial statements if such statements
       were prepared as of such date.

       "Consolidated Net Worth" means at any date the Consolidated stockholder's
       equity of the Account Party and its Consolidated Subsidiaries determined
       as of such date, provided that such determination for the purposes of
       Clause 15.7 (Adjusted Consolidated Debt to Total Capitalisation Ratio),
       Clause 15.8 (Consolidated Net Worth) and Clause 15.9 (Liens) shall be
       made without giving effect to adjustments pursuant to

                                      -3-

<PAGE>

       Statement No. 115 of the Financial Accounting Standards Board of the
       United States of America.

       "Contingent Obligation" means, with respect to any Person, any obligation
       or arrangement of such Person to guarantee or indemnify or intended to
       guarantee or indemnify any Debt, leases, dividends or other payment
       obligations ("primary obligations") of any other Person (the "primary
       obligor") in any manner, whether directly or indirectly, including,
       without limitation, (a) the direct or indirect guarantee, endorsement
       (other than for collection or deposit in the ordinary course of
       business), co-making, discounting with recourse or sale with recourse by
       such Person of the obligation of a primary obligor, (b) the obligation to
       make take-or-pay or similar payments, if required, regardless of
       non-performance by any other party or parties to an agreement or (c) any
       obligation of such Person, whether or not contingent, (i) to purchase any
       such primary obligation or any property constituting direct or indirect
       security therefor, (ii) to advance or supply funds (A) for the purchase
       or payment of any such primary obligation or (B) to maintain working
       capital or equity capital of the primary obligor or otherwise to maintain
       the net worth or solvency of the primary obligor, (iii) to purchase
       property, assets, securities or services primarily for the purpose of
       assuring the owner of any such primary obligation of the ability of the
       primary obligor to make payment of such primary obligation or (iv)
       otherwise to assure or hold harmless the holder of such primary
       obligation against loss in respect thereof; provided, however, that
       Contingent Obligations shall not include any obligations of any such
       Person arising under insurance contracts entered into in the ordinary
       course of business. The amount of any Contingent Obligation shall be
       deemed to be an amount equal to the stated or determinable amount of the
       primary obligation in respect of which such Contingent Obligation is made
       (or, if less, the maximum amount of such primary obligation for which
       such Person may be liable pursuant to the terms of the instrument
       evidencing such Contingent Obligation) or, if not stated or determinable,
       the maximum reasonably anticipated liability in respect thereof (assuming
       such person is required to perform thereunder), as determined by such
       Person in good faith.

       "Custodian" means (at the date of the Charge Agreement) State Street Bank
       and Trust Company, or such other entity or entities as may be agreed from
       time to time between the Account Party and the Security Trustee (each
       acting reasonably), provided that such other Custodian has entered into
       Security Documents in a form reasonably acceptable to the Security
       Trustee.

       "Custodian's Undertaking" means the undertaking delivered to the Security
       Trustee by the Custodian in respect of the Charged Portfolio as
       contemplated by the Charge Agreement.

       "Debenture" means debt securities issued by the Account Party or ACE INA
       to a Special Purpose Trust in exchange for proceeds of Preferred
       Securities and common securities of such Special Purpose Trust.

       "Debt" of any Person means, without duplication for purposes of
       calculating financial ratios:

       (a)    all indebtedness of such Person for borrowed money:

                                      -4-

<PAGE>

       (b)    all obligations of such Person for the deferred purchase price of
              property or services (other than trade payables incurred in the
              ordinary course of such Person's business);

       (c)    all obligations of such Person evidenced by notes, bonds,
              debentures or other similar instruments;

       (d)    all obligations of such Person created or arising under any
              conditional sale or other title retention agreement with respect
              to property acquired by such Person (even though the rights and
              remedies of the seller or lender under such agreement in the event
              of default are limited to repossession or sale of such property);

       (e)    all obligations of such Person as lessee under Capitalised Leases
              (excluding imputed interest);

       (f)    all obligations of such Person under acceptance, letter of credit
              or similar facilities;

       (g)    all obligations of such Person (except for Approved Investments)
              to purchase, redeem, retire, defease or otherwise make any payment
              in respect of any Equity Interests (except for obligations to pay
              for Equity Interests within customary settlement periods) in such
              Person or any other Person or any warrants, rights or options to
              acquire such capital stock (excluding payments under a contract
              for the forward sale of ordinary shares of such Person issued in a
              public offering), valued, in the case of Redeemable Preferred
              Interests, at the greater of its voluntary or involuntary
              liquidation preference plus accrued and unpaid dividends;

       (h)    all Contingent Obligations of such Person in respect of Debt (of
              the types described above) of any other Person; and

       (i)    all indebtedness and other payment obligations referred to in
              clauses (a) through (h) above of another Person secured by (or for
              which the holder of such Debt has an existing right, contingent or
              otherwise, to be secured by) any Lien on property (including,
              without limitation, accounts and contract rights) owned by such
              Person, even though such Person has not assumed or become liable
              for the payment of such indebtedness or other payment obligations;

       provided, however, that the amount of Debt of such Person under clause
       (i) above shall, if such Person has not assumed or otherwise become
       liable for any such Debt, be limited to the lesser of the principal
       amount of such Debt or the fair market value of all property of such
       Person securing such Debt; provided further that "Debt" shall not include
       obligations in respect of insurance or reinsurance contracts entered into
       in the ordinary course of business; provided further that, solely for the
       purposes of Clause 15.7 (Adjusted Consolidated Debt to Total
       Capitalisation Ratio) and Clause 15.8 (Consolidated Net Worth) and the
       definitions of "Adjusted Consolidated Debt" and "Total Capitalisation",
       "Debt" shall not include (x) any contingent obligations of any Person
       under or in connection with acceptance, letter of credit or similar
       facilities or (y)

                                      -5-

<PAGE>

       obligations of the Account Party or ACE INA under any Debentures or under
       any subordinated guarantee or any Preferred Securities or obligations of
       a Special Purpose Trust under any Preferred Securities.

       "Default" means an Event of Default or a Potential Event of Default.

       "Derivatives Obligations" of any Person means all obligations of such
       Person in respect of any rate swap transaction, basis swap, forward rate
       transaction, commodity swap, commodity option, equity or equity index
       swap, equity or equity index option, bond option, interest rate option,
       foreign exchange transaction, cap transaction, floor transaction, collar
       transaction, currency swap transaction, cross-currency rate swap
       transaction, currency option or other similar transaction (including any
       option with respect to any of the foregoing transactions) or any
       combination of the foregoing transactions.

       "Effective Date" means, in respect of each Letter of Credit, 29 November
       2001.

       "Equity Interests" means, with respect to any Person, shares of capital
       stock of (or other ownership or profit interests in) such Person,
       warrants, options or other rights for the purchase or other acquisition
       from such Person of shares of capital stock of (or other ownership or
       profit interests in) such Person, securities convertible into or
       exchangeable for shares of capital stock of (or other ownership or profit
       interests in) such Person or warrants, rights or options for the purchase
       or other acquisition from such Person of such shares (or such other
       interests), and other ownership or profit interests in such Person
       (including, without limitation, partnership, member or trust interests
       therein), whether voting or nonvoting, and whether or not such shares,
       warrants, options, rights or other interests are authorised or otherwise
       existing on any date of determination.

       "Event of Default" means any circumstance described as such in Clause 16
       (Events of Default).

       "Expiry Date" means, in relation to any Letter of Credit, the date on
       which the maximum aggregate liability thereunder is to be reduced to
       zero.

       "Facility" means the sterling and dollar letter of credit facility
       granted to the Account Party in this Agreement.

       "Facility Office" means, in relation to the Agent, the office identified
       with its signature below or such other office as it may select by notice
       and, in relation to any Bank, the office notified by it to the Agent in
       writing prior to the date hereof (or, in the case of a Transferee, at the
       end of the Transfer Certificate to which it is a party as Transferee) or
       such other office as it may from time to time select by notice to the
       Agent.

       "Finance Documents" means this Agreement and any Security Document
       entered into pursuant to sub-clause 17.1.2 of Clause 17.1 (Letter of
       Credit Commission) and any other document or documents as may be agreed
       by the Agent and the Account Party.

       "Finance Parties" means the Agent, the Security Trustee, the Arrangers
       and the Banks.

                                      -6-

<PAGE>

       "First Restatement Agreement" means the amendment and restatement
       agreement dated 17 November 2000 made between (amongst others) the
       Account Party, the Guarantor, the Agent and the Banks named therein.

       "Funds at Lloyd's" has the meaning given to it in paragraph 4 of the
       Membership Bylaw (No. 17 of 1993).

       "Funds at Lloyd's Requirements" means, in respect of any member, the
       amount required to be maintained by that member as Funds at Lloyd's.

       "Funds Date" means the date notified by Lloyd's each year as being the
       latest date in that year by which Funds at Lloyd's can be placed with
       Lloyd's in order to satisfy Funds at Lloyd's Requirements in respect of
       the immediately succeeding calendar year, such date notified by Lloyd's
       in respect of the 2001 calendar year being 29 November 2001, or such
       other date as may be advised by Lloyd's.

       "GAAP" has the meaning specified in Clause 1.7 (Accounting Terms and
       Determinations).

       "Group" means the Account Party and its Subsidiaries for the time being.

       "Hedge Agreements" means interest rate swap, cap or collar agreements,
       interest rate future or option contracts, currency swap agreements,
       currency future or option contracts and other hedging agreements.

       "Internal Revenue Code" means the Internal Revenue Code of 1986 of the
       United States of America, as amended, or any successor statute, and
       includes regulation promulgated and rulings issued thereunder.

       "Investment" in any Person means any loan or advance to such Person, any
       purchase or other acquisition of any Equity Interests or Debt or the
       assets comprising a division or business unit or a substantial part or
       all of the business of such Person, any capital contribution to such
       Person or any other direct or indirect investment in such Person,
       including, without limitation, any acquisition by way of a merger or
       consolidation and any arrangement pursuant to which the investor incurs
       Debt of the types referred to in clause (h) or (i) of the definition of
       "Debt" in respect of such Person; provided, however, that any purchase by
       any US Facility Agreement Loan Party or any Subsidiary of any
       catastrophe-linked instruments which are (x) issued for the purpose of
       transferring traditional reinsurance risk to the capital markets and (y)
       purchased by such US Facility Agreement Loan Party or any Subsidiary in
       accordance with its customary reinsurance underwriting procedures, or the
       entry by any US Facility Agreement Loan Party or any Subsidiary into swap
       transactions relating to such instruments in accordance with such
       procedures, shall be deemed to be the entry by such Person into a
       reinsurance contract and shall not be deemed to be an Investment by such
       Person.

       "L/C Commission Rate" means the rate per annum determined in accordance
       with Clause 17.1 (Letter of Credit Commission) or Schedule 9 (Pricing
       Schedule), as the case may be.

                                      -7-

<PAGE>

       "L/C Proportion" means, in relation to a Bank in respect of any Letter of
       Credit and save as otherwise provided herein, the proportion (expressed
       as a percentage) borne by such Bank's Available Commitment to the
       Available Facility immediately prior to the issue of such Letter of
       Credit.

       "L/C Valuation Date" means the first Business Day which falls six months
       after the Commencement Date and each day falling at six monthly intervals
       thereafter.

       "Letter of Credit" means a letter of credit issued or to be issued
       pursuant to Clause 3 (Utilisation of the Facility) substantially in the
       form set out in Schedule 6 (Form of Letter of Credit) or in such other
       form requested by the Account Party which is approved by the Banks (such
       approval not to be unreasonably withheld or delayed).

       "Letter of Credit Commission" means the letter of credit commission
       described in Clause 17.1 (Letter of Credit Commission).

       "LIBOR" means, in relation to any Unpaid Sum on which interest for a
       given period is to accrue, the percentage rate per annum equal to the
       offered quotation which appears on the page of the Telerate Screen which
       displays an average British Bankers Association Interest Settlement Rate
       for the currency of the relevant amount (being currently "3740" or, as
       the case may be, "3750") for such period as of 11.00 a.m. on the
       Quotation Date for such period or, if such page or such service shall
       cease to be available, such other page or such other service for the
       purpose of displaying an average British Bankers Association Interest
       Settlement Rate for such currency as the Agent, after consultation with
       the Banks and the Account Party, shall select, acting reasonably.

       "Lien" means, with respect to any asset, any mortgage, lien, pledge,
       charge, security interest or other charge or encumbrance of any kind, or
       any other type of preferential arrangement that has the practical effect
       of creating a security interest, in respect of such asset. For the
       purposes of this Agreement, the Account Party shall be deemed to own
       subject to a Lien any asset which it has acquired or holds subject to the
       interest of a vendor or lessor under any conditional sale agreement,
       capital lease or other title retention agreement relating to such asset.

       "Lloyd's" means the society incorporated by Lloyd's Act 1871 by the name
       of Lloyd's.

       "Mandatorily Convertible Preferred Securities" means units comprised of
       (i) Preferred Securities or preferred shares of the Account Party and
       (ii) a contract for the sale of ordinary shares of the Account Party
       (including "Feline PridesTM", "RhinosTM" or any substantially similar
       securities).

       "Mandatory Liquid Asset Costs Rate" in relation to any Unpaid Sum shall
       bear the meaning given to it in Schedule 7 (Mandatory Liquid Asset Costs
       Rate).

       "Majority Banks" means, save as otherwise provided herein:

       (a)    whilst there are no Outstandings, a Bank or Banks whose
              Commitments amount (or, if each Bank's Commitment has been reduced
              to zero, did immediately before such reduction to zero, amount) in
              aggregate to sixty-six and two thirds

                                      -8-

<PAGE>

              per cent. or more (or for the purposes of Clause 16.18
              (Acceleration and Cancellation) to more than fifty per cent.) of
              the Total Commitments; and

       (b)    whilst there are Outstandings a Bank or Banks to whom in aggregate
              more than sixty-six and two thirds per cent. (or for the purposes
              of Clause 16.18 (Acceleration and Cancellation) more than fifty
              per cent.) of the Outstandings is owed,

       provided that, in respect of a Letter of Credit issued by a Declining
       Bank pursuant to sub-clause 4.7.2 of Clause 4.7 (Replacement Letters of
       Credit), an amount equal to the amount of its Outstandings in respect
       thereof multiplied by the Reduction Percentage applicable at that time
       shall be excluded in determining the amount of Outstandings owed to such
       Bank for the purposes of this definition only.

       "Material Debt" means Debt of the Account Party and/or one or more of its
       Subsidiaries, arising in one or more related or unrelated transactions,
       in an aggregate principal or face amount exceeding US$25,000,000.

       "Material Financial Obligations" means a principal amount of Debt and/or
       current payment obligations in respect of Derivatives Obligations of the
       Account Party and/or one or more of its Subsidiaries, arising in one or
       more related or unrelated transactions, exceeding in the aggregate
       US$25,000,000.

       "Material Subsidiary" means any Subsidiary having (i) assets (after inter
       company eliminations) in excess of 10 per cent. of the total assets of
       the Account Party and its Subsidiaries determined on a Consolidated
       basis, or (ii) annual net income constituting 10 per cent. or more of the
       total annual net income of the Account Party and its Subsidiaries on a
       Consolidated basis, in each case determined as of the end of the most
       recently ended fiscal year and in any event ACE UK Limited and ACE
       Tempest Reinsurance Ltd. shall be construed as Material Subsidiaries.

       "Notice of Charge" means the notice of charge of the Charged Portfolio to
       be delivered by the Obligors to the Custodian pursuant to the terms of
       the Charge Agreement.

       "Obligors" means the Account Party and the Guarantor.

       "Original Agreement" means this Agreement as (i) amended and restated
       pursuant to the First Restatement Agreement and (ii) amended by the
       Amendment Agreement, prior to its amendment and restatement on the
       Commencement Date.

       "Original Letters of Credit" means the letters of credit issued under the
       Original Agreement.

       "Original Sterling Amount" means:

       (a)    in relation to a Letter of Credit denominated in sterling, the
              amount specified as the amount of the Letter of Credit in the
              Utilisation Request relating thereto; and

       (b)    in relation to a Letter of Credit denominated in dollars, the
              amount of sterling which could be purchased with the dollar amount
              of such Letter of Credit at the

                                      -9-

<PAGE>

              spot rate of exchange quoted by the Agent at or about 11.00 am
              London time on the day falling three Business Days before the
              Utilisation Date for the purchase of sterling with dollars for
              delivery two business days thereafter.

       "Outstandings" means, at any time the aggregate of the Sterling Amounts
       of the maximum actual and contingent liabilities of the Banks in respect
       of each outstanding Letter of Credit.

       "Permitted Liens" means such of the following as to which no enforcement,
       collection, execution, levy or foreclosure proceeding shall have been
       commenced or which are being contested in good faith by appropriate
       proceedings: (a) Liens for taxes, assessments and governmental charges or
       levies not yet due and payable; (b) Liens imposed by law, such as
       materialsmen's, mechanics', carriers', workmen's and repairmen's Liens
       and other similar Liens arising in the ordinary course of business
       securing obligations that are not overdue for a period of more than 90
       days; (c) pledges or deposits to secure obligations under workers'
       compensation laws or similar legislation or to secure public or statutory
       obligations; and (d) easements, rights of way and other encumbrances on
       title to real property that do not render title to the property
       encumbered thereby unmarketable or materially adversely affect the use of
       such property for its present purposes.

       "Person" means an individual, a company, a corporation, a partnership, an
       association, a trust or any other entity or organisation, including a
       government or political subdivision or an agency or instrumentality
       thereof.

       "Potential Event of Default" means any event which would reasonably be
       expected to become (with the passage of time, the giving of notice, the
       making of any determination hereunder or any combination thereof) an
       Event of Default.

       "Preferred Interests" means, with respect to any Person, Equity Interests
       issued by such Person that are entitled to a preference or priority over
       any other Equity Interests issued by such Person upon any distribution of
       such Person's property and assets, whether by dividend or upon
       liquidation.

       "Preferred Securities" means (i) preferred securities issued by the
       Special Purpose Trust which shall provide, among other things, that
       dividends shall be payable only out of proceeds of interest payments on
       the Debentures, or (ii) other instruments that may be treated in whole or
       in part as equity for rating agency purposes while being treated as debt
       for tax purposes.

       "Proportion" means, in relation to a Bank the proportion borne by its
       Commitment to the Total Commitments (or, if the Total Commitments are
       then zero, by its Commitment to the Total Commitments immediately prior
       to their reduction to zero).

       "Qualifying Bank" means an institution which is a bank as defined for the
       purposes of Section 349 of the Income and Corporation Taxes Act 1988 and
       such bank is within the charge to United Kingdom corporation tax as
       respects to interest which is (or which, if it were a Bank, would be)
       payable to it hereunder.

                                      -10-

<PAGE>

     "Quotation Date" means, in relation to any period for which an interest
     rate is to be determined hereunder, the day on which quotations would
     ordinarily be given by prime banks in the London Interbank Market for
     deposits in the currency in relation to which such rate is to be determined
     for delivery on the first day of that period, provided that, if, for any
     such period, quotations would ordinarily be given on more than one date,
     the Quotation Date for that period shall be the last of those dates.

     "Redeemable" means, with respect to any Equity Interest, any Debt or any
     other right or obligation, any such Equity Interest, Debt, right or
     obligation that (a) the issuer has undertaken to redeem at a fixed or
     determinable date or dates, whether by operation of a sinking fund or
     otherwise, or upon the occurrence of a condition not solely within the
     control of the issuer or (b) is redeemable at the option of the holder.

     "Reduction Percentage" means 20 per cent. x (5 - a); where "a" equals the
     remaining number of years (and for such purposes any incomplete year shall
     be treated as one year) for which the relevant Letter of Credit is
     currently valid.

     "Representations" means each of the representations set out in Clause 14
     (Representations).

     "Required Value" has the meaning ascribed to it in the Charge Agreement.

     "Second Restatement Agreement" means the agreement dated 21 November 2001
     which amends and restates the Original Agreement.

     "Securitisation Transaction" means any sale, assignment or other transfer
     by the Account Party or any Subsidiary of any accounts receivable, premium
     finance loan receivables, lease receivables or other payment obligations
     owing to the Account Party or such Subsidiary or any interest in any of the
     foregoing, together in each case with any collections and other proceeds
     thereof, any collection or deposit accounts related thereto, and any
     collateral, guaranties or other property or claims in favour of the Account
     Party or such Subsidiary supporting or securing payment by the obligor
     thereon of, or otherwise related to, any such receivables.

     "Security" means any security granted over the Charged Portfolio by the
     Obligors in favour of the Security Trustee pursuant to the Charge
     Agreement.

     "Security Documents" means the Charge Agreement, the Custodian's
     Undertaking and the Notice of Charge.

     "Special Purpose Trust" means a special purpose business trust established
     by the Account Party or ACE INA of which the Account Party or ACE INA will
     hold all the common securities, which will be the issuer of Preferred
     Securities, and which will loan to the Account Party or ACE INA (such loan
     being evidenced by the Debentures) the net proceeds of the issuance and
     sale of the Preferred Securities and common securities of such Special
     Purpose Trust.

     "Spot Rate" means the spot rate of exchange quoted by the Agent at or about
     11.00 am London time on the day on which the relevant calculation is to be
     made for the purchase

                                      -11-

<PAGE>

     of sterling with dollars or any other relevant currency for delivery two
     business days thereafter.

     "Sterling Amount" means:

     (a)  in relation to a Letter of Credit at any time:

          (i)  if such Letter of Credit is denominated in sterling, the maximum
               actual and contingent liability of the Banks thereunder or in
               respect thereof at such time; and

          (ii) if such Letter of Credit is denominated in dollars, the
               equivalent in sterling of the maximum actual and contingent
               liability of the Banks thereunder at such time, calculated as at
               the later of the date which falls (1) two Business Days before
               its Utilisation Date or (2) the most recent L/C Valuation Date;
               and

     (b)  in relation to the Outstandings, the aggregate of the Sterling Amounts
          of each outstanding Letter of Credit.

     "Subsidiary" means, as to any Person, any corporation or other entity of
     which securities or other ownership interests having ordinary voting power
     to elect a majority of the board of directors or other persons performing
     similar functions are at the time directly or indirectly owned by such
     Person; unless otherwise specified, "Subsidiary" means a Subsidiary of the
     Account Party.

     "Term" means, save as otherwise provided herein:

     (a)  in relation to any Letter of Credit, the period from its Effective
          Date until its Expiry Date; and

     (b)  in relation to an Unpaid Sum, any of those periods mentioned in Clause
          19 (Default Interest and Break Costs).

     "Termination Date" means 31 December 2006.

     "Total Capitalisation" means, at any time, an amount (without duplication)
     equal to (i) the then outstanding Consolidated Debt of the Account Party
     and its Subsidiaries plus (ii) Consolidated stockholders' equity of the
     Account Party and its Subsidiaries plus (without duplication) (iii) the
     then issued and outstanding amount of Preferred Securities (including
     Mandatorily Convertible Preferred Securities) and (without duplication)
     Debentures.

     "Total Commitments" means, at any time, the aggregate of the Banks'
     Commitments.

     "Transfer Certificate" means a certificate substantially in the form set
     out in Schedule 2 (Form of Transfer Certificate) signed by a Bank and a
     Transferee under which:

     (a)  such Bank seeks to procure the transfer to such Transferee of all or a
          part of such Bank's rights, benefits and obligations under the Finance
          Documents upon

                                      -12-

<PAGE>

          and subject to the terms and conditions set out in Clause 26.3
          (Assignments and Transfers by Banks); and

     (b)  such Transferee undertakes to perform the obligations it will assume
          as a result of delivery of such certificate to the Agent as
          contemplated in Clause 26.5 (Transfers by Banks).

     "Transfer Date" means, in relation to any Transfer Certificate, the date
     for the making of the transfer as specified in such Transfer Certificate.

     "Transferee" means a person to which a Bank seeks to transfer by novation
     all or part of such Bank's rights, benefits and obligations under the
     Finance Documents.

     "Unpaid Sum" means the unpaid balance of any of the sums referred to in
     Clause 19.1 (Default Interest).

     "US Facility Agreements" means each of:

     (a)  the US$800,000,000 364 day revolving credit facility agreement
          originally entered into on 11 June 1999 (as amended and restated on
          (i) 8 May 2000 and (ii) 6 April 2001) and made between, inter alia,
          ACE Limited and ACE INA as borrowers, the financial institutions named
          therein and others; and

     (b)  the US$250,000,000 revolving credit facility agreement originally
          entered into on 11 June 1999 (as amended and restated on 8 May 2000)
          and made between, inter alia, ACE Limited and ACE INA as borrowers,
          the financial institutions named therein and others (the "Five Year US
          Facility"),

     in each case as the same may be further amended or restated from time to
     time.

     "US Facility Agreement Loan Parties" means, at any time, any or all of the
     Account Party, ACE INA, ACE Financial Services Inc., ACE Guaranty Re Inc.,
     ACE Bermuda Insurance Ltd. and ACE Tempest Reinsurance Ltd.

     "US Fee Letter" means the fee letter dated 5 March 2001 and made between,
     inter alia, the Account Party, the arrangers of the US Facility Agreements,
     JP Morgan Securities Inc. and others.

     "US Letter of Credit Agreements" means any and all letter of credit
     agreements entered into by any borrower pursuant to the Five Year US
     Facility.

     "US Loan Documents" means (i) each US Facility Agreement, (ii) the US
     Notes, (iii) the US Fee Letter and (iv) each US Letter of Credit Agreement.

     "US Notes" means each promissory note issued or to be issued pursuant to
     the terms of the US Facility Agreements.

     "Utilisation Date" means the date on which a Letter of Credit is to be
     issued.

     "Utilisation Request" means a notice substantially in the form set out in
     Schedule 4 (Form of Utilisation Request).

                                      -13-

<PAGE>

     "Voting Interests" means shares of capital stock issued by a corporation,
     or equivalent Equity Interest in any other Person, the holders of which are
     ordinarily, in the absence of contingencies, entitled to vote for the
     election of directors (or persons performing similar functions) of such
     Person, even if the right so to vote has been suspended by the happening of
     such a contingency.

     "Wholly-Owned Consolidated Subsidiary" means any Consolidated Subsidiary
     all of the shares of capital stock or other ownership interests of which
     (except directors' qualifying shares) are at the time directly or
     indirectly owned by the Account Party.

1.2  Interpretation
     Any reference in this Agreement to:

     the "Agent", "Security Trustee" or any "Bank" shall be construed so as to
     include its and any subsequent successors and permitted transferees in
     accordance with their respective interests;

     "continuing", in the context of an Event of Default shall be construed as a
     reference to an Event of Default which has not been remedied or waived in
     accordance with the terms hereof and in relation to a Potential Event of
     Default, one which has not been remedied within the relevant grace period
     or waived in accordance with the terms hereof.

     the "euro" means the single currency of participating member states of the
     European Union;

     a "holding company" of a company or corporation shall be construed as a
     reference to any company or corporation of which the first-mentioned
     company or corporation is a Subsidiary;

     a "law" shall be construed as any law (including common or customary law),
     statute, constitution, decree, judgment, treaty, regulation, directive,
     bye-law, order or any other legislative measure of any government,
     supranational, local government, statutory or regulatory body or court;

     a "member" shall be construed (as the context may require) as a reference
     to an underwriting member of Lloyd's;

     a "month" is a reference to a period starting on one day in a calendar
     month and ending on the numerically corresponding day in the next
     succeeding calendar month save that, where any such period would otherwise
     end on a day which is not a Business Day, it shall end on the next
     succeeding Business Day, unless that day falls in the calendar month
     succeeding that in which it would otherwise have ended, in which case it
     shall end on the immediately preceding Business Day, provided that, if a
     period starts on the last Business Day in a calendar month or if there is
     no numerically corresponding day in the month in which that period ends,
     that period shall end on the last Business Day in that later month (and
     references to "months" shall be construed accordingly);

     a Bank's "participation", in relation to a Letter of Credit, shall be
     construed as a reference to the rights and obligations of such Bank in
     relation to such Letter of Credit as are expressly set out in this
     Agreement;

                                      -14-

<PAGE>

     a "successor" shall be construed so as to include an assignee or successor
     in title of such party and any person who under the laws of its
     jurisdiction of incorporation or domicile has assumed the rights and
     obligations of such party under this Agreement or to which, under such
     laws, such rights and obligations have been transferred;

     "tax" shall be construed so as to include any tax, levy, impost, duty or
     other charge of a similar nature (including any penalty or interest payable
     in connection with any failure to pay or any delay in paying any of the
     same);

     "VAT" shall be construed as a reference to value added tax including any
     similar tax which may be imposed in place thereof from time to time; and

     the "winding-up", "dissolution" or "administration" of a company or
     corporation shall be construed so as to include any equivalent or analogous
     proceedings under the law of the jurisdiction in which such company or
     corporation is incorporated or any jurisdiction in which such company or
     corporation carries on business including the seeking of liquidation,
     winding-up, reorganisation, dissolution, administration, arrangement,
     adjustment, protection or relief of debtors.

1.3  Currency Symbols
     1.3.1     "(pound)" and "sterling" denote lawful currency of the United
               Kingdom for the time being.

     1.3.2     "US$" and "dollars" denote lawful currency of the United States
               of America for the time being.

1.4  Agreements and Statutes
     Any reference in this Agreement to:

     1.4.1     this Agreement or any other agreement or document shall be
               construed as a reference to this Agreement or, as the case may
               be, such other agreement or document as the same may have been,
               or may from time to time be, amended, varied, novated or
               supplemented;

     1.4.2     a statute or treaty shall be construed as a reference to such
               statute or treaty as the same may have been, or may from time to
               time be, amended or, in the case of a statute, re-enacted; and

     1.4.3     a bylaw shall be construed as a reference to a bylaw made under
               Lloyd's Acts 1871 to 1982 as the same may have been, or may from
               time to time be, amended or replaced.

1.5  Headings
     Clause and Schedule headings are for ease of reference only.

1.6  Time
     Any reference in this Agreement to a time of day shall, unless a contrary
     indication appears, be a reference to London time.

                                      -15-

<PAGE>

1.7  Accounting Terms and Determinations
     Unless otherwise specified herein, all accounting terms used herein shall
     be interpreted, all accounting determinations hereunder shall be made, and
     all financial statements required to be delivered hereunder shall be
     prepared in accordance with generally accepted accounting principles as in
     effect from time to time ("GAAP"), applied on a basis consistent (except
     for changes concurred in by the Account Party's independent public
     accountants) with the most recent audited consolidated financial statements
     of the Account Party and its Consolidated Subsidiaries delivered to the
     Banks; provided that, if the Account Party notifies the Agent that the
     Account Party wishes to amend any covenant in Clause 15 (Covenants) to
     eliminate the effect of any change in generally accepted accounting
     principles on the operation of such covenant (or if the Agent notifies the
     Account Party that the Majority Banks wish to amend Clause 15 (Covenants)
     for such purpose), then the Account Party's compliance with such covenant
     shall be determined on the basis of generally accepted accounting
     principles in effect immediately before the relevant change in generally
     accepted account principals became effective, until either such notice is
     withdrawn or such covenant is amended in a manner satisfactory to the
     Account Party and the Majority Banks.

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

2.   THE FACILITY

2.1  Grant of the Facility
     The Banks, upon the terms and subject to the conditions hereof, grant to
     the Account Party a dual currency letter of credit facility in an aggregate
     amount of (pounds)440,000,000.

2.2  Purpose and Application
     The Facility is intended to support Funds at Lloyd's, and, accordingly, the
     Account Party shall apply all Letters of Credit issued hereunder in or
     towards satisfaction of such purpose and none of the Finance Parties shall
     be obliged to concern themselves with such application.

2.3  Conditions Precedent
     Save as the Banks may otherwise agree, the Account Party may not deliver
     any Utilisation Request unless the Agent has confirmed to the Account Party
     and the Banks that it has received all of the documents and other evidence
     listed in Schedule 3 (Conditions Precedent) and that each is, in form and
     substance, satisfactory to the Agent.

2.4  Several Obligations
     The obligations of each Bank are several and the failure by a Bank to
     perform its obligations hereunder and/or under any Letter of Credit issued
     hereunder shall not affect the obligations of either Obligor towards any
     other party hereto nor shall any other party be liable for the failure by
     such Bank to perform its obligations hereunder and/or under such Letter of
     Credit.

                                      -16-

<PAGE>

2.5  Several Rights
     The rights of each Finance Party are several and any debt arising hereunder
     at any time from an Obligor to any Finance Party shall be a separate and
     independent debt. Each such party shall be entitled to protect and enforce
     its individual rights arising out of this Agreement independently of any
     other party (so that it shall not be necessary for any party hereto to be
     joined as an additional party in any proceedings for this purpose).

2.6  Cancellation of Original Letters of Credit
     On and with effect from the Effective Date, all outstanding Original
     Letters of Credit shall be replaced by the Letters of Credit issued after
     the Commencement Date.

3.   UTILISATION OF THE FACILITY

3.1  Utilisation Conditions for the Facility
     Save as otherwise provided herein, a Letter of Credit will be issued at the
     request of the Account Party on behalf of an Applicant if:

     3.1.1     no later than 10.00 a.m. two Business Days before the proposed
               Utilisation Date, the Agent has received a duly completed
               Utilisation Request from the Account Party;

     3.1.2     the proposed Utilisation Date is a Business Day falling within
               the Availability Period;

     3.1.3     the proposed Original Sterling Amount of such Letter of Credit is
               less than or equal to the Available Facility;

     3.1.4     the proposed Term of the Letter of Credit is a period ending on
               or before the Termination Date;

     3.1.5     the Letter of Credit is substantially in the form set out in
               Schedule 6 (Form of Letter of Credit) or in such other form
               requested by the Account Party which is approved by the Banks
               (such approval not to be unreasonably withheld or delayed);

     3.1.6     the beneficiary of such Letter of Credit is Lloyd's;

     3.1.7     on and as of the proposed Utilisation Date (a) no Event of
               Default or Potential Event of Default has occurred and is
               continuing and (b) the Representations are true in all material
               respects; and

     3.1.8     the Agent has received evidence acceptable to it that the Charged
               Portfolio has been delivered to the Custodian and the amount of
               the Charged Portfolio is at least equal to the Required Value.

3.2  Request for Letters of Credit
     A single Utilisation Request may be issued in respect of more than one
     Letter of Credit.

3.3  Completion of Letters of Credit
     The Agent is authorised to arrange for the issue of any Letter of Credit
     pursuant to Clause 3.1 (Utilisation Conditions for the Facility) by:

                                      -17-

<PAGE>

     3.3.1     completing the Effective Date and the proposed Expiry Date of
               such Letter of Credit;

     3.3.2     completing the schedule to such Letter of Credit with the
               percentage participation of each Bank as allocated pursuant to
               the terms hereof; and

     3.3.3     executing such Letter of Credit on behalf of each Bank and
               following such execution delivering such Letter of Credit to
               Lloyd's on the Utilisation Date,

     provided that the Agent shall not deliver any such Letter of Credit to
     Lloyd's unless the Agent is satisfied that (a) Lloyd's has cancelled (or
     will upon such delivery cancel) the Original Letters of Credit and (b) all
     amounts outstanding in respect of the Original Letters of Credit have been
     paid in full.

3.4  Dollar Option
     The Account Party may, in a Utilisation Request, request that such Letter
     of Credit be denominated in dollars in which event such Letter of Credit
     shall be denominated in dollars.

3.5  Amounts of Letters of Credit
     The amount of a Letter of Credit shall be:

     3.5.1     the Original Sterling Amount of such Letter of Credit, if such
               Letter of Credit is to be denominated in sterling; and

     3.5.2     if such Letter of Credit is to be denominated in dollars, the
               amount specified in the Utilisation Request relating thereto.

3.6  Each Bank's Participation in Letters of Credit
     Save as otherwise provided herein, each Bank will participate in each
     Letter of Credit issued pursuant to this Clause 3 in the proportion borne
     by its Available Commitment to the Available Facility immediately prior to
     the issue of such Letter of Credit.

3.7  Cancellation of Commitments
     On the expiry of the Availability Period the Available Facility and each
     Bank's Available Commitment shall be reduced to zero.

4.   EXTENSION OF LETTERS OF CREDIT

4.1  Bank Notification
     Each Bank acknowledges that the Account Party may request one or more
     extensions of a Letter of Credit hereunder, and that pursuant to the terms
     thereof each Letter of Credit shall be extended automatically for a further
     year each year unless Lloyd's receives notice to the contrary. Accordingly,
     each Bank undertakes to notify the Agent in writing as soon as reasonably
     practicable after it has determined that it will not agree to a requested
     extension, and in any event by no later than close of business on the date
     which falls ten weeks prior to the first date which Lloyd's notifies as
     being the Funds Date of such year and the Agent shall give notice thereof
     to the Account Party within two Business Days of notification from such
     Bank. Unless notice is given to the Agent as aforesaid each Bank will be
     deemed automatically to have agreed to such extension.

                                      -18-

<PAGE>

4.2  Request for Extension
     If the Account Party wishes to request the extension of a Letter of Credit,
     the Account Party shall give the Agent notice, by way of a Letter of Credit
     extension request in the form of Schedule 5 (Form of Extension Request) by
     the date which falls thirteen weeks prior to the Funds Date of such year,
     specifying that the Expiry Date of the applicable Letter of Credit is to be
     extended to 31 December of the year immediately succeeding the year in
     which the then current Expiry Date falls (such notice being a "Notice of
     Extension"). A single Notice of Extension may be delivered in respect of
     more than one Letter of Credit.

4.3  Non-Delivery of Notice of Extension
     If the Account Party does not deliver a Notice of Extension in accordance
     with the provisions of Clause 4.2 (Request for Extension), the Agent shall:

     4.3.1     as soon as reasonably practicable after the date which falls ten
               weeks prior to the Funds Date of such year, notify the Account
               Party and then notify the Banks thereof; and

     4.3.2     as soon as reasonably practicable after the date which falls ten
               weeks prior to the Funds Date of such year and in any event by no
               later than close of business on the Business Day immediately
               preceding the Funds Date of such year, notify Lloyd's that the
               Term of the relevant Letter of Credit will not be extended beyond
               its then current Expiry Date.

4.4  Notification to Banks
     Upon receipt of a Notice of Extension, the Agent shall promptly notify each
     Bank of the contents thereof and of the amount of such Bank's participation
     in the applicable Letter of Credit, together with notice of the applicable
     Funds Date for such year.

4.5  Extension of a Letter of Credit
     4.5.1     If all of the Banks agree (or are deemed to have agreed) to the
               extension of the Letter of Credit in accordance with Clause 4.1
               (Bank Notification) the Agent shall notify the Account Party and
               the Banks thereof and subject to the provisions of Clause 4.8
               (Extension Conditions Precedent), the Letter of Credit shall be
               automatically extended in accordance with the terms thereof.

     4.5.2     If a Bank gives notice in accordance with the provisions of
               Clause 4.1 (Bank Notification) that it does not agree to a
               requested extension of any Letter of Credit the Agent shall
               notify the Account Party and Lloyd's accordingly within two
               Business Days thereafter, and the succeeding provisions of this
               Clause 4 shall apply.

4.6  Substitute Bank
     4.6.1     If any Bank (a "Declining Bank") gives notice in accordance with
               the provisions of Clause 4.1 (Bank Notification) that it does not
               agree to a requested extension, then the Account Party may
               designate by the date which falls four weeks prior to the Funds
               Date of such year an Approved Credit Institution (the "Substitute
               Bank") which is willing to assume all of the rights and
               obligations

                                      -19-

<PAGE>

               of the Declining Bank in respect of its participation in the
               relevant Letter of Credit (the "Old Letter of Credit").

     4.6.2     If the Account Party has found a Substitute Bank it shall
               promptly notify the Agent and the Declining Bank thereof and
               shall procure the release by Lloyd's of the Old Letter of Credit
               from the Funds at Lloyd's of the relevant Applicant.

     4.6.3     The Declining Bank shall as soon as reasonably practicable and in
               any event no later than the date which falls two weeks prior to
               the Funds Date of such year transfer its rights and obligations
               hereunder to the Substitute Bank in accordance with the
               provisions of Clause 26.5 (Transfers by Banks).

     4.6.4     The Substitute Bank shall pay to the Declining Bank all amounts
               then due and owing (and all fees accrued to but excluding the
               date of such transfer) to the Declining Bank in respect of its
               participation in the Old Letter of Credit.

4.7  Replacement Letters of Credit
     4.7.1     If a Substitute Bank has become party hereto pursuant to Clause
               4.6 (Substitute Bank), then subject to the provisions of Clause
               4.8 (Extension Conditions Precedent) the Banks who have confirmed
               their agreement to the extension of the Old Letter of Credit (the
               "Extending Banks") shall, together with the Substitute Bank,
               participate in, and issue by the Funds Date of such year, a new
               Letter of Credit (the "New Letter of Credit") which shall (i)
               replace the Old Letter of Credit, (ii) be in an amount equal to
               the Old Letter of Credit and (iii) have an Expiry Date which
               corresponds with the Expiry Date requested in the Notice of
               Extension.

     4.7.2     If a Substitute Bank has not been found then: (a) the Account
               Party shall procure the release by Lloyd's of the Old Letter of
               Credit from the Funds at Lloyd's of the relevant Applicant, (b)
               subject to the provisions of Clause 4.8 (Extension Conditions
               Precedent), the Extending Banks shall participate in, and issue
               by the Funds Date of such year, a new Letter of Credit (the
               "Reduced Letter of Credit") which shall (1) replace their
               participation in the Old Letter of Credit, (2) be in an amount
               equal to the Old Letter of Credit less the amount of the
                                                 ----
               Declining Bank's participation and (3) have an Expiry Date
               which corresponds with the Expiry Date requested in the Notice of
               Extension; and (c) the Declining Bank shall participate in a
               separate Letter of Credit (a "Bilateral Letter of Credit") which
               shall (1) replace its participation in the Old Letter of Credit,
               (2) be in an amount equal to the Declining Bank's participation
               in the Old Letter of Credit and (3) have an Expiry Date which is
               the same as the Expiry Date specified in the Old Letter of Credit
               (as the same may have been extended from time to time with the
               consent of the Declining Bank).

4.8  Extension Conditions Precedent
     4.8.1     On or prior to close of business on the Funds Date immediately
               following the delivery of any Notice of Extension, the Account
               Party shall promptly notify the Agent if:

                                      -20-

<PAGE>

                    (a)  an Event of Default or Potential Event of Default
                         occurs which is continuing;

                    (b)  any of the representations and warranties of either or
                         both of the Obligors contained in this Agreement or in
                         the Charge Agreement cease to be correct in all
                         material respects, or become misleading in any material
                         respect; or

                    (c)  the Letter of Credit which is the subject of such
                         Notice of Extension ceases solely to be used to support
                         the relevant Applicant's underwriting business at
                         Lloyd's which has been provided in accordance with the
                         requirements of Lloyd's applicable to it.

          4.8.2     Subject to due notification to Lloyd's in accordance with
                    the provisions of the relevant Letter of Credit, the Banks
                    shall not be obliged to agree to any extension requested if
                    the Account Party fails to comply with its obligations under
                    Clause 4 (Extension of Letters of Credit) or if any of the
                    events specified in sub-clause 4.8.1 above occurs.

4.9       Cancellation of Bilateral Letters of Credit

          At any time after the issue of a Bilateral Letter of Credit by a
          Declining Bank the Account Party may give the Agent and the Declining
          Bank not less than fourteen days' prior written notice of its
          intention to procure that the liability of the Declining Bank under
          such Letter of Credit is reduced to zero (whereupon it shall do so).

4.10      Mandatory Collateralisation

          If a Letter of Credit is automatically extended in accordance with the
          terms thereof and, on or prior to the time of such extension the
          Company had failed to comply with its obligations under Clause 4
          (Extension of Letters of Credit) or any of the events specified in
          sub-clause 4.8.1 thereof had occurred, the Agent may (and if so
          instructed by the Majority Banks participating in such Letter of
          Credit shall) require the Account Party to procure that the
          liabilities of each of the Banks under such Letter of Credit are
          reduced to zero and/or provide Cash Collateral for each Bank's L/C
          Proportion under such Letter of Credit.

4.11      Revised Letters of Credit

          In the event that the Funds at Lloyd's Requirements of an Applicant
          change at or around the time of any given Funds Date in terms of
          amount and/or the identity of the Applicant, subject to the approval
          of Lloyd's and subject to each Bank's Outstandings under the Letters
          of Credit issued hereunder not being increased other than in
          accordance with Clause 5 (Increase of the Facility), the Banks shall
          co-operate with the Account Party to ensure to the extent reasonably
          possible that the Letters of Credit provide for the revised Funds at
          Lloyd's Requirements of the Applicants.

5.        Increase of the Facility

5.1       Request for Increase

          In the event that the Funds at Lloyd's Requirements of an Applicant
          increases at or around the time of any given Funds Date and as a
          result of such increase the aggregate amount of the Funds at Lloyd's
          Requirements of the Applicants on such Funds Date

                                      -21-

<PAGE>

          would exceed the aggregate amount of the Banks' Outstandings under the
          Letters of Credit, the Account Party shall be entitled to request an
          increase of the amount of the Letter of Credit of such Applicant by
          giving notice to the Agent no later than thirteen weeks prior to the
          Funds Date of such year (the "Increase Request"). The Increase Request
          shall be made in writing and shall be unconditional and irrevocable
          and shall specify:

          5.1.1     which Letters of Credit and Applicants the Increase Request
                    relates to;

          5.1.2     the additional amount of commitments required by the Account
                    Party from the Banks; and

          5.1.3     any other information relevant to the Increase Request.

5.2       Notification of Increase Request

          The Agent shall forward a copy of the Increase Request to the Banks as
          soon as practicable, and in any event no later than two Business Days
          after receipt thereof together with notification of the amount of such
          Banks' pro rata participation in any such increased Letter of Credit.

5.3       Response to Increase Request

          If a Bank, in its sole discretion, agrees to the increase requested by
          the Account Party pursuant to the Increase Request, it shall give
          notice to the Agent (a "Notice of Increase") accordingly not less than
          ten weeks prior to the Increase Date. If a Bank does not give such
          Notice of Increase by such date, then such Bank shall be deemed to
          have refused such increase. Nothing shall oblige a Bank to agree to
          the Increase Request.

5.4       Notification of Response to Increase Request

          The Agent shall notify the Account Party in writing of each Bank's
          decision in relation to the Increase Request (specifying which Banks
          have given a Notice of Increase, which Banks have actually refused the
          Increase Request and which Banks are deemed to have refused the
          Increase Request) no less than eight weeks prior to the Increase Date.

5.5       Increase

          5.5.1     If one or more of the Banks does not give a Notice of
                    Increase (hereinafter referred to as "Refusing Banks"), then
                    the Refusing Banks shall not participate in any increase
                    pursuant to the Increase Request but shall continue to
                    participate in the Letters of Credit to the extent of their
                    existing participation.

          5.5.2     If one or more Banks agree to the Increase Request such
                    Banks' participation in the relevant Letter(s) of Credit
                    shall, subject to satisfaction of any conditions precedent
                    which may be specified in connection therewith, be increased
                    in accordance with the terms of the Increase Request.

          5.5.3     The Account Party shall co-operate with the Agent, the Banks
                    and Lloyd's with respect to the replacement of any Letters
                    of Credit required as a result of an Increase Request and
                    all parties shall agree on any necessary replacement Letters
                    of Credit in the context of any replacement Letters of
                    Credit required in accordance with Clause 4.7 (Replacement
                    Letters of Credit).

                                      -22-

<PAGE>

          5.5.4     The Facility, save as amended pursuant to the Increase
                    Request, shall continue to operate in accordance with its
                    terms.

6.        NOTIFICATION

6.1       Letters of Credit

          On or before each Utilisation Date the Agent shall notify each Bank of
          the Letter of Credit that is to be issued by the Agent on behalf of
          the Banks, the name of the Applicant in respect of whom the Letter of
          Credit is being issued, the proposed length of the relevant Term and
          the aggregate principal amount of the relevant Letter of Credit
          allocated to such Bank pursuant to this Agreement.

6.2       Demands under Letters of Credit

          If a demand is made by Lloyd's under a Letter of Credit the Agent
          shall promptly make demand upon the Account Party in accordance with
          this Agreement and notify the Banks.

7.        THE ACCOUNT PARTY'S LIABILITIES IN RELATION TO LETTERS OF CREDIT

7.1       The Account Party's Indemnity to Banks

          The Account Party shall irrevocably and unconditionally as a primary
          obligation indemnify (on demand by the Agent) each Bank against:

          7.1.1     any sum paid or due and payable by such Bank in accordance
                    with the terms of any Letter of Credit requested by the
                    Account Party; and

          7.1.2     all liabilities, costs (including, without limitation, any
                    costs incurred in funding any amount which falls due from
                    such Bank in connection with such Letter of Credit), claims,
                    losses and expenses which such Bank may at any time properly
                    incur or sustain in connection with any Letter of Credit.

7.2       Preservation of Rights

          Neither the obligations of the Account Party set out in this Clause 7
          nor the rights, powers and remedies conferred on any Bank by this
          Agreement or by law shall be discharged, impaired or otherwise
          affected by:

          7.2.1     the winding-up, dissolution, administration or
                    re-organisation of any Bank or any other person or any
                    change in its status, function, control or ownership;

          7.2.2     any of the obligations of any Bank or any other person
                    hereunder or under any Letter of Credit or under any other
                    security taken in respect of the Account Party's obligations
                    hereunder or otherwise in connection with any Letter of
                    Credit being or becoming illegal, invalid, unenforceable or
                    ineffective in any respect;

          7.2.3     time or other indulgence being granted or agreed to be
                    granted to any Bank or any other person in respect of its
                    obligations hereunder or under or in connection with any
                    Letter of Credit or under any such other security;

          7.2.4     any amendment to, or any variation, waiver or release of,
                    any obligation of any Bank or any other person under any
                    Letter of Credit or this Agreement; or

                                      -23-

<PAGE>

          7.2.5     any other act, event or omission which, but for this Clause
                    7, might operate to discharge, impair or otherwise affect
                    any of the obligations of the Account Party set out in this
                    Clause 7 or any of the rights, powers or remedies conferred
                    upon any Bank by this Agreement or by law.

          The obligations of the Account Party set out in this Clause 7 shall be
          in addition to and independent of every other security which any Bank
          may at any time hold in respect of the Account Party's obligations
          hereunder.

7.3       Settlement Conditional

          Any settlement or discharge between the Account Party and a Bank shall
          be conditional upon no security or payment to such Bank by the Account
          Party or any other person on behalf of the Account Party, being
          avoided or reduced by virtue of any laws relating to bankruptcy,
          insolvency, liquidation or similar laws of general application and, if
          any such security or payment is so avoided or reduced, such Bank shall
          be entitled to recover the value or amount of such security or payment
          from the Account Party subsequently as if such settlement or discharge
          had not occurred.

7.4       Right to make Payments under Letters of Credit

          Each Bank shall be entitled to make any payment in accordance with the
          terms of the relevant Letter of Credit without any reference to or
          further authority from the Account Party or any other investigation or
          enquiry. The Account Party irrevocably authorises each Bank to comply
          with any demand under a Letter of Credit which is valid on its face.

7.5       Revaluation of Outstandings

          On each L/C Valuation Date, the Agent shall calculate the amount of
          the Outstandings (having regard to changes in the Sterling Amounts of
          the Letters of Credit which may arise as a result of currency
          fluctuations), and the Agent shall notify the Account Party of the
          amount, if any (the "Excess Amount"), by which the Outstandings exceed
          105 per cent. of the aggregate Commitments of the Banks on such date,
          and the Account Party shall secure such Excess Amount by providing
          Cash Collateral in an amount not less than the Excess Amount provided
          that if the Account Party provides Cash Collateral as aforesaid and,
          on any succeeding L/C Valuation Date the Excess Amount as determined
          on such date (the "New Excess Amount") is:

          7.5.1     less than the amount of the Cash Collateral provided at such
                    time, the Agent shall deliver to the Account Party an amount
                    equal to the difference between the amount of such Cash
                    Collateral and the New Excess Amount; or

          7.5.2     greater than the amount of Cash Collateral provided at such
                    time, the Account Party shall deliver to the Agent an amount
                    equal to the amount by which the New Excess Amount exceeds
                    the amount of such Cash Collateral.

8.        CANCELLATION and COLLATERALISATION

8.1       Cancellation/Cash Collateralisation of Letters of Credit

          The Account Party may give the Agent not less than fourteen days'
          prior notice of its intention to procure that the liability of each
          Bank under a Letter of Credit requested by it is reduced to zero
          (whereupon it shall do so) or provide Cash Collateral for each Bank's
          L/C Proportion under such Letter of Credit (whereupon it shall do so).

                                      -24-

<PAGE>

8.2       Notice of Cancellation or Collateralisation

          Any notice of cancellation or collateralisation given by the Account
          Party pursuant to this Clause 8 shall be irrevocable, shall specify
          the date upon which such cancellation or collateralisation is to be
          made and the amount of such cancellation or collateralisation and
          shall oblige the Account Party to procure such cancellation or
          collateralisation on such date.

8.3       Notice of Removal of a Bank

          If:

          8.3.1     any sum payable to any Bank by the Account Party is required
                    to be increased pursuant to Clause 9.1 (Tax Gross-up); or

          8.3.2     any Bank claims indemnification from the Account Party under
                    Clause 9.2 (Tax Indemnity) or Clause 11.1 (Increased Costs),

          the Account Party may, whilst such circumstance continues, give the
          Agent at least ten Business Days' notice (which notice shall be
          irrevocable) of its intention to cancel, and/or provide Cash
          Collateral in respect of the Commitment of such Bank.

8.4       Removal of a Bank

          On the day the notice referred to in Clause 8.3 (Notice of Removal of
          a Bank) expires the Account Party shall procure either that such
          Bank's L/C Proportion of each relevant Letter of Credit be reduced to
          zero (by reduction of the amount of such Letter of Credit in an amount
          equal to such Bank's L/C Proportion) or that Cash Collateral be
          provided in an amount equal to such Bank's L/C Proportion of such
          Letter of Credit.

8.5       No Further Availability

          A Bank for whose account a repayment is to be made under Clause 8.3
          (Notice of Removal of a Bank) shall not be obliged to participate in
          the making of any Letter of Credit on or after the date upon which the
          Agent receives the Account Party's notice of its intention to procure
          the repayment of such Bank's share of the Outstandings, and such
          Bank's Available Commitment shall be reduced to zero.

8.6       No Other Repayments or Cancellation

          The Account Party shall not repay or cancel all or any part of the
          Outstandings except at the times and in the manner expressly provided
          for in this Agreement.

9.        TAXES

9.1       Tax Gross-up

          All payments to be made by an Obligor to any Finance Party hereunder
          shall be made free and clear of and without deduction for or on
          account of tax unless such Obligor is required to make such a payment
          subject to the deduction or withholding of tax, in which case the sum
          payable by such Obligor (in respect of which such deduction or
          withholding is required to be made) shall be increased to the extent
          necessary to ensure that such Finance Party receives a sum net of any
          deduction or withholding equal to the sum which it would have received
          had no such deduction or withholding been made or required to be made.

                                      -25-

<PAGE>

9.2       Tax Indemnity

          Without prejudice to Clause 9.1 (Tax Gross-up), if any Finance Party
          is required to make any payment of or on account of tax on or in
          relation to any sum received or receivable hereunder (including any
          sum deemed for purposes of tax to be received or receivable by such
          Finance Party whether or not actually received or receivable) or if
          any liability in respect of any such payment is asserted, imposed,
          levied or assessed against any Finance Party, the Account Party shall,
          upon demand of the Agent, promptly indemnify the Finance Party which
          suffers a loss or liability as a result against such payment or
          liability, together with any interest, penalties, costs and expenses
          payable or incurred in connection therewith, provided that this Clause
          9.2 shall not apply to:

          9.2.1     any tax imposed on and calculated by reference to the net
                    income actually received or receivable by such Finance Party
                    by the jurisdiction in which such Finance Party is
                    incorporated; or

          9.2.2     any tax imposed on and calculated by reference to the net
                    income of the Facility Office of such Finance Party actually
                    received or receivable by such Finance Party by the
                    jurisdiction in which its Facility Office is located.

9.3       Claims by Banks

          A Bank intending to make a claim pursuant to Clause 9.2 (Tax
          Indemnity) shall notify the Agent of the event giving rise to the
          claim, whereupon the Agent shall notify the Account Party thereof.

10.       TAX RECEIPTS

10.1      Notification of Requirement to Deduct Tax

          If, at any time, an Obligor is required by law to make any deduction
          or withholding from any sum payable by it hereunder (or if thereafter
          there is any change in the rates at which or the manner in which such
          deductions or withholdings are calculated), such Obligor shall
          promptly, upon becoming aware of the same, notify the Agent.

10.2      Evidence of Payment of Tax

          If an Obligor makes any payment hereunder in respect of which it is
          required to make any deduction or withholding, it shall pay the full
          amount required to be deducted or withheld to the relevant taxation or
          other authority within the time allowed for such payment under
          applicable law and shall deliver to the Agent for each Bank, within
          thirty days after it has made such payment to the applicable
          authority, an original receipt (or a certified copy thereof) issued by
          such authority evidencing the payment to such authority of all amounts
          so required to be deducted or withheld in respect of that Bank's share
          of such payment.

10.3      Tax Credit Payment

          If an additional payment is made under Clause 9 (Taxes) by an Obligor
          for the benefit of any Finance Party and such Finance Party, in its
          sole discretion, determines that it has obtained (and has derived full
          use and benefit from) a credit against, a relief or remission for, or
          repayment of, any tax, then, if and to the extent that such Finance
          Party, in its sole opinion, determines that:

                                      -26-

<PAGE>

          10.3.1    such credit, relief, remission or repayment is in respect of
                    or calculated with reference to the additional payment made
                    pursuant to Clause 9 (Taxes); and

          10.3.2    its tax affairs for its tax year in respect of which such
                    credit, relief, remission or repayment was obtained have
                    been finally settled,

          such Finance Party shall, to the extent that it can do so without
          prejudice to the retention of the amount of such credit, relief,
          remission or repayment, pay to such Obligor such amount as such
          Finance Party shall, in its sole opinion, determine to be the amount
          which will leave such Finance Party (after such payment) in no worse
          after-tax position than it would have been in had the additional
          payment in question not been required to be made by such Obligor.

10.4      Tax Credit Clawback

          If any Finance Party makes any payment to an Obligor pursuant to
          Clause 10.3 (Tax Credit Payment) and such Finance Party subsequently
          determines, in its sole opinion, that the credit, relief, remission or
          repayment in respect of which such payment was made was not available
          or has been withdrawn or that it was unable to use such credit,
          relief, remission or repayment in full, the Obligor shall reimburse
          such Finance Party such amount as such Finance Party determines, in
          its sole opinion, is necessary to place it in the same after-tax
          position as it would have been in if such credit, relief, remission or
          repayment had been obtained and fully used and retained by such
          Finance Party.

10.5      Tax and Other Affairs

          No provision of this Agreement shall interfere with the right of any
          Finance Party to arrange its tax or any other affairs in whatever
          manner it thinks fit, oblige any Finance Party to claim any credit,
          relief, remission or repayment in respect of any payment under Clause
          8.1 (Tax Gross-up) in priority to any other credit, relief, remission
          or repayment available to it nor oblige any Finance Party to disclose
          any information relating to its tax or other affairs or any
          computations in respect thereof.

11.       INCREASED COSTS

11.1      Increased Costs

          If, by reason of (a) any change in law or in its interpretation or
          administration and/or (b) compliance with any request or requirement
          relating to the maintenance of capital or any other request from or
          requirement of any central bank or other fiscal, monetary or other
          authority (being a request or requirement with which banks are
          accustomed to comply) and/or (c) the introduction of, changeover to or
          operation of the euro in any participating member state:

          11.1.1    a Bank or any holding company of such Bank is unable to
                    obtain the rate of return on its capital which it would have
                    been able to obtain but for such Bank's entering into or
                    assuming or maintaining a commitment, issuing or performing
                    its obligations under this Agreement or any Letter of
                    Credit;

          11.1.2    a Bank or any holding company of such Bank incurs a cost as
                    a result of such Bank's entering into or assuming or
                    maintaining a commitment, issuing or performing its
                    obligations under this Agreement or any Letter of Credit; or

                                      -27-

<PAGE>

          11.1.3    there is any increase in the cost to a Bank or any holding
                    company of such Bank of funding or maintaining such Bank's
                    share of any Unpaid Sum or any Letter of Credit,

          then the Account Party shall, from time to time on demand of the
          Agent, promptly pay to the Agent for the account of that Bank amounts
          sufficient to indemnify that Bank or to enable that Bank to indemnify
          its holding company from and against, as the case may be, (i) such
          reduction in the rate of return of capital, (ii) such cost or (iii)
          such increased cost.

11.2      Increased Costs Claims

          A Bank intending to make a claim pursuant to Clause 11.1 (Increased
          Costs) shall notify the Agent of the event giving rise to such claim
          and the amount of such claim and the basis for calculation of such
          amount in reasonable detail whereupon the Agent shall notify the
          Account Party thereof.

11.3      Exclusions

          Notwithstanding the foregoing provisions of this Clause 11, no Bank
          shall be entitled to make any claim under this Clause 11 in respect
          of:

          11.3.1    any cost, increased cost or liability as referred to in
                    Clause 11.1 (Increased Costs) to the extent the same is
                    compensated by the Mandatory Liquid Asset Costs Rate; or

          11.3.2    any cost, increased cost or liability compensated by Clause
                    9 (Taxes).

12.       ILLEGALITY

          If, at any time, it is or will become unlawful or prohibited pursuant
          to any request from or requirement of any central bank or other
          fiscal, monetary or other authority (being a request or requirement
          with which banks are accustomed to comply) for a Bank to fund, issue,
          participate in or allow to remain outstanding all or part of its share
          of the Letters of Credit, then that Bank shall, promptly after
          becoming aware of the same, deliver to the Account Party through the
          Agent a notice to that effect and:

          12.1.1    such Bank shall not thereafter be obliged to participate in
                    any Letter of Credit or issue any Letter of Credit
                    (whichever shall be so affected) and the amount of its
                    Available Commitment shall be immediately reduced to zero;
                    and

          12.1.2    if the Agent on behalf of such Bank so requires, the Account
                    Party shall on such date as the Agent shall have specified
                    ensure that the liabilities of such Bank under or in respect
                    of each affected Letter of Credit are reduced to zero or
                    otherwise secured by providing Cash Collateral in an amount
                    equal to such Bank's L/C Proportion of such Letters of
                    Credit or such Bank's maximum actual or contingent
                    liabilities under such Letter of Credit.

13.       MITIGATION

          If, in respect of any Bank, circumstances arise which would or would
          upon the giving of notice result in:

                                      -28-

<PAGE>

          13.1.1    an increase in any sum payable to it or for its account
                    pursuant to Clause 9.1 (Tax Gross-up);

          13.1.2    a claim for indemnification pursuant to Clause 9.2 (Tax
                    Indemnity) or Clause 11.1 (Increased Costs); or

          13.1.3    the reduction of its Available Commitment to zero or any
                    repayment to be made pursuant to Clause 12 (Illegality),

        then, without in any way limiting, reducing or otherwise qualifying the
        rights of such Bank or the obligations of the Obligors under any of the
        Clauses referred to in sub-clauses 13.1.1, 13.1.2 and 13.1.3 such Bank
        shall promptly upon becoming aware of such circumstances notify the
        Agent thereof and, in consultation with the Agent and the Account Party
        and to the extent that it can do so lawfully and without prejudice to
        its own position, take reasonable steps (including a change of location
        of its Facility Office or the transfer of its rights, benefits and
        obligations hereunder to another financial institution which is an
        Approved Credit Institution and which is acceptable to the Account Party
        and willing to participate in the Facility) to mitigate the effects of
        such circumstances, provided that such Bank shall be under no obligation
        to take any such action if, in the opinion of such Bank, to do so might
        have any adverse effect upon its business, operations or financial
        condition (other than any minor costs and expenses of an administrative
        nature).

14.       REPRESENTATIONS

          The Obligors jointly and severally represent and warrant on the
          Commencement Date that:

14.1      Corporate Existence and Power

          The Account Party is a company limited by shares, and the Guarantor is
          a limited liability company, and in each case, is duly incorporated
          and validly existing under the laws of its jurisdiction of
          incorporation and the Account Party is in good standing under the laws
          of the Cayman Islands. Each of the Obligors has all corporate powers
          and all material governmental licenses, authorisations, consents and
          approvals required to carry on its respective business as now
          conducted. The Guarantor is a Wholly-Owned Consolidated Subsidiary of
          the Account Party.

14.2      Corporate and Governmental Authorisation; No Contravention

          The execution, delivery and performance by each Obligor of this
          Agreement and the other Finance Documents to which it is a party are
          within its corporate powers, have been duly authorised by all
          necessary corporate action, require no action by or in respect of, or
          filing with, any governmental body, agency or official and do not
          contravene, or constitute a default under, any provision of applicable
          law or regulation or of the memorandum of association, articles of
          association or bye-laws (or any comparable document) of any Obligor or
          of any agreement, judgment, injunction, order, decree or other
          instrument binding upon any Obligor or any of their respective
          Subsidiaries or result in the creation or imposition of any Lien
          (excluding the provision of Security pursuant to this Agreement) on
          any asset of any Obligor or any of their respective Subsidiaries.

                                      -29-

<PAGE>

14.3      Binding Effect

          Each of this Agreement and the other Finance Documents to which any
          Obligor is a party constitutes a valid and binding agreement of each
          Obligor enforceable in accordance with its terms, subject to
          bankruptcy, insolvency or other laws of general application affecting
          the enforcement of creditors rights, the application of equitable
          principles and the non-availability of the equitable remedies of
          specific performance or injunctive relief.

14.4      Financial Information

          14.4.1    The consolidated balance sheet of the Account Party and its
                    Consolidated Subsidiaries as of 31 December 2000 and the
                    related consolidated statements of operations and of cash
                    flows for the fiscal year then ended, reported on by
                    PricewaterhouseCoopers LLP, copies of which have been
                    delivered to each of the Banks, fairly present, in all
                    material respects, in conformity with GAAP, the consolidated
                    financial position of the Account Party and its Consolidated
                    Subsidiaries as of such date and their consolidated results
                    of operations and cash flows for such fiscal year.

          14.4.2    The unaudited consolidated balance sheet of the Account
                    Party and its Consolidated Subsidiaries as of 30 June 2001
                    and the related unaudited consolidated statements of
                    operations and of cash flows for the six months then ended,
                    copies of which have been delivered to each of the Banks,
                    fairly present, in all material respects, in conformity with
                    GAAP (except for the absence of footnotes) applied on a
                    basis consistent with the financial statements referred to
                    in sub-clause 14.4.1 of Clause 14.4 (Financial Information),
                    the consolidated financial position of the Account Party and
                    its Consolidated Subsidiaries as of such date and their
                    consolidated results of operations and cash flows for such
                    six month period (subject to normal year-end adjustments).

          14.4.3    Since 30 June 2001 there has been no material adverse change
                    in the business, financial position or results of operations
                    of the Account Party and its Consolidated Subsidiaries,
                    considered as a whole.

          14.4.4    The consolidated balance sheet of the Guarantor and its
                    Consolidated Subsidiaries as of 31 December 2000 and the
                    related consolidated statements of operations and retained
                    earnings and of cash flows for the fiscal year then ended,
                    all reported on by PricewaterhouseCoopers LLP, copies of
                    which have been delivered to each of the Banks, fairly
                    present, in all material respects in conformity with GAAP,
                    the consolidated financial position of the Guarantor and its
                    Consolidated Subsidiaries as of such date and their
                    consolidated results of operations and retained earnings and
                    cash flows for such fiscal year.

          14.4.5    Since 31 December 2000 there has been no material adverse
                    change in the business, financial position or results of
                    operations of the Guarantor and its Consolidated
                    Subsidiaries, considered as a whole.

14.5      Litigation

          Except as disclosed in the notes to the financial statements referred
          to in sub-clause 14.4.1 of Clause 14.4 (Financial Information) and
          except for insurance claims made in

                                      -30-

<PAGE>

          the context of the ordinary course of business of the Group, there is
          no action, suit or proceeding pending against, or to the knowledge of
          the Account Party threatened against or affecting, the Account Party
          or any of its Subsidiaries before any court or arbitrator or any
          governmental body, agency or official in which there is a reasonable
          likelihood of an adverse decision which could materially adversely
          affect the business, consolidated financial position or consolidated
          results of operations of the Account Party and its Consolidated
          Subsidiaries, considered as a whole, or which in any manner draws into
          question the validity or enforceability of this Agreement or any other
          Finance Document.

14.6      Taxes

          The Account Party and its Subsidiaries have filed all material income
          tax returns and all other material tax returns which are required to
          be filed by them and have paid all taxes due pursuant to such returns
          or pursuant to any assessment received by the Account Party or any
          Subsidiary. The charges, accruals and reserves on the books of the
          Account Party and its Subsidiaries in respect of taxes or other
          governmental charges are, in the opinion of the Account Party,
          adequate.

14.7      Written Information

          All written information supplied by any member of the Group which is
          factual, is true, complete and accurate in all material respects as at
          the date it was given and is not misleading in any material respect
          and all financial projections so supplied have been prepared on the
          basis of recent historical information and on the basis of reasonable
          assumptions.

14.8      Compliance with Laws

          The Account Party and each Subsidiary are in compliance, in all
          material respects, with all applicable laws, ordinances, rules,
          regulations, guidelines and other requirements of governmental
          authorities except where the necessity of compliance therewith is
          contested in good faith by appropriate proceedings and any reserves
          required under generally accepted accounting principles with respect
          thereto have been established and except where any such failure could
          not reasonably be expected to materially adversely affect the
          business, consolidated financial position or consolidated results of
          operations of the Account Party and its Consolidated Subsidiaries,
          considered as a whole.

14.9      Lien

          14.9.1    Upon delivery of the Security to the Custodian as provided
                    in the Charge Agreement, each Obligor will have good and
                    marketable title in and to its portion of the Security free
                    and clear of all Liens (except the Lien created under the
                    Finance Documents and subject to the interest of the
                    Custodian under the Finance Documents and to "Permitted
                    Liens" as defined in the Charge Agreement).

          14.9.2    Upon delivery of the Security to the Custodian as provided
                    in the Charge Agreement, the Charge Agreement will create in
                    favour of the Security Trustee for the benefit of the Banks
                    a valid and enforceable first priority Lien on all of the
                    Security, subject to the interest of the Custodian under the
                    Finance Documents.

                                      -31-

<PAGE>

          14.9.3    Upon delivery of the Security to the Custodian as provided
                    in the Charge Agreement, neither Obligor will have
                    outstanding, nor will either Obligor be contractually bound
                    to create, any Lien on or with respect to any of the
                    Security, subject to the interest of the Custodian under the
                    Finance Documents and to "Permitted Liens" as defined in the
                    Charge Agreement.

          14.9.4    Neither Obligor is subject to any agreement, judgment,
                    injunction, order, decree or other instrument or any law or
                    regulation which would prevent or otherwise interfere with
                    such Obligor's obligations to deliver Security in the
                    amounts, at the times and as otherwise provided in the
                    Charge Agreement, subject to the interest of the Custodian
                    under the Finance Documents.

          The representations contained in this Clause 14.9 shall only be made
          on the date hereof and shall only be repeated on each day commencing
          on the date on which the Pricing Level is Level V.

14.10     Validity and Admissibility in Evidence

          All acts, conditions and things required to be done, fulfilled and
          performed in order (a) to enable each Obligor lawfully to enter into,
          exercise its rights under and perform and comply with the obligations
          expressed to be assumed by it in the Finance Documents to which it is
          a party, (b) to ensure that the obligations expressed to be assumed by
          it in the Finance Documents to which it is a party are legal, valid,
          binding and enforceable and (c) to make the Finance Documents to which
          it is a party admissible in evidence in its jurisdiction of
          incorporation have been done, fulfilled and performed (subject to any
          exception contained in the legal opinions provided as conditions
          precedent).

14.11     Claims Pari Passu

          Under the laws of its jurisdiction of incorporation in force at the
          date of this Agreement, the claims of the Finance Parties against each
          Obligor under this Agreement will rank at least pari passu with the
          claims of all its other unsecured and unsubordinated creditors save
          those claims which are preferred solely by any bankruptcy, insolvency,
          liquidation or other similar laws of general application or are
          mandatorily preferred by law applying to insurance companies
          generally.

14.12     No Filing or Stamp Taxes

          Under the laws of the jurisdiction of incorporation of each Obligor in
          force at the date of this Agreement, it is not necessary that the
          Finance Documents to which it is party be filed, recorded or enrolled
          with any court or other authority in such jurisdiction or that any
          stamp, registration or similar tax be paid on or in relation to the
          Finance Documents to which it is party.

14.13     No Winding-up

          No Obligor or Material Subsidiary has taken any corporate action nor
          have any other steps been taken or legal proceedings been started or
          (to the best of its knowledge and belief) threatened against any
          Obligor or Material Subsidiary for its winding-up, dissolution,
          administration or re-organisation (whether by voluntary arrangement,
          scheme of arrangement or otherwise) or for the appointment of a
          receiver, administrator, administrative receiver, conservator,
          custodian, trustee or similar officer of it or of any or all of its
          assets or revenues.

                                      -32-

<PAGE>

14.14     No Default

          No Default has occurred and is continuing.

15.       COVENANTS

          The Account Party agrees that, so long as any Original Letter of
          Credit or any Letter of Credit is in effect or any Outstandings remain
          unpaid:

15.1      Information

          The Account Party will deliver to the Agent in sufficient copies for
          the Banks:

          15.1.1    as soon as available and in any event within 90 days after
                    the end of each fiscal year of the Account Party, a
                    consolidated balance sheet of the Account Party and its
                    Consolidated Subsidiaries as of the end of such fiscal year
                    and the related consolidated statements of operations and of
                    cash flows for such fiscal year, setting forth in each case
                    in comparative form the figures for the previous fiscal
                    year, all reported on in a manner acceptable to the
                    Securities and Exchange Commission of the United States of
                    America or otherwise reasonably acceptable to the Majority
                    Banks by PricewaterhouseCoopers LLP or other independent
                    public accountants of internationally recognised standing;

          15.1.2    as soon as available and in any event within 45 days after
                    the end of each of the first three quarters of each fiscal
                    year of the Account Party, a consolidated balance sheet of
                    the Account Party and its Consolidated Subsidiaries as of
                    the end of such quarter and the related consolidated
                    statements of operations and of cash flows for such quarter
                    and for the portion of the Account Party's fiscal year ended
                    at the end of such quarter, setting forth in the case of
                    such statements of operations and cash flows in comparative
                    form the figures for the corresponding quarter and the
                    corresponding portion of the Account Party's previous fiscal
                    year, all certified (subject to normal year-end adjustments)
                    as to fairness of presentation, generally accepted
                    accounting principles and consistency by the chief financial
                    officer or the chief accounting officer of the Account
                    Party;

          15.1.3    simultaneously with the delivery of each set of financial
                    statements referred to in sub-clauses 15.1.1 and 15.1.2 of
                    this Clause 15.1, a certificate of the chief financial
                    officer or the chief accounting officer of the Account Party
                    (a) setting forth in reasonable detail the calculations
                    required to establish whether the Account Party was in
                    compliance with the requirements of Clauses 15.7 (Adjusted
                    Consolidated Debt to Total Capitalisation Ratio) to 15.9
                    (Liens), inclusive, on the date of such financial statements
                    and (b) stating whether any Default exists on the date of
                    such certificate and, if any Default then exists, setting
                    forth the details thereof and the action which the Account
                    Party is taking or proposes to take with respect thereto;

          15.1.4    within five days after any executive officer of the Account
                    Party obtains knowledge of any Default, if such Default is
                    then continuing, a certificate of the chief financial
                    officer or the chief accounting officer of the Account Party
                    setting forth the details thereof and the action which the
                    Account Party is taking or proposes to take with respect
                    thereto;

                                  -33-

<PAGE>

          15.1.5    promptly upon the mailing thereof to the shareholders of the
                    Account Party generally, copies of all financial statements,
                    reports and proxy statements so mailed;

          15.1.6    promptly upon the filing thereof, copies of all registration
                    statements (other than the exhibits thereto and any
                    registration statements on Form S-8 or its equivalent) and
                    reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
                    which the Account Party shall have filed with the Securities
                    and Exchange Commission of the United States of America;

          15.1.7    as soon as available and in any event within 20 days after
                    submission, each statutory statement of the Guarantor in the
                    form submitted to The Insurance Division of the Office of
                    Registrar of Companies of Bermuda;

          15.1.8    as soon as available and in any event within 120 days after
                    the end of each fiscal year of the Guarantor, a consolidated
                    balance sheet of the Guarantor and its Consolidated
                    Subsidiaries as of the end of such fiscal year and the
                    related statements of income and changes in financial
                    position for such fiscal year, setting forth in each case in
                    comparative form the figures for the previous fiscal year,
                    all reported on by the independent public accountants which
                    reported on the financial statements referred to in
                    sub-clause 15.1.1 of this Clause 15.1;

          15.1.9    promptly after any executive officer of the Account Party
                    obtains knowledge thereof, (a) a copy of any notice from the
                    Supervisor of Insurance or the Registrar of Companies or any
                    other Person of the revocation, the suspension or the
                    placing of any restriction or condition on the registration
                    as an insurer of the Guarantor under the Bermuda Insurance
                    Law or of the institution of any proceeding or investigation
                    which could result in any such revocation, suspension or
                    placing of such a restriction or condition, (b) copies of
                    any correspondence by, to or concerning the Guarantor
                    relating to an investigation conducted by the Minister of
                    Finance, whether pursuant to Section 132 of the Bermuda
                    Companies Law or otherwise and (c) a copy of any notice of
                    or requesting or otherwise relating to the winding up or any
                    similar proceeding of or with respect to the Guarantor; and

          15.1.10   from time to time such additional information regarding the
                    financial position, results of operations or business of the
                    Account Party or any of its Subsidiaries as the Agent, at
                    the request of any Bank, may reasonably request from time to
                    time.

15.2      Payment of Obligations

          The Account Party will pay and discharge, and will cause each
          Subsidiary to pay and discharge, at or before maturity, all their
          respective material obligations and liabilities, including, without
          limitation, tax liabilities, except where the same may be contested in
          good faith by appropriate proceedings, and will maintain, and will
          cause each Subsidiary to maintain, in accordance with generally
          accepted accounting principles, appropriate reserves for the accrual
          of any of the same.

                                      -34-

<PAGE>

15.3      Maintenance of Property; Insurance.

          15.3.1    The Account Party will keep, and will cause each Subsidiary
                    to keep, all property useful and necessary in its business
                    in good working order and condition, ordinary wear and tear
                    excepted.

          15.3.2    The Account Party will maintain, and will cause each
                    Subsidiary to maintain, insurance with responsible and
                    reputable insurance companies or associations in such
                    amounts and covering such risks as is usually carried by
                    companies engaged in similar businesses and owning similar
                    properties in the same general areas in which the Account
                    Party or such Subsidiary operates (it being understood that
                    the foregoing shall not apply to maintenance of reinsurance
                    or similar matters which shall be solely within the
                    reasonable business judgement of the Account Party and its
                    Subsidiaries). The Account Party will deliver to the Banks
                    upon request of any Bank through the Agent from time to
                    time, full information as to the insurance carried.

15.4      Conduct of Business and Maintenance of Existence

          The Account Party will continue, and will cause each Subsidiary to
          continue, to engage in business of the same general type as now
          conducted by the Account Party and its Subsidiaries, and will
          preserve, renew and keep in full force and effect, and will cause each
          Subsidiary to preserve, renew and keep in full force and effect, their
          respective existence and their respective rights, privileges and
          franchises necessary or desirable in the normal conduct of business;
          provided that nothing in this Clause 15.4 shall prohibit (i) the
          merger of a Subsidiary (other than the Guarantor) into the Account
          Party or the merger or consolidation of a Subsidiary (other than the
          Guarantor) with or into another Person if the corporation surviving
          such consolidation or merger is a Subsidiary and if, in each case,
          after giving effect thereto, no Default shall have occurred and be
          continuing, (ii) any merger of any Obligor permitted by Clause 15.10
          (Consolidations, Mergers and Sale of Assets) or (iii) the termination
          of (x) the corporate existence or (y) any rights, privileges and
          franchises of any Subsidiary (other than the Guarantor) if the Account
          Party in good faith determines that such termination is in the best
          interest of the Account Party and is not materially disadvantageous to
          the Banks.

15.5      Compliance with Laws

          The Account Party will comply, and cause each Subsidiary to comply, in
          all material respects with all applicable laws, ordinances, rules,
          regulations, guidelines and other requirements of governmental
          authorities except where the necessity of compliance therewith is
          contested in good faith by appropriate proceedings and any reserves
          required under generally accepted accounting principles with respect
          thereto have been established and except where any such failure to
          comply could not reasonably be expected to materially adversely affect
          the business, consolidated financial position or consolidated results
          of operations of the Account Party and its Consolidated Subsidiaries,
          considered as a whole.

15.6      Inspection of Property, Books and Records

          The Account Party will keep, and will cause each Subsidiary to keep,
          proper books of records and account in accordance with generally
          accepted accounting principles in which full, true and correct entries
          shall be made of all dealings and transactions in

                                      -35-

<PAGE>

          relation to its business and activities; and will permit, and will
          cause each Subsidiary to permit, representatives of any Bank at such
          Bank's expense to visit and inspect any of their respective
          properties, to examine and make abstracts from any of their respective
          books and records and to discuss their respective affairs, finances
          and accounts with their respective officers, employees and independent
          public accountants, all at such reasonable times on reasonable notice
          and as often as may reasonably be desired.

15.7      Adjusted Consolidated Debt to Total Capitalisation Ratio

          The Account Party shall maintain at all times a ratio of Adjusted
          Consolidated Debt to Total Capitalisation of not more than 0.35 to 1.

15.8      Consolidated Net Worth

          The Account Party shall maintain at all times Consolidated Net Worth
          in an amount at least equal to the sum of (i) US$3,600,000,000 plus
          (ii) 25 per cent. of Consolidated Net Income for each fiscal quarter
          of the Account Party ending on and after 31 March 2000 for which such
          Consolidated Net Income is positive.

15.9      Liens

          Neither the Account Party nor any Subsidiary will create, incur,
          assume or suffer to exist, or permit any of its Subsidiaries to
          create, incur, assume or suffer to exist, any Lien on or with respect
          to any of its properties of any character (including, without
          limitation, accounts) whether now owned or hereafter acquired, or
          assign, or permit any of its Subsidiaries to assign, any accounts or
          other right to receive income, except:

          15.9.1    Liens created under the US Loan Documents;

          15.9.2    Permitted Liens;

          15.9.3    Liens described in Schedule 10 (Existing Liens);

          15.9.4    purchase money Liens upon or in real property or equipment
                    acquired or held by the Account Party or any of its
                    Subsidiaries in the ordinary course of business to secure
                    the purchase price of such property or equipment or to
                    secure Debt incurred solely for the purpose of financing the
                    acquisition, construction or improvement of any such
                    property or equipment to be subject to such Liens, or Liens
                    existing on any such property or equipment at the time of
                    acquisition or within 180 days following such acquisition
                    (other than any such Liens created in contemplation of such
                    acquisition that do not secure the purchase price), or
                    extensions, renewals or replacements or any of the foregoing
                    for the same or a lesser amount; provided, however, that no
                    such Lien shall extend to or cover any property other than
                    the property or equipment being acquired, constructed or
                    improved, and no such extension, renewal or replacement
                    shall extend to or cover any property not theretofore
                    subject to the Lien being extended, renewed or replaced;

          15.9.5    Liens arising in connection with Capitalised Leases;
                    provided that no such Lien shall extend to or cover any
                    assets other than the assets subject to such Capitalised
                    Leases;

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<PAGE>

          15.9.6    (A) any Lien existing on any asset of any Person at the time
                    such Person becomes a Subsidiary and not created in
                    contemplation of such event, (B) any Lien on any asset of
                    any Person existing at the time such Person is merged or
                    consolidated with or into the Account Party or any of its
                    Subsidiaries in accordance with Clause 15.10
                    (Consolidations, Mergers and Sales of Assets) and not
                    created in contemplation of such event and (C) any Lien
                    existing on any asset prior to the acquisition thereof by
                    the Account Party or any of its Subsidiaries and not created
                    in contemplation of such acquisition;

          15.9.7    Liens securing obligations under credit default swap
                    transactions determined by reference to, or Contingent
                    Obligations in respect of, Debt issued by the Account Party
                    or one of its Subsidiaries; such Debt not to exceed an
                    aggregate principal amount of US$550,000,000;

          15.9.8    Liens arising in the ordinary course of its business which
                    (A) do not secure Debt and (B) do not in the aggregate
                    materially detract from the value of its assets or
                    materially impair the use thereof in the operation of its
                    business;

          15.9.9    Liens on cash and Approved Investments securing Hedge
                    Agreements arising in the ordinary course of business;

          15.9.10   other Liens securing Debt or other obligations outstanding
                    in an aggregate principal or face amount not to exceed at
                    any time 5 per cent. of Consolidated Net Worth;

          15.9.11   Liens consisting of deposits made by the Account Party or
                    any insurance Subsidiary with any insurance regulatory
                    authority or other statutory Liens or Liens or claims
                    imposed or required by applicable insurance law or
                    regulation against the assets of the Account Party or any
                    insurance Subsidiary, in each case in favour of
                    policyholders of the Account Party or such insurance
                    Subsidiary or an insurance regulatory authority and in the
                    ordinary course of the Account Party's or such insurance
                    Subsidiary's business;

          15.9.12   Liens on Investments and cash balances of the Account Party
                    or any insurance Subsidiary (other than capital stock of any
                    Subsidiary) securing obligations of the Account Party or any
                    insurance Subsidiary in respect of (i) letters of credit
                    obtained in the ordinary course of business and/or (ii)
                    trust arrangements formed in the ordinary course of business
                    for the benefit of cedents to secure reinsurance or
                    insurance obligations owed to them by the Account Party or
                    any insurance Subsidiary;

          15.9.13   the replacement, extension or renewal of any Lien permitted
                    by sub-clause 15.9.2 or 15.9.5 of this Clause 15.9 upon or
                    in the same property theretofore subject thereto or the
                    replacement, extension or renewal (without increase in the
                    amount (other than in respect of fees, expenses and
                    premiums, if any) or change in any direct or contingent
                    obligor) of the Debt secured thereby;

          15.9.14   Liens securing obligations owed by the Account Party to any
                    Subsidiary or by any Subsidiary to the Account Party or any
                    other Subsidiary;

                                      -37-

<PAGE>

          15.9.15   Liens incurred in the ordinary course of business in favour
                    of financial intermediaries and clearing agents pending
                    clearance of payments for investment or in the nature of
                    set-off, banker's lien or similar rights as to deposit
                    accounts or other funds;

          15.9.16   judgement or judicial attachment Liens, provided that the
                    enforcement of such Liens is effectively stayed;

          15.9.17   Liens on any assets of the Obligors created pursuant to the
                    Finance Documents;

          15.9.18   Liens arising in connection with certain equity proceeds
                    received on or about 12 September 2000 (plus interest
                    accrued thereon) placed in a segregated account in support
                    of (or pledged as collateral for) the Account Party's
                    guarantee of the US$412,372,000 principal amount of Auction
                    Rate Reset Subordinated Notes Series A issued by ACE INA to
                    ACE RHINOS Trust on 30 June 1999;

          15.9.19   Liens arising in connection with Securitisation
                    Transactions, provided that the aggregate principal amount
                    of the investment or claim held at any time by all
                    purchasers, assignees or other transferees of (or of
                    interests in) receivables and other rights to payment in all
                    Securitisation Transactions shall not exceed US$250,000,000;

          15.9.20   Liens on securities arising out of repurchase agreements
                    with a term of not more than three months entered into with
                    "Lenders" (as such term is defined in the Five Year US
                    Facility) or their Affiliates or with securities dealers of
                    recognised standing; provided that (but without prejudice to
                    sub-clause 15.9.10) the aggregate amount of all assets of
                    the Account Party and its Subsidiaries subject to such
                    agreements shall not at any time exceed US$800,000,000; and

          15.9.21   Liens securing up to an aggregate amount of US$200,000,000
                    of obligations of ACE Tempest Reinsurance Ltd, the Account
                    Party or any wholly owned subsidiary, arising out of
                    catastrophe bond financing.

15.10     Consolidations, Mergers and Sales of Assets

          15.10.1   No Obligor will consolidate with or merge into any other
                    Person, provided that if both immediately before and after
                    giving effect thereto no Default shall have occurred and be
                    continuing, then:

                    (a)  the Guarantor may merge or consolidate with any other
                         Person so long as the surviving entity is the Guarantor
                         or a Wholly-Owned Consolidated Subsidiary of the
                         Account Party and, if the Guarantor is not the
                         surviving entity, such surviving entity shall have
                         assumed the obligations of the Guarantor hereunder
                         pursuant to an instrument in form and substance
                         reasonably satisfactory to the Majority Banks and shall
                         have delivered such opinions of counsel with respect
                         thereto as the Agent may reasonably request; and

                    (b)  the Account Party may merge with another Person so long
                         as the Account Party is the surviving entity.

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<PAGE>

          15.10.2   No Obligor will sell, lease or otherwise transfer, directly
                    or indirectly, all or any substantial part of its assets to
                    any other Person (excluding sales of investment securities
                    in the ordinary course of business).

15.11     No Amendments

          The Account Party shall not amend or waive, or utilise or rely on any
          waiver of, any provision of any Security Document that may be entered
          into without the written consent of the Agent, the Security Trustee
          and the Majority Banks.

15.12     Maintenance of Legal Validity

          Each Obligor shall obtain, comply with the terms of and do all that is
          necessary to maintain in full force and effect all authorisations,
          approvals, licences and consents required in or by the laws of its
          jurisdiction of incorporation to enable it lawfully to enter into and
          perform its obligations under the Finance Documents to which it is a
          party and to ensure the legality, validity, enforceability or
          admissibility in evidence in its jurisdiction of incorporation of the
          Finance Documents to which it is a party.

15.13     Claims Pari Passu

          Each Obligor shall ensure that at all times the claims of the Finance
          Parties against it under this Agreement ranks at least pari passu with
          the claims of all its other unsecured and unsubordinated creditors
          save those claims which are preferred by any bankruptcy, insolvency,
          liquidation or other similar laws of general application or are
          mandatorily preferred by law applying to insurance companies
          generally.

16.       EVENTS OF DEFAULT

          Each of Clause 16.1 (Failure to Pay) to Clause 16.17 (Custodian's
          Undertaking) describes circumstances which constitute an Event of
          Default for the purposes of this Agreement.

16.1      Failure to Pay

          The Account Party shall fail to reimburse any drawing under any Letter
          of Credit when required hereunder or shall fail to pay within five
          Business Days of the due date thereof any interest or fees or other
          amounts payable hereunder or under any other Finance Document or the
          Guarantor shall fail to pay when due any such reimbursement
          obligations, interest, fees or other amounts payable hereunder
          provided that, for the purposes of this Clause 16.1, no such payment
          default by the Account Party shall be continuing if the Guarantor pays
          the amount thereof at the time and otherwise in the manner provided in
          Clause 29 (Guarantee and Indemnity).

16.2      Specific Covenants

          The Account Party shall fail to observe or perform any covenant (a)
          contained in Clauses 15.7 (Adjusted Consolidated Debt to Total
          Capitalisation Ratio) to Clause 15.10 (Consolidations, Mergers and
          Sale of Assets) inclusive or (b) contained in Clause 17.1 (Letter of
          Credit Commission).

16.3      Other Obligations

          Any Obligor shall fail to observe or perform any covenant or agreement
          contained in this Agreement or in any other Finance Document (other
          than those covered by Clause 16.1 (Failure to Pay) or Clause 16.2
          (Specific Covenants)) and such failure, if, in the

                                      -39-

<PAGE>

          reasonable opinion of the Majority Banks, it is capable of remedy, is
          not remedied within 30 days after notice thereof has been given to the
          Account Party by the Agent at the request of any Bank.

16.4      Misrepresentation

          Any representation, warranty, certification or statement made by any
          Obligor in this Agreement or in any other Finance Document or in any
          certificate, financial statement or other document delivered pursuant
          to this Agreement or any other Finance Document shall prove to have
          been incorrect in any material respect when made (or deemed made).

16.5      Cross-default

          The Account Party or any Subsidiary shall fail to make any payment in
          respect of any Material Financial Obligations when due or within any
          applicable grace period.

16.6      Cross-Acceleration

          Any event or condition shall occur which results in the acceleration
          of the maturity of any Material Debt or enables (or, with the giving
          of notice or lapse of time or both, would enable) the holder of such
          Material Debt or any Person acting on such holder's behalf to
          accelerate the maturity thereof.

16.7      Winding-up of the Account Party or the Guarantor

          16.7.1    A resolution or other similar action is passed authorising
                    the voluntary winding up of the Account Party or any other
                    similar action with respect to the Account Party or a
                    petition is filed for the winding up of the Account Party or
                    the taking of any other similar action with respect to the
                    Account Party in the Grand Court of the Cayman Islands
                    (except in the case of any frivolous or vexatious steps or
                    proceedings started by any Person who is not a member of the
                    Group where such steps or proceedings are dismissed within
                    30 days); or

          16.7.2    any corporate action is taken authorising the winding up,
                    the liquidation, any arrangement or the taking of any other
                    similar action of or with respect to the Guarantor or
                    authorising any corporate action to be taken to facilitate
                    any such winding up, liquidation, arrangement or other
                    similar action or any petition shall be filed seeking the
                    winding up, the liquidation, any arrangement or the taking
                    of any other similar action of or with respect to the
                    Guarantor by the Registrar of Companies in Bermuda, one or
                    more holders of insurance policies or reinsurance
                    certificates issued by the Guarantor or by any other Person
                    or Persons or any petition shall be presented for the
                    winding up of the Guarantor to a court of Bermuda as
                    provided under the Bermuda Companies Law and in either such
                    case such petition shall remain undismissed and unstayed for
                    a period of 60 days or any creditors' or members' voluntary
                    winding up of the Guarantor as provided under the Bermuda
                    Companies Law shall be commenced or any receiver shall be
                    appointed by a creditor of the Guarantor or by a court of
                    Bermuda on the application of a creditor of the Guarantor as
                    provided under any instrument giving rights for the
                    appointment of a receiver.

16.8      Execution or Distress

          A proceeding shall be commenced by any Person seeking execution or
          distress over or possession of the assets of either Obligor or any
          substantial part thereof or any similar

                                      -40-

<PAGE>

          remedy and such proceedings shall remain undismissed and unstayed for
          a period of 60 days.

16.9      Insolvency and Rescheduling

          An Obligor or Material Subsidiary shall commence a voluntary case or
          other proceeding seeking liquidation, reorganisation or other relief
          with respect to itself or its debts under any bankruptcy, insolvency
          or other similar law now or hereafter in effect or seeking the
          appointment of a trustee, receiver, liquidator, custodian or other
          similar official of it or any substantial part of its property, or
          shall consent to any such relief or to the appointment of or taking
          possession by any such official in an involuntary case or other
          proceeding commenced against it or shall make a general assignment for
          the benefit of creditors, or shall fail generally to pay its debts as
          they become due, or shall take any corporate action to authorise any
          of the foregoing; or an involuntary case or other proceeding shall be
          commenced against an Obligor or Material Subsidiary seeking
          liquidation, reorganisation or other relief with respect to it or its
          debts under any bankruptcy, insolvency or other similar law now or
          hereafter in effect or seeking the appointment of a trustee, receiver,
          liquidator, custodian or other similar official of it or any
          substantial part of its property, and such involuntary case or other
          proceeding shall remain undismissed and unstayed for a period of 60
          days; or an order for relief shall be entered against an Obligor or
          Material Subsidiary under the United States federal bankruptcy laws as
          now or hereafter in effect.

16.10     Analogous Proceedings

          There occurs, in relation to an Obligor or Material Subsidiary in any
          country or territory in which any of them carries on business or in
          any jurisdiction where any part of their assets is subject, any event
          which corresponds in that country or territory with any of those
          mentioned in Clause 16.7 (Winding-up of the Account Party or the
          Guarantor) to Clause 16.9 (Insolvency and Rescheduling) above.

16.11     Failure to comply with Judgment

          A final judgment or order for the payment of money in excess of
          US$100,000,000 shall be rendered against an Obligor or Material
          Subsidiary and such judgment or order shall continue unsatisfied and
          unstayed for a period of 30 days.

16.12     Ownership of the Account Party and the Guarantor

          16.12.1   Any Person or two or more Persons acting in concert shall
                    have acquired beneficial ownership (within the meaning of
                    Rule 13d-3 of the Securities and Exchange Commission under
                    the Securities Exchange Act of 1934 of the United States of
                    America, as amended), directly or indirectly, of Voting
                    Interests of the Account Party (or other securities
                    convertible into such Voting Interests) representing 30 per
                    cent. or more of the combined voting power of all Voting
                    Interests of the Account Party; or

          16.12.2   during any period of 12 consecutive calendar months,
                    individuals who were directors of the Account Party on the
                    first day of such period shall cease to constitute a
                    majority of the board of directors of the Account Party; or

          16.12.3   any Person or two or more Persons acting in concert shall
                    have acquired, by contract or otherwise, or shall have
                    entered into a contract or arrangement that

                                      -41-

<PAGE>

                    results in its or their acquisition of the power to
                    exercise, directly or indirectly, a controlling influence
                    over the management or policies of the Account Party; or

          16.12.4   the Guarantor ceases to be a Wholly-Owned Consolidated
                    Subsidiary of the Account Party.

16.13     Illegality
          At any time it is or becomes unlawful for either Obligor to perform or
          comply with any or all of its obligations hereunder or under any of
          the Finance Documents or any court or arbitrator or any governmental
          body, agency or official which has jurisdiction in the matter shall
          decide, rule or order that any provision of any of the Finance
          Documents is invalid or unenforceable in any material respect, or
          either Obligor shall so assert in writing.

16.14     Revocation of Registration
          The registration of the Guarantor as an insurer shall be revoked,
          suspended or otherwise have restrictions or conditions placed upon it
          unless, in the case of the placing of any such restrictions or
          conditions, such restrictions or conditions could not have a material
          adverse effect on the interests of the Finance Parties under the
          Finance Documents.

16.15     Security
          If the Obligors are required to grant security pursuant to sub-clause
          17.1.2 of Clause 17.1 (Letter of Credit Commission) and they fail to
          deliver Security at the times, in the amounts or as otherwise
          specified in the Finance Documents or the Lien created pursuant
          thereto on the Security shall at any time or for any reason cease to
          be a valid, enforceable and first priority Lien on any of the Security
          or either Obligor shall fail to observe or perform any covenant
          relating to the delivery of the Security and the perfection of the
          first priority charge and security interest created therein contained
          in any other Finance Document, provided that if the market value of
          the Charged Portfolio falls below the Required Value or the Charged
          Portfolio fails to satisfy the Security Trustee's Requirements (as
          defined in the Charge Agreement), such circumstances shall not
          constitute an Event of Default if the market value of the Charged
          Portfolio is restored to the Required Value and/or, as the case may
          be, the Security Trustee's Requirements are satisfied in each case
          within five Business Days of notification by the Security Trustee on
          behalf of the Banks of the breach of clause 4 of the Charge Agreement
          or, if earlier, within five Business Days of either Obligor becoming
          aware of such breach.

16.16     Finance Documents
          Any provision of any Finance Document is repudiated, terminated,
          amended or waived by any party thereto without the written consent of
          the Agent, the Security Trustee and the Majority Banks.

16.17     Custodian's Undertaking
          In the event that the Obligors are required to grant Security pursuant
          to sub-clause 17.1.2 of Clause 17.1 (Letter of Credit Commission), the
          Custodian fails to observe or perform any material provision of the
          Custodian's Undertaking and such failure, if in the reasonable opinion
          of the Majority Banks it is capable of remedy, is not remedied within
          30 days after notice thereof has been given to the Custodian by the
          Account Party or by the Agent at the request of any Bank.

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16.18     Acceleration and Cancellation
          Upon the occurrence of an Event of Default at any time thereafter
          while that Event of Default is continuing, the Agent may (and, if so
          instructed by the Majority Banks shall) by notice to the Account
          Party:

          16.18.1   require the Account Party to procure that the liabilities of
                    each of the Banks under each Letter of Credit are promptly
                    reduced to zero and/or provide Cash Collateral for each
                    Letter of Credit in an amount specified by the Agent
                    (whereupon the Account Party shall do so); and/or

          16.18.2   declare that any unutilised portion of the Facility shall be
                    cancelled, whereupon the same shall be cancelled and the
                    Available Commitment of each Bank shall be reduced to zero;
                    and

          16.18.3   (in the event that the Obligors have granted Security
                    pursuant to sub-clause 17.1.2 of Clause 17.1 (Letter of
                    Credit Commission), direct the Security Trustee to exercise
                    all rights and remedies of a mortgagee or a secured party at
                    such time including, without limitation, the right to take
                    possession of any or all of the assets subject to the
                    Security Documents and the books and records relating
                    thereto, with or without judicial process. For the purposes
                    of the preceding sentence, the Security Trustee may enter
                    upon any or all of the premises where any of the assets
                    subject to the Security Documents, such other security or
                    books or records may be situated and take possession and
                    remove the same therefrom.

17.       COMMISSION AND FEES

17.1      Letter of Credit Commission
          17.1.1    The Account Party shall, in respect of each Letter of Credit
                    requested by it, pay to the Agent for the account of each
                    Bank (for distribution in proportion to each Bank's L/C
                    Proportion of such Letter of Credit) a letter of credit
                    commission in sterling at the L/C Commission Rate on the
                    maximum actual and contingent liabilities of the Banks under
                    the relevant Letter of Credit. Such Letter of Credit
                    Commission shall be paid quarterly in arrear in respect of
                    each successive period of three months (or such shorter
                    period as shall end on the relevant Expiry Date) which
                    begins during the Term of the relevant Letter of Credit,
                    commencing from the Effective Date of such Letter of Credit,
                    and payable on the first day of each such period thereafter.

          17.1.2    If the Pricing Level reaches Level V (each as defined in
                    Schedule 9 (Pricing Schedule)), the Required Value (for the
                    avoidance of doubt, the Obligors will not each be required
                    to grant Security to the Required Value) shall (subject to
                    Section 25.21.3) be increased to an amount equal to the
                    aggregate amount of the Letters of Credit issued hereunder,
                    and each Obligor shall promptly (and in any event within
                    five Business Days) perform its obligations under clause 4
                    of the Charge Agreement. Upon the Security Trustee being
                    satisfied that each Obligor has performed its obligations
                    under clause 4 of the Charge Agreement, and having received
                    legal opinions in form and substance satisfactory to the
                    Security Trustee (acting reasonably) opining that the Charge
                    Agreement creates

                                      -43-

<PAGE>

                    in favour of the Security Trustee on behalf of the Banks a
                    valid and enforceable first priority Lien on all of the
                    Security (subject to such qualifications and assumptions as
                    are customarily made by leading firms of solicitors in
                    giving legal opinions of that nature), the L/C Commission
                    Rate shall become 0.15 per cent. and the Security Trustee
                    shall notify all parties hereto accordingly.

          17.1.3    Any change to the L/C Commission Rate shall take effect on
                    the day on which the event giving rise to such change occurs
                    (whether pursuant to Schedule 9 (Pricing Schedule) or
                    pursuant to Clause 17.1.2).

          17.1.4    Any unpaid Letter of Credit Commission payable in respect of
                    each Original Letter of Credit shall be paid in full by the
                    Account Party by no later than the Effective Date.

17.2      Arrangement Fees
          The Account Party shall pay to the Lead Arranger the fees specified in
          the letter dated 11 September 2001 from the Lead Arranger to the
          Account Party at the times, and in the amounts, specified in such
          letter.

17.3      Agency Fee
          The Account Party shall pay to the Agent for its own account the
          agency fees specified in the letter dated 11 September 2001 from the
          Lead Arranger to the Account Party at the times, and in the amounts,
          specified in such letter.

17.4      Participation Fees
          The Account Party shall pay to the Lead Arranger the participation
          fees specified in the letter dated 11 September 2001 from the Lead
          Arranger to the Account Party at the times, and in the amounts,
          specified in such letter. These fees shall be distributed by the Lead
          Arranger among certain of the Banks in accordance with the
          arrangements agreed by the Lead Arranger with such Banks prior to the
          date of this Agreement.

18.       COSTS AND EXPENSES

18.1      Transaction Expenses
          The Account Party shall, from time to time within thirty days of
          demand of the Agent, reimburse the Agent and the Arrangers for all
          reasonable costs and expenses (including legal fees) together with any
          VAT thereon incurred by them in connection with the negotiation,
          preparation and execution of the Finance Documents, any other document
          referred to in the Finance Documents and the completion of the
          transactions therein contemplated.

18.2      Preservation and Enforcement of Rights
          18.2.1    The Account Party shall, from time to time on demand of the
                    Agent, reimburse the Finance Parties for all costs and
                    expenses (including legal fees) properly incurred on a full
                    indemnity basis together with any VAT thereon incurred in or
                    in connection with the preservation and/or enforcement of
                    any of the rights of the Finance Parties under the Finance
                    Documents and any document referred to in the Finance
                    Documents (including, without limitation, any costs and
                    expenses relating to any investigation as to whether or not
                    an Event of Default

                                      -44-

<PAGE>

                    might have occurred or is likely to occur or any steps
                    necessary or desirable in connection with any proposal for
                    remedying or otherwise resolving a Default).

          18.2.2    In the event that the Obligors have granted Security
                    pursuant to sub-clause 17.1.2 of Clause 17.1 (Letter of
                    Credit Commission) and if, by reason of a subsequent breach
                    of clause 4 of the Charge Agreement by either Obligor, any
                    Bank incurs a capital cost or is unable to continue to
                    obtain the rate of return obtained by it hereunder at the
                    date the Security is granted or at the date it becomes party
                    hereto as a Bank, the Obligors shall on demand of the Agent,
                    promptly pay to the Agent for the account of the Bank
                    amounts sufficient to indemnify that Bank from and against
                    such cost or loss in return.

18.3      Stamp Taxes
          The Account Party shall pay all stamp, registration and other taxes to
          which the Finance Documents, any other document referred to in the
          Finance Documents or any judgment given in connection therewith is or
          at any time may be subject and to which it is a party and shall, from
          time to time on demand of the Agent, indemnify the Finance Parties
          against any liabilities, costs, claims and expenses resulting from any
          failure to pay or any delay in paying any such tax.

18.4      Amendment Costs
          If an Obligor requests any amendment, waiver or consent to any Finance
          Document then the Account Party shall, within thirty days of demand by
          the Agent, reimburse the Finance Parties for all reasonable costs and
          expenses (including legal fees) together with any VAT thereon incurred
          by such persons in responding to or complying with such request.

18.5      Banks' Liabilities for Costs
          If the Account Party fails to perform any of its obligations under
          this Clause 18 each Bank shall, in its Proportion, indemnify each of
          the Agent and the Arrangers against any loss incurred by any of them
          as a result of such failure.

19.       DEFAULT INTEREST AND BREAK COSTS

19.1      Default Interest
          If any sum due and payable by an Obligor hereunder is not paid on the
          due date therefor in accordance with Clause 22 (Payments) or if any
          sum due and payable by an Obligor under any judgment of any court in
          connection herewith is not paid on the date of such judgment, the
          period beginning on such due date or, as the case may be, the date of
          such judgment and ending on the date upon which the obligation of such
          Obligor to pay such sum is discharged shall be divided into successive
          periods, each of which (other than the first) shall start on the last
          day of the preceding such period and the duration of each of which
          shall (except as otherwise provided in this Clause 19) be selected by
          the Agent.

19.2      Default Interest Rate
          An Unpaid Sum shall bear interest during each Term in respect thereof
          at the rate per annum which is the sum from time to time of two per
          cent. and LIBOR on the Quotation Date therefor.

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19.3      Payment of Default Interest
          Any interest which shall have accrued under Clause 19.1 (Default
          Interest) in respect of an Unpaid Sum shall be due and payable and
          shall be paid by the relevant Obligor, together with any Mandatory
          Liquid Asset Costs Rate in respect thereof on the last day of each
          Term in respect thereof or on such other dates as the Agent may
          specify by notice to the relevant Obligor.

19.4      Break Costs
          If any Bank or the Agent on its behalf receives or recovers all or any
          part of an Unpaid Sum otherwise than on the last day of a Term
          relating thereto, the Account Party shall pay to the Agent on demand
          for the account of such Bank an amount equal to the amount (if any) by
          which (a) the additional interest which would have been payable on the
          amount so received or recovered had it been received or recovered on
          the last day of that Term exceeds (b) the amount of interest which in
          the opinion of the Agent (acting reasonably) would have been payable
          to the Agent on the last day of that Term in respect of a deposit in
          the currency of the amount so received or recovered equal to the
          amount so received or recovered placed by it with a prime bank in
          London for a period starting on the first Business Day following the
          date of such receipt or recovery and ending on the last day of that
          Term.

20.       INDEMNITIES

20.1      Company's Indemnity
          The Account Party undertakes to indemnify:

          20.1.1    each Finance Party against any reasonable cost, claim, loss,
                    expense (including legal fees) or liability together with
                    any VAT thereon, whether or not reasonably foreseeable,
                    which it may sustain or incur as a consequence of the
                    occurrence of any Event of Default or any default by an
                    Obligor in the performance of any of the obligations
                    expressed to be assumed by it in the Finance Documents;

          20.1.2    the Agent against any reasonable cost or loss it may suffer
                    or incur as a result of its entering into, or performing,
                    any foreign exchange contract for the purposes of Clause 22
                    (Payments);

          20.1.3    each Bank against any reasonable cost or loss it may suffer
                    under Clause 18.5 (Banks' Liabilities for Costs) or Clause
                    25.5 (Indemnification); and

          20.1.4    each Bank against any reasonable cost or loss it may suffer
                    or incur as a result of its issuing or making arrangements
                    to issue a Letter of Credit requested by the Account Party
                    hereunder but not issued by reason of the operation of any
                    one or more of the provisions hereof.

20.2      Currency Indemnity
          If any sum (a "Sum") due from an Obligor under the Finance Documents
          or any order or judgment given or made in relation thereto has to be
          converted from the currency (the "First Currency") in which such Sum
          is payable into another currency (the "Second Currency") for the
          purpose of:

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          20.2.1    making or filing a claim or proof against such Obligor;

          20.2.2    obtaining an order or judgment in any court or other
                    tribunal; or

          20.2.3    enforcing any order or judgment given or made in relation
                    thereto,

          the Account Party shall indemnify each person to whom such Sum is due
          from and against any loss suffered or incurred as a result of any
          discrepancy between (a) the rate of exchange used for such purpose to
          convert such Sum from the First Currency into the Second Currency and
          (b) the rate or rates of exchange available to such person at its
          prevailing spot rate at the time of receipt of such Sum.

21.       CURRENCY OF ACCOUNT AND PAYMENT

21.1      Currency of Account
          Sterling is the currency of account and payment for each and every sum
          at any time due from an Obligor hereunder, provided that:

          21.1.1    each sum falling due by an Obligor hereunder in relation to
                    any demand made under a Letter of Credit or in relation to
                    any reimbursement of the Banks pursuant to a demand made
                    under a Letter of Credit shall be made in the currency of
                    the demand;

          21.1.2    each payment of interest shall be made in the currency in
                    which the sum in respect of which such interest is payable
                    is denominated;

          21.1.3    each payment in respect of costs and expenses shall be made
                    in the currency in which the same were incurred;

          21.1.4    each payment pursuant to Clause 9.2 (Tax Indemnity) or
                    Clause 11.1 (Increased Costs) shall be made in the currency
                    specified by the party claiming thereunder; and

          21.1.5    any amount expressed to be payable in a currency other than
                    sterling shall be paid in that other currency.

22.       PAYMENTS

22.1      Payments to the Agent
          On each date on which this Agreement requires an amount to be paid by
          an Obligor, such Obligor shall make the same available to the Agent
          for value on the due date at such time and in such funds and to such
          account with such bank as the Agent shall specify from time to time
          upon reasonable advance notice to such Obligor.

22.2      Payments by the Agent
          Save as otherwise provided herein, each payment received by the Agent
          pursuant to Clause 22.1 (Payments to the Agent) shall be made
          available by the Agent to the person entitled to receive such payment
          in accordance with this Agreement (in the case of a Bank, for the
          account of its Facility Office) for value the same day by transfer to
          such account of such person with such bank in the principal financial
          centre of the country of the currency of such payment as such person
          shall have previously notified to the Agent.

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22.3      No Set-off
          All payments required to be made by an Obligor hereunder shall be
          calculated without reference to any set-off or counterclaim and shall
          be made free and clear of and without any deduction for or on account
          of any set-off or counterclaim.

22.4      Clawback
          Where a sum is to be paid hereunder to the Agent for the account of
          another person, the Agent shall not be obliged to make the same
          available to that other person or to enter into or perform any
          exchange contract in connection therewith until it has been able to
          establish to its satisfaction that it has actually received such sum,
          but if it does so and it proves to be the case that it had not
          actually received such sum, then the person to whom such sum or the
          proceeds of such exchange contract was so made available shall on
          request refund the same to the Agent together with an amount
          sufficient to indemnify the Agent against any cost or loss it may have
          suffered or incurred by reason of its having paid out such sum or the
          proceeds of such exchange contract prior to its having received such
          sum.

22.5      Partial Payments
          If and whenever a payment is made by an Obligor hereunder and the
          Agent receives an amount less than the due amount of such payment the
          Agent may apply the amount received towards the obligations of the
          Obligors under this Agreement in the following order:

          22.5.1    first, in or towards payment of any unpaid costs and
                    expenses of each of the Agent and the Arrangers;

          22.5.2    second, in or towards payment pro rata of any accrued
                    interest, Letter of Credit Commission or fees payable to any
                    Bank hereunder due but unpaid;

          22.5.3    third, in or towards payment pro rata of any Outstandings
                    due but unpaid; and

          22.5.4    fourth, in or towards payment pro rata of any other sum due
                    but unpaid.

22.6      Variation of Partial Payments
          The order of partial payments set out in Clause 22.5 (Partial
          Payments) shall override any appropriation made by the Obligors to
          which the partial payment relates but the order set out in sub-clauses
          22.5.2, 22.5.3 and 22.5.4 of Clause 22.5 (Partial Payments) may be
          varied if agreed by all the Banks.

22.7      Appropriations of proceeds of enforcement of Security
          If the Agent recovers any moneys from the enforcement of any Finance
          Document in its capacity as Agent or Security Trustee thereunder, it
          shall apply the money recovered in the following order:

          22.7.1    first, in payment of all costs, charges, expenses and
                    liabilities (and all interest thereon as provided in the
                    Finance Documents) incurred by or on behalf of the Agent and
                    the Security Trustee and any receiver, attorney or agent in
                    connection with the due performance of its duties and
                    exercise of its powers and discretions under the Finance
                    Documents and the remuneration of the Agent, the Security
                    Trustee and every receiver under the Finance Documents;

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          22.7.2    secondly, in or towards payment pro rata of any due but
                    unpaid costs and expenses of the Agent, the Arrangers and
                    the Banks under the Finance Documents;

          22.7.3    thirdly, in or towards payment pro rata of any accrued
                    interest, Letter of Credit Commission or fees due but unpaid
                    under this Agreement;

          22.7.4    fourthly, in or towards payment pro rata of any Outstandings
                    due but unpaid under this Agreement;

          22.7.5    fifthly, in or towards payment pro rata of any other sum due
                    but unpaid under the Finance Documents; and

          22.7.6    sixthly, in payment of the surplus (if any) to the Account
                    Party or any other person entitled thereto.

          The order of application of money recovered in this Clause may only be
          varied with the consent of all the Banks.

23.       SET-OFF

23.1      Contractual Set-off
          Each Obligor authorises each Bank at any time after an Event of
          Default has occurred which is continuing to apply any credit balance
          to which such Obligor is entitled on any account of such Obligor with
          such Bank in satisfaction of any sum due and payable from such Obligor
          to such Bank hereunder (whether by way of collateralisation or
          otherwise) but unpaid. For this purpose, each Bank is authorised to
          purchase with the moneys standing to the credit of any such account
          such other currencies as may be necessary to effect such application.

23.2      Set-off not Mandatory
          No Bank shall be obliged to exercise any right given to it by Clause
          23.1 (Contractual Set-off).

24.       SHARING

24.1      Payments to Banks
          If a Bank (a "Recovering Bank") applies any receipt or recovery from
          an Obligor to a payment due under this Agreement and such amount is
          received or recovered other than in accordance with Clause 22
          (Payments), then such Recovering Bank shall:

          24.1.1    notify the Agent of such receipt or recovery;

          24.1.2    at the request of the Agent, promptly pay to the Agent an
                    amount (the "Sharing Payment") equal to such receipt or
                    recovery less any amount which the Agent determines may be
                    retained by such Recovering Bank as its share of any payment
                    to be made in accordance with Clause 22.5 (Partial
                    Payments).

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24.2      Redistribution of Payments
          The Agent shall treat the Sharing Payment as if it had been paid by
          the relevant Obligor and distribute it between the Finance Parties
          (other than the Recovering Bank) in accordance with Clause 22.5
          (Partial Payments).

24.3      Recovering Bank's Rights
          The Recovering Bank will be subrogated to the rights of the parties
          which have shared in a redistribution pursuant to Clause 24.2
          (Redistribution of Payments) in respect of the Sharing Payment (and
          the relevant Obligor shall be liable to the Recovering Bank in an
          amount equal to the Sharing Payment) in place of any corresponding
          liability to the parties which have shared in the redistribution.

24.4      Repayable Recoveries
          If any part of the Sharing Payment received or recovered by a
          Recovering Bank becomes repayable and is repaid by such Recovering
          Bank, then:

          24.4.1    each party which has received a share of such Sharing
                    Payment pursuant to Clause 24.2 (Redistribution of Payments)
                    shall, upon request of the Agent, pay to the Agent for
                    account of such Recovering Bank an amount equal to its share
                    of such Sharing Payment; and

          24.4.2    such Recovering Bank's rights of subrogation in respect of
                    any reimbursement shall be cancelled and the relevant
                    Obligor will be liable to the reimbursing party for the
                    amount so reimbursed.

24.5      Exception
          This Clause 24 shall not apply if the Recovering Bank would not, after
          making any payment pursuant hereto, have a valid and enforceable claim
          against the relevant Obligor.

24.6      Recoveries Through Legal Proceedings
          If any Bank intends to commence any action in any court it shall give
          prior notice to the Agent and the other Banks. If any Bank shall
          commence any action in any court to enforce its rights hereunder and,
          as a result thereof or in connection therewith, receives any amount,
          then such Bank shall not be required to share any portion of such
          amount with any Bank which has the legal right to, but does not, join
          in such action or commence and diligently prosecute a separate action
          to enforce its rights in another court.

25.       THE AGENT, THE ARRANGERS AND THE BANKS

25.1      Appointment of the Agent
          The Arrangers and each of the Banks hereby appoints the Agent to act
          as its agent in connection herewith and authorises the Agent to
          exercise such rights, powers, authorities and discretions as are
          specifically delegated to the Agent by the terms hereof together with
          all such rights, powers, authorities and discretions as are reasonably
          incidental thereto.

25.2      Agent's Discretions
          The Agent may:

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<PAGE>

          25.2.1    assume, unless it has, in its capacity as agent for the
                    Banks, received notice to the contrary from any other party
                    hereto, that (a) any representation made or deemed to be
                    made by an Obligor in connection with the Finance Documents
                    is true, (b) no Event of Default or Potential Event of
                    Default has occurred, (c) no Obligor is in breach of or
                    default under its obligations under the Finance Documents
                    and (d) any right, power, authority or discretion vested
                    therein upon the Majority Banks, the Banks or any other
                    person or group of persons has not been exercised;

          25.2.2    assume that the Facility Office of each Bank is that
                    notified to it by such Bank in writing prior to the date
                    hereof (or, in the case of a Transferee, at the end of the
                    Transfer Certificate to which it is a party as Transferee)
                    until it has received from such Bank a notice designating
                    some other office of such Bank to replace its Facility
                    Office and act upon any such notice until the same is
                    superseded by a further such notice;

          25.2.3    engage and pay for the advice or services of any lawyers,
                    accountants, surveyors or other experts whose advice or
                    services may to it seem necessary, expedient or desirable
                    and rely upon any advice so obtained;

          25.2.4    rely as to any matters of fact which might reasonably be
                    expected to be within the knowledge of an Obligor upon a
                    certificate signed by or on behalf of such Obligor;

          25.2.5    rely upon any communication or document believed by it to be
                    genuine;

          25.2.6    refrain from exercising any right, power or discretion
                    vested in it as agent hereunder unless and until instructed
                    by the Majority Banks as to whether or not such right, power
                    or discretion is to be exercised and, if it is to be
                    exercised, as to the manner in which it should be exercised;

          25.2.7    refrain from acting in accordance with any instructions of
                    the Majority Banks to begin any legal action or proceeding
                    arising out of or in connection with the Finance Documents
                    until it shall have received such security as it may require
                    (whether by way of payment in advance or otherwise) for all
                    costs, claims, losses, expenses (including legal fees) and
                    liabilities together with any VAT thereon which it will or
                    may expend or incur in complying with such instructions; and

          25.2.8    assume (unless it has specific notice to the contrary) that
                    any notice or request made by the Account Party is made on
                    behalf of both Obligors.

25.3      Agent's Obligations
          The Agent shall:

          25.3.1    promptly inform each Bank of the contents of any notice or
                    document received by it in its capacity as Agent from an
                    Obligor under the Finance Documents and shall promptly
                    deliver to each Bank a copy of each Letter of Credit
                    delivered to Lloyd's pursuant to Clause 3.3 (Completion of
                    Letters of Credit);

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<PAGE>

         25.3.2  promptly notify each Bank of the occurrence of any Event of
                 Default or any default by an Obligor in the due performance of
                 or compliance with its obligations under the Finance Documents
                 of which the Agent has notice from any other party hereto;

         25.3.3  save as otherwise provided herein, act as agent under the
                 Finance Documents in accordance with any instructions given to
                 it by an Majority Banks, which instructions shall be binding on
                 the Arrangers and the Banks; and

         25.3.4  if so instructed by the Majority Banks, refrain from exercising
                 any right, power or discretion vested in it as agent under the
                 Finance Documents.

         The Agent's duties under the Finance Documents are solely mechanical
         and administrative in nature.

25.4     Excluded Obligations

         Notwithstanding anything to the contrary expressed or implied herein,
         neither the Agent nor the Arrangers shall:

         25.4.1  be bound to enquire as to (a) whether or not any representation
                 made or deemed to be made by an Obligor in connection with the
                 Finance Documents is true, (b) the occurrence or otherwise of
                 any Default, (c) the performance by an Obligor of its
                 obligations under the Finance Documents or (d) any breach of or
                 default by an Obligor of or under its obligations under the
                 Finance Documents;

         25.4.2  be bound to account to any Bank for any sum or the profit
                 element of any sum received by it for its own account;

         25.4.3  be bound to disclose to any other person any information
                 relating to any member of the Group if (a) such person, on
                 providing such information, expressly stated to the Agent or,
                 as the case may be, the Arrangers, that such information was
                 confidential or (b) such disclosure would or might in its
                 opinion constitute a breach of any law or be otherwise
                 actionable at the suit of any person;

         25.4.4  be under any obligations other than those for which express
                 provision is made herein; or

         25.4.5  be or be deemed to be a fiduciary for any other party hereto.

25.5     Indemnification

         Each Bank shall, in its Proportion, from time to time on demand by the
         Agent, indemnify the Agent against any and all costs, claims, losses,
         expenses (including legal fees) and liabilities together with any VAT
         thereon which the Agent may incur, otherwise than by reason of its own
         gross negligence or wilful misconduct, in acting in its capacity as
         agent hereunder (other than any which have been reimbursed by the
         Account Party pursuant to Clause 20.1 Company's Indemnity).

25.6     Exclusion of Liabilities

         Except in the case of gross negligence or wilful default, neither the
         Agent nor the Arrangers accepts any responsibility:

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<PAGE>

         25.6.1  for the adequacy, accuracy and/or completeness of any
                 information supplied by the Agent or the Arrangers, by an
                 Obligor or by any other person in connection with the Finance
                 Documents or any other agreement, arrangement or document
                 entered into, made or executed in anticipation of, pursuant to
                 or in connection with the Finance Documents;

         25.6.2  for the legality, validity, effectiveness, adequacy or
                 enforceability of the Finance Documents or any other agreement,
                 arrangement or document entered into, made or executed in
                 anticipation of, pursuant to or in connection with the Finance
                 Documents; or

         25.6.3  for the exercise of, or the failure to exercise, any judgement,
                 discretion or power given to any of them by or in connection
                 with the Finance Documents or any other agreement, arrangement
                 or document entered into, made or executed in anticipation of,
                 pursuant to or in connection with the Finance Documents.

         Accordingly, neither the Agent nor the Arrangers shall be under any
         liability (whether in negligence or otherwise) in respect of such
         matters, save in the case of gross negligence or wilful misconduct.

25.7     No Actions

         Each of the Banks agree that it will not assert or seek to assert
         against any director, officer or employee of the Agent or the Arrangers
         any claim it might have against any of them in respect of the matters
         referred to in Clause 25.6 (Exclusion of Liabilities).

25.8     Business with the Group

         The Agent and the Arrangers may accept deposits from, lend money to and
         generally engage in any kind of banking or other business with any
         member of the Group.

25.9     Resignation

         The Agent may resign its appointment hereunder at any time without
         assigning any reason therefor by giving not less than thirty days'
         prior notice to that effect to each of the other parties hereto,
         provided that no such resignation shall be effective until a successor
         for the Agent is appointed in accordance with the succeeding
         provisions of this Clause 25.

25.10    Removal of Agent

         The Majority Banks may remove the Agent from its role as agent
         hereunder after consultation with the Account Party by giving notice to
         that effect to each of the other parties hereto. Such removal shall
         take effect only when a successor to the Agent is appointed in
         accordance with the terms hereof.

25.11    Successor Agent

         If the Agent gives notice of its resignation pursuant to Clause 25.9
         (Resignation) or it is removed pursuant to Clause 25.10 (Removal of
         Agent) then any reputable and experienced bank or other financial
         institution may be appointed as a successor to the Agent by the
         Majority Banks (after consultation with the Account Party if the
         successor is a Bank or otherwise with the Account Party's prior
         written consent) during the period of such notice (with the
         co-operation of the Agent), subject to such entity executing and
         delivering a confidentiality undertaking substantially in the form set
         out in Schedule 8

                                      -53-

<PAGE>

         (Form of Confidentiality Undertaking) but, if no such successor is so
         appointed, the Agent may appoint such a successor itself.

25.12    Rights and Obligations

         If a successor to the Agent is appointed under the provisions of
         Clause 25.11 (Successor Agent), then (a) the retiring Agent shall be
         discharged from any further obligation hereunder but shall remain
         entitled to the benefit of the provisions of this Clause 25 and (b)
         its successor and each of the other parties hereto shall have the same
         rights and obligations amongst themselves as they would have had if
         such successor had been a party hereto.

25.13    Own Responsibility

         It is understood and agreed by each Bank that at all times it has
         itself been, and will continue to be, solely responsible for making
         its own independent appraisal of and investigation into all risks
         arising under or in connection with this Agreement including, but not
         limited to:

         25.13.1 the financial condition, creditworthiness, condition, affairs,
                 status and nature of each member of the Group;

         25.13.2 the legality, validity, effectiveness, adequacy and
                 enforceability of the Finance Documents and any other
                 agreement, arrangement or document entered into, made or
                 executed in anticipation of, pursuant to or in connection with
                 the Finance Documents;

         25.13.3 whether such Bank has recourse, and the nature and extent of
                 that recourse, against an Obligor or any other person or any of
                 its assets under or in connection with the Finance Documents,
                 the transactions therein contemplated or any other agreement,
                 arrangement or document entered into, made or executed in
                 anticipation of, pursuant to or in connection with the Finance
                 Documents; and

         25.13.4 the adequacy, accuracy and/or completeness of any information
                 provided by the Agent or the Arrangers, an Obligor or by any
                 other person in connection with the Finance Documents, the
                 transactions contemplated therein or any other agreement,
                 arrangement or document entered into, made or executed in
                 anticipation of, pursuant to or in connection with the Finance
                 Documents.

         Accordingly, each Bank acknowledges to the Agent and the Arrangers that
         it has not relied on and will not hereafter rely on the Agent and the
         Arrangers or either of them in respect of any of these matters.

25.14    Agency Division Separate

         In acting as agent hereunder for the Banks, the Agent shall be
         regarded as acting through its agency division which shall be treated
         as a separate entity from any other of its divisions or departments
         and, notwithstanding the foregoing provisions of this Clause 25, any
         information received by some other division or department of the Agent
         may be treated as confidential and shall not be regarded as having
         been given to the Agent's agency division.

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<PAGE>

25.15   Declaration of Agent as Security Trustee

        The Agent hereby declares that it shall hold:

        25.15.1   all rights, titles and interests that may hereafter be
                  mortgaged, charged, assigned or otherwise secured in favour of
                  the Agent by or pursuant to the Finance Documents;

        25.15.2   the benefit of all representations, covenants, guarantees,
                  indemnities and other contractual provisions given in favour
                  of the Agent (other than any such benefits given to the Agent
                  solely for its own benefit) by or pursuant to the Finance
                  Documents (other than this Agreement); and

        25.15.3   all proceeds of the security referred to in sub-clause 25.15.1
                  above and of the enforcement of the benefits referred to in
                  25.15.2 above,

        on trust for itself and the other Finance Parties from time to time.

        Such declaration shall remain valid notwithstanding that the Agent may
        on the date hereof or at any other time be the sole Finance Party; for
        the avoidance of doubt, however, such declaration shall, in such case,
        be deemed repeated on each date on which the Agent ceases to be the sole
        Finance Party.

        Each of the parties hereto agrees that the obligations, rights and
        benefits vested or to be vested in the Agent as trustee as aforesaid by
        the Finance Documents or any document entered into pursuant thereto
        shall (as well before as after enforcement) be performed and (as the
        case may be) exercised by the Agent in accordance with the provisions of
        this Clause 25.

25.16   Powers and Discretions

        The Agent shall have all the powers and discretions conferred upon
        trustees by the Trustee Act 1925 (to the extent not inconsistent
        herewith) and by way of supplement it is expressly declared as follows:

        25.16.1   the Agent shall be at liberty to place any of the Finance
                  Documents and any other instruments, documents or deeds
                  delivered to it pursuant thereto or in connection therewith
                  for the time being in its possession in any safe deposit, safe
                  or receptacle selected by the Agent or with any bank, any
                  company whose business includes undertaking the safe custody
                  of documents or any firm of lawyers of good repute;

        25.16.2   the Agent may, whenever it thinks fit, delegate by power of
                  attorney or otherwise to any person or persons or fluctuating
                  body of persons all or any of the rights, trusts, powers,
                  authorities and discretions vested in it by any of the Finance
                  Documents and such delegation may be made upon such terms and
                  subject to such conditions (including the power to
                  sub-delegate) and subject to such regulations as the Agent may
                  think fit and the Agent shall not be bound to supervise, or be
                  in any way responsible for any loss incurred by reason of any
                  misconduct or default on the part of, any such delegate (or
                  sub-delegate);

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<PAGE>

         25.16.3  notwithstanding anything else herein contained, the Agent may
                  refrain from doing anything which would or might in its
                  opinion be contrary to any law of any jurisdiction or any
                  directive or regulation of any agency of any state or which
                  would or might otherwise render it liable to any person and
                  may do anything which is, in its opinion, necessary to comply
                  with any such law, directive or regulation;

         25.16.4  save in the case of gross negligence or wilful misconduct, the
                  Agent and every attorney, agent, delegate, sub-delegate and
                  any other person appointed by any of them under any of the
                  Finance Documents may indemnify itself or himself out of the
                  security held by the Agent against all liabilities, costs,
                  fees, charges, losses and expenses incurred by any of them in
                  relation to or arising out of the taking or holding of any of
                  the security constituted by, or any of the benefits provided
                  by, any of the Finance Documents, in the exercise or purported
                  exercise of the rights, trusts, powers and discretions vested
                  in any of them or in respect of any other matter or thing done
                  or omitted to be done in any way relating to any of the
                  Finance Documents or pursuant to any law or regulation; and

         25.16.5  without prejudice to the provisions of any of the Finance
                  Documents, the Agent shall not be under any obligation to
                  insure any property or to require any other person to maintain
                  any such insurance and shall not be responsible for any loss
                  which may be suffered by any person as a result of the lack of
                  or inadequacy or insufficiency of any such insurance.

25.17    Liability

         The Agent shall not be liable for any failure:

         25.17.1  to require the deposit with it of any deed or document
                  certifying, representing or constituting the title of the
                  Account Party to any of the property mortgaged, charged,
                  assigned or otherwise encumbered by or pursuant to any of the
                  Finance Documents;

         25.17.2  to obtain any licence, consent or other authority for the
                  execution, delivery, validity, legality, adequacy,
                  performance, enforceability or admissibility in evidence of
                  any of the Finance Documents;

         25.17.3  to register or notify any deed or document mentioned at
                  sub-clause 25.17.1 in accordance with the provisions of any of
                  the documents of title of the Account Party;

         25.17.4  to effect or procure registration of or otherwise protect any
                  of the security created by any of the Finance Documents by
                  registering the same under any applicable registration laws in
                  any territory or otherwise by registering any notice, caution
                  or other entry prescribed by or pursuant to the provisions of
                  the said Act or laws;

         25.17.5  to take or to require the Account Party to take any steps to
                  render the security without limitation, any floating charge)
                  created or purported to be created by or

                                      -56-

<PAGE>

                    pursuant to any of the Finance Documents effective or to
                    secure the creation of any ancillary charge under the laws
                    of any jurisdiction; or

          25.17.6   to require any further assurances in relation to any of the
                    Finance Documents.

25.18     Title to Security etc.

          The Agent may accept without enquiry, requisition or objection such
          right and title as the Account Party may have to the property
          belonging (or purportedly belonging) to it (or any part thereof) which
          is the subject matter of any of the Finance Documents and shall not be
          bound or concerned to investigate or make any enquiry into the right
          or title of the Account Party to such property (or any part thereof)
          or, without prejudice to the foregoing, to require the Account Party
          to remedy any defect in the Account Party's right or title as
          aforesaid.

25.19     New Security Trustee

          The Agent may at any time appoint any person (whether or not a trust
          corporation) to act either as a separate trustee or as a co-trustee
          jointly with the Agent:

          25.19.1   if the Agent considers such appointment to be in the
                    interests of the Banks; or

          25.19.2   for the purposes of conforming to any legal requirements,
                    restrictions or conditions which the Agent deems relevant
                    for the purposes of the Finance Documents and the Agent
                    shall give prior notice to the Account Party and the Banks
                    of any such appointment.

          Any person so appointed shall (subject to the provisions of the
          Finance Documents) have such powers, authorities and discretions and
          such duties and obligations as shall be conferred or imposed or such
          person by the instrument of appointment and shall have the same
          benefits under this Clause 25 as the Agent.

          The Agent shall have power in like manner to remove any person so
          appointed.

          Such reasonable remuneration as the Agent may pay to any person so
          appointed, and any costs, charges and expenses incurred by such person
          in performing its functions pursuant to such appointment, shall for
          the purposes hereof be treated as costs, charges and expenses incurred
          by the Agent under the Finance Documents.

25.20     Perpetuity Period

          The perpetuity period under the rule against perpetuities if
          applicable to the trusts constituted in this Clause 25 and the other
          Finance Documents shall be the period of eighty years from the date of
          this Agreement and, subject thereto, if the Agent determines that all
          of the obligations of the Account Party under any of the Finance
          Documents have been fully and unconditionally discharged, such trusts
          shall be wound up.

25.21     Security

          25.21.1   In the event that the Required Value is greater than US$100
                    pursuant to sub-clause 17.1.2 of Clause 17.1 (Letter of
                    Credit Commission), as soon as reasonably practicable after
                    each delivery to the Security Trustee of the statement(s) of
                    the Charged Portfolio by the Custodian pursuant to paragraph
                    3

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                    of the Custodian's Undertaking and in any event within seven
                    Business Days of such delivery, the Security Trustee and the
                    Obligors shall adjust the Required Value to the extent
                    necessary to ensure that the Required Value of the Charged
                    Portfolio is an amount equal to the aggregate of:

                    A + (A x Y per cent.) + B + (B x Y per cent.) +C + (C x Y
                    per cent.)

                    where:

                    A    represents the amount of the Charged Portfolio
                         denominated in sterling

                    B    represents the amount of the Charged Portfolio
                         denominated in dollars (converted into sterling at the
                         Spot Rate)

                    C    represents the amount of the Charged Portfolio
                         denominated in any currency other than sterling or
                         dollars (converted into sterling at the Spot Rate)

                    Y per cent. means:

                    (a)  10 per cent. in respect of any portion of the Charged
                         Portfolio denominated in sterling;

                    (b)  10 per cent. in respect of any portion of the Charged
                         Portfolio denominated in dollars; and

                    (c)  15 per cent. in respect of any portion of the Charged
                         Portfolio denominated in any currency other than
                         dollars or sterling

                    and shall notify the Custodian of any such adjustments.

          25.21.2   The Security Trustee shall not amend the Security Trustee's
                    Requirements without the consent of the Banks.

          25.21.3   In the event that the Pricing Level reverts from Level V to
                    level IV or above (each as defined in Schedule 9 (Pricing
                    Schedule), the Required Value will revert to US$100. For the
                    avoidance of doubt, if, following any such reduction in the
                    Required Value, the Pricing Level again reaches Level V, the
                    Required Value shall be increased to the extent required
                    pursuant to sub-clause 17.1.2 of Clause 17.1 (Letter of
                    Credit Commission).

25.22     Bank Representations

          Each Bank represents to the Agent on the date of issue of each Letter
          of Credit that:

          25.22.1   the execution and delivery of each Letter of Credit by the
                    Agent on the Bank's behalf has been duly authorised by all
                    necessary action on the part of the Bank; and

          25.22.2   the obligations of the Bank under each Letter of Credit
                    constitute its legal, valid and binding obligations.

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25.23     Letters of Credit

          Each Bank shall in its Proportion, indemnify the Agent against any and
          all liabilities, costs and expenses which the Agent may incur (in its
          capacity as Agent) as a result of the execution and delivery of any
          Letter of Credit and any documents executed and delivered by the Agent
          in connection therewith.

26.       ASSIGNMENTS AND TRANSFERS

26.1      Binding Agreement

          The Finance Documents shall be binding upon and enure to the benefit
          of each party hereto and its or any subsequent successors and
          Transferees.

26.2      No Assignments and Transfers by the Obligors

          No Obligor shall be entitled to assign or transfer all or any of its
          rights, benefits and obligations under the Finance Documents without
          the prior written consent of all the Banks.

26.3      Assignments and Transfers by Banks

          Subject to obtaining the prior written consent of the Account Party
          (such consent not to be unreasonably withheld or delayed), any Bank
          may, at any time, assign all or any of its rights and benefits under
          the Finance Documents or transfer in accordance with Clause 26.5
          (Transfers by Banks) all or any of its rights, benefits and
          obligations under the Finance Documents to a bank or financial
          institution, provided that:

          26.3.1    no such assignment or transfer of the whole or any part of
                    the Commitment may be made unless it is to an Approved
                    Credit Institution; and

          26.3.2    the Account Party's consent is not required if such
                    assignment or transfer is:

                    (a)   to any subsidiary or holding company, or to any
                          subsidiary of any holding company, of such Bank; or

                    (b)   to any other Bank.

26.4      Assignments by Banks

          If any Bank assigns all or any of its rights and benefits under the
          Finance Documents in accordance with Clause 26.3 (Assignments and
          Transfers by Banks), then, unless and until the assignee has delivered
          a notice to the Agent confirming in favour of the Agent, the Arrangers
          and the Banks that it shall be under the same obligations towards each
          of them as it would have been under if it had been an original party
          hereto as a Bank (whereupon such assignee shall become a party hereto
          as a "Bank"), the Agent, the Arrangers, and the Banks shall not be
          obliged to recognise such assignee as having the rights against each
          of them which it would have had if it had been such a party hereto.

26.5      Transfers by Banks

          If any Bank wishes to transfer all or any of its rights, benefits
          and/or obligations under the Finance Documents as contemplated in
          Clause 26.3 (Assignments and Transfers by Banks), then such transfer
          may be effected by the delivery to the Agent of a duly completed
          Transfer Certificate executed by such Bank and the relevant Transferee
          in which event, on the later of the Transfer Date specified in such
          Transfer Certificate and

                                      -59-

<PAGE>

          the fifth Business Day after (or such earlier Business Day endorsed by
          the Agent on such Transfer Certificate falling on or after) the date
          of delivery of such Transfer Certificate to the Agent:

          26.5.1    to the extent that in such Transfer Certificate the Bank
                    party thereto seeks to transfer by novation its rights,
                    benefits and obligations under the Finance Documents, each
                    of the Obligors and such Bank shall be released from further
                    obligations towards one another under the Finance Documents
                    and their respective rights against one another shall be
                    cancelled (such rights and obligations being referred to in
                    this Clause 26.5 as "discharged rights and obligations");

          26.5.2    each of the Obligors and the Transferee party thereto shall
                    assume obligations towards one another and/or acquire rights
                    against one another which differ from such discharged rights
                    and obligations only insofar as such Obligor and such
                    Transferee have assumed and/or acquired the same in place of
                    such Obligor and such Bank;

          26.5.3    the Agent, the Arrangers, the Security Trustee, such
                    Transferee and the other Banks shall acquire the same rights
                    and benefits and assume the same obligations between
                    themselves as they would have acquired and assumed had such
                    Transferee been an original party hereto as a Bank with the
                    rights, benefits and/or obligations acquired or assumed by
                    it as a result of such transfer and to that extent the
                    Agent, the Arrangers and the relevant Bank shall each be
                    released from further obligations to each other under the
                    Finance Documents; and

          26.5.4    such Transferee shall become a party hereto as a "Bank".

26.6      Replacement of Letter of Credit

          On any transfer pursuant to Clause 26.5 (Transfers by Banks) other
          than such a transfer upon the designation of a Substitute Bank in
          accordance with the provisions of sub-clause 4.6.1 of Clause 4.6
          (Substitute Bank) the Bank transferring all or any of its rights,
          benefits and/or obligations under the Finance Documents shall ensure
          that the Account Party will procure the release by Lloyd's of each
          Letter of Credit (an "Old Letter of Credit") with respect to which the
          transfer is to have effect and its replacement by a new Letter of
          Credit to be issued by the Transferee and all the other Banks in an
          amount equal to that of the Old Letter of Credit and having an Expiry
          Date which corresponds with the Expiry Date thereof.

26.7      Transfer Fees

          On the date upon which a transfer takes effect pursuant to Clause 26.5
          (Transfers by Banks) the relevant Transferee shall pay to the Agent
          for its own account a fee of (Pounds)1,000.

26.8      Disclosure of Information

          Any Bank may disclose to any person:

          26.8.1    to (or through) whom such Bank assigns or transfers (or may
                    potentially assign or transfer) all or any of its rights,
                    benefits and obligations under the Finance Documents;

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          26.8.2    with (or through) whom such Bank enters into (or may
                    potentially enter into) any sub-participation in relation
                    to, or any other transaction under which payments are to be
                    made by reference to, this Agreement or any Obligor; or

          26.8.3    to whom information may be required to be disclosed by any
                    applicable law,

such information about any Obligor or the Group and the Finance Documents as
such Bank shall consider appropriate and in the case of sub-clause 26.8.1 and
26.8.2, subject to requiring and receiving a confidentiality undertaking
substantially in the form set out in Schedule 8 (Form of Confidentiality
Agreement).

26.9      Partial Transfers/Assignments

          Any assignment or transfer by a Bank of part of its Commitment or
          Outstandings shall be in a minimum amount of (Pounds)10,000,000.

27.       ECONOMIC AND MONETARY UNION

27.1      Alternative Currencies during Transition Period
          On and from the date on which the United Kingdom becomes a
          Participating Member State, if and to the extent that any EMU
          Legislation provides that an amount denominated either in the euro or
          in sterling and payable within that Participating Member State by
          crediting an account of the creditor can be paid by the debtor either
          in the euro unit or in sterling, the Borrower shall be entitled to pay
          or repay any such amount payable hereunder either in the euro unit or
          in sterling.

27.2      Business Days

          With effect on and from the date on which the United Kingdom becomes a
          Participating Member State, the definition of Business Day in Clause
          1.1 (Definitions) shall be amended by the addition thereto (at the
          end) of the following:

                    "and if such reference relates to a date for the payment or
                    purchase of a sum denominated in the euro or in sterling, a
                    day (other than a Saturday or Sunday) on which (a) such
                    clearing or settlement system as is determined by the Agent
                    to be suitable for clearing or settlement of the euro is
                    open for business and (b) banks are generally open for
                    business in London.".

27.3      Rounding and Other Consequential Changes

          With effect on and from the date on which the United Kingdom becomes a
          Participating Member State:

          27.3.1    without prejudice and in addition to any method of
                    conversion or rounding prescribed by any EMU Legislation,
                    each reference in this Agreement to a fixed amount or fixed
                    amounts in a national currency unit to be paid to or by the
                    Agent shall be replaced by a reference to such comparable
                    and convenient fixed amount or fixed amounts in the euro
                    unit as the Agent may from time to time specify; and

          27.3.2    save as expressly provided in this Clause 27, the Finance
                    Documents shall be subject to such changes of construction
                    or interpretation as the Agent and the Security Trustee may
                    from time to time specify to be necessary to reflect the

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<PAGE>

                    changeover to the euro in the United Kingdom and to put the
                    parties in the same position, so far as possible, that they
                    would have been in if no change in currency had occurred.

28.       CALCULATIONS AND EVIDENCE of DEBT

28.1      Basis of Accrual
          Interest and Letter of Credit Commission shall accrue from day to day
          and shall be calculated on the basis of a year of 365 days (or in the
          case of any such amounts denominated in dollars, 360 days) and the
          actual number of days elapsed.

28.2      Proportionate Reductions
          Any collateralisation of Outstandings denominated in dollars shall
          reduce the amount of such Outstandings by the amount of dollars
          collateralised and shall reduce the Sterling Amount of such
          Outstandings proportionately.

28.3      Evidence of Debt
          Each Bank shall maintain in accordance with its usual practice
          accounts evidencing the face amount of its participations in Letters
          of Credit and the amounts from time to time owing to it hereunder.

28.4      Control Accounts
          The Agent shall maintain on its books a control account or accounts in
          which shall be recorded (a) the amount of any Unpaid Sum and the face
          amount of any Letter of Credit issued and each Bank's share therein,
          (b) the amount of all fees, interest and other sums due or to become
          due from an Obligor and each Bank's share therein and (c) the amount
          of any sum received or recovered by the Agent hereunder and each
          Bank's share therein.

28.5      Prima Facie Evidence
          In any legal action or proceeding arising out of or in connection with
          this Agreement, the entries made in the accounts maintained pursuant
          to Clause 28.3 (Evidence of Debt) and Clause 28.4 (Control Accounts)
          shall be prima facie evidence of the existence and amounts of the
          specified obligations of the Obligors.

28.6      Certificates of Banks
          A certificate of a Bank as to (a) the amount by which a sum payable to
          it hereunder is to be increased under Clause 9.1 (Tax Gross-up), (b)
          the amount for the time being required to indemnify it against any
          such cost, payment or liability as is mentioned in Clause 9.2 (Tax
          Indemnity) or Clause 11.1 (Increased Costs) or (c) the amount of any
          credit, relief, remission or repayment as is mentioned in Clause 10.3
          (Tax Credit Payment) or Clause 10.4 (Tax Credit Clawback) shall, in
          the absence of manifest error, be prima facie evidence of the
          existence and amounts of the specified obligations of the Obligors.

28.7      Agent's Certificates
          A certificate of the Agent as to the amount at any time due from the
          Account Party hereunder or the amount which, but for any of the
          obligations of the Account Party hereunder being or becoming void,
          voidable, unenforceable or ineffective, at any time would have been
          due from the Account Party hereunder shall, in the absence of manifest
          error, be conclusive for the purposes of Clause 29 (Guarantee and
          Indemnity).

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28.8      Letters of Credit
          A certificate of a Bank as to the amount paid out by such Bank in
          respect of any Letter of Credit shall, save for manifest error, be
          prima facie evidence of the payment of such amounts in any legal
          action or proceedings arising in connection therewith.

29.       GUARANTEE AND INDEMNITY

29.1      Guarantee and Indemnity
          The Guarantor irrevocably and unconditionally:

          29.1.1    guarantees to each Finance Party the due and punctual
                    observance and performance of all the terms, conditions and
                    covenants on the part of the Account Party contained in the
                    Finance Documents and agrees to pay from time to time on
                    demand any and every sum or sums of money which the Account
                    Party is at any time liable to pay to any Finance Party
                    under or pursuant to the Finance Documents and which has
                    become due and payable but has not been paid at the time
                    such demand is made; and

          29.1.2    agrees as a primary obligation to indemnify each Finance
                    Party from time to time on demand from and against any loss
                    incurred by any Finance Party as a result of any of the
                    obligations of the Account Party under or pursuant to the
                    Finance Documents being or becoming void, voidable,
                    unenforceable or ineffective as against the Account Party
                    for any reason whatsoever, whether or not known to any
                    Finance Party or any other person, the amount of such loss
                    being the amount which the person or persons suffering it
                    would otherwise have been entitled to recover from the
                    Account Party.

29.2      Additional Security
          The obligations of the Guarantor herein contained shall be in addition
          to and independent of every other security which any Finance Party may
          at any time hold in respect of any of the Account Party's obligations
          under the Finance Documents.

29.3      Continuing Obligations
          The obligations of the Guarantor herein contained shall constitute and
          be continuing obligations notwithstanding any settlement of account or
          other matter or thing whatsoever and shall not be considered satisfied
          by any intermediate payment or satisfaction of all or any of the
          obligations of the Account Party under the Finance Documents and shall
          continue in full force and effect until final payment in full of all
          amounts owing by the Account Party under the Finance Documents and
          total satisfaction of all the Account Party's actual and contingent
          obligations under the Finance Documents.

29.4      Obligations not Discharged
          Neither the obligations of the Guarantor herein contained nor the
          rights, powers and remedies conferred in respect of the Guarantor upon
          any Finance Party by the Finance Documents or by law shall be
          discharged, impaired or otherwise affected by:

          29.4.1    the winding-up, dissolution, administration or
                    re-organisation of the Account Party or any other person or
                    any change in its status, function, control or ownership;

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<PAGE>

          29.4.2    any of the obligations of the Account Party or any other
                    person under the Finance Documents or under any other
                    security taken in respect of any of its obligations under
                    the Finance Documents being or becoming illegal, invalid,
                    unenforceable or ineffective in any respect;

          29.4.3    time or other indulgence being granted or agreed to be
                    granted to the Account Party in respect of its obligations
                    under the Finance Documents or under any such other
                    security;

          29.4.4    any amendment to, or any variation, waiver or release of,
                    any obligation of the Account Party under the Finance
                    Documents or under any such other security;

          29.4.5    any failure to take, or fully to take, any security
                    contemplated hereby or otherwise agreed to be taken in
                    respect of the Account Party's obligations under the Finance
                    Documents;

          29.4.6    any failure to realise or fully to realise the value of, or
                    any release, discharge, exchange or substitution of, any
                    security taken in respect of the Account Party's obligations
                    under the Finance Documents; or

          29.4.7    any other act, event or omission which, but for this Clause
                    29.4, might operate to discharge, impair or otherwise affect
                    any of the obligations of the Guarantor herein contained or
                    any of the rights, powers or remedies conferred upon any of
                    the Finance Parties by the Finance Documents or by law.

29.5      Settlement Conditional
          Any settlement or discharge between the Account Party and any of the
          Finance Parties shall be conditional upon no security or payment to
          any Finance Party by the Account Party or any other person on behalf
          of the Account Party being avoided or reduced by virtue of any laws
          relating to bankruptcy, insolvency, liquidation or similar laws of
          general application and, if any such security or payment is so avoided
          or reduced, each Finance Party shall be entitled to recover the value
          or amount of such security or payment from the Account Party
          subsequently as if such settlement or discharge had not occurred.

29.6      Exercise of Rights
          No Finance Party shall be obliged before exercising any of the rights,
          powers or remedies conferred upon them in respect of the Guarantor by
          the Finance Documents or by law to:

          29.6.1    make any demand of the Account Party;

          29.6.2    take any action or obtain judgment in any court against the
                    Account Party;

          29.6.3    make or file any claim or proof in a winding-up or
                    dissolution of the Account Party; or

          29.6.4    enforce or seek to enforce any other security taken in
                    respect of any of the obligations of the Account Party under
                    the Finance Documents.

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<PAGE>

29.7      Deferral of Guarantor's Rights
          The Guarantor agrees that, so long as any amounts are or may be owed
          by the Account Party under the Finance Documents or the Account Party
          is under any actual or contingent obligations under the Finance
          Documents, it shall not exercise any rights which it may at any time
          have by reason of performance by it of its obligations under the
          Finance Documents:

          29.7.1    to be indemnified by the Account Party; and/or

          29.7.2    to claim any contribution from any other guarantor of the
                    Account Party's obligations under the Finance Documents;
                    and/or

          29.7.3    to take the benefit (in whole or in part and whether by way
                    of subrogation or otherwise) of any rights of the Finance
                    Parties under the Finance Documents or of any other security
                    taken pursuant to, or in connection with, the Finance
                    Documents by all or any of the Finance Parties.

29.8      Suspense Accounts
          All moneys received, recovered or realised by a Bank by virtue of
          Clause 29.1 (Guarantee and Indemnity) may, in that Bank's discretion,
          be credited to an interest bearing suspense or impersonal account and
          may be held in such account for so long as such Bank thinks fit
          pending the application from time to time (as such Bank may think fit)
          of such moneys in or towards the payment and discharge of any amounts
          owing by the Account Party to such Bank under the Finance Documents.

30.       REMEDIES AND WAIVERS, PARTIAL INVALIDITY

30.1      Remedies and Waivers
          No failure to exercise, nor any delay in exercising, on the part of
          any Finance Party, any right or remedy hereunder shall operate as a
          waiver thereof, nor shall any single or partial exercise of any right
          or remedy prevent any further or other exercise thereof or the
          exercise of any other right or remedy. The rights and remedies herein
          provided are cumulative and not exclusive of any rights or remedies
          provided by law.

30.2      Partial Invalidity
          If, at any time, any provision of the Finance Documents is or becomes
          illegal, invalid or unenforceable in any respect under the law of any
          jurisdiction, neither the legality, validity or enforceability of the
          remaining provisions thereof nor the legality, validity or
          enforceability of such provision under the law of any other
          jurisdiction shall in any way be affected or impaired thereby.

31.       NOTICES

31.1      Communications in writing
          31.1.1    Any communication to be made under or in connection with the
                    Finance Documents shall be made in writing and, unless
                    otherwise stated, may be made by fax, letter or telex or (to
                    the extent that the relevant party hereto has specified such
                    address pursuant to Clause 31.2 (Addresses)) by e-mail.

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          31.1.2    The Agent may additionally (if the parties hereto agree and
                    the Account Party has specifically approved in writing), in
                    the case of any document to be forwarded by the Agent
                    pursuant to this Agreement where such document has been
                    supplied to such Agent pursuant to Clause 15.1
                    (Information), refer the relevant party or parties hereto
                    (by fax, letter, telex or (if so specified) e-mail) to a web
                    site considered by the Account Party as secure and
                    confidential and to the location of the relevant information
                    on such web site in discharge of such notification or
                    delivery obligation.

31.2      Addresses
          The address, fax number, e-mail address, telex number and, where
          appropriate, web site (and the department or officer, if any, for
          whose attention the communication is to be made) of each party hereto
          for any communication or document to be made or delivered under or in
          connection with the Finance Documents is:

          31.2.1    in the case of an Obligor, that identified with its name
                    below;

          31.2.2    in the case of each Bank, that notified in writing to the
                    Agent on or prior to the date on which it becomes a party
                    hereto; and

          31.2.3    in the case of the Agent, that identified with its name
                    below,

          or any substitute address, fax number, e-mail address, telex number,
          web site, department or officer as the party hereto may notify to the
          Agent (or the Agent may notify to the other parties hereto, if a
          change is made by the Agent or a web site carrying relevant
          information has been set up by the Agent) by not less than five
          Business Days' notice.

31.3      Delivery
          31.3.1    Any communication or document made or delivered by one
                    person to another under or in connection with the Finance
                    Documents will only be effective:

                    (a)  if by way of fax, when received in legible form; or

                    (b)  if by way of letter, when it has been left at the
                         relevant address or five Business Days after being
                         deposited in the post postage prepaid in an envelope
                         addressed to it at that address; or

                    (c)  if by way of telex, when dispatched, but only if, at
                         the time of transmission, the correct answerback
                         appears at the start and at the end of the sender's
                         copy of the notice; or

                    (d)  if by way of e-mail, when sent in legible form, but
                         only if, following transmission, the sender does not
                         receive a non-delivery message; or

                    (e)  where reference in such communication is to a web site,
                         when the delivery of the letter, fax, telex or, as the
                         case may be, e-mail referring the addressee to such web
                         site is effective,

                    and, if a particular department or officer is specified as
                    part of its address details provided under Clause 31.2
                    (Addresses), if addressed to that department or officer.

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<PAGE>
          31.3.2    Any communication or document to be made or delivered to the
                    Agent will be effective only when actually received by the
                    Agent and then only if it is expressly marked for the
                    attention of the department or officer identified with the
                    Agent's signature below (or any substitute department or
                    officer as the agent shall specify for this purpose).

          31.3.3    All notices from or to any Obligor shall be sent through the
                    Agent.

31.4      Notification of address, fax number and telex number
          Promptly upon receipt of notification of an address, fax number, telex
          number or e-mail address or change of such pursuant to Clause 31.2
          (Addresses) or changing its own address, fax number, telex number or
          e-mail address, the Agent shall notify the other parties hereto.

31.5      English language
          31.5.1    Any notice given under or in connection with any Finance
                    Document must be in English.

          31.5.2    All other documents provided under or in connection with any
                    Finance Document must be:

                    (a)  in English; or

                    (b)  if not in English, accompanied by an English
                         translation thereof certified (by an officer of the
                         person making or delivering the same) as being a true
                         and accurate translation thereof.

31.6      Deemed receipt by the Obligors
          Any communication or document made or delivered to the Account Party
          in accordance with Clause 31.3 (Delivery) shall be deemed to have been
          made or delivered to both Obligors.

32.       COUNTERPARTS

          This Agreement may be executed in any number of counterparts, all of
          which taken together shall constitute one and the same instrument.

33.       AMENDMENTS

33.1      Amendments
          The Agent, if it has the prior consent of the Majority Banks, and the
          Obligors may from time to time agree in writing to amend this
          Agreement or to waive, prospectively or retrospectively, any of the
          requirements of this Agreement and any amendments or waivers so agreed
          shall be binding on all the Finance Parties, provided that no such
          waiver or amendment shall subject any Finance Party hereto to any new
          or additional obligations without the consent of such Finance Party.

33.2      Amendments Requiring the Consent of all the Banks
          An amendment or waiver which relates to:

          33.2.1    Clause 24 (Sharing) or this Clause 33;

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<PAGE>

          33.2.2    a change in the currency or amount of any Letter of Credit;

          33.2.3    a reduction in the Letter of Credit Commission, or the
                    amount or currency of any payment of interest, fees or any
                    other amount payable hereunder to any Finance Party or
                    deferral of the date for payment thereof;

          33.2.4    a release of the Guarantor from any of its obligations set
                    out in Clause 29 (Guarantee and Indemnity);

          33.2.5    Clause 15.7 (Adjusted Consolidated Debt to Total
                    Capitalisation Ratio) and Clause 15.8 (Consolidated Net
                    Worth);

          33.2.6    the definition of Majority Banks;

          33.2.7    any provision which contemplates the need for the consent or
                    approval of all the Banks; or

          33.2.8    the Security Documents (if any),

          shall not be made without the prior consent of all the Banks.

33.3      Exceptions
          Notwithstanding any other provisions hereof, the Agent shall not be
          obliged to agree to any such amendment or waiver if the same would:

          33.3.1    amend or waive this Clause 33, Clause 18 (Costs and
                    Expenses) or Clause 25 (The Agent, the Arrangers and the
                    Banks); or

          33.3.2    otherwise amend or waive any of the Agent's rights hereunder
                    or subject the Agent or the Arrangers to any additional
                    obligations hereunder.

34.       GOVERNING LAW

          This Agreement is governed by English law.

35.       JURISDICTION

35.1      English Courts
          Each of the parties hereto irrevocably agrees for the benefit of each
          of the Agent, the Arrangers and the Banks that the courts of England
          shall have jurisdiction to hear and determine any suit, action or
          proceeding, and to settle any disputes, which may arise out of or in
          connection with this Agreement and the other Finance Documents and,
          for such purposes, irrevocably submits to the jurisdiction of such
          courts.

35.2      Convenient Forum
          The Obligors irrevocably waive any objection which either of them
          might now or hereafter have to the courts referred to in Clause 35.1
          being nominated as the forum to hear and determine any suit, action or
          proceeding, and to settle any disputes, which may arise out of or in
          connection with this Agreement and agree not to claim that any such
          court is not a convenient or appropriate forum.

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35.3      Service of Process
          Each Obligor agrees that the process by which any suit, action or
          proceeding is begun may be served on it by being delivered in
          connection with any suit, action or proceeding in England, to ACE UK
          Limited at Crosby Court, 38 Bishopsgate, London EC2N 4AJ or its other
          principal place of business for the time being.

35.4      Non-Exclusive Jurisdiction
          The submission to the jurisdiction of the courts referred to in Clause
          35.1 shall not (and shall not be construed so as to) limit the right
          of the Agent, the Arrangers and the Banks or any of them to take
          proceedings against the Account Party in any other court of competent
          jurisdiction nor shall the taking of proceedings in any one or more
          jurisdictions preclude the taking of proceedings in any other
          jurisdiction, whether concurrently or not.

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.

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                                   SCHEDULE 1
                                    The Banks

Bank                                        Commitment ((Pounds))
Citibank, N.A.                                  96,660,000.00
Barclays Bank PLC                               91,670,000.00
ING Bank N.V., London Branch                    86,670,000.00
Credit Lyonnais New York Branch                 50,000,000.00
National Westminster Bank PLC                   50,000,000.00
Lloyds TSB Bank plc                             35,000,000.00
ABN AMRO Bank N.V., London Branch               30,000,000.00
                                           ---------------------

Total                                          440,000,000.00

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

                                      -70-

<PAGE>

                                   SCHEDULE 2
                          Form of Transfer Certificate

To:  Citibank International plc

                              TRANSFER CERTIFICATE

relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Credit Agreement") originally dated 19 November 1999 whereby
following the First Restatement Agreement, the Amendment Agreement and the
Second Restatement Agreement a (Pounds)440,000,000 letter of credit facility was
made available to ACE Limited by a group of banks on whose behalf Citibank
International plc acted as agent in connection therewith.

1.   Terms defined in the Credit Agreement shall, subject to any contrary
     indication, have the same meanings herein. The terms Bank, Transferee and
     Portion Transferred are defined in the schedule hereto.

2.   The Bank (a) confirms that the details in the schedule hereto under the
     heading "Letters of Credit" accurately summarises its participation in the
     Credit Agreement and the Term of any existing Letters of Credit and (b)
     requests the Transferee to accept and procure the transfer by novation to
     the Transferee of the Portion Transferred (specified in the schedule
     hereto) of its Commitment and/or its participation in such Letters of
     Credit by counter-signing and delivering this Transfer Certificate to the
     Agent at its address for the service of notices specified in the Credit
     Agreement.

3.   The Transferee hereby requests the Agent to accept this Transfer
     Certificate as being delivered to the Agent pursuant to and for the
     purposes of Clause 26.5 (Transfers by Banks) of the Credit Agreement so as
     to take effect in accordance with the terms thereof on the Transfer Date or
     on such later date as may be determined in accordance with the terms
     thereof.

4.   The Transferee confirms that it has received a copy of the Credit Agreement
     together with such other information as it has required in connection with
     this transaction and that it has not relied and will not hereafter rely on
     the Bank to check or enquire on its behalf into the legality, validity,
     effectiveness, adequacy, accuracy or completeness of any such information
     and further agrees that it has not relied and will not rely on the Bank to
     assess or keep under review on its behalf the financial condition,
     creditworthiness, condition, affairs, status or nature of the Obligors.

5.   The Transferee hereby undertakes with the Bank and each of the other
     parties to the Credit Agreement that it will perform in accordance with
     their terms all those obligations which by the terms of the Finance
     Documents will be assumed by it after delivery of this Transfer Certificate
     to the Agent and satisfaction of the conditions (if any) subject to which
     this Transfer Certificate is expressed to take effect.

6.   The Bank makes no representation or warranty and assumes no responsibility
     with respect to the legality, validity, effectiveness, adequacy or
     enforceability of the Finance Documents or any document relating thereto
     and assumes no responsibility for the financial condition of the Obligors
     or for the performance and observance by the

                                      -71-

<PAGE>

     Obligors of any of their respective obligations under the Finance Documents
     or any document relating thereto and any and all such conditions and
     warranties, whether express or implied by law or otherwise, are hereby
     excluded.

7.   The Bank hereby gives notice that nothing herein or in the Finance
     Documents (or any document relating thereto) shall oblige the Bank to (a)
     accept a re-transfer from the Transferee of the whole or any part of its
     rights, benefits and/or obligations under the Finance Documents transferred
     pursuant hereto or (b) support any losses directly or indirectly sustained
     or incurred by the Transferee for any reason whatsoever including the
     non-performance by an Obligor or any other party to the Finance Documents
     (or any document relating thereto) of its obligations under any such
     document. The Transferee hereby acknowledges the absence of any such
     obligation as is referred to in (a) or (b) above.

8.   This Transfer Certificate and the rights, benefits and obligations of the
     parties hereunder shall be governed by and construed in accordance with
     English law.

                                  THE SCHEDULE

9.   Bank:

10.  Transferee:

11.  Transfer Date:

12.  Bank's Commitment                            Portion Transferred

13.  Letter(s) of Credit           Term and       Portion Transferred
     Bank's L/C Participation      Expiry Date

     [Transferor Bank]             [Transferee Bank]

By:                                By:

Date:                              Date:

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

                      ADMINISTRATIVE DETAILS OF TRANSFEREE

Address
Contact Name:

Account for Payments
in sterling:

Fax:
Telephone:

                                      -72-

<PAGE>

                                   SCHEDULE 3

                              Conditions Precedent

1.   In relation to each Obligor:

     (i)   confirmation by an Authorised Signatory of such Obligor that there
           have been no changes to the constitutional documents of such Obligor
           since 19 November 1999;

     (ii)  a copy, certified as at the date of the Second Restatement Agreement
           a true and up-to-date copy by an Authorised Signatory of such
           Obligor, of a board resolution of such Obligor approving the
           execution, and performance of the Second Restatement Agreement, the
           Charge Agreement and the Notice of Charge and the terms and
           conditions thereof and authorising a named person or persons to sign
           the Second Restatement Agreement, the Charge Agreement and Notice of
           Charge and any documents to be delivered by such Obligor pursuant
           thereto;

     (iii) a certificate of an Authorised Signatory of such Obligor setting out
           the names and signatures of the persons authorised to sign, on behalf
           of such Obligor, Second Restatement Agreement, the Charge Agreement
           and the Notice of Charge and any documents to be delivered by such
           Obligor pursuant thereto.

2.   Opinion of Clifford Chance, solicitors to the Agent.

3.   An opinion of Maples and Calder, Cayman Islands counsel to the Account
     Party addressed to the Finance Parties.

4.   An opinion of Conyers, Dill and Pearman, Bermudian counsel to the Account
     Party addressed to the Finance Parties.

5.   A copy, certified a true copy by an Authorised Signatory of the Account
     Party, of the financial statements of the Account Party referred to in
     sub-clauses 14.4.1 and 14.4.2 of Clause 14.4 (Financial Information).

6.   Evidence satisfactory to the Agent that Lloyd's agrees to accept deeds of
     substitution in respect of transfers by Banks.

7.   Evidence satisfactory to the Agent that all Original Letters of Credit will
     be cancelled by Lloyd's upon the issue of the Letters of Credit issued
     hereunder on and after the Commencement Date.

8.   A duly signed original copy of the Charge Agreement, executed by the
     Obligors in favour of the Security Trustee, in substantially the form set
     out in Schedule 11 (Form of Charge Agreement) to this Agreement.

9.   A copy, certified a true copy by an Authorised Signatory of each Obligor,
     of the Notice of Charge (in the form set out in the First Schedule to the
     Charge Agreement) dated on or about the date hereof, executed by the
     Obligors and delivered to State Street Bank and Trust Company as the
     Custodian.

                                      -73-

<PAGE>

10.  A duly signed original copy of the Custodian's Undertaking (in the form set
     out in the Second Schedule to the Charge Agreement), executed by State
     Street Bank and Trust Company as the Custodian.

11.  Evidence of the payment by the Obligors to Conyers, Dill and Pearman of the
     sum of US$446 for the purposes of effecting the registration of the Charge
     Agreement with the Registrar of Companies in Bermuda.

12.  Evidence that the Charge Agreement has been recorded in the Account Party's
     internal register of mortgages and charges.

13.  Evidence satisfactory to the Agent of payment by the Obligors of the sum of
     CI$500 to Maples and Calder in respect of the Ad Valorem stamp duty payable
     in the Cayman Islands in relation to the Charge Agreement.

14.  Evidence that ACE UK Limited of Crosby Court, 38 Bishopsgate, London EC2N
     4AJ has agreed to act as the agent of each Obligor for the service of
     process in England in respect of the Amended Agreement.

                                      -74-

<PAGE>

                                   SCHEDULE 4

                              Utilisation Request

From:  ACE Limited

To:    Citibank International plc

Dated:

Dear Sirs,

1.   We refer to the (pounds)440,000,000 letter of credit agreement originally
     dated 19 November 1999 (as (i) amended and restated pursuant to the First
     Restatement Agreement, (ii) amended pursuant to the Amendment Agreement and
     (iii) amended and restated pursuant to the Second Restatement Agreement
     (the "Credit Agreement")) and made between inter alia, ACE Limited as
     account party, Citibank International plc as agent and the financial
     institutions named therein as Banks. Terms defined in the Credit Agreement
     shall have the same meaning in this notice. This notice is irrevocable.

2.   We hereby give you notice that, pursuant to the Credit Agreement we wish
     the Banks to issue the following Letters of Credit:

<TABLE>
<CAPTION>
================== ======================== ========================= ========================== =======================
    Amount                Effective Date            Expiry Date               Beneficiary                Applicant
------------------ ------------------------ ------------------------- -------------------------- -----------------------
<S>                <C>                      <C>                       <C>                        <C>
(pound)/US$/1/           29 November 2001         31 December 2006          Society of Lloyd's
------------------ ------------------------ ------------------------- -------------------------- -----------------------
(pound)/US$/1/           29 November 2001         31 December 2006          Society of Lloyd's
------------------ ------------------------ ------------------------- -------------------------- -----------------------
(pound)/US$/1/           29 November 2001         31 December 2006          Society of Lloyd's
------------------ ------------------------ ------------------------- -------------------------- -----------------------
(pound)/US$/1/           29 November 2001         31 December 2006          Society of Lloyd's
------------------ ------------------------ ------------------------- -------------------------- -----------------------
(pound)/US$/1/           29 November 2001         31 December 2006          Society of Lloyd's
------------------ ------------------------ ------------------------- -------------------------- -----------------------
(pound)/US$/1/           29 November 2001         31 December 2006          Society of Lloyd's
------------------ ------------------------ ------------------------- -------------------------- -----------------------
(pound)/US$/1/           29 November 2001         31 December 2006          Society of Lloyd's
================== ======================== ========================= ========================== =======================
</TABLE>

3.   Utilisation Date: [       ].

4.   We confirm that, at the date hereof, the Representations are true in all
     material respects and no Default is continuing, or would result from the
     issue of such Letters of Credit.

The Letters of Credit should be issued in the form attached and delivered to the
recipient at [address of recipient]. The purpose of their issue is to support
Funds at Lloyd's in respect of the Applicants.

Yours faithfully
--------------------------------------------------------------------------------
1  Delete where appropriate.

                                      -75-

<PAGE>

______________________

Authorised Signatory

for and on behalf of

ACE LIMITED

                                      -76-

<PAGE>

                                   SCHEDULE 5

                           FORM OF EXTENSION REQUEST

From:  ACE Limited

To:    Citibank International plc

Dated:

Re:    [Applicant 1]
       [Applicant 2]

Dear Sirs

We refer to the (pounds)440,000,000 letter of credit agreement originally dated
19 November 1999, (as (i) amended and restated pursuant to the First Restatement
Agreement, (ii) amended pursuant to the Amendment Agreement and (iii) amended
and restated pursuant to the Second Restated Agreement (the "Agreement")
between, inter alia, ACE Limited (the "Company"), the financial institutions
named therein as Banks and Citibank International plc as Agent.

Terms defined in the Agreement shall have the same meanings herein.

1.   Pursuant to Clause 4 (Extension of Letters of Credit) of the Agreement, the
     Account Party, on behalf of [ ] (the "Applicant[s]") hereby requests that
     the Banks extend the Letter[s] of Credit in accordance with the information
     annexed hereto as Annex A.

2.   The Account Party hereby certifies that on the date hereof and on the date
     of extension set forth in Annex A, in each case both before and after
     giving effect to the extension requested hereby:

     (i)   no Event of Default or Potential Event of Default has occurred and is
           continuing;

     (ii)  each of the representations and warranties of the Account Party
           contained in the Agreement and each other Finance Document is correct
           in all material respects on the date hereof, except representations
           and warranties which expressly refer to an earlier date in which case
           the same shall be true on and as of such earlier date;

     (iii) after giving effect to the extension requested hereby, the aggregate
           Sterling Amount of the Outstandings will not exceed the Total
           Commitments; and

     (iv)  the Letter[s] of Credit requested hereby [is/are] being extended
           solely as security to support the underwriting business of the
           Applicant[s] at Lloyd's which has been provided in accordance with
           the requirements of Lloyd's applicable to [it/them].

                                      -77-

<PAGE>

IN WITNESS WHEREOF, the Account Party has caused this Certificate to be executed
by its duly authorised officer as of the date and year first written above.

ACE LIMITED

By: ___________________________

Name: _________________________

Title: ________________________

                                      -78-

<PAGE>

                                     Annex A

                         Letter of Credit Information/2/

1.   Name of Beneficiary:

     ________________________________________________

2.   Letter of Credit Number:

     ________________________________________________

3.   Maximum amount available under Letter of Credit:  (pound)/US$________

4.   Effective Expiry Date:                            31 December ____/3/

--------------------------------------------------------------------------------
/2/  A separate "Letter of Credit Information" should be completed for each
     Letter of Credit covered by the Extension Request.

/3/  Insert immediately succeeding year in which the then current Expiry Date
     falls.

                                      -79-

<PAGE>

                                   SCHEDULE 6

                            Form of Letter of Credit

        Letter of Credit to be issued by the Agent on behalf of the Banks

To:  The Society and Council of Lloyd's
     Gun Wharf
     Dock Road
     Chatham
     Kent ME4 4TU

Dear Sirs

Irrevocable Standby Letter of Credit No. [           ]
Re: [name of corporate member of Lloyd's] (the "Applicant")

This Clean Irrevocable Standby Letter of Credit (the "Credit") is issued by the
banks whose names are set out in Appendix 1 hereto (the "Issuing Banks", and
each an "Issuing Bank") in favour of the Society of Lloyd's ("Lloyd's") on the
following terms:

1.   Subject to the terms hereof, the Issuing Banks shall make payments within
     two business days of demand on Citibank International plc (the "Agent") in
     accordance with paragraph 4 below.

2.   Upon a demand being made by Lloyd's pursuant to paragraph 4 below each
     Issuing Bank shall pay that proportion of the amount demanded which is
     equal to the proportion which its Commitment set out in Appendix 1 hereto
     bears to the aggregate Commitments of all the Issuing Banks set out in
     Appendix 1 hereto, provided that the obligations of the Issuing Banks under
     this Credit shall be several and no Issuing Bank shall be required to pay
     an amount exceeding its Commitment set out in Appendix 1 hereto and the
     Issuing Banks shall not be obliged to make payments hereunder in aggregate
     exceeding a maximum amount of [amount in approved currency]. Any payment by
     an Issuing Bank hereunder shall be made in [approved currency] to Lloyd's
     account specified in the demand made by Lloyd's pursuant to paragraph 4
     below.

3.   The initial expiry date of this Credit shall be 31 December 2006. This
     Credit will be extended automatically for a further year, without written
     amendment, on the first day of January of every future year after 1 January
     2002, so that it is always valid for a minimum period of four years unless
     at least thirty days prior to 31 December of the first year of the then
     current validity period, notice is given in writing, sent by registered
     mail for the attention of the Manager, Members' Funds Department, at the
     above address, that this Credit will not be extended beyond the then
     current expiry date.

4.   Subject to paragraph 3 above, the Issuing Banks shall pay to Lloyd's under
     this Credit upon presentation of a demand by Lloyd's on Citibank
     International plc at P.O. Box 449, Riverdale House, 68 Molesworth Street,
     Lewisham, London SE13 7EU marked for the attention of Cliff Posner, Loans
     Agency (and, in copy, at P.O. Box 200, Cottons Centre, Hays Lane, London
     SE1 2QT marked for the attention of Jon Pasquill, Global Cash and

                                      -80-

<PAGE>

     Trade) in the form set out in Appendix 2 or Appendix 3 (as appropriate)
     hereto the amount specified therein (which amount shall not, when
     aggregated with all other amounts paid by the Issuing Banks to Lloyd's
     under this Credit, exceed the maximum amount referred to in paragraph 2
     above).

5.   The Agent has signed this Credit as agent for disclosed principals and
     accordingly shall be under no obligation to Lloyd's hereunder other than in
     its capacity as an Issuing Bank.

6.   All charges are for the Applicant's account.

7.   Subject to any contrary indication herein, [this Credit is subject to the
     Uniform Customs and Practice for Documentary Credits (1993 Revision)
     International Chamber of Commerce Publication No. 500]*.

8.   This Credit shall be governed by and interpreted in accordance with English
     law and the Issuing Banks hereby irrevocably submit to the jurisdiction of
     the High Court of Justice in England.

9.   Each of the Issuing Banks engages with Lloyd's that demands made under and
     in compliance with the terms and conditions of this Credit shall be duly
     honoured on presentation.

Yours faithfully

CITIBANK INTERNATIONAL plc

for and on behalf of

[Names of all Issuing Banks]

--------------------------------------------------------------------------------
*    This language may be substituted by the following if so requested by
     Lloyd's: "this Credit is subject to The International Standby Practices -
     ISP98 (1998 Revision) International Chamber of Commerce Publication No.
     590"

                                      -81-

<PAGE>

                                   APPENDIX 1

                           Issuing Banks' Commitments

Name and Address of Issuing Bank                                Commitment

                                      -82-

<PAGE>

                                   APPENDIX 2

                            Form of Demand (Sterling)

                             [on Lloyd's letterhead]

Dear Sir/Madam

THE SOCIETY OF LLOYD'S
TRUSTEE OF
LETTER OF CREDIT NO.

With reference to the above, we enclose for your attention a Bill of Exchange,
together with the respective Credit. Payment should be made by way of CHAPS. The
account details are as follows:-

National Westminster Bank Plc                       Sort Code 60-00-01
City of London Office                               Account 140-00-04026268
P.O. Box 12258
1 Princes Street
London EC2R 8AP

Please quote Member Code:

Yours faithfully

for Manager
Members' Funds Department
Members' Services Unit

                                      -83-

<PAGE>

Your ref:
Our ref: MEM/ / / /C911f
Extn:

BILL OF EXCHANGE
The Society of Lloyd's

Trustee of
Letter of Credit No.

Please pay in accordance with the terms of the Credit to our order the amount
of (pounds).
                                                            For and on behalf of

                                                            Authorised Signatory
                                                           Membership Department

To:  Citibank International plc

       as Agent

                                      -84-

<PAGE>
                                   APPENDIX 3

                       Form of Demand (Approved Currency)

                             [on Lloyd's letterhead]

Dear Sir/Madam

THE SOCIETY OF LLOYD'S
TRUSTEE OF
LETTER OF CREDIT NO.

With reference to the above, we enclose for your attention a Bill of Exchange,
together with the respective Credit. Payment should be made by way of SWIFT. The
account details are as follows:-

National Westminster Bank Plc                   Sort Code 60-00-01

City of London Office                           Account 140-00-40120066
P.O. Box 12258
1 Princes Street                              SWIFT Code       NWBK GB21
London EC2R 8AP                               SWIFT Code Intermediary CHA SUS33

Please quote Member Code:

Yours faithfully

for Manager
Members' Funds Department
Members' Services Unit

                                      -85-

<PAGE>

Your ref:
Our ref: MEM/ / / /C911f
Extn:

BILL OF EXCHANGE
The Society of Lloyd's

Trustee of
Letter of Credit No.

Please pay in accordance with the terms of the Credit to our order the amount of
$     .

                                                            For and on behalf of

                                                            Authorised Signatory
                                                           Membership Department

To:  Citibank International plc

       as Agent

                                      -86-

<PAGE>

                                   SCHEDULE 7

                        Mandatory Liquid Asset Costs Rate

1.      For the purposes of this Agreement, the cost of compliance with existing
        requirements of the Bank of England and/or the Financial Services
        Authority will be calculated by the Agent in relation to each Unpaid Sum
        on the basis of rates supplied by the Agent (or such Bank(s) as it may
        from time to time determine) by reference to the circumstances existing
        on the first day of each Term in respect of such Unpaid Sum and, if any
        such Term of such Unpaid Sum exceeds three months, at three calendar
        monthly intervals from the first day of such Term during its duration in
        accordance with the following formula:

        (a)       in relation to Unpaid Sums denominated in Sterling:

                        AB + C(B - D) + E x 0.01             per cent. per annum
                        ------------------------
                           100 - (A + /\C)

        (b)       in relation to Unpaid Sums denominated in dollars:

                                  E x 0.01             per cent. per annum
                                  --------                       ---
                                    300

Where:
                  A       is the percentage of eligible liabilities (assuming
                          these to be in excess of any stated minimum) which the
                          Agent (or such Bank as it may determine) is from time
                          to time required to maintain as an interest free cash
                          ratio deposit with the Bank of England to comply with
                          cash ratio requirements.

                  B       is the percentage rate per annum at which sterling
                          deposits are offered by the Agent (or such Bank as it
                          may determine) in accordance with its normal practice,
                          for a period equal to (a) the relevant Term (or, as
                          the case may be, remainder of such Term) in respect of
                          the relevant Unpaid Sum or (b) three months, whichever
                          is the shorter, to a leading bank in the London
                          Interbank Market as of 11.00 a.m. in a sum
                          approximately equal to the amount of such Unpaid Sum.

                  C       is the percentage of eligible liabilities which the
                          Agent (or such Bank as it may determine) is required
                          from time to time to maintain as interest bearing
                          special deposits with the Bank of England.

                  D       is the percentage rate per annum payable by the Bank
                          of England to the Agent (or such Bank as it may
                          determine) on interest bearing special deposits.

                  E       is the rate payable by the Agent (or such Bank as it
                          may determine) to the Financial Services Authority
                          pursuant to the Fees Regulations (but, for this
                          purpose, ignoring any minimum fee required pursuant to
                          the

                                      -87-

<PAGE>

                  Fees Regulations) and expressed in pounds per (pounds)
                  1,000,000 of the Fee Base of the Agent (or such Bank as it may
                  determine).

2.       For the purposes of this Schedule:

         (i)      "eligible liabilities" and "special deposits" shall bear the
                  meanings ascribed to them from time to time under or pursuant
                  to the Bank of England Act 1998 or (as may be appropriate) by
                  the Bank of England;

         (ii)     "Fee Regulations" means the Banking Supervision (Fees)
                  Regulations 2000 or such other regulation as may be in force
                  from time to time in respect of the payment of fees for
                  banking supervision; and

         (iii)    "Fee Base" shall bear the meaning ascribed to it, and shall be
                  calculated in accordance with, the Fees Regulations.

3.       The percentages used in A and C above shall be those required to be
         maintained on the first day of the relevant period as determined in
         accordance with B above.

4.       In application of the above formula, A, B, C and D will be included
         in the formula as figures and not as percentages e.g. if A is 0.5 per
         cent. and B is 12 per cent., AB will be calculated as 0.5 x 12 and not
         as 0.5 per cent. x 12 per cent.

5.       Calculations will be made on the basis of a 365 day year (or, if
         market practice differs, in accordance with market practice).

6.       A negative result obtained by subtracting D from B shall be taken as
         zero.

7.       The resulting figures shall be rounded to four decimal places.

8.       Additional amounts calculated in accordance with this Schedule are
         payable on the last day of the Term to which they relate.

9.       The determination of the Mandatory Liquid Asset Costs Rate by the
         Agent in relation to any period shall, in the absence of manifest
         error, be conclusive and binding on all of the parties hereto.

10.      The Agent may from time to time, after consultation with the Account
         Party and the Banks, determine and notify to all parties any
         amendments or variations which are required to be made to the formula
         set out above in order to comply with any requirements from time to
         time imposed by the Bank of England or the Financial Services
         Authority in relation to any Unpaid Sum and any such determination
         shall, in the absence of manifest error, be conclusive and binding on
         all the parties hereto.

                                      -88-

<PAGE>
                                   SCHEDULE 8

                       Form of Confidentality Undertaking

                           [Letterhead of Transferor]

[Date]

To:      [Transferee]

Dear Sirs,

ACE Limited - (pounds)440,000,000 Letter of Credit Facility Agreement originally
dated 19 November 1999 (as (i) amended and restated pursuant to a First
Amendment Agreement dated 17 November 2000, (ii) an Amendment Agreement dated 23
October 2001 and (iii) a Second Restatement Agreement dated 21 November 2001)
Confidentiality Agreement

In connection with your possible interest in becoming a bank in the
above-captioned facility (the "Transaction") for ACE Limited (the "Company"), we
will be providing you with information that is not in the public domain but that
is confidential or proprietary in nature. Such information and any other
information concerning the Company or the Transaction furnished to you by
[Transferor], or by or on behalf of the Company (whether before, on or after the
date of this Agreement), together with analyses, compilations or other materials
prepared by you or your directors, officers, employees or advisors
(collectively, "Representatives") which contain or otherwise reflect such
information, are hereinafter collectively referred to as the "Information". In
consideration of your receipt of the Information, you agree that:

1.   Except as otherwise expressly provided herein, you will not (i) use the
     Information except in connection with the Transaction or (ii) disclose to
     any person any terms or conditions of the Transaction or any portion of the
     Information.

2.   Notwithstanding the foregoing, you may disclose the Information: (i) to
     your Representatives who need to know the Information for purposes of
     evaluating the Transaction and who are informed by you of the confidential
     nature of the Information and who agree to be bound by the terms of this
     Agreement; (ii) as may be required by applicable law or at the request of
     any regulatory or supervisory authority having jurisdiction over you or at
     the request of any rating agency for purposes of establishing or
     maintaining your debt ratings, provided that you request confidential
     treatment thereof to the extent permitted by law; or (iii) with the prior
     written consent of the Company and [Transferor].

3.   The reference to the term "Information" contained in paragraphs 1 and 2
     shall not include such portions thereof which (i) are or become available
     to the public through no fault or action by you or your Representatives or
     (ii) are or hereafter become available to you on a non-confidential basis
     from a source other than the Company, [Transferor] or their respective
     Representatives, which source, to the best of your knowledge, is not
     prohibited from disclosing such Information to you by a contractual, legal
     or fiduciary obligation to the Company or [Transferor].

                                      -89-

<PAGE>

4.      In the event that you or any of your Representatives becomes legally
        compelled to disclose any of the Information or the existence of the
        Transaction, you will, to the extent permitted by law provide the
        Company and [Transferor] with prompt notice so that they may seek a
        protective order or other appropriate remedy. In the event that such
        protective order or remedy is not obtained, you shall furnish only that
        portion of the Information that is legally required and shall disclose
        such Information in a manner reasonably designed to preserve its
        confidential nature.

5.      In the event that discussions with you concerning the Transaction are
        discontinued or your participation in the Transaction is otherwise
        terminated, you shall redeliver to [Transferor] any Information that was
        furnished to you by or on behalf of the Company or the Transferor or
        shall certify to the Company and [Transferor] that you have destroyed
        all such Information.

6.      You agree to be responsible for any breach of this Agreement by you
        or your Representatives.

7.      You acknowledge that money damages and other remedies at law may be
        inadequate to protect against breach of this Agreement and you hereby
        agree to the granting of injunctive or other equitable relief without
        proof of actual damages.

8.      It is further understood and agreed that no failure or delay by the
        Company or [Transferor] in exercising any right, power or privilege
        hereunder shall operate as a waiver thereof, nor shall any single or
        partial exercise thereof preclude any other or further exercise thereof.

9.      This Agreement shall be governed by and construed in accordance with the
        laws of England and Wales.

If you are prepared to accept the Information on the foregoing terms, please
countersign this Agreement in the space provided below and deliver it via
telecopier (with the executed original to follow by next-day courier) to:

                  [Transferor]

                  [address]

                  Attention:

                  Telecopier:

Your acceptance of this Agreement shall be effective upon our receipt of such
fax from you.

Yours faithfully,

[TRANSFEROR]

By:  [           ]                [ACCEPTED AND AGREED]

                                      -90-

<PAGE>

Title: [                ]                    As at the date hereof

                                             [Name of Transferee]

                                             By:    [                 ]

                                             Title: [                 ]

                                      -91-

<PAGE>

                                   SCHEDULE 9

                                PRICING SCHEDULE

"L/C Commission Rate" means, for any date, the rates set forth below in the row
opposite such term and in the column corresponding to the Pricing Level that
applies at such date:

<TABLE>
<CAPTION>
==========================================================================================================
                                Level I         Level II        Level III       Level IV        Level V

----------------------------------------------------------------------------------------------------------
<S>                             <C>             <C>             <C>             <C>             <C>
L/C Commission Rate             0.55 per        0.60 per cent.  0.65 per        0.675 per       0.70 per
                                cent.           cent.           cent.           cent.           cent.

==========================================================================================================
</TABLE>

For purposes of this Schedule 9, the following Pricing Levels have the following
meanings:

"Level I" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated AA- or higher by S&P.

"Level II" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated A+ by S&P.

"Level III" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated A by S&P.

"Level IV" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated A- by S&P.

"Level V" applies at any date if, at such date, the Guarantor's Financial
Strength Rating is rated BBB+ or less by S&P.

"Financial Strength Rating" means the financial strength rating of a company
determined by the method used by S&P.

"Pricing Level" refers to the determination of which of Level I, Level II, Level
III, Level IV or Level V applies at any date.

"S&P" means Standard & Poor's Rating Services (a division of The McGraw-Hill
Companies, Inc.).

The credit ratings to be utilised for the purposes of this Schedule 9 are those
ratings assigned to the Financial Strength Rating of the Guarantor. The rating
in effect at any date is that in effect at the close of business on such date.

                                      -92-

<PAGE>

                                  SCHEDULE 10

                                 Existing Liens

     1.   Liens securing letters of credit issued by Citibank, N.A. for the
          account of Cigna Europe in an aggregate stated amount not exceeding
          US$16,000,000 (subject to currency fluctuations).

     2.   Liens securing letters of credit issued by Citibank, N.A. for the
          account of INA (UK) in an aggregate stated amount not exceeding
          US$8,000,000.

     3.   US$70,000,000 of Cigna Overseas Insurance Company investments are
          pledged to Domestic Pool companies under a Regulation 114 trust.

     4.   Lien arising under a Subordination Agreement dated as of 27 October
          1998 among ACE US Holdings, Inc., ACE Limited and The Chase Manhattan
          Bank encumbering ACE US Holdings, Inc.'s rights under the Subordinated
          Loan Agreement dated as of 27 October 1998 among ACE US Holdings,
          Inc., ACE Bermuda Insurance Ltd. and United States Trust Company of
          New York, as trustee under the Indenture dated 17 October 1998 of ACE
          US Holdings, Inc.

                                      -93-

<PAGE>

                                  SCHEDULE 11

                            Form of Charge Agreement

      --------------------------------------------------------------------------
      Name of each Chargor and the address of its registered or principal
      office:

      (1)     ACE Limited
              ACE Global Headquarters
              17 Woodbourne Avenue
              Hamilton  HM08
              Bermuda

      Facsimile no: +441 296 0087

      (2)     ACE Bermuda Insurance Ltd.
              ACE Global Headquarters
              17 Woodbourne Avenue
              Hamilton  HM08
              Bermuda

      Facsimile no: +441 296 0087

      ((1) and (2) together the "Chargors" and each a "Chargor")
      --------------------------------------------------------------------------

      --------------------------------------------------------------------------
      Name of Custodian and address of its registered or principal office:

      [       ]

      Facsimile no:  [       ] (the "Custodian")

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

      --------------------------------------------------------------------------
      Date:    [Date]

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

      To:   CITIBANK INTERNATIONAL plc (the "Security Trustee")
            336 Strand
            London WC2R 1HB

            The terms used in this Charge Agreement are defined in Clause 23.

                                      -94-

<PAGE>

          It is a condition precedent to the obligations of the Banks under the
          Agreement that the Chargors shall have granted the security interests
          and undertaken the obligations contemplated by this Charge Agreement.

          NOW, THEREFORE, in consideration of the premises and in order to
          induce the Banks to issue Letters of Credit under the Agreement and
          for other good and valuable consideration, the receipt and adequacy of
          which are hereby acknowledged, each Chargor hereby agrees with the
          Security Trustee as follows:

     1.   PAYMENT AND DISCHARGE

          We shall pay and discharge in full all of the Obligations at the times
          and in the manner provided for in the Agreements.

     2.   CHARGE

     2.1  Each Chargor hereby pledges and assigns to the Security Trustee, and
          hereby grants to the Security Trustee a security interest in, its
          portion of the Charged Portfolio as collateral security for the prompt
          payment or performance in full when due, whether at stated maturity,
          by required prepayment, declaration, acceleration, demand or otherwise
          (including the payment of amounts that would become due but for the
          operation of the automatic stay under Section 362(a) of the United
          States Bankruptcy Code, 11 U.S.C. 362(a)), of all Obligations.

     2.2  Notwithstanding any provision of the Agreement to the contrary, the
          Security Trustee's entitlement and recourse against the Charged
          Portfolio under this Charge Agreement shall not in any circumstances
          exceed an amount equal to the Required Value.

     2.3  Each Chargor shall deposit all of its portion of the Charged Portfolio
          in the accounts comprising the Charged Portfolio and held with the
          Custodian.

     3.   CUSTODIAN'S UNDERTAKING

          We undertake to deliver (or procure the delivery of) the Custodian's
          Undertaking to you forthwith upon the execution of this Charge
          Agreement.

     4.   REQUIRED VALUE

          We undertake to ensure that with effect from the date of this Charge
          Agreement and at all times thereafter until the Obligations are
          discharged in full:

     4.1  the market value of the Charged Portfolio (including the accounts and
          securities of both Chargors) shall not be less than the Required Value
          and without limitation from time to time to pay or transfer to the
          Custodian (by way of increment to the Charged Portfolio) money and/or
          securities so that the market value of each Chargor's portion of the
          Charged Portfolio (including the accounts and securities of both
          Chargors) shall not be less than the Required Value; and

     4.2  each component part of the Charged Portfolio shall satisfy the
          Security Trustee's Requirements applicable thereto.

                                      -95-

<PAGE>

     5.   FURTHER ASSURANCE

          Each Chargor agrees that from time to time, at the expense of such
          Chargor, such Chargor shall promptly execute and deliver all further
          instruments and documents, and take all further action, that may be
          necessary or desirable, or that the Security Trustee may reasonably
          request, in order to perfect and protect any security interest granted
          or purported to be granted hereby or to enable the Security Trustee or
          the Custodian to exercise and enforce its rights and remedies
          hereunder or under the Custodian's Undertaking with respect to any
          part of such Chargor's portion of the Charged Portfolio. Without
          limiting the generality of the foregoing, each Chargor shall: (a)
          execute and file such assignments, financing or continuation
          statements, or amendments thereto, and such other instruments or
          notices, as may reasonably be necessary or desirable, or as the
          Security Trustee may request, in order to perfect and preserve the
          security interests granted or purported to be granted hereby, and (b)
          at the Security Trustee's request, appear in and defend any action or
          proceeding that may affect such Chargor's title to or the Security
          Trustee's security interest in all or any part of such Chargor's
          portion of the Charged Portfolio.

     6.   REPRESENTATIONS AND WARRANTIES

          Each Chargor hereby represents and warrants to you and undertakes
          that:

     6.1  it is (or at the time of transfer thereof to the Custodian will be)
          the beneficial owner of its portion of the Charged Portfolio from time
          to time transferred by it to the Custodian, as agent for the Security
          Trustee, free and clear of any lien other than Permitted Liens in
          accordance with the undertaking contained in Clause 7 (Negative
          Pledge) hereof, except for the security interest created by this
          Charge Agreement. The pledge and assignment of the Charged Portfolio
          pursuant to this Charge Agreement and the Custodian's Undertaking
          creates a valid security interest in its portion of the Charged
          Portfolio securing the payment of the Obligations. Assuming execution
          and due performance of the Custodian's Undertaking by the Custodian,
          the security interest in the Charged Portfolio is or will be perfected
          and senior in priority to any other lien therein;

     6.2  subject to paragraph 11 of the Custodian's Undertaking, it has not
          sold or agreed to sell or otherwise disposed of or agreed to dispose
          of the benefit of its portion of the Charged Portfolio or any part
          thereof;

     6.3  it has and will at all times have the necessary power to enable it to
          enter into and perform the obligations expressed to be assumed by it
          under this Charge Agreement;

     6.4  this Charge Agreement constitutes its legal, valid, binding and
          enforceable obligation (subject to bankruptcy, insolvency or other
          laws of general application affecting the enforcement of creditors'
          rights, the application of equitable principles and the
          non-availability of the equitable remedies of specific performance or
          injunctive relief) and is a security over its portion of the Charged
          Portfolio and every part thereof effective in accordance with its
          terms; and

     6.5  all necessary authorisations to enable or entitle it to enter into
          this Charge Agreement have been obtained and are in full force and
          effect and will remain in full force and effect

                                      -96-

<PAGE>

          at all times during the subsistence of the security hereby constituted
          and no authorisation, approval or other action by, and no notice to or
          filing with, any governmental authority or regulatory body is required
          for either (a) the grant by it of the security interest granted
          hereby, (b) the execution, delivery or performance of this Charge
          Agreement or the Custodian's Undertaking by it, or (c) the perfection
          of or the exercise by Security Trustee or the Custodian of its rights
          and remedies hereunder or under the Custodian's Undertaking.

     6.6  All information heretofore, herein or hereafter supplied to the
          Security Trustee or the Custodian by or on behalf of it with respect
          to its portion of the Charged Portfolio is accurate and complete in
          all material respects.

     7.   NEGATIVE PLEDGE

          Each Chargor undertakes with you that at no time during the
          subsistence of the security interest granted hereby will it, otherwise
          than:

     7.1  in your favour, or

     7.2  with your prior written consent and in accordance with and subject to
          any conditions which you may attach to such consent, create, grant,
          extend or permit to subsist any lien, security interest or other
          encumbrance on or over its portion of the Charged Portfolio or any
          part thereof, other than Permitted Liens. The foregoing prohibition
          shall apply not only to any lien, security interest or other
          encumbrance which rank or purport to rank in point of security in
          priority to the security hereby constituted but also to any lien,
          security interest or other encumbrance which rank or purport to rank
          pari passu therewith or thereafter.

     8.   POWER OF SALE

     8.1  Upon the occurrence of an Event of Default which is continuing and has
          not been remedied or waived under the Agreement, the Security Trustee
          may instruct the Custodian to (a) sell or redeem any of the Charged
          Portfolio, (b) transfer any or all of the Charged Portfolio
          constituting cash to any account designated by the Security Trustee,
          including an account or accounts established in the Security Trustee's
          name (whether with the Security Trustee or the Custodian or
          otherwise), (c) register title to all or any portion of the Charged
          Portfolio in any name specified by the Security Trustee, including the
          name of the Security Trustee or any of its nominees or agents, without
          reference to any interest of the Chargors, or (d) otherwise deal with
          the Charged Portfolio as directed by the Security Trustee.

     8.2  Upon the occurrence of an Event of Default which is continuing and has
          not been remedied or waived under the Agreement, the Security Trustee
          may exercise in respect of the Charged Portfolio, in addition to all
          other rights and remedies provided for herein or otherwise available
          to it, all the rights and remedies of a secured party on default under
          the Uniform Commercial Code as in effect in any relevant jurisdiction
          (the "UCC") (whether or not the UCC applies to the affected Charged
          Portfolio), and the Security Trustee may also in its sole discretion
          sell the Charged Portfolio or any part thereof in one or more parcels
          at public or private sale, at any exchange or broker's board

                                      -97-

<PAGE>

          or at any of the Security Trustee's offices or elsewhere, for cash, on
          credit or for future delivery, at such time or times and at such price
          or prices and upon such other terms as the Security Trustee may deem
          commercially reasonable, irrespective of the impact of any such sales
          on the market price of the Charged Portfolio. Each purchaser at any
          such sale shall hold the property sold absolutely free from any claim
          or right on the part of the Chargors, and each Chargor hereby waives
          (to the extent permitted by applicable law) all rights of redemption,
          stay or appraisal which it now has or may at any time in the future
          have under any rule of law or statute now existing or hereafter
          enacted. The Security Trustee shall not be obligated to make any sale
          of Charged Portfolio regardless of notice of sale having been given.
          The Security Trustee may adjourn any public or private sale from time
          to time by announcement at the time and place fixed therefor, and such
          sale may, without further notice, be made at the time and place to
          which it was so adjourned.

     8.3  Each Chargor hereby agrees that the property included in the Charged
          Portfolio is of a type customarily sold on recognized markets and,
          accordingly, that no notice to any person is required before any sale
          of any of the Charged Portfolio pursuant to the terms of this Charge
          Agreement; provided that, without prejudice to the foregoing, each
          Chargor agrees that, to the extent notice of any such sale shall be
          required by law, at least ten days' notice to it of the time and place
          of any public sale or the time after which any private sale is to be
          made shall constitute reasonable notification.

     8.4  If the proceeds of any sale or other disposition of the Charged
          Portfolio are insufficient to pay all the Obligations, the Chargors
          shall be liable for the deficiency and the fees of any attorneys
          employed by the Security Trustee to collect such deficiency.

     8.5  Anything contained herein to the contrary notwithstanding, any of the
          Charged Portfolio consisting of a deposit or an other obligation of
          the Security Trustee, whether credited to the Charged Portfolio or
          otherwise, shall be subject to the Security Trustee's rights of
          set-off.

     9.   POWER OF ATTORNEY

     9.1  Each Chargor hereby irrevocably appoints the Security Trustee as its
          attorney-in-fact, with full authority in the place and stead of such
          Chargor and in the name of such Chargor, the Security Trustee or
          otherwise, from time to time in the Security Trustee's discretion upon
          the occurrence of an Event of Default which is continuing and has not
          been remedied or waived under the Agreement, to take any action and
          execute and deliver, any instrument that the Security Trustee may
          reasonably deem necessary or advisable to accomplish the purposes of
          this Charge Agreement or the Custodian's Undertaking, including,
          without limitation, executing instruments of transfer (or completing
          partially completed instruments executed by us), assignments or
          notices, or exercising any of the rights and powers from time to time
          attaching to any part of such Chargor's portion of the Charged
          Portfolio. Each Chargor hereby undertakes to ratify and confirm all
          things done and documents executed by the Security Trustee in the
          exercise of the power of attorney conferred by this Clause.

     9.2  If the Chargor fails to perform any agreement contained herein, the
          Security Trustee may itself perform, or cause performance of, such
          agreement, and the expenses of the Security

                                      -98-

<PAGE>

          Trustee incurred in connection therewith shall be payable by the
          Chargor under Clause 15 (Costs, Charges and Expenses).

     10.  EFFECTIVENESS OF SECURITY

     10.1 This Charge Agreement shall be in addition to and shall be independent
          of every other security which you may at any time hold for any of the
          Obligations. No prior security held by you over the whole or any part
          of the Charged Portfolio shall merge in the security hereby
          constituted.

     10.2 Nothing contained in this Charge Agreement is intended to, or shall
          operate so as to, prejudice or affect any bill, note, guarantee,
          mortgage, pledge, charge or other security of any kind whatsoever
          which you may have for the Obligations or any of them or any right,
          remedy or privilege of yours thereunder.

     11.  REMEDIES, TIME OR INDULGENCE

     11.1 The rights, powers and remedies provided by this Charge Agreement are
          cumulative and are not, nor are they to be construed as, exclusive of
          any right of set-off or other rights, powers and remedies provided by
          law.

     11.2 No failure on your part to exercise, or delay on your part in
          exercising, any of the rights, powers and remedies provided by this
          Charge Agreement or by law (each a "Security Trustee Right") shall
          operate as a waiver thereof, nor shall any single or partial waiver of
          a Security Trustee Right preclude any further or other exercise of
          that Security Trustee Right or the exercise of any other Security
          Trustee Right.

     11.3 You may in your discretion grant time or other indulgence or make any
          other arrangement, variation or release with any person(s) not party
          hereto (irrespective of whether such person(s) is/are jointly liable
          with us) in respect of the Obligations or in any way affecting or
          concerning them or any of them or in respect of any security for the
          Obligations or any of them, without in any such case prejudicing,
          affecting or impairing the security hereby constituted, or any
          Security Trustee Right or the exercise of the same, or any
          indebtedness or other liability owed by either of us to you.

     12.  ACCOUNTS

          All monies received, recovered or realised by you under this Charge
          Agreement (including the proceeds of any conversion of currency) may
          in your discretion be credited to any suspense or impersonal account
          and may be held in such account for so long as you shall think fit
          (with interest accruing thereon at such rate, if any, as you may deem
          fit) pending their application from time to time (as you shall be
          entitled to do in your discretion) in or towards the discharge of any
          of the Obligations.

     13.  CURRENCY

     13.1 For the purpose of or pending the discharge of any of the Obligations
          you may convert any monies received, recovered or realised or subject
          to application by you under this Charge Agreement (including the
          proceeds of any previous conversion under this Clause) from their
          existing currency of denomination into the currency of denomination

                                      -99-

<PAGE>

          of such Obligations as you may think fit, and any such conversion
          shall be effected at your then prevailing spot rate of exchange for
          obtaining such other currency with the existing currency.

     13.2 References herein to any currency extend to any funds of that currency
          and for the avoidance of doubt funds of one currency may be converted
          into different funds of the same currency.

     14.  EXCULPATION, COSTS, CHARGES AND EXPENSES

     14.1 The powers conferred on the Security Trustee hereunder are solely to
          protect its interest in the Charged Portfolio and shall not impose any
          duty upon it to exercise any such powers. Except for the exercise of
          reasonable care in the custody of any portion of the Charged Portfolio
          in its possession and the accounting for moneys actually received by
          it hereunder, the Security Trustee shall have no duty as to any
          Charged Portfolio, it being understood that the Security Trustee shall
          have no responsibility for (a) ascertaining or taking action with
          respect to calls, conversions, exchanges, maturities, tenders or other
          matters relating to any Charged Portfolio, whether or not the Security
          Trustee has or is deemed to have knowledge of such matters, (b) taking
          any necessary steps (other than steps taken in accordance with the
          standard of care set forth above to maintain possession of the Charged
          Portfolio) to preserve rights against any parties with respect to any
          Charged Portfolio, (c) taking any necessary steps to collect or
          realize upon the Obligations or any guarantee therefor, or any part
          thereof, or any of the Charged Portfolio, (d) initiating any action to
          protect the Charged Portfolio against the possibility of a decline in
          market value, (e) any loss resulting from investments made, held or
          sold, or (f) determining (i) the correctness of any statement or
          calculation made by a Chargor in any written instructions or (ii)
          whether any transfer to or from the Charged Portfolio is proper. The
          Security Trustee shall be deemed to have exercised reasonable care in
          the custody and preservation of Charged Portfolio in its possession if
          such Charged Portfolio is accorded treatment substantially equal to
          that which the Security Trustee accords its own property of like kind.
          In addition to the foregoing and without limiting the generality
          thereof, the Security Trustee shall not be responsible for any actions
          or omissions of Custodian.

     14.2 Each Chargor agrees to indemnify the Security Trustee from and against
          any and all claims, losses and liabilities in any way relating to,
          growing out of or resulting from this Charge Agreement and the
          transactions contemplated hereby (including enforcement of this Charge
          Agreement), except to the extent such claims, losses or liabilities
          result from the Security Trustee's gross negligence or willful
          misconduct as finally determined by a court of competent jurisdiction.

     14.3 Each Chargor shall pay to the Security Trustee upon demand the amount
          of any and all costs and expenses, including the reasonable fees and
          expenses of its counsel and of any experts and agents, that the
          Securities Trustee may incur in connection with (a) the administration
          of this Charge Agreement, (b) the custody, preservation, use or
          operation of, or the sale of, collection from, or other realization
          upon, any of the Charged Portfolio, (c) the exercise or enforcement of
          any of the rights of the Security Trustee hereunder, or (d) the
          failure by a Chargor to perform or observe any of the provisions
          hereof on a full

                                     -100-

<PAGE>

          indemnity basis together with interest from the date of the same
          having been incurred (or from the date of demand if such demand is
          made after unreasonable delay) to the date of payment at such rate or
          rates as you may determine in relation to the currency involved.

     15.  CONTINUING SECURITY INTEREST

          This Charge Agreement shall create a continuing security interest in
          the Charged Portfolio and shall (a) remain in full force and effect
          until the indefeasible payment in full of the Obligations and the
          cancellation or expiration of all outstanding Letters of Credit, (b)
          be binding upon each Chargor, its successors and assigns, and (c)
          inure, together with the rights and remedies of the Security Trustee
          hereunder, to the benefit of Security Trustee and the Banks and their
          respective successors, transferees and assigns. Upon the indefeasible
          payment in full of all Obligations and the cancellation or expiration
          of all outstanding Letters of Credit, the security interest granted
          hereby shall terminate and all rights to the Charged Portfolio shall
          revert to the respective Chargor so long as the Custodian's fees,
          expenses, and advancements have first been paid or reimbursed in full.
          Upon any such termination the Security Trustee shall, at the Chargors'
          expense, execute and deliver to the Chargors such documents as the
          Chargors shall reasonably request to evidence such termination and
          each Chargor shall be entitled to the return, upon its request and at
          its expense, against receipt and without recourse to the Security
          Trustee, of such of its Charged Portfolio as shall not have been sold
          or otherwise applied pursuant to the terms hereof.

     16.  AMENDMENTS

          No amendment or waiver of any provision of this Charge Agreement, or
          consent to any departure by a Chargor herefrom, shall in any event be
          effective unless the same shall be in writing and signed by the
          Security Trustee, and then such waiver or consent shall be effective
          only in the specific instance and for the specific purpose for which
          it was given.

     17.  LAW AND JURISDICTION

     17.1 THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
          ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
          YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE
          EXTENT THAT THE UCC PROVIDES THAT THE VALIDITY OR PERFECTION OF THE
          SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
          PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
          THAN THE STATE OF NEW YORK.

     17.2 ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE CHARGORS ARISING OUT OF
          OR RELATING TO THIS CHARGE AGREEMENT MAY BE BROUGHT IN ANY STATE OR
          FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY
          OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS CHARGE AGREEMENT
          EACH CHARGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
          GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
          AFORESAID COURTS AND WAIVES ANY DEFENSE

                                     -101-

<PAGE>

     OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
     RENDERED THEREBY IN CONNECTION WITH THIS CHARGE AGREEMENT. Each Chargor
     hereby agrees that service of all process in any such proceeding in any
     such court may be made by registered or certified mail, return receipt
     requested, to such Chargor at its address as provided pursuant to Clause 19
     (Notices), such service being hereby acknowledged by each Chargor to be
     sufficient for personal jurisdiction in any action against such Chargor in
     any such court and to be otherwise effective and binding service in every
     respect. Nothing herein shall affect the right to serve process in any
     other manner permitted by law or shall limit the right of the Security
     Trustee to bring proceedings against a Chargor in the courts of any other
     jurisdiction.

17.3 EACH CHARGOR AND THE SECURITY TRUSTEE HEREBY AGREE TO WAIVE THEIR
     RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
     UPON OR ARISING OUT OF THIS CHARGE AGREEMENT OR THE CUSTODIAN'S
     UNDERTAKING. The scope of this waiver is intended to be all-encompassing of
     any and all disputes that may be filed in any court and that relate to the
     subject matter of this transaction, including contract claims, tort claims,
     breach of duty claims, and all other common law and statutory claims. Each
     Chargor and the Security Trustee acknowledge that this waiver is a material
     inducement for such Chargor and the Security Trustee to enter into a
     business relationship, that each Chargor and the Security Trustee have
     already relied on this waiver in entering into this Charge Agreement and
     that each will continue to rely on this waiver in their related future
     dealings. Each Chargor and the Security Trustee further warrant and
     represents that it has reviewed this waiver with its legal counsel, and
     that it knowingly and voluntarily waives its jury trial rights following
     consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT
     IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
     APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
     TO THIS CHARGE AGREEMENT OR THE CUSTODIAN'S UNDERTAKING. In the event of
     litigation, this Charge Agreement may be filed as a written consent to a
     trial by the court.

18.  PROVISIONS SEVERABLE

     Each of the provisions contained in this Charge Agreement shall be
     severable and distinct from one another and if at any time any one or more
     of such provisions is or becomes invalid, illegal or unenforceable, the
     validity, legality and enforceability of each of the remaining provisions
     of this Charge Agreement shall not in any way be affected, prejudiced or
     impaired thereby.

19.  NOTICES

     All notices, requests and demands to or upon the Security Trustee or either
     Chargor hereunder shall be effected in the manner provided for in Clause 31
     of the Agreement.

                                     -102-

<PAGE>

20.  THE SECURITY TRUSTEE'S DISCRETIONS

     Any liberty or power which may be exercised or any determination which may
     be made hereunder by you may be exercised or made in your absolute and
     unfettered discretion and you shall not be under any obligation to give
     reasons therefor, provided that the Security Trustee will so act in good
     faith and in accordance with Clause 25 (The Agent, The Arrangers and The
     Banks) of the Agreement).

21.  ASSIGNMENT

     You shall have a full and unfettered right to assign the whole or any part
     of the benefit of this Charge Agreement to any Person who is appointed as
     your successor pursuant to Clause 25 (The Agent, The Arrangers and The
     Banks) of the Agreement and the words "you" and "your" and the expression
     "the Security Trustee" wherever used herein shall be deemed to include your
     assignees and other successors, whether immediate or derivative, who shall
     be entitled to enforce and proceed upon this Charge Agreement in the same
     manner as if named herein. You shall be entitled to impart any information
     concerning us to any such assignee or other successor or any participant or
     proposed assignee, successor or participant subject to such person
     executing and delivering a confidentiality undertaking substantially in the
     form set out in Schedule 8 (Form of Confidentiality Undertaking) of the
     Agreement.

22.  COUNTERPARTS

     This Charge Agreement may be executed in one or more counterparts and by
     different parties hereto in separate counterparts, each of which when so
     executed and delivered shall be deemed an original, but all such
     counterparts together shall constitute but one and the same instrument;
     signature pages may be detached from multiple separate counterparts and
     attached to a single counterpart so that all signature pages are physically
     attached to the same document.

23.  INTERPRETATION

23.1 Terms not otherwise defined herein shall bear the meaning ascribed to them
     in the Agreement.

     In this Charge Agreement:

     "Agreement" means the (pounds)440,000,000 letter of credit facility
     agreement originally dated 19 November 1999 (as (i) amended and restated
     pursuant to the First Restatement Agreement, (ii) amended pursuant to the
     Amendment Agreement and (iii) amended and restated pursuant to the Second
     Restatement Agreement) and made between ACE Limited as account party, ACE
     Bermuda Insurance Ltd. as guarantor, Citibank, N.A. as lead arranger,
     Barclays Bank PLC as arranger, ING Barings as co-arranger, Citibank
     International plc as agent and security trustee and the financial
     institutions defined therein as banks;

     "Charged Portfolio" means at any time all of each Chargor's right, title
     and interest in any and all assets (to include without limitation any and
     all securities) now or hereafter carried in or credited to or held for the
     benefit of:

                                     -103-

<PAGE>

     (a)  the account (designated, at the date hereof, with account number
          [    ]) maintained by the Custodian in the name of ACE Limited; and

     (b)  the account (designated, at the date hereof, with account number
          [    ]) maintained by the Custodian in the name of ACE Bermuda
          Insurance Ltd.

     "Custodian" means the above-mentioned Custodian or such other person as the
     Chargors and the Security Trustee may agree to in writing from time to
     time;

     "Custodian's Undertaking" means an undertaking in the form set out in the
     Second Schedule duly executed by the Custodian as the same may be amended
     or substituted with the prior written consent of the Security Trustee from
     time to time;

     "Obligations" means any and all of the present or future, actual or
     contingent, obligations of the Chargors to the Finance Parties hereunder or
     under the Agreement;

     "Permitted Lien" means any Lien described in clause (a) of the definition
     of "Permitted Lien" in the Agreement or in subsection 15.9.16 of the
     Agreement;

     "Required Value" means US$100 or, if Pricing Level V applies, such other
     amount as is determined in accordance with the Agreement and notified from
     time to time by the Security Trustee to the Custodian; and

     "Security Trustee's Requirements" means the Security Trustee's requirements
     in respect of the component parts of the Charged Portfolio all as set forth
     in Part B of the Schedule to the Custodian's Undertaking or as may be
     agreed from time to time by the Security Trustee and ACE Limited on behalf
     of the Chargors and notified to the Custodian (provided that the Security
     Trustee's Requirements may be adjusted by the Security Trustee without the
     agreement of the Chargors (but after consultation in good faith with ACE
     Limited on behalf of the Chargors) where an adjustment is necessary to
     ensure that the Banks continue to receive the same regulatory treatment in
     respect of their Outstandings as they receive at the date hereof and
     Provided further that, in the event that the "financial strength rating" of
     either or both of the Chargors as determined by Standard and Poor's Rating
     Services reaches BBB+ or less, the Security Trustee's Requirements shall be
     amended without the prior agreement of the Chargors by the additional
     requirement that any fixed income securities comprising the Charged
     Portfolio issued by or fully and explicitly guaranteed by the central
     government of an OECD (Organisation for Economic Co-operation and
     Development) country shall only satisfy the Security Trustee's Requirements
     if such country is rated AA or better by Standard and Poor's Rating
     Services or AA equivalent or better by any other recognised rating
     service).

23.2 Any reference in this Charge Agreement to:-

     a "business day" shall be construed as a reference to a day (other than a
     Saturday or Sunday) on which banks are generally open for business in
     London, Bermuda, and the jurisdiction in which the Custodian's principal or
     head office is located;

     a "clearance system" means Clearstream, the Euro-Clear System, the First
     Chicago Clearing Centre, The Depository Trust Company and such other
     clearance system as may

                                      -104-

<PAGE>

     from time to time be used in connection with transactions relating to any
     securities, and any depository for any of the foregoing;

     a "Clause" is, unless otherwise stated, a reference to a Clause hereof;

     a "person" shall be construed as a reference to any person, firm, company,
     corporation, government, state or agency of a state or any association or
     partnership (whether or not having separate legal personality) of two or
     more of the foregoing;

     a "Schedule" is, unless otherwise stated, a reference to a schedule hereto;
     and

     "securities" shall be construed as a reference to bonds, debentures, notes,
     stocks, shares or other securities and all moneys, rights or property which
     may at any time accrue or be offered (whether by way of bonus, redemption,
     preference, option or otherwise) in respect of any of the foregoing (and
     without limitation, shall include any of the foregoing not constituted,
     evidenced or represented by a certificate or other document but by an entry
     in the books or other permanent records of the issuer, a trustee or other
     fiduciary thereof, or a clearance system).

23.3 The obligations of the Chargors hereunder shall be joint and several.

23.4 Any reference in this Charge Agreement to another agreement, arrangement or
     undertaking shall be construed as a reference to such other agreement,
     arrangement or undertaking as the same may have been, or may from time to
     time be, amended, varied, novated or supplemented.

23.5 Clause and Schedule headings are for ease of reference only.

The COMMON or CORPORATE SEAL of

ACE LIMITED was hereto affixed

to this DEED in the presence of:

Director

Secretary/Director

THE COMMON or CORPORATE SEAL of

ACE BERMUDA INSURANCE LTD was hereto affixed

to this DEED in the presence of:

Director

                                     -105-

<PAGE>

Secretary/Director

ACKNOWLEDGED AND AGREED:

CITIBANK INTERNATIONAL PLC
As Security Trustee

By:

Title:

                               THE FIRST SCHEDULE

                      NOTICE OF CHARGE OF CHARGED PORTFOLIO

To: [   ]

   *  _____________________________

(*Contact name at the Custodian)

We refer to (i) the Charge Agreement (the "Charge Agreement") dated [  ]entered
into by us in favour of Citibank International plc of 336 Strand, London WC2R
1HB (the "Security Trustee"), a copy of which is annexed hereto and (ii) the
Custodian's Undertaking in the form of the Second Schedule to the Charge
Agreement. Terms defined in the Charge Agreement shall have the same meanings
herein.

Notice is hereby given by us to you that, by and pursuant to the Charge
Agreement, we have charged in favour of the Security Trustee all of the Charged
Portfolio.

We hereby:

(a)     confirm that references to the "Charged Portfolio" are to all the
        securities and proceeds received from time to time in respect of such
        securities, which are credited to (i) the account (designated with
        account number [ ]) in the name of ACE Limited and (ii) the account
        (designated with account number [ ]) in the name of ACE Bermuda
        Insurance Ltd., maintained by you in accordance with the terms of our
        custodian arrangement with you;

(b)     request that you execute the attached Custodian's Undertaking in favour
        of the Security Trustee and comply with any entitlement orders and
        instructions, received by you from the Security Trustee, to deliver,
        transfer or assign the securities and monies (together with all
        certificates and other instruments evidencing title thereto) in the
        Charged Portfolio [and any entitlement orders or other instructions that
        you receive from the Security Trustee with respect to the Charged
        Portfolio shall constitute "Proper Instructions" for the purposes of the
        Custodian Agreement between us]*;
.................................................................................

* To be inserted if State Bank and Trust Company are appointed Custodian.

                                     -106-

<PAGE>

(c)       confirm that you shall not be liable to us for any action taken or
          omitted to be taken by you in connection with the Custodian's
          Undertaking save in the case of wilful misconduct or gross negligence
          (and, to the maximum extent permitted by law, shall under no
          circumstances be liable for indirect, special, punitive or
          consequential damages);

(d)       indemnify you against any liabilities, costs, claims and expenses
          (including reasonable legal fees (whether incurred with external or
          internal legal advisors)) arising from or in connection with the
          Custodian's Undertaking or the Charged Portfolio, provided that
          nothing contained herein shall require that you be indemnified for
          your wilful misconduct or gross negligence;

[(e)/(f)]  [notwithstanding the terms of Section IX of the Custodian Agreement
          dated June 7, 2001, you shall be entitled to debit any of our accounts
          maintained by you, other than the account (designated with account
          number []) in the name of ACE Limited and the account (designated with
          account number [ ]) in the name of ACE Bermuda Insurance Ltd.
          (hereinafter the "Charged Accounts") if we require you, your
          affiliates, subsidiaries or agents to advance cash or investments to,
          for or on behalf of the Charged Portfolio, for any purpose (including
          but not limited to securities settlements, foreign exchange contracts
          and assumed settlement) or in the event that you, your subcustodians
          or their respective nominees shall incur or be assessed any taxes
          (except your income taxes or those of any of your subcustodians),
          charges, expenses, assessment, claims or liabilities in connection
          with the performance of the Custodian's Undertaking except as may
          arise from your or your subcustodians' or their respective nominees'
          own gross negligent action, gross negligent failure to act or wilful
          misconduct. Any of our property at any time held by you (other than
          the Charged Portfolio) shall be security therefore and should we fail
          to repay you promptly, upon ten (10) days' written notice to us, you
          (save as otherwise provided above) shall be entitled to utilise
          available cash in any of our accounts (other than the Charged
          Accounts) maintained by you and to dispose of assets of any of our
          accounts (other than the Charged Accounts) maintained by you to the
          extent necessary to obtain reimbursement.]*

[(f)/(g)]  confirm that (except as may raise from your own gross negligence, bad
          faith, or wilful misconduct or the gross negligence, bad faith, or
          wilful misconduct of a subcustodian or agent) you shall be without
          liability to us for any loss, liability, claim or expense resulting
          from or caused by events or circumstances beyond your reasonable
          control, including, without limitation, the interruption, suspension
          or restriction of trading on or the closure of any securities markets,
          power or other mechanical or technological failures or interruptions
          not within your reasonable control, or computer viruses or
          communications disruptions, work stoppages, natural disasters, or
          other similar events or acts.

This notice shall be governed by and construed in accordance with the laws of
the State of New York.

Yours faithfully,

.................................................................................

* To be inserted if State Bank and Trust Company are appointed Custodian.

                                     -107-

<PAGE>

For and on behalf of
ACE Limited

_____________________________                     Dated _______________________

For and on behalf of
ACE Bermuda Insurance Ltd.                  Dated _______________________

                                     -108-

<PAGE>

                               THE SECOND SCHEDULE

                             Custodian's Undertaking

--------------------------------------------------------------------------------
Name of Custodian and address of its registered or principal office:

[     ]

Attn: [       ]

Facsimile no:  [        ]   (the "Custodian")

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

--------------------------------------------------------------------------------
Name of each Chargor and the address of its registered or principal office:

ACE Limited
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM08
Bermuda

Facsimile no:  +441 296 0087

ACE Bermuda Insurance Ltd.
ACE Global Headquarters
17 Woodbourne Avenue
Hamilton HM08
Bermuda

Facsimile no: +441 296 0087
((1) and (2) together the "Chargors" and each a "Chargor" )

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

--------------------------------------------------------------------------------
Name of Security Trustee and address of its registered or principal office:

Citibank International plc
336 Strand
London  WC2R 1HB

Attn: Loans Agency

Facsimile no: +4420 7500 4482 (the "Security Trustee")

--------------------------------------------------------------------------------
Date of Charge Agreement:    [Date]

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

                                     -109-

<PAGE>

To:     the Security Trustee

We, the Custodian, refer to the afore-mentioned Charge Agreement (the "Charge
Agreement") between the Chargors and the Security Trustee. Save where the
context otherwise requires, terms defined in the Charge Agreement shall have the
same meanings herein.

In consideration of the Security Trustee and the other Finance Parties entering
into the Agreement and issuing Letters of Credit thereunder and pursuant to
instructions received by the Custodian from the Chargors, the Custodian hereby
represents and irrevocably undertakes and agrees to and with the Security
Trustee as follows:

1.   The Custodian acknowledges the security interest granted by each Chargor in
     favor of Security Trustee in the Charged Portfolio.

2.   Anything contained herein to the contrary notwithstanding, the Custodian
     will, without further consent by any Chargor (a) comply with Entitlement
     Orders originated by the Security Trustee with respect to the Charged
     Portfolio and any Security Entitlements carried therein, (b) transfer, sell
     or redeem any of the Charged Portfolio as directed by the Security Trustee,
     (c) transfer any or all of the Charged Portfolio to any account or accounts
     designated by the Security Trustee, including an account established in the
     Security Trustee's name (whether at the Security Trustee or the Custodian
     or otherwise), (d) register title to any of the Charged Portfolio in any
     name specified by the Security Trustee, including the name of the Security
     Trustee or any of its nominees or agents, without reference to any interest
     of either Chargor, or (e) otherwise deal with the Charged Portfolio as
     directed by the Security Trustee.

3.   The Custodian hereby further acknowledges that it holds the Charged
     Portfolio, all Security Entitlements carried therein, and all other
     collateral held by the Custodian under this Custodian's Undertaking or the
     Charge Agreement, as custodian for the benefit of, and subject to the
     control of, the Security Trustee. The Custodian shall, by book entry or
     otherwise, indicate that the Charged Portfolio, and all Security
     Entitlements carried therein, are subject to the control of the Security
     Trustee as provided in Section 2.

4.   The Custodian hereby represents and warrants (a) that the records of
     Custodian show that each Chargor is the sole owner of such Chargor's
     portion of the Charged Portfolio, (b) that the Custodian has not been
     served with any notice of levy or received any notice of any security
     interest in or other claim to the Charged Portfolio, or any portion of the
     Charged Portfolio, other than Security Trustee's claim pursuant to the
     Charge Agreement, (c) that the Custodian is not presently obliged to accept
     any entitlement order from any person with respect to the Charged
     Portfolio, except for entitlement orders that the Custodian is obligated to
     accept from the Security Trustee under this undertaking and entitlement
     orders that the Custodian, subject to the provisions of Section 10 below,
     is obligated to accept from the Chargors, (d) that the Custodian has all
     necessary corporate power and authority to enter into and perform this
     undertaking, (e) that the execution, delivery and performance of this
     undertaking by the Custodian have been duly authorized by all necessary
     corporate action on the part of the Custodian, (f) that the Custodian is a
     "securities intermediary" (as that term is defined in Section 8-102(a)(14)
     of the Uniform Commercial Code as in effect in the state of New York (the
     "Code")) and is acting in such capacity with respect to the Charged
     Portfolio and (g) that the Custodian

                                     -110-

<PAGE>

     is not a "clearing corporation" (as that term is defined in Section
     8-102(a)(5) of the Code).

5.   Without the prior written consent of the Security Trustee, the Custodian
     will not enter into any agreement by which the Custodian agrees to comply
     with any entitlement order of any person other than the Security Trustee
     or, subject to the provisions of Section 10 below, the Chargors, with
     respect to any portion or all of the Charged Portfolio. The Custodian (a)
     shall promptly notify the Security Trustee if any person requests the
     Custodian to enter into any such agreement or otherwise assert or seeks to
     assert a lien, encumbrance or adverse claim against any portion or all of
     the Charged Portfolio and (b) will not acknowledge any limitation on the
     right of Security Trustee to originate "entitlement orders" (as such term
     is defined in Section 8-102(8) of the Code, "Entitlement Orders") with
     respect to or direct the transfer of the Charged Portfolio or any portion
     thereof.

6.   The Custodian hereby agrees that: (i) each account comprising the Charged
     Portfolio established by the Custodian (each, a "Charged Account") is and
     will be maintained as a "securities account" (within the meaning of Section
     8-501 of the Code); (ii) any credit balances or other property, other than
     cash, credited to, or held for the credit of, any such Charged Account
     shall be treated as "financial assets" (within the meaning of Section
     8-102(a)(9) of the Code, "Financial Assets") and (iii) each Chargor is an
     "entitlement holder" (within the meaning of Section 8-102(a)(7) of the
     Code) in respect of the Financial Assets credited to such Charged Account
     and with respect to such Charged Account and Custodian shall so note in its
     records pertaining to such Financial Assets and each Charged Account; and
     (iv) all Financial Assets in registered form or payable to or to the order
     of and credited to any such Charged Account shall be registered in the name
     of, payable to or to the order of, or specially endorsed to, the Custodian
     or in blank, or credited to another securities account maintained in the
     name of the Custodian, and in no case will any Financial Asset credited to
     any such Charged Account be registered in the name of, payable to or to the
     order of, or endorsed to, either Chargor except to the extent the foregoing
     have been subsequently endorsed by such Chargor to the Custodian or in
     blank.

7.   The Custodian will deliver to the Security Trustee within three business
     days of the Security Trustee's request therefor an up-to-date statement or
     statements of the Charged Portfolio, each component thereof and the
     aggregate value thereof.

8.   The Custodian will in any event deliver to the Security Trustee not later
     than the tenth business day of each calendar month a statement or
     statements, made up as at the close of business on the last business day of
     the preceding calendar month, of the Charged Portfolio, each component
     thereof and the aggregate value thereof.

9.   If trades of, or any transactions relating to, a component part of the
     Charged Portfolio are processed by the Custodian on any Business Day, the
     Custodian shall notify the Security Trustee as soon as possible (and in any
     event within three Business Days of such day) of the trades and
     transactions processed.

10.  The Custodian acknowledges that the Security Trustee has the right, by
     delivery of written notice (a "Prohibition Notice") to the Custodian, to
     prohibit each Chargor from

                                     -111-

<PAGE>

     effecting any withdrawals, sales, trades, transfers or exchanges of any of
     the Charged Portfolio and the Custodian agrees that upon delivery of a
     Prohibition Notice, the Custodian will cease to honor instructions from
     either of the Chargors with respect to the Charged Portfolio and will
     comply with any and all written instructions delivered by the Security
     Trustee to the Custodian and has no obligation to and will not, investigate
     the reason for any action taken by the Security Trustee, the amount of any
     obligations of any Chargor to the Security Trustee, the validity of any of
     the Security Trustee's claims against or agreements with either Chargor,
     the existence of any defaults under such agreements, or any other matter.

11.  The Custodian acknowledges that, unless it receives written instructions
     from the Security Trustee to the contrary, it shall be entitled to process
     trades as it may be directed to do so under the terms of its custodial
     agreement with the [Chargors/each Chargor respectively] only to the extent
     such trades comprise a disposal to a third party in the market of a
     component part of the Charged Portfolio and the substitution therefor with
     the proceeds of such disposition or other securities, save that transfers
     can be made (i) to the Security Trustee in accordance with the terms of
     this undertaking or (ii) to any person with the Security Trustee's prior
     written consent or (iii) in respect of any part of the Charged Portfolio
     representing an excess over the Required Value, to the relevant Chargor or
     as it may direct, which excess will be determined by the Security Trustee
     and specified in written notice from the Security Trustee to the Custodian
     on the date of the request from the Chargors.

12.  After delivery of a Prohibition Notice, the Custodian shall deliver,
     transfer or assign to the Security Trustee on the Security Trustee's first
     written demand securities and monies in the Charged Portfolio as directed
     by the Security Trustee and all certificates and other instruments
     evidencing title thereto or necessary or desirable in order for the
     Security Trustee to acquire good and marketable title thereto. The Security
     Trustee shall indicate the identity of the securities and monies it wishes
     to receive and the Custodian shall have no discretion in this matter and
     shall be fully protected in relying upon any direction received from the
     Security Trustee.

13.  The Custodian agrees that it will not attempt to assert control, and does
     not claim and will not accept any security or other interest in any part of
     the Charged Portfolio, and will not exercise, enforce or attempt to enforce
     any claim, right of set-off, banker's lien, clearing lien, counterclaim or
     similar right against the Charged Portfolio or any portion thereof, or
     otherwise charge or deduct from the Charged Portfolio any amount
     whatsoever, except as provided below. All rights and interests of the
     Custodian in or towards the Charged Portfolio or any part thereof are and
     shall be subordinated and postponed to the Security Trustee's rights and
     interests therein under and pursuant to the Charge Agreement, save that the
     Custodian shall be entitled to debit any account of the relevant Chargor
     maintained with the Custodian with any reasonable fees or commissions due
     and owing by such Chargor to the Custodian in respect of the Charged
     Portfolio or part thereof or to settle any reasonable bank charges due and
     owing by such Chargor to the Custodian and incurred in the ordinary course
     of business for the purchase of securities and/or foreign exchange or
     contracts for foreign exchange.

                                     -112-

<PAGE>

14.  Any notice, demand or other communication required to be:

     (a)     served on us by you hereunder, may be served by letter properly
             addressed and deposited with a recognised air express courier or
             transmitted by facsimile if (a) a telephone call is placed to the
             officer noted for address purposes on page 1 of this Custodian's
             Undertaking notifying such officer of the facsimile transmission
             and (b) the original is properly addressed and mailed. Any notice,
             demand or other communication shall be deemed to have been served
             on us on the third business day following if sent by recognised air
             express courier and when dispatched if sent in accordance with the
             facsimile procedures;

     (b)     made by us to you hereunder, may be transmitted by facsimile to the
             facsimile number and for the attention of the officer noted on page
             1 of this Custodian's Undertaking, or to any substitute facsimile
             number or officer as you may notify to us.

15.  The Custodian shall not amend, supplement or otherwise modify its
     agreements with the Chargors or the Security Trustee governing the
     establishment and maintenance of the Charged Accounts (including, without
     limitation the choice of law provision and provisions providing for
     treatment of property held in any Charged Account as a financial asset) in
     any respect without the Security Trustee's prior written consent.

16.  This agreement shall remain in full force and effect until the Custodian
     receives written notice of its termination given by the Security Trustee
     and the Custodian shall not terminate the Charged Accounts, and shall not
     permit either Chargor to terminate the Charged Accounts, without the
     Security Trustee's prior written consent.

17.  The Custodian hereby acknowledges that in the event any dispute arises
     between one or both Chargors, on the one hand, and the Security Trustee, on
     the other hand, with respect to the payment, ownership or right to
     possession of the Charged Portfolio or any portion thereof, the Custodian
     shall take such actions and shall refrain from taking such actions with
     respect thereto as may be directed by the Security Trustee.

18.  THE CUSTODIAN AGREES that THIS UNDERTAKING shall be governed under and in
     accordance with the laws of the State of NEW YORK, without regard to
     conflict of laws principles AND FURTHER AGREES THAT ALL JUDICIAL
     PROCEEDINGS BROUGHT AGAINST THE CUSTODIAN ARISING OUT OF OR RELATING TO
     THIS AGREEMENT MAY BE BROUGHT IN THE ENGLISH COURTS OR ANY STATE OR FEDERAL
     COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.
     For purposes of this undertaking, the State of New York shall be deemed to
     be the Custodian's jurisdiction.

19.  Save as expressly provided herein, the Custodian shall have no further
     obligations or liabilities to the Security Trustee in relation to the
     Charged Portfolio and specifically shall have no liability or
     responsibility for monitoring or determining the compliance by any party
     with any other agreement including, without limitation, the Charge
     Agreement.

                                     -113-

<PAGE>

_____________________________________________
(Authorised Signatory)
for and on behalf of the Custodian

[Date]

                                     -114-

<PAGE>

                                  THE SCHEDULE

                                     PART A

The Required Value is at the date hereof:-

US$100 (One hundred United States dollars)

or such other amount as may be agreed between the Security Trustee and the
Chargors and notified to the Custodian by the Security Trustee from time to
time.

                                     PART B

The initial Security Trustee's Requirements are:-

To the extent of an aggregate amount not less than the Required Value, the
Charged Portfolio shall at all times be comprised of the following: (a) cash,
(b) fixed income securities issued by or fully and explicitly guaranteed by the
central government of an OECD (Organisation for Economic Co-Operation and
Development) country, and (c) fixed income securities issued by US government
agencies (whose debt obligations are fully and explicitly guaranteed as to the
timely payment of principal and interest by the full faith and credit of the US
Government) as used in Appendix A, Section III (C), Category I to Regulation H
as promulgated by the Board of Governors of the Federal Reserve System and the
same are either (i) uncertificated and governed by the provisions of 31 C.F.R.
Part 357 or such similar provisions of the Code of Federal Regulations,
applicable to United States agency securities as are acceptable to the Security
Trustee; or (ii) certificated.

                                     -115-

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