Document:

<PAGE>

                                                                   EXHIBIT 10.53

                            DATED     NOVEMBER 1999

                                  ACE LIMITED

                               as Account Party

                          ACE BERMUDA INSURANCE LTD.

                                 as Guarantor

                                CITIBANK, N.A.

                                  as Arranger

                               BARCLAYS BANK PLC

                                      and

                                  ING BARINGS

                                as Co-Arrangers

                          CITIBANK INTERNATIONAL plc

                         as Agent and Security Trustee

                                      and

                                    OTHERS

               -------------------------------------------------
                              (Pounds)290,000,000
                      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...................................................... 28

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

12.  Illegality........................................................ 30

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

14.  Representations................................................... 31

15.  Covenants......................................................... 35

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

17.  Commission And Fees............................................... 45

18.  Costs And Expenses................................................ 46

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

20.  Indemnities....................................................... 48

21.  Currency Of Account And Payment................................... 49

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

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

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

25.  The Agent, The Arranger 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

32.  Counterparts...................................................... 70

33.  Amendments........................................................ 70

34.  Governing Law..................................................... 71
</TABLE>

<PAGE>

<TABLE>
<S>                                                                   <C>
35.  Jurisdiction...................................................... 71

Schedule 1  The Banks.................................................. 73

Schedule 2  Form Of Transfer Certificate............................... 74

Schedule 3  Conditions Precedent....................................... 76

Schedule 4  Utilisation Request........................................ 77

Schedule 5  Form Of Extension Request.................................. 79

Schedule 6  Form Of Letter Of Credit................................... 82

Schedule 7  Mandatory Liquid Asset Costs Rate.......................... 90

Schedule 8  Form Of Confidentiality Undertaking........................ 92

Schedule 9  Pricing Schedule........................................... 95

Schedule 10 Existing Liens............................................. 96

Schedule 11 Form Of Charge Agreement................................... 97

</TABLE>
<PAGE>

THIS AGREEMENT is made on       November 1999

BETWEEN

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

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

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

(4)  BARCLAYS BANK PLC and ING BARINGS as co-arrangers of the Facility (the "Co-
     Arrangers");

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

(6)  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.

     "Acquisition" means the acquisition by the Account Party or one of its
     Subsidiaries of the domestic and international property and casualty
     business (the "CIGNAP&C Business") of Cigna Corporation.

     "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) 50 per cent. of 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.

     "Applicant" means each of ACE Staff Corporate Member Limited, ACE Capital
     Limited, ACE Capital II Limited, ACE Capital III Limited, ACE Capital IV
     Limited and ACE Capital V 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
<PAGE>

     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 of such board.

     "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 date of this Agreement to
     26 November 1999 (or such other date which Lloyd's may specify as the Funds
     Date for 1999) 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.

     "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.
<PAGE>

     "Capitalised Leases" means all leases that have been or should be, in
     accordance with generally accepted accounting principles, 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, in substantially the form
     set out in Schedule 11 (Form of Charge Agreement), that may be required to
     be entered into by the Account Party as chargor pursuant to sub-clause
     17.1.2 of Clause 17.1 (Letter of Credit Commission) and pursuant to which
     the Account Party charges the Charged Portfolio in favour of the Security
     Trustee.

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

     "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 Tangible Net Worth" means at any date the consolidated
     stockholder's equity of the Account Party and its Consolidated Subsidiaries
     (plus, to the extent not included in such consolidated stockholder's
     equity, the outstanding amount of all Mandatorily Convertible Preferred
     Securities) less their consolidated Intangible Assets all determined as of
     such date, provided that such determination for the purposes of Clause 14.7
     (Adjusted Consolidated Debt to Total Capitalisation Ratio), Clause 14.8
     (Tangible Net Worth) and Clause 14.9 (Liens) shall be made without giving
     effect to adjustments pursuant to Statement No. 115 of the Financial
     Accounting Standards Board of the United States of America. For the
     purposes of this definition, "Intangible Assets" means the amount (to the
     extent reflected in determining such consolidated stockholder's equity) of
     (i) all write-ups (other than write-ups resulting from foreign currency
     translations and write-ups of assets of a going concern business made
     within twelve months after the acquisition of such business) subsequent to
     31 March 1999 in the book value of any asset owned by the Account Party or
     a Consolidated Subsidiary, and (ii) all unamortised debt discount and
     expense, unamortised deferred charges, deferred acquisition cost relating
     to the acquisition of the stock or assets of any other Person, goodwill,
     patents, trademarks, service marks, trade names, anticipated future benefit
     of tax loss carry-forwards, copyrights, organisation or developmental
     expense and other intangible assets.

     "Contingent Obligation" means, with respect to any Person, any obligation
     or arrangement of such Person to guarantee or indemnify or intended to
     guarantee or
<PAGE>

     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 Mellon Bank, N.A. or such other entity or entities as may
     be agreed from time to time between the Account Party and 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
     the Special Purpose Trust in exchange for proceeds of Preferred Securities.

     "Debt" of any Person means, without duplication for purposes of calculating
     financial ratios, (a) all indebtedness of such Person for borrowed money,
     (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 to purchase, redeem, retire, defease or
     otherwise make any payment in respect of any Equity Interests 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
<PAGE>

     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
     and (Tangible Net Worth) 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) obligations of the Account Party or ACE
     INA under any Debentures or under any subordinated guarantee or any
     Preferred Securities or obligations of the 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, 26 November
     1999.

     "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.

     "Equity Issuance" means one or more issuances by the Account Party and/or
     ACE INA of Equity Interests and/or equity-linked securities, the Net Cash
     Proceeds of which shall be at least US$500,000,000.
<PAGE>

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

     "Existing Facilities" means:

     (a)  the (Pounds)156,000,000 letter of credit facility agreement dated 24
          November 1998 between ACE Limited as account party, ACE Bermuda
          Insurance Ltd. (formerly known as A.C.E. Insurance Company, Ltd.) as
          guarantor, Citibank International plc as agent and security trustee,
          Citibank, N.A. as arranger, Barclays Bank plc and ING Baring as co-
          arrangers and others; and

     (b)  the (Pounds)114,000,000 letter of credit facility agreement dated 24
          November 1998 between ACE Limited as account party, ACE Bermuda
          Insurance Ltd. (formerly known as A.C.E. Insurance Company, Ltd.) as
          guarantor, Citibank International plc as agent and security trustee,
          Citibank, N.A. as arranger, Barclays Bank plc and ING Baring as co-
          arrangers and others.

     "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, 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 Arranger, the
     Co-Arrangers and the Banks.

     "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 being, in respect of the 1999 calendar
     year, 26 November 1999 or such other date as may be advised by Lloyd's.

     "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.
<PAGE>

     "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, and 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.

     "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 date hereof 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 encumbrance of any kind, or any other type of
     preferential arrangement that
<PAGE>

     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
     Preferred Securities and a contract for the sale of ordinary shares of the
     Account Party (including "Feline PridesTM" 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 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 5.7.2 of Clause 5.7 (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 Tempest
     Reinsurance Company Limited shall be construed as Material Subsidiaries.

     "Net Cash Proceeds" means, with respect to any sale, lease, transfer or
     other disposition of any asset or the incurrence or issuance of any Debt or
     the sale or issuance of any
<PAGE>

     Equity Interests or Preferred Securities by any Person, the aggregate
     amount of cash received from time to time (whether as initial consideration
     or through payment or disposition of deferred consideration) by or on
     behalf of such Person in connection with such transaction after deducting
     therefrom only (without duplication) (a) reasonable and customary brokerage
     commissions, underwriting fees and discounts, legal fees, finder's fees and
     other similar fees and commissions, (b) the amount of taxes payable in
     connection with or as a result of such transaction and (c) the amount of
     any Debt secured by a Lien on such asset that, by the terms of the
     agreement or instrument governing such Debt, is required to be repaid upon
     such disposition, in each case to the extent, but only to the extent, that
     the amounts so deducted are, at the time of receipt of such cash, actually
     paid to a Person that is not an Affiliate of such Person or any US Facility
     Agreement Loan Party or any Affiliate of any US Facility Agreement Loan
     Party and are properly attributable to such transaction or to the asset
     that is the subject thereof; provided however, that in the case of taxes
     that are deductible under clause (b) above but for the fact that, at the
     time of receipt of such case, such taxes have not been actually paid or are
     not then payable, such US Facility Agreement Loan Party or such Subsidiary
     may deduct an amount (the "Reserved Amount") equal to the amount reserved
     in accordance with generally accepted accounting principles for such US
     Facility Agreement Loan Party's or such Subsidiary's reasonable estimate of
     such taxes, other than taxes for which such US Facility Agreement Loan
     Party or such Subsidiary is indemnified; provided further that, at the time
     such taxes are paid, an amount equal to the amount, if any, by which the
     Reserved Amount for such taxes exceeds the amount of such taxes actually
     paid shall constitute "Net Cash Proceeds" of the type for which such taxes
     were reserved for all purposes hereunder; provided further that, prior to
     the date on which the Public Debt Rating of the Account Party falls to
     BBB/Baa2 or below, Net Cash Proceeds from the sale, lease, transfer or
     other disposition of any asset or Equity Interests shall not include any
     amount of cash proceeds received in connection with such transaction to the
     extent such cash proceeds are reinvested in the same or related line of
     business as the business of the Account Party.

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

     "Obligors" means the Account Party and the Guarantor.

     "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.

     "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 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.
<PAGE>

     "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.

     "Principal Private Residence" has the meaning given to it in Schedule 6
     (Form of Letter of Credit).

     "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).

     "Public Debt Rating" means, as of any date, the lower rating that has been
     most recently announced by either Standard & Poor's Rating Services (a
     division of the McGraw Hill Companies, Inc.) or Moody's Investor Services
     Inc., as the case may be, for any class of non-credit enhanced long-term
     senior unsecured debt issued by the Account Party.

     "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.

     "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
<PAGE>

     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.

     "Security" means any security granted over the Charged Portfolio by the
     Account Party 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 the 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.

     "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 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.
<PAGE>

     "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 2004.

     "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) stockholders' equity of the Account Party
     and its Subsidiaries consolidated in accordance with generally accepted
     accounting principles plus (iii) the then issued and outstanding amount of
     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 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 Agreement Loan Parties" means, at any time, any or all of the
     Account Party, ACE INA, ACE Bermuda Insurance Ltd. and Tempest Reinsurance
     Company Limited.

     "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).
<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;

     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
<PAGE>

     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     "(Pounds)" 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.

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, applied on a basis
<PAGE>

     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.

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)290,000,000.

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.

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 Existing Facilities
     On and with effect from the Effective Date, the Existing Facilities shall
     be irrevocably cancelled and all outstanding letters of credit thereunder
     shall be replaced by the Letters of Credit issued hereunder.
<PAGE>

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     (if the Charge Agreement is required to be executed and delivered
               by the Account Party pursuant to sub-clause 17.1.2 of Clause 17.1
               (Letter of Credit Commission)), 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
     The Account Party may request the issue by the Banks hereunder of one
     Letter of Credit only in respect of each Applicant (with the exception of
     ACE Capital V Limited in respect of whom two Letters of Credit may be
     issued). 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:

     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;
<PAGE>

     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; and

     3.3.4     executing and delivering a "principal private residence letter"
               in respect of each such Letter of Credit substantially in the
               form set out in Appendix 3 to Schedule 6 (Form of Letter of
               Credit).

     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 contemporaneously with such delivery cancel) the letters of credit
     issued under the Existing Facilities, and (b) that all amounts outstanding
     under the Existing Facilities 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.

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
<PAGE>

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

     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:

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

               (b)  any of the representations and warranties of the Account
                    Party 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
<PAGE>

               (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 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;
<PAGE>

     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).

     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
<PAGE>

     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

     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.
<PAGE>

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).

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:
<PAGE>

     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.

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:
<PAGE>

     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  Banks' Tax Status Confirmation
     Each Bank confirms in favour of the Agent (on the date hereof or, in the
     case of a Bank which becomes a party hereto pursuant to a transfer or
     assignment, on the date on which the relevant transfer or assignment
     becomes effective) that either:

     9.3.1     it is a Qualifying Bank; or

     9.3.2     it is not resident for tax purposes in the United Kingdom and is
               beneficially entitled to its share of the Outstandings and any
               interest thereon.

9.4  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:

     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,
<PAGE>

     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

     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.
<PAGE>

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:

     13.1.1    an increase in any sum payable to it or for its account pursuant
               to Clause 8.1 (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
<PAGE>

     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 each day during
     the term of this Agreement 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.

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 30 September 1998 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
               generally
<PAGE>

               accepted accounting principles, 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 1999 and the related
               unaudited consolidated statements of operations and of cash flows
               for the nine months then ended, copies of which have been
               delivered to each of the Banks, fairly present, in all material
               respects, in conformity with generally accepted accounting
               principles (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 nine month period
               (subject to normal year-end adjustments).

     14.4.3    Since 30 June 1999 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 30 September 1998 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 generally accepted accounting principles, 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 30 September 1998 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
     Clause 14.4.1 (Financial Information) and except for insurance claims made
     in 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
<PAGE>

      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, the Account Party will have good and
               marketable title in and to 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).

      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.

      14.9.3   Upon delivery of the Security to the Custodian as provided in
               the Charge Agreement, the Account Party will not have
               outstanding, nor will it 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.

      14.9.4   The Account Party is not subject to any agreement, judgment,
               injunction, order, decree or other instrument or any law or
               regulation which would prevent or otherwise interfere with the
               Account Party'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
      each day commencing on the date on which the Account Party may be required
      to grant Security pursuant to sub-clause 17.1.2 of Clause 17.1 (Letter of
      Credit Commission) and for so long as such Security is required to remain
      in place.

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
<PAGE>

       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 whose claims
       are preferred solely by any bankruptcy, insolvency, liquidation or other
       similar laws of general application.

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.

14.14  No Default
       No Default has occurred and is continuing.

15.    COVENANTS
       The Account Party agrees that, so long as 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;
<PAGE>

       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;

       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;
<PAGE>

     15.1.9    promptly after any executive officer of the Account Party obtains
               knowledge thereof, (a) a copy of any notice from the Minister of
               Finance 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.

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, physical damage insurance on all real and personal
               property on an all risks basis (including the perils of flood and
               quake), covering the repair and replacement cost of all such
               property and consequential loss coverage for business
               interruption and extra expense (but, for the avoidance of doubt,
               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
<PAGE>

     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 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 the lesser of
     (a) 0.50 to 1 or (b) the Specified Ratio. For the purposes of the
     foregoing, the Specified Ratio shall be the greater of 0.35 to 1 or the
     ratio determined by multiplying 1.25 times the numerator of the lowest
     ratio of Adjusted Consolidated Debt to Total Capitalisation as of the last
     day of any fiscal quarter of the Account Party after completion of the
     Acquisition.

15.8 Tangible Net Worth
     The Account Party shall maintain at all times Consolidated Tangible Net
     Worth in an amount at least equal to the sum of (i) US$1,000,000,000 plus
     (ii) 25 per cent. of Consolidated Net Income for each fiscal quarter of the
     Account Party ending on and after 30 June 1999 for which such Consolidated
     Net Income is positive plus (iii) 75 per cent. (or, after the Equity
     Issuance (so long as the Net Cash Proceeds received by the Account Party
     and its Subsidiaries are at least US$500,000,000), 50 per cent.) of the
     aggregate amount by which Consolidated Tangible Net Worth shall have been
     increased by reason of the issuance and sale of any Equity Interests or
     Mandatorily Convertible Preferred Securities or, without duplication, the
     conversion or exchange of any Debt of the Account Party into or with Equity
     Interests of the Account Party.
<PAGE>

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    Permitted Liens;

     15.9.2    Liens described in Schedule 10 (Existing Liens) and other Liens
               arising in the ordinary course of business of the CIGNAP&C
               Business;

     15.9.3    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;

     15.9.4    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;

     15.9.5    (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;

     15.9.6    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;

     15.9.7    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;

     15.9.8    Liens on cash and Approved Investments securing Hedge Agreements
               arising in the ordinary course of business;
<PAGE>

      15.9.9   other Liens securing Debt or other obligations outstanding in an
               aggregate principal or face amount not to exceed at any time 10
               per cent. of Consolidated Tangible Net Worth;

      15.9.10  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;

      15.9.11  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 recoverables owed to them by the
               Account Party or any insurance Subsidiary;

      15.9.12  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;

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

      15.9.14  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;

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

      15.9.16  Liens  on any assets of the Account Party created pursuant to the
               Finance Documents.

15.10 Consolidations, Mergers and Sales of Assets
      No Obligor will (i) consolidate with or merge into any other Person or
      (ii) sell, lease or otherwise transfer, directly or indirectly, all or any
      substantial part of its assets to 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.
<PAGE>

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 whose claims are preferred by any bankruptcy, insolvency,
       liquidation or other similar laws of general application.

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 or Clause 16.2 above) 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
       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
<PAGE>

      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 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
<PAGE>

       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 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 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
<PAGE>

       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 Account Party is required to grant security pursuant to sub-clause
       17.1.2 of Clause 17.1 (Letter of Credit Commission), the Account Party
       fails 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 the Account
       Party 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 the Account Party
       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 Account Party is 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.

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
<PAGE>

       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 Account Party has 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 Account Party shall execute
                 and deliver a Charge Agreement and grant Security in favour of
                 the Security Trustee in accordance with the terms thereof with
                 a Required Value equal to the aggregate amount of the Letters
                 of Credit issued hereunder or such other amount as may be
                 required by the Security Trustee, and the Account Party 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 the Account Party 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 has been executed
                 with the necessary power and authorisation and creates in
                 favour of the Security Trustee on behalf of the Banks a valid
                 and enforceable first priority Lien on all of the Security in
                 respect 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).
<PAGE>

17.2   Arrangement Fees
       The Account Party shall pay to the Arranger the fees specified in the
       letter dated 6 October 1999 from the 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 6 October 1999 from the 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 Arranger the participation fees
       specified in the letter dated 6 October 1999 from the Arranger to the
       Account Party at the times, and in the amounts, specified in such letter.
       These fees shall be distributed by the Arranger among certain of the
       Banks in accordance with the arrangements agreed by the 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 Arranger 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
                 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 Account Party has 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 the Account Party, 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
                 Account Party 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
<PAGE>

       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 Arranger 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.

19.3   Payment of Default Interest
       Any interest which shall have accrued under Clause 19.2 (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
<PAGE>

       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 A gent 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:

       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
<PAGE>

                 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.

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 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
<PAGE>

       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 Arranger;

       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;

       22.7.2    secondly, in or towards payment pro rata of any due but unpaid
                 costs and expenses of the Agent, the Arranger 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.
<PAGE>

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).

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.
<PAGE>

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 ARRANGER AND THE BANKS

25.1   Appointment of the Agent
       The Arranger 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:

       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;
<PAGE>

       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);

       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 Arranger 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 Arranger 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;
<PAGE>

       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 Arranger, 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 Arranger accepts any responsibility:

       25.6.1    for the adequacy, accuracy and/or completeness of any
                 information supplied by the Agent or the Arranger, 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 Arranger 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 Arranger 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 Arranger may accept deposits from, lend money to and
       generally engage in any kind of banking or other business with any member
       of the Group.
<PAGE>

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  Successor Agent

       If the Agent gives notice of its resignation pursuant to Clause 25.9
       (Resignation) then any reputable and experienced bank or other financial
       institution may be appointed as a successor to the Agent by the Majority
       Banks 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 (Form of
       Confidentiality Undertaking) but, if no such successor is so appointed,
       the Agent may appoint such a successor itself.

25.11  Rights and Obligations

       If a successor to the Agent is appointed under the provisions of Clause
       25.10 (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.

25.12  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:

       25.12.1   the financial condition, creditworthiness, condition, affairs,
                 status and nature of each member of the Group;

       25.12.2   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;

       25.12.3   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

       25.12.4   the adequacy, accuracy and/or completeness of any information
                 provided by the Agent or the Arranger, 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.
<PAGE>

       Accordingly, each Bank acknowledges to the Agent and the Arranger that it
       has not relied on and will not hereafter rely on the Agent and the
       Arranger or either of them in respect of any of these matters.

25.13  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.

25.14  Declaration of Agent as Security Trustee
       The Agent hereby declares that it shall hold:

       25.14.1   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;

       25.14.2   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

       25.14.3   all proceeds of the security referred to in sub-clause 25.14.1
                 above and of the enforcement of the benefits referred to in
                 25.14.2 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.

25.15  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:

       25.15.1   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;
<PAGE>

       25.15.2   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);

       25.15.3   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;

       25.15.4   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

       25.15.5   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.

25.16  Liability
       The Agent shall not be liable for any failure:

       25.16.1   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;

       25.16.2   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;

       25.16.3   to register or notify any deed or document mentioned at sub-
                 clause 25.16.1 in accordance with the provisions of any of the
                 documents of title of the Account Party;

       25.16.4   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
<PAGE>

                 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;

       25.16.5   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 pursuant to any of the
                 Finance Documents effective or to secure the creation of any
                 ancillary charge under the laws of any jurisdiction; or

       25.16.6   to require any further assurances in relation to any of the
                 Finance Documents.

25.17  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.

25.18  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:

       25.18.1   if the Agent considers such appointment to be in the interests
                 of the Banks; or

       25.18.2   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.

25.19  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.
<PAGE>

25.20  Security

       25.20.1   In the event that the Account Party grants Security 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 of
                 the Custodian's Undertaking and in any event within seven
                 Business Days of such delivery, the Security Trustee and the
                 Account Party shall adjust the Required Value to the extent
                 necessary to ensure that the Required Value of the Charged
                 Portfolio is of an amount equal to the aggregate of:

                 (A x Y per cent.) +(B x Y per cent.) +(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.

       25.20.2   The Security Trustee shall not amend the Security Trustee's
                 Requirements without the consent of the Banks.

       25.20.3   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 Security Trustee will release the Security
                 granted to it pursuant to sub-clause 17.1.2 of Clause 17.1
                 (Letter of Credit Commission) except for a portion of such
                 Security which has a Required Value of US$100. For the
                 avoidance of doubt, if, following any such release, further
                 Security is again required to be granted pursuant to sub-clause
                 17.1.2 of Clause 17.1 (Letter of Credit Commission), the
                 Required Value of the Security charged pursuant to the Charge
                 Agreement shall be increased to the extent required pursuant to
                 sub-clause 17.1.2 of Clause 17.1 (Letter of Credit Commission).

25.21  Bank Representations
       Each Bank represents to the Agent on the date of issue of each Letter of
       Credit that:
<PAGE>

       25.21.1   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;

       25.21.2   the obligations of the Bank under each Letter of Credit
                 constitute its legal, valid and binding obligations; and

       25.21.3   it has not participated in such Letter of Credit on the basis
                 that the collateral securing the repayment of any amounts
                 payable by it under the Letter of Credit comprises directly or
                 indirectly a security interest over a Principal Private
                 Residence.

25.22  Letters of Credit
       Each Bank shall (i) 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; and (ii) inform the Agent promptly if at any time
       the collateral securing the repayment of any amounts payable under any
       Letter of Credit comprises directly or indirectly a security interest
       over a Principal Private Residence.

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.

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 Arranger 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
<PAGE>

       (whereupon such assignee shall become a party hereto as a "Bank"), the
       Agent, the Arranger, 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 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 Arranger, the Security Trustee, the Co-
                 Arrangers, 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 Arranger 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 Clause 4.6.1 (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.
<PAGE>

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;

       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 (i) and (ii)
       above, 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
<PAGE>

                 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 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.
<PAGE>

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).

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.
<PAGE>

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;

       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;
<PAGE>

       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.

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
       Each communication to be made under the Finance Documents shall be made
       in writing and, unless otherwise stated, shall be made by telex, fax or
       letter.
<PAGE>

31.2   Addresses
       Any communication or document to be made or delivered pursuant to the
       Finance Documents shall (unless the recipient of such communication or
       document has, by fifteen days' written notice to the Agent, specified
       another address or fax number) be made or delivered to the address or fax
       or telex number:

       31.2.1    in the case of the Obligors and the Agent, identified with its
                 name below; and

       31.2.2    in the case of each Bank, notified in writing to the Agent
                 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).

31.3   Delivery
       Any communication or document to be made or delivered by one person to
       another pursuant to the Finance Documents shall:

       31.3.1    if by way of fax, be deemed to have been received when
                 transmission has been completed;

       31.3.2    if by way of letter, be deemed to have been delivered when left
                 at the relevant address or, as the case may be, ten days after
                 being deposited in the post postage prepaid in an envelope
                 addressed to it at such address; and

       31.3.3    if by way of telex, be deemed to have been made or delivered
                 when despatched and answerback received

       provided that any communication or document to be made or delivered to
       the Agent shall be effective only when received by its agency division
       and then only if the same is expressly marked for the attention of the
       department or officer identified with the Agent's signature below (or
       such other department or officer as the Agent shall from time to time
       specify for this purpose).

31.4   Notification of Changes
       Promptly upon receipt of notification of a change of address or fax
       number pursuant to Clause 31.2 (Addresses) or changing its own address or
       fax number, the Agent shall notify the other parties hereto of such
       change.

31.5   English Language
       Each communication and document made or delivered by one party to another
       pursuant to the Finance Documents shall be in the English language or
       accompanied by a translation thereof into English 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.
<PAGE>

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;

       33.2.2    a change in the currency or amount of any Letter of Credit;

       33.2.3    a change 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), Clause 15.8 (Tangible Net Worth) and Clause 15.9
                 (Liens);

       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 Arranger and the Banks); or

       33.3.2    otherwise amend or waive any of the Agent's rights hereunder or
                 subject the Agent or the Arranger 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 Arranger and the Banks that the courts of England shall
       have jurisdiction to hear and
<PAGE>

       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.

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 Arranger, the Co-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.
<PAGE>

                                  SCHEDULE 1
                                  The Banks

<TABLE>
<CAPTION>
                                                                    Commitment
          Bank                                                      ((Pounds))
<S>                                                              <C>
Citibank, N.A.                                                     71,666,667.00
Barclays Bank PLC                                                  71,666,666.50
ING Bank N.V., London Branch                                       71,666,666.50
ABN Amro Bank N.V., London Branch                                  30,000,000.00
National Westminster Bank PLC                                      30,000,000.00
Credit Lyonnais New York Branch                                    15,000,000.00
                                                                  --------------
Total                                                             290,000,000.00
                                                                  --------------
</TABLE>
<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") dated November 1999 whereby a
(Pounds)290,000,000 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 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.
<PAGE>

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

1.   Bank:

2.   Transferee:

3.   Transfer Date:

4.   Bank's Commitment                              Portion Transferred

5.   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:
<PAGE>

                                  SCHEDULE 3
                             Conditions Precedent

1.   In relation to each Obligor:

     (i)   a copy, certified as at the date of this Agreement a true and up-to-
           date copy by an Authorised Signatory of such Obligor, of the
           constitutional documents of such Obligor;

     (ii)  a copy, certified as at the date of this 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, delivery and
           performance of this Agreement and the Finance Documents and the terms
           and conditions hereof and thereof and authorising a named person or
           persons to sign this Agreement and any documents to be delivered by
           such Obligor pursuant hereto or 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, this Agreement and the Finance Documents and any
           documents to be delivered by such Obligor pursuant hereto or 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
     Clauses 14.4.1 and 14.4.2 (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 the Existing Facilities will be
     cancelled and all amounts outstanding thereunder paid in full and that all
     letters of credit issued thereunder will be cancelled by Lloyds
     contemporaneously with the issue of the Letters of Credit pursuant to the
     terms of this Agreement.

8.   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.
<PAGE>

                                  SCHEDULE 4
                              Utilisation Request

From:         ACE Limited
To:           Citibank International plc

Dated:

Dear Sirs,

1. We refer to the (Pounds)290,000,000 letter of credit agreement (the "Credit
   Agreement") dated November 1999 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>
--------------------------------------------------------------------------------------------------------
(Pounds)/US$/1/     26 November 1999             31 December 2004        Society of Lloyd's
--------------------------------------------------------------------------------------------------------

(Pounds)/US$/1/     26 November 1999             31 December 2004        Society of Lloyd's
--------------------------------------------------------------------------------------------------------

(Pounds)/US$/1/     26 November 1999             31 December 2004        Society of Lloyd's
--------------------------------------------------------------------------------------------------------

(Pounds)/US$/1/     26 November 1999             31 December 2004        Society of Lloyd's
--------------------------------------------------------------------------------------------------------

(Pounds)/US$/1/     26 November 1999             31 December 2004        Society of Lloyd's
--------------------------------------------------------------------------------------------------------

(Pounds)/US$/1/     26 November 1999             31 December 2004        Society of Lloyd's
========================================================================================================
</TABLE>
/1/ Delete where appropriate.

3. Utilisation Date: [       ].

4. We confirm that, at the date hereof, the Representations are true in all
material respects and no Default is continuing.

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

 ............................

Authorised Signatory
for and on behalf of
ACE LIMITED

/1/  Delete where appropriate.
<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)290,000,000 letter of credit agreement dated    November
1999 (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].
<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:......................................
<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:  (Pounds)/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.
<PAGE>

                                  SCHEDULE 6
                            Form Of Letter of Credit

       Letter of Credit to be issued by the Agent on behalf of the Banks

To:  The Council of Lloyd's
     One Lime Street
     London EC3M 7HA

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 Schedule 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 Schedule 1 hereto bears to
   the aggregate Commitments of all the Issuing Banks set out in Schedule 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 Schedule 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 2004. This Credit
   will be extended automatically for a further year, without written amendment,
   on the first day of January of every future year from 1 January 2000, 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 Brian Ellis, Global Insurance) in the form
   set out in Schedule 2 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.
<PAGE>

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]
<PAGE>

                                   APPENDIX 1

                          Issuing Banks' Commitments

Name and Address of Issuing Bank                  Commitment
<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
<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
<PAGE>

                               APPENDIX 2 (CONT.)

                      Form of Demand  (Approved Currency)

                              [Lloyd's to supply]
<PAGE>

                                  APPENDIX 3

      Form of letter as to principal private residences of the Applicants

                             [Letterhead of Agent]

To:  The Society incorporated by Lloyd's Act 1871 by the name of Lloyd's
     Lloyd's of London
     One Lime Street
     London  EC3M 7HA

We, Citibank International plc (the "Agent") acting as agent on behalf of each
of [             ] (the "Banks"), hereby confirm the following:

1.   We have provided a multi bank letter of credit as agent on behalf of the
     Banks which will be included in the [Lloyd's deposit/Lloyd's life
     deposit]/4/ of [      ] /5/(the "Corporate Member");

2.   The execution and delivery by the Agent of the letter of credit has been
     duly authorised by all necessary action on the part of the Banks and the
     letter of credit has been duly executed and delivered by the Agent on
     behalf of the Banks.

3.   The obligations of the Banks under the letter of credit constitute legal,
     valid and bind obligations.

4.   We have not issued the letter of credit on behalf of the Banks on the basis
     that the collateral securing the repayment of any amounts payable under the
     letter of credit comprises directly or indirectly a security interest over
     a Principal Private Residence (as defined in paragraph 6 below);

5.   We undertake to inform Lloyd's promptly if at any time we become aware that
     the collateral securing the repayment of any amounts payable under the
     letter of credit comprises directly or indirectly a security interest over
     a Principal Private Residence (as so defined);

6.   For the purposes of paragraphs 4 and 5 a "Principal Private Residence" is a
     dwelling house, or any part or share of a dwelling house, which is the only
     or main residence of any person or their spouse, minor child or adopted
     child and/or including land for the enjoyment or occupation of that
     residence.

Signature of [                     ]
[Authorised signatory]/6/

for and on behalf of
Citibank International plc as Agent

Date:                .

/4/  Delete as appropriate.

/5/  Insert the name of the corporate member in respect of whose Lloyd's deposit
     of Lloyd's list deposit the letter of credit has been issued.

/6/  Specify as appropriate - this letter should not be signed by any person who
     signed the letter of credit to which this letter relates.
<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 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:
<PAGE>

     (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
            1999 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.
<PAGE>

                                  SCHEDULE 8
                      Form of Confidentiality Undertaking

                          [Letterhead of Transferor]

[Date]

To:   [Transferee]

Dear Sirs,

ACE Limited - (Pounds)290,000,000 Letter of Credit Facility Agreement dated
November 1999 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].

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
<PAGE>

     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]
Title: [           ]          As at the date hereof

                              [Name of Transferee]

                              By:    [               ]

                              Title: [               ]
<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         0.50 per cent.  0.55 per cent.  0.60 per cent.    0.62.5 per cent    0.65 per 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.
<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.
<PAGE>

                                  SCHEDULE 11
                           Form of Charge Agreement

------------------------------------------------------------------
Name of Chargor and address of its registered or principal office:

ACE Limited
The ACE Building
30 Woodbourne Avenue
Hamilton  HM08
Bermuda

Facsimile no:  +441 296 0087            (the "Chargor")
------------------------------------------------------------------

------------------------------------------------------------------
Name of Custodian and address of its registered or principal office:

Mellon Bank, N.A.
Suite 1570
One Mellon Bank Center
Pittsburgh  PA15258

Facsimile no:    +1 412 234 8725  (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 21.

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  We, acting in the Due Capacity, hereby charge, by way of first charge, in
     your favour all of the Charged Portfolio for the payment to you and the
     discharge of all of the Obligations.
<PAGE>

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 We shall deliver, transfer and assign all of the Charged Portfolio to the
    Custodian by means acceptable to you.

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 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 such value 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.

5.  FURTHER ASSURANCE

5.1 We undertake forthwith upon notice to that effect by you to execute and sign
    in your favour or your nominees' and to deliver to you all such transfers
    (or, if you shall so require, partially completed instruments of transfer
    with the name of the transferee, date and consideration left blank),
    assignments and notices (including without limitation the notice in the form
    set out in the First Schedule), and to make all such payments, as you may
    specify in such notice for the purpose of perfecting your title to all or
    any part of the Charged Portfolio or for enabling you (as you shall be
    entitled at any time to do) to vest the same in your name or in the name(s)
    of your nominees or agents or any purchaser.

5.2 We further undertake forthwith upon notice to that effect by you to execute
    in your favour or your nominees' or agents' and to deliver to you such legal
    or other mortgages of the Charged Portfolio or any part thereof for the
    purpose of securing or further securing the Obligations and being in such
    form as you shall require (provided that the Obligations are not thereby
    increased).

6.  REPRESENTATIONS AND WARRANTIES

    We hereby represent and warrant to you and undertake that:

6.1 we are and will, at all times during the subsistence of the security hereby
    constituted, be the sole beneficial owner of all of the Charged Portfolio
    free from mortgages or charges in accordance with our undertaking contained
    in Clause 7 hereof;

6.2 subject to paragraph 5 of the Custodian's Undertaking, we have not sold or
    agreed to sell or otherwise disposed of or agreed to dispose of the benefit
    of the Charged Portfolio or any part thereof;
<PAGE>

6.3 we have and will at all times have the necessary power to enable us to enter
    into and perform the obligations expressed to be assumed by us under this
    Charge Agreement;

6.4 this Charge Agreement constitutes our 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 the
    Charged Portfolio and every part thereof effective in accordance with its
    terms; and

6.5 all necessary authorisations to enable or entitle us to enter into this
    Charge Agreement have been obtained and are in full force and effect and
    will remain in such force and effect at all times during the subsistence of
    the security hereby constituted.

7.  NEGATIVE PLEDGE

    We hereby undertake with you that at no time during the subsistence of the
    security hereby constituted will we, 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 mortgage or other fixed
    security or any floating charge on or over the Charged Portfolio or any part
    thereof. The foregoing prohibition shall apply not only to mortgages, other
    fixed securities and floating charges which rank or purport to rank in point
    of security in priority to the security hereby constituted but also to any
    mortgages, securities or floating charges 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 which has
    not been remedied or waived under the Agreement, you shall have and be
    entitled without prior notice to us to exercise the power to sell or
    otherwise dispose of, for any consideration (whether payable immediately or
    by instalments) as you shall think fit, the whole or any part of the Charged
    Portfolio and may (without prejudice to any right which you may have under
    any other provision hereof) treat such part of the Charged Portfolio as
    consists of money as if it were the proceeds of such sale or other disposal.
    You shall be entitled to apply the proceeds of such sale or other disposal
    in paying the costs of such sale or other disposal and (subject to the
    rights or claims of any person entitled in priority to you) in or towards
    the discharge of the Obligations, the balance (if any) to be paid to us or
    other persons entitled thereto. Such power of sale or other disposal shall
    operate as a variation and extension of the statutory power of sale under
    Section 101 of the Law of Property Act 1925.

8.2 The restriction contained in Section 103 of the Law of Property Act 1925 on
    the exercise of the statutory power of sale shall not apply to any exercise
    by you of your power of sale or other disposal which shall arise, as shall
    the statutory power under the said Section 101 of appointing a receiver of
    the Charged Portfolio or the income thereof, immediately upon the occurrence
    of an Event of Default which is continuing and which
<PAGE>

    has not been remedied or waived as is referred to in Clause 8.1. In favour
    of a purchaser of all or any part of the Charged Portfolio, a certificate in
    writing by your officer or agent that either or both of such powers has
    arisen and is exercisable shall be conclusive evidence of that fact.

8.3 Without limitation to the generality of your rights and remedies as set
    forth in Clause 8.1, you may at any time without prior notice to us:-

    8.3.1 after an Event of Default has occurred which is continuing and which
          has not been remedied or waived, exercise any or all of your rights
          under or pursuant to the Custodian's Undertaking; and

    8.3.2 if any or all of the component parts of the Charged Portfolio (the
          "Ineligible Property") delivered, transferred or assigned to you under
          or pursuant to the Custodian's Undertaking do not satisfy the Security
          Trustee's Requirements,

    then you may (but shall not be obliged to):

    (a)   convert for our account and at our sole risk all or any part of the
          Ineligible Property into property which does satisfy all or any of the
          Security Trustee's Requirements in such manner as you in your sole
          discretion (acting reasonably) may determine to be appropriate; and/or

    (b)   sell for our account and at our sole risk all or any part of the
          Ineligible Property in return for payment of such currency or
          currencies as you in your sole discretion (acting reasonably)
          determine to be appropriate and pay the same to an account or accounts
          opened or maintained by you for that purpose pursuant to Clause 13.2.

9.  POWER OF ATTORNEY

    We hereby by way of security for the performance of our obligations
    hereunder irrevocably (within the meaning of Section 4 of the Powers of
    Attorney Act 1971) appoint you to be our attorney and in our name and on our
    behalf and as our act and deed after an Event of Default has occurred which
    is continuing and which has not been remedied or waived, to sign, seal,
    execute, deliver, perfect and do all deeds, instruments, mortgages and
    things as may be, or as you may consider to be, requisite for carrying out
    any obligations imposed on us under Clause 5, or for enabling you to
    exercise your power(s) of sale or other disposal or conversion referred to
    in Clause 8 or for carrying into effect any such sale or other disposal or
    conversion made under such power(s) by 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 the Charged Portfolio.  We hereby undertake to
    ratify and confirm all things done and documents executed by you in the
    exercise of the power of attorney conferred by this Clause.

10. CONSOLIDATION OF SECURITIES

    Subsection (1) of Section 93 of the Law of Property Act 1925 shall not apply
    to this Charge Agreement.

11. EFFECTIVENESS OF SECURITY
<PAGE>

11.1   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.

11.2   This Charge Agreement shall remain in full force and effect as a
       continuing security unless and until you discharge it.

11.3   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.

12.    REMEDIES, TIME OR INDULGENCE

12.1   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.

12.2   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.

12.3   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 us
       to you.

13.    ACCOUNTS

13.1   If you shall at any time receive notice of any subsequent mortgage,
       assignment, charge or other interest affecting all or any part of the
       Charged Portfolio you may open a new account or accounts for us in your
       books. If you do not do so, then (unless you give to us express written
       notice to the contrary) as from the time of receipt of such notice by
       you, all payments made by us to you shall in the absence of any express
       appropriation by you to the contrary be treated as having been credited
       to a new account of ours and not as having been applied in reduction of
       the Obligations at the time when you received the notice.

13.2   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.
<PAGE>

13.3   In case you shall have more than one account for us in your books you may
       at any time after making any demand for payment or other discharge of any
       of the Obligations, and for so long as all the Obligations remain unpaid,
       or after you shall have received notice of any subsequent charge or other
       interest affecting all or any part of the Charged Portfolio, and without
       prior notice in that behalf, forthwith transfer all or any part of any
       balance standing to the credit of any such account to any other such
       account which may be in debit.

14.    CURRENCY

14.1   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 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.

14.2   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.

15.    COSTS, CHARGES AND EXPENSES

       All your reasonable costs, charges and expenses incurred in the exercise
       of any Security Trustee Right, or in connection with the execution of or
       otherwise in relation to this Charge Agreement and all your costs,
       charges and expenses incurred in connection with the perfection or
       enforcement of the security hereby constituted or any other security held
       by you for the Obligations or any guarantee to you in respect thereof,
       shall be reimbursed to you by us on demand on a full 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.

16.    LAW AND JURISDICTION

       This Charge Agreement shall be governed by English law and for your
       benefit we hereby irrevocably submit to the jurisdiction of the English
       courts.

17.    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.

18.    NOTICES

18.1   Any notice or demand required to be served on us by you hereunder may be
       served:-

       18.1.1    on any of our officers personally,
<PAGE>

       18.1.2    by letter addressed to us or to any of our officers and left at
                 our registered office or at any one of our principal places of
                 business,

       18.1.3    by posting the same by letter addressed in any such manner as
                 aforesaid to such registered office or any such principal place
                 of business or

       18.1.4    by telex or facsimile addressed in any such manner as aforesaid
                 to any then published telex or facsimile number of ours.

18.2   Any notice or demand:

       18.2.1    sent by post in accordance with Clause 18.1 to an address in
                 the United Kingdom shall be deemed to have been served on us at
                 10.00 a.m. (London time) on the second business day next
                 following the date of posting or, in the case of an address
                 outside the United Kingdom, shall be deemed to have been served
                 on us at 10.00 a.m. (London time) on the fifth business day
                 next following and exclusive of the date of posting; or

       18.2.2    sent by telex or facsimile in accordance with Clause 18.1 shall
                 be deemed to have been served on us when despatched, provided
                 that an activity report indicates that the document has been so
                 transmitted.

18.3   In proving such service by post it shall be sufficient to show that the
       letter containing the notice or demand was properly addressed and posted
       and such proof of service shall be effective notwithstanding that the
       letter was in fact not delivered or was returned undelivered.

19.    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 of the Agreement).

20.    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 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 of the Agreement.

21.    INTERPRETATION

21.1   Terms not otherwise defined herein shall bear the meaning ascribed to
       them in the Agreement.
<PAGE>

       In this Charge Agreement:-

       "Agreement" means the (Pounds)290,000,000 letter of credit facility
       agreement dated      November 1999 and made between ACE Limited as
       account party, ACE Bermuda Insurance Ltd. as guarantor, Citibank, N.A. as
       arranger, Barclays Bank PLC and ING Barings as co-arrangers, Citibank
       International plc as agent and security trustee and the financial
       institutions defined therein as banks;

       "Charged Portfolio" means at any time all of the Chargor's right, title
       and interest in and to:

       (a)       all securities which are held by, to the order, for the account
                 or under the control or direction of, the Custodian;

       (b)       all securities which are held by any clearance system on behalf
                 of, for the account of or to the order of the Custodian;

       (c)       all rights, benefits and proceeds attaching to or arising from
                 or in respect of any of the securities referred to in (a) and
                 (b) above;

       (d)       all sums of money standing to the credit of any account opened
                 or maintained by the Custodian for the Chargor;

       (e)       all sums of money standing to the credit of any account opened
                 or maintained by any clearance system for the Chargor and under
                 the direction or control of the Custodian;

       (f)       all sums of money standing to the credit of any account opened
                 or maintained by any clearance system for the Custodian; and

       (g)       any of the foregoing at any time delivered, transferred or
                 assigned by the Custodian to the Security Trustee;

       but in each case only to the extent that the same are entered or
       evidenced in one or more accounts identified in the Custodian's records
       by express reference to ACE Limited and the Security Trustee (which
       accounts are, at the date hereof, account number [TRIF 090 2002]), and to
       the extent that the same meets the Security Trustee's Requirements;

       "Custodian" means the above-mentioned Custodian or such other person as
       the Chargor 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;

       "Due Capacity" means capacity as beneficial owner;

       "Obligations" means any and all of the present or future, actual or
       contingent, obligations of the Chargor to the Finance Parties hereunder
       or under the Agreement;

       "Required Value" means the amount stated in Part A of the Schedule to the
       Custodian's Undertaking or such other amount determined in accordance
       with the Agreement as may be notified from time to time by the Security
       Trustee to the Custodian; and
<PAGE>

       "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 the
       Chargor and notified to the Custodian (provided that the Security
       Trustee's Requirements may be adjusted by the Security Trustee without
       the agreement of the Chargor (but after consultation in good faith with
       the Chargor) 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 the Chargor 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 Chargor 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 by Standard
       and Poor's Rating Services or AA equivalent or better).

21.2   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 Cedelbank S.A., the Euro-Clear System, the
       First Chicago Clearing Centre, The Depository Trust Company and such
       other clearance system as may 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).

21.3   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.

21.4   Clause and Schedule headings are for ease of reference only.
<PAGE>

                              THE FIRST SCHEDULE

                     NOTICE OF CHARGE OF CHARGED PORTFOLIO

To: Mellon Bank, N.A.
    Suite 1570
    One Mellon Bank Center
    Pittsburgh  PA15258]

  * _____________________________

(*Contact name at the Custodian)

We refer to 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. 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.

Yours faithfully,

For and on behalf of

ACE Limited

_____________________________
(Signature(s))

Dated _______________________
<PAGE>

                             THE SECOND SCHEDULE

                           Custodian's Undertaking

--------------------------------------------------------------------
Name of Custodian and address of its registered or principal office:

Mellon Bank, N.A.
Suite 1570
One Mellon Bank Center
Pittsburgh  PA15258

Attn: Dawn Hood

facsimile no:    +1 412 234 8725  (the "Custodian")
--------------------------------------------------------------------

--------------------------------------------------------------------
Name of Chargor and address of its registered or principal office:

ACE Limited
The ACE Building
30 Woodbourne Avenue
Hamilton  HM08
Bermuda

facsimile no:  +441 296 0087            (the "Chargor")
--------------------------------------------------------------------

--------------------------------------------------------------------
Date of Charge Agreement:  [Date]
--------------------------------------------------------------------

To:  Citibank International plc (the "Security Trustee")

336 Strand
London WC2R 1HB

We, the Custodian, refer to the above-mentioned Charge Agreement (the "Charge
Agreement") between the Chargor 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 Chargor, the Custodian hereby
represents and irrevocably undertakes and agrees to and with the Security
Trustee as follows:

1.   The Custodian will hold the Charged Portfolio to the Security Trustee's
     order.
<PAGE>

2. 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.

3. 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.

4. 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 one Business Day of such day) of the trades and transactions
   processed.

5. The Custodian shall be entitled to process trades as it may be directed to do
   so under the terms of its custodial agreement with the Chargor 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 of
   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 Chargor or as it may direct, which excess will be determined by the
   Security Trustee on the date of the request from the Chargor.

6. 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 up to the Required Value 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.

7. 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 Chargor with the Custodian with any reasonable fees or
   commissions due and owing by the Chargor to the Custodian in respect of the
   Charged Portfolio or part thereof or to settle any reasonable bank charges
   due and owing by the 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.
<PAGE>

8.  Any notice, demand or other communication required to be 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.

9.  This undertaking shall be governed by, and construed in accordance with,
    English law. The Custodian and the Security Trustee agree that a proper
    forum for any dispute would be either the English courts or the federal
    courts within the United States of America.

10. 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.
<PAGE>

                                 THE SCHEDULE

                                     PART A

The initial Required Value is:-

(Pounds)[                 ] (amount in words)

(or such other amount as may be agreed between the Security Trustee and the
Chargor 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 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 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.

____________________________________________

(Authorised Signatory)

for and on behalf of the Custodian

[Date]
<PAGE>

The COMMON or CORPORATE SEAL of

the CHARGOR was hereto affixed

to this DEED in the presence of:

Director

Secretary/Director
<PAGE>

                                  SIGNATURES

The Account Party

ACE LIMITED

By:

Address:      The Ace Building
              30 Woodbourne Avenue
              Hamilton HM08
              Bermuda

Fax:          +1 441 296 0087

The Guarantor

ACE BERMUDA INSURANCE LTD.

By:

Address:      The Ace Building
              30 Woodbourne Avenue
              Hamilton HM08
              Bermuda

Fax:          +1 441 296 0087

The Arranger

CITIBANK, N.A.

By:

Address:      UK Insurance Team, 3rd Floor
              PO Box 200
              Cottons Centre
              Hays Lane
              London SE1 2QT

Fax:          + 44 207 500 5353
<PAGE>

The Co-Arrangers

BARCLAYS BANK PLC

By:

Address:      54 Lombard Street
              London  EC3V 9EX

Fax:          +44 20 7699 2407

ING BARINGS

By:

Address:      60 London Wall
              London  EC2N 5TQ

Fax:          +44 20 7767 7507

The Agent and Security Trustee

CITIBANK INTERNATIONAL plc

By:

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

Fax:          +44 20 7500 4482/3

Attention:    Loans Agency

The Banks

ABN AMRO BANK N.V., LONDON BRANCH

By:

BARCLAYS BANK PLC

By:
<PAGE>

CITIBANK, N.A.

By:

CREDIT LYONNAIS NEW YORK BRANCH

By:

ING BANK N.V., LONDON BRANCH

By:

NATIONAL WESTMINSTER BANK PLC

By:<PAGE>
                                                                   EXHIBIT 10.54

                                  ACE LIMITED
                          1999 REPLACEMENT STOCK PLAN

                                   ARTICLE 1
                                    GENERAL
                                    -------

     1.1 Purpose. The ACE Limited 1999 Replacement Stock Plan (the "Plan") has
been established by ACE Limited (the "Company") for the purpose of (i) amending,
restating, combining into a single plan, and continuing the Capital Re
Corporation Director's Stock Option Plan, the Capital Re Corporation 1992 Stock
Option Plan, the Capital Re Corporation 1997 Employee Stock Option Plan and the
Capital Re Corporation Performance Share Plan, as in effect immediately prior to
the Transaction Date (as described below) (collectively, the "CapRe Plans");
(ii) permitting the grant of Awards to selected individuals in connection with
the closing of the transaction (the "Transaction") pursuant to and as of the
date (the "Transaction Date") contemplated by the Amended and Restated Agreement
and Plan of Merger among the Capital Re Corporation ("CapRe"), the Company and
CapRe Acquisition Corporation, dated as of October 26, 1999 (the "Merger
Agreement"), including the granting of Replacement Awards in satisfaction of the
Company's obligations under Section 6.12 of the Merger Agreement; and (iii)
permitting the granting of compensation that is based on the Company's ordinary
shares of stock.

     1.2 Participation. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Individuals, those persons who will be granted one or more Awards
(including, without limitation, Replacement Awards described in Section 2) under
the Plan, and thereby become "Participants" in the Plan. In the discretion of
the Committee, a Participant may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be granted to a Participant.
Awards may be granted as alternatives to or replacement of awards granted or
outstanding under the Plan, or any other plan or arrangement of the Company or a
Subsidiary (including a plan or arrangement of a business or entity, all or a
portion of which is acquired by the Company or a Subsidiary).

     1.3 Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 5 (relating to operation and
administration). Capitalized terms in the Plan (excluding any exhibits to the
Plan) shall be defined as set forth in the Plan (without regard to such
exhibits).

                                   ARTICLE 2
                              REPLACEMENT AWARDS
                              ------------------

     The Committee may grant awards under this Plan in replacement of awards
granted prior to Transaction Date under any of the CapRe Plans (the "Replacement
Awards"). To the extent provided by the Committee, or required by the terms of
the Merger Agreement, the Replacement Awards shall be subject to the applicable
terms of the CapRe Plans.
<PAGE>

                                   SECTION 3
                               OPTIONS AND SARS
                               -----------------

     3.1   Definitions.

(a) The grant of an "Option" entitles the Participant to purchase shares of
     Stock at an Exercise Price established by the Committee. Any Option granted
     under this Section 3 shall be a non-qualified option (an "NQO"), as
     determined in the discretion of the Committee. An "NQO" is an Option that
     is not intended to be an "incentive stock option" as that term is described
     in section 422(b) of the Code.

(b) A stock appreciation right (an "SAR") entitles the Participant to receive,
     in cash or Stock (as determined in accordance with subsection 4.5), value
     equal to (or otherwise based on) the excess of: (a) the Fair Market Value
     of a specified number of shares of Stock at the time of exercise; over (b)
     an Exercise Price established by the Committee.

     3.2 Exercise Price. The "Exercise Price" of each Option and SAR granted
under this Section 3 shall be established by the Committee or shall be
determined by a method established by the Committee at the time the Option or
SAR is granted; except that the Exercise Price shall not be less than 100% of
the Fair Market Value of a share of Stock on the date of grant (or, if greater,
the par value of a share of Stock).

     3.3 Exercise. An Option and an SAR shall be exercisable in accordance with
such terms and conditions and during such periods as may be established by the
Committee.

     3.4 Payment of Option Exercise Price. The payment of the Exercise Price of
an Option granted under this Section 3 shall be subject to the following:

(a) Subject to the following provisions of this subsection 3.4, the full
     Exercise Price for shares of Stock purchased upon the exercise of any
     Option shall be paid at the time of such exercise (except that, in the case
     of an exercise arrangement approved by the Committee and described in
     paragraph 3.4(c), payment may be made as soon as practicable after the
     exercise).

(b) The Exercise Price shall be payable in cash or by tendering, by either
     actual delivery of shares or by attestation, shares of Stock acceptable to
     the Committee, and valued at Fair Market Value as of the day of exercise,
     or in any combination thereof, as determined by the Committee.

(c) The Committee may permit a Participant to elect to pay the Exercise Price
     upon the exercise of an Option by irrevocably authorizing a third party to
     sell shares of Stock (or a sufficient portion of the shares) acquired upon
     exercise of the Option and remit to the Company a sufficient portion of the
     sale proceeds to pay the entire Exercise Price and any tax withholding
     resulting from such exercise.

                                      -2-
<PAGE>

     3.5 Settlement of Award. Shares of Stock delivered pursuant to the exercise
of an Option or SAR shall be subject to such conditions, restrictions and
contingencies as the Committee may establish in the applicable Award Agreement.
Settlement of SARs may be made in shares of Stock (valued at their Fair Market
Value at the time of exercise), in cash, or in a combination thereof, as
determined in the discretion of the Committee. The Committee, in its discretion,
may impose such conditions, restrictions and contingencies with respect to
shares of Stock acquired pursuant to the exercise of an Option or an SAR as the
Committee determines to be desirable.

                                   SECTION 4
                              OTHER STOCK AWARDS
                              -------------------

     4.1   Definitions.

(a)  A "Stock Unit" Award is the grant of a right to receive shares of Stock in
     the future.

(b)  A "Performance Share" Award is a grant of a right to receive shares of
     Stock or Stock Units which is contingent on the achievement of performance
     or other objectives during a specified period.

(c)  A "Performance Unit" Award is a grant of a right to receive a designated
     dollar value amount of Stock which is contingent on the achievement of
     performance or other objectives during a specified period.

(d)  A "Restricted Stock" Award is a grant of shares of Stock, and a "Restricted
     Stock Unit" Award is the grant of a right to receive shares of Stock in the
     future, with such shares of Stock or right to future delivery of such
     shares of Stock subject to a risk of forfeiture or other restrictions that
     will lapse upon the achievement of one or more goals relating to completion
     of service by the Participant, or achievement of performance or other
     objectives, as determined by the Committee.

     4.2 Restrictions on Awards. Each Stock Unit Award, Restricted Stock Award,
Restricted Stock Unit Award, Performance Share Award and Performance Unit Award
shall be subject to such conditions, restrictions and contingencies as the
Committee shall determine.

                                   SECTION 5
                         OPERATION AND ADMINISTRATION
                         -----------------------------

     5.1 Effective Date. This amendment and restatement is effective as of the
Closing Date as that term is used in the Merger Agreement (the "Effective
Date"). The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Awards may be granted under the Plan
after the ten-year anniversary of the Effective Date.

                                      -3-
<PAGE>

     5.2 Shares Subject to Plan. The shares of Stock for which Awards may be
granted under the Plan shall be subject to the following:

(a)  The shares of Stock with respect to which Awards may be made under the Plan
     shall be currently authorized but unissued shares, or shares purchased in
     the open market by a direct or indirect wholly-owned subsidiary of the
     Company (as determined by the Chairman or any Executive Vice President of
     the Company). The Company may contribute to the subsidiary an amount
     sufficient to accomplish the purchase in the open market of the shares of
     Stock to be so acquired (as determined by the Chairman or any Executive
     Vice President of the Company).

(b)  Subject to this subsection 5.2, the number of shares of Stock available for
     Awards under the Plan shall be equal to the number of ACE Limited ordinary
     shares into which the total number of Available Capital Re Corporation
     Shares would be converted pursuant to the terms of the Merger Agreement if
     the number of Available Capital Re Corporation Shares were outstanding
     immediately prior to Transaction Date. For purposes of this paragraph (b),
     the number of "Available Capital Re Corporation Shares" shall be equal to
     the aggregate number of shares of Cap Re Corporation stock available for
     awards under the Cap Re Plans immediately prior to the Transaction Date
     plus the number of shares of Cap Re Corporation stock under all awards
     under the Cap Re Plans that were canceled as of that date.

(c)  To the extent provided by the Committee, any Award may be settled in cash
     rather than Stock. To the extent any shares of Stock covered by an Award
     are not delivered to a Participant or beneficiary because the Award is
     forfeited or canceled, or the shares of Stock are not delivered because the
     Award is settled in cash or used to satisfy the applicable tax withholding
     obligation, such shares shall not be deemed to have been delivered for
     purposes of determining the maximum number of shares of Stock available for
     delivery under the Plan.

(d)  If the exercise price of any Option granted under the Plan is satisfied by
     tendering shares of Stock to the Company (by either actual delivery or by
     attestation), only the number of shares of Stock issued net of the shares
     of Stock tendered shall be deemed delivered for purposes of determining the
     maximum number of shares of Stock available for delivery under the Plan.

(e)  In the event of a corporate transaction involving the Company (including,
     without limitation, any stock dividend, stock split, extraordinary cash
     dividend, recapitalization, reorganization, merger, consolidation, split-
     up, spin-off, combination or exchange of shares), the Committee may adjust
     Awards to preserve the benefits or potential benefits of the Awards. Action
     by the Committee may include: (i) adjustment of the number and kind of
     shares which may be delivered under the Plan; (ii) adjustment of the number
     and kind of shares subject to outstanding Awards; (iii) adjustment of the
     Exercise Price of

                                      -4-
<PAGE>

     outstanding Options and SARs; and (iv) any other adjustments that the
     Committee determines to be equitable.

     5.3 General Restrictions. Delivery of shares of Stock or other amounts
under the Plan shall be subject to the following:

(a)  Notwithstanding any other provision of the Plan, the Company shall have no
     liability to deliver any shares of Stock under the Plan or make any other
     distribution of benefits under the Plan unless such delivery or
     distribution would comply with all applicable laws (including, without
     limitation, the requirements of the United States Securities Act of 1933),
     and the applicable requirements of any securities exchange or similar
     entity.

(b)  To the extent that the Plan provides for issuance of stock certificates to
     reflect the issuance of shares of Stock, the issuance may be effected on a
     non-certificated basis, to the extent not prohibited by applicable law or
     the applicable rules of any stock exchange.

     5.4 Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such withholding, may permit such withholding obligations to be satisfied
through cash payment by the Participant, through the surrender of shares of
Stock which the Participant already owns, or through the surrender of shares of
Stock to which the Participant is otherwise entitled under the Plan.

     5.5 Use of Shares. Subject to the overall limitation on the number of
shares of Stock that may be delivered under the Plan, the Committee may use
available shares of Stock as the form of payment for compensation, grants or
rights earned or due under any other compensation plans or arrangements of the
Company or a Subsidiary, including the plans and arrangements of the Company or
a Subsidiary assumed in business combinations.

     5.6 Dividends and Dividend Equivalents. An Award (including without
limitation an Option or SAR Award) may provide the Participant with the right to
receive dividend payments or dividend equivalent payments with respect to Stock
subject to the Award (both before and after the Stock subject to the Award is
earned, vested, or acquired), which payments may be either made currently or
credited to an account for the Participant, and may be settled in cash or Stock
as determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.

     5.7 Payments. Awards may be settled through cash payments, the delivery of
shares of Stock, the granting of replacement Awards, or combination thereof as
the Committee shall determine. Any Award settlement, including payment
deferrals, may be subject to such

                                      -5-
<PAGE>

conditions, restrictions and contingencies as the Committee shall determine. The
Committee may permit or require the deferral of any Award payment, subject to
such rules and procedures as it may establish, which may include provisions for
the payment or crediting of interest, or dividend equivalents, including
converting such credits into deferred Stock equivalents. Each Subsidiary shall
be liable for payment of cash due under the Plan with respect to any Participant
to the extent that such benefits are attributable to the services rendered for
that Subsidiary by the Participant. Any disputes relating to liability of a
Subsidiary for cash payments shall be resolved by the Committee.

     5.8 Transferability. Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.

     5.9 Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.

     5.10 Agreement With Company. An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not require that the Participant
sign a copy of such document. Such document is referred to in the Plan as an
"Award Agreement" regardless of whether any Participant signature is required.

     5.11 Action by Company or Subsidiary. Any action required or permitted to
be taken by the Company or any Subsidiary shall be by resolution of its board of
directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of such company.

     5.12 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.

     5.13 Limitation of Implied Rights.

(a)  Neither a Participant nor any other person shall, by reason of
     participation in the Plan, acquire any right in or title to any assets,
     funds or property of the Company or any Subsidiary whatsoever, including,
     without limitation, any specific funds, assets, or other property which the
     Company or any Subsidiary, in their sole discretion, may set aside in
     anticipation of a liability under the Plan. A Participant shall have only a
     contractual right

                                      -6-
<PAGE>

     to the Stock or amounts, if any, payable under the Plan, unsecured by any
     assets of the Company or any Subsidiary, and nothing contained in the Plan
     shall constitute a guarantee that the assets of the Company or any
     Subsidiary shall be sufficient to pay any benefits to any person.

(b)  The Plan does not constitute a contract of employment, and selection as a
     Participant will not give any participating employee or other individual
     the right to be retained in the employ of the Company or any Subsidiary or
     the right to continue to provide services to the Company or any Subsidiary,
     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. Except as
     otherwise provided in the Plan, no Award under the Plan shall confer upon
     the holder thereof any rights as a shareholder of the Company prior to the
     date on which the individual fulfills all conditions for receipt of such
     rights.

     5.14 Benefits Under Qualified Retirement Plans. Except as otherwise
provided by the Committee, Awards to a Participant (including the grant and the
receipt of benefits) under the Plan shall be disregarded for purposes of
determining the Participant's benefits under any Qualified Retirement Plan and
other plans maintained by the Participant's employer. The term "Qualified
Retirement Plan" means any plan of the Company or a Subsidiary that is intended
to be qualified under section 401(a) of the Code.

     5.15 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.

                                   SECTION 6
                               CHANGE IN CONTROL
                              ------------------

     Subject to the provisions of paragraph 5.2(e) (relating to the adjustment
of shares), and except as otherwise provided in the Plan or the Award Agreement
reflecting the applicable Award, upon the occurrence of a Change in Control:

(a)  All outstanding Options (regardless of whether in tandem with SARs) shall
     become fully exercisable.

(b)  All outstanding SARs (regardless of whether in tandem with Options) shall
     become fully exercisable.

(c)  All Stock Units, Restricted Stock, Restricted Stock Units, Performance
     Shares, and Performance Units shall become fully vested.

                                      -7-
<PAGE>

                                   SECTION 7
                                   COMMITTEE
                                   ---------

     7.1 Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee") in
accordance with this Section 6. The Compensation Committee of the Board shall
serve as the "Committee" under the Plan, except as otherwise determined by the
Board. If the Committee does not exist, or for any other reason determined by
the Board, the Board may take any action under the Plan that would otherwise be
the responsibility of the Committee.

     7.2 Powers of Committee. The Committee's administration of the Plan shall
be subject to the following:

(a)  Subject to the provisions of the Plan, the Committee will have the
     authority and discretion to select from among the Eligible Individuals
     those persons who shall receive Awards, to determine the time or times of
     receipt, to determine the types of Awards and the number of shares covered
     by the Awards, to establish the terms, conditions, performance criteria,
     restrictions, and other provisions of such Awards, and (subject to the
     restrictions imposed by Section 8) to cancel or suspend Awards.

(b)  To the extent that the Committee determines that the restrictions imposed
     by the Plan preclude the achievement of the material purposes of the Awards
     in jurisdictions outside the United States, the Cayman Islands, and
     Bermuda, the Committee will have the authority and discretion to modify
     those restrictions as the Committee determines to be necessary or
     appropriate to conform to applicable requirements or practices of
     jurisdictions outside of the United States, the Cayman Islands, and
     Bermuda.

(c)  The Committee will have the authority and discretion to interpret the Plan,
     to establish, amend, and rescind any rules and regulations relating to the
     Plan, to determine the terms and provisions of any Award Agreement made
     pursuant to the Plan, and to make all other determinations that may be
     necessary or advisable for the administration of the Plan.

(d)  Any interpretation of the Plan by the Committee and any decision made by it
     under the Plan is final and binding on all persons.

(e)  In controlling and managing the operation and administration of the Plan,
     the Committee shall take action in a manner that conforms to the Memorandum
     and Articles of Association of the Company, and applicable corporate law.

     7.3 Delegation by Committee. Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any part

                                      -8-
<PAGE>

of its responsibilities and powers to any person or persons selected by it. Any
such allocation or delegation may be revoked by the Committee at any time.

     7.4 Information to be Furnished to Committee. The Company and Subsidiaries
shall furnish the Committee with such data and information as it determines may
be required for it to discharge its duties. The records of the Company and
Subsidiaries as to an employee's or Participant's employment (or other provision
of services), termination of employment (or cessation of the provision of
services), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms
of the Plan.

                                   SECTION 8
                           AMENDMENT AND TERMINATION
                           -------------------------

     The Board may, at any time, amend or terminate the Plan, provided that no
amendment or termination may, in the absence of written consent to the change by
the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; provided that adjustments pursuant to subject
to paragraph 5.2(e) shall not be subject to the foregoing limitations of this
Section 8.

                                   SECTION 9
                                 DEFINED TERMS
                                 -------------
     In addition to the other definitions contained herein, the following
definitions shall apply:

(a)  Award. The term "Award" shall mean any award or benefit granted under the
     Plan, including, without limitation, the grant of Replacement Awards,
     Options, SARs, Stock Unit Awards, Restricted Stock Awards, Restricted Stock
     Unit Awards, Performance Share Awards, and Performance Unit Awards.

(b)  Board. The term "Board" shall mean the Board of Directors of the Company.

(c)  Change in Control. The term "Change in Control" shall mean the occurrence
     of any one of the following events:

     (i) any "person," as such term is used in Sections 3(a)(9) and 13(d) of the
     United States Securities Exchange Act of 1934, becomes a "beneficial
     owner," as such term is used in Rule 13d-3 promulgated under that act, of
     50% or more of the Voting Stock (as defined below) of the Company;

     (ii) the majority of the Board consists of individuals other than Incumbent
     Directors, which term means the members of the Board on the Effective Date;
     provided that any

                                      -9-
<PAGE>

     person becoming a director subsequent to such date whose election or
     nomination for election was supported by three-quarters of the directors
     who then comprised the Incumbent Directors shall be considered to be an
     Incumbent Director;

     (iii) the Company adopts any plan of liquidation providing for the
     distribution of all or substantially all of its assets;

     (iv) all or substantially all of the assets or business of the Company is
     disposed of pursuant to a merger, consolidation or other transaction
     (unless the shareholders of the Company immediately prior to such merger,
     consolidation or other transaction beneficially own, directly or
     indirectly, in substantially the same proportion as they owned the Voting
     Stock of the Company, all of the Voting Stock or other ownership interests
     of the entity or entities, if any, that succeed to the business of the
     Company); or

     (v) the Company combines with another company and is the surviving
     corporation but, immediately after the combination, the shareholders of the
     Company immediately prior to the combination hold, directly or indirectly,
     50% or less of the Voting Stock of the combined company (there being
     excluded from the number of shares held by such shareholders, but not from
     the Voting Stock of the combined company, any shares received by Affiliates
     (as defined below) of such other company in exchange for stock of such
     other company).

     For the purpose of this definition of "Change in Control," (I) an
     "Affiliate" of a person or other entity shall mean a person or other entity
     that directly or indirectly controls, is controlled by, or is under common
     control with the person or other entity specified and (II) "Voting Stock"
     shall mean capital stock of any class or classes having general voting
     power under ordinary circumstances, in the absence of contingencies, to
     elect the directors of a corporation.

(d)  Code. The term "Code" means the United States Internal Revenue Code of
     1986, as amended. A reference to any provision of the Code shall include
     reference to any successor provision of the Code.

(e)  Dollars. As used in the Plan, the term "dollars" or numbers preceded by the
     symbol "$" shall mean amounts in United States dollars.

(f)  Eligible Individual. For purposes of the Plan, the term "Eligible
     Individual" shall mean any employee of the Company or a Subsidiary, and any
     consultant, director, or other person providing services to the Company or
     a Subsidiary. An Award may be granted to an employee or other individual
     providing services, in connection with hiring, retention or otherwise,
     prior to the date the employee or service provider first performs services
     for the Company or the Subsidiaries, provided that such Awards shall not
     become vested prior to the date the employee or service provider first
     performs such services.

                                      -10-
<PAGE>

(g)  Fair Market Value. Except as otherwise provided by the Committee, the "Fair
     Market Value" of a share of Stock as of any date shall be the closing
     market composite price for such Stock as reported for the New York Stock
     Exchange - Composite Transactions on that date or, if Stock is not traded
     on that date, on the next preceding date on which Stock was traded.

(h)  Subsidiaries. For purposes of the Plan, the term "Subsidiary" means any
     corporation, partnership, joint venture or other entity during any period
     in which at least a fifty percent voting or profits interest is owned,
     directly or indirectly, by the Company (or by any entity that is a
     successor to the Company), and any other business venture designated by the
     Committee in which the Company (or any entity that is a successor to the
     Company) has a significant interest, as determined in the discretion of the
     Committee.

(i)  Stock. The term "Stock" shall mean ordinary shares of stock of the Company.

                                      -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]