Document:

EXHIBIT 4.4

                                                                  EXECUTION COPY

                                 XL CAPITAL LTD,

                              THE BANK OF NEW YORK,
        as Collateral Agent, Custodial Agent and Securities Intermediary

                                       AND

                              THE BANK OF NEW YORK,

                           as Purchase Contract Agent

                                PLEDGE AGREEMENT

                          Dated as of December 9, 2005

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                                TABLE OF CONTENTS

                                                                            PAGE
ARTICLE I DEFINITIONS..........................................................2

     SECTION 1.1   Definitions.................................................2

ARTICLE II PLEDGE; CONTROL AND PERFECTION......................................4

     SECTION 2.1   The Pledge..................................................4
     SECTION 2.2   Delivery, Control and Perfection............................5

ARTICLE III PAYMENTS ON COLLATERAL.............................................7

     SECTION 3.1   Payments ...................................................7
     SECTION 3.2   Application of Payments.....................................8

ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES.............9

     SECTION 4.1   Collateral Substitution and the Creation
                     of Stripped Units.........................................9
     SECTION 4.2   Collateral Substitution and the Re-Creation
                     of Normal Units...........................................9
     SECTION 4.3   Termination Event..........................................10
     SECTION 4.4   Early Settlement; Merger Early Settlement;
                     Cash Settlement..........................................11
     SECTION 4.5   Remarketing; Application of Proceeds; Settlement...........11

ARTICLE V VOTING RIGHTS -- NOTES..............................................13

     SECTION 5.1   Exercise by Purchase Contract Agent........................13

ARTICLE VI RIGHTS AND REMEDIES; SPECIAL EVENT REDEMPTION......................14

     SECTION 6.1   Rights and Remedies of the Collateral Agent................14
     SECTION 6.2   Substitutions..............................................15
     SECTION 6.3   Special Event Redemption...................................15
     SECTION 6.4   Cash Received from Holders of Normal Units
                      not Participating in the Remarketing....................15

ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS.........................16

     SECTION 7.1   Representations and Warranties of the Holders..............16
     SECTION 7.2   Representations and Warranties of the Collateral
                     Agent, Custodial Agent and Securities Intermediary.......16
     SECTION 7.3   Covenants..................................................17

ARTICLE VIII THE COLLATERAL AGENT.............................................17

     SECTION 8.1   Appointment, Powers and Immunities.........................17
     SECTION 8.2   Instructions of the Company................................19

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     SECTION 8.3   Reliance 19
     SECTION 8.4   Rights in Other Capacities.................................20
     SECTION 8.5   Non-Reliance on Collateral Agent...........................20
     SECTION 8.6   Compensation and Indemnity.................................20
     SECTION 8.7   Failure to Act.............................................21
     SECTION 8.8   Resignation; Replacement of Collateral Agent,
                     Custodial Agent or Securities Intermediary...............22
     SECTION 8.9   Right to Appoint Agent or Advisor..........................23
     SECTION 8.10  Survival...................................................23
     SECTION 8.11  Exculpation................................................23
     SECTION 8.12  Limitation on Duty.........................................23

ARTICLE IX AMENDMENT..........................................................24

     SECTION 9.1   Amendment Without Consent of Holders.......................24
     SECTION 9.2   Amendment with Consent of Holders..........................25
     SECTION 9.3   Execution of Amendments....................................25
     SECTION 9.4   Effect of Amendments.......................................26
     SECTION 9.5   Reference to Amendments....................................26

ARTICLE X MISCELLANEOUS.......................................................26

     SECTION 10.1   No Waiver.................................................26
     SECTION 10.2   GOVERNING LAW.............................................26
     SECTION 10.3   Judgment Currency.........................................27
     SECTION 10.4   Notices ..................................................27
     SECTION 10.5   Successors and Assigns....................................28
     SECTION 10.6   Counterparts..............................................28
     SECTION 10.7   Severability..............................................28
     SECTION 10.8   Expenses, Etc.............................................28
     SECTION 10.9   Security Interest Absolute................................29
     SECTION 10.10  Waiver of Jury Trial......................................29
     SECTION 10.11  Incorporation by Reference................................29

EXHIBIT A  Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT B  Instruction to Purchase Contract Agent
EXHIBIT C  Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D  Instruction to Custodial Agent Regarding Withdrawal from Remarketing

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                                PLEDGE AGREEMENT

              PLEDGE AGREEMENT, dated as of December 9, 2005 (this "Agreement"),
among XL Capital Ltd, a Cayman Islands exempted limited company (the "Company"),
The Bank of New York, a New York banking corporation, not individually but
solely as collateral agent (in such capacity, together with its successors in
such capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as
"securities intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and The Bank of New York, a New York
banking corporation, not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders from time to time of the Units (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as defined herein).

                                    RECITALS

              WHEREAS, the Company and the Purchase Contract Agent are parties
to the Purchase Contract Agreement, dated as of the date hereof (as modified,
amended or supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued Units having a Stated Amount
of $25 per Unit, all of which will initially be Normal Units.

              WHEREAS, each Normal Unit will be comprised of (a) a Purchase
Contract and (b) either beneficial ownership of (i) a 1/40, or 2.5%, beneficial
ownership interest in a Note having a $1,000 principal amount or (ii) following
a Special Event Redemption in accordance with the Purchase Contract Agreement
and the terms of the Notes, beneficial ownership of the Treasury Consideration.

              WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a Holder of Normal Units may separate the Notes or the Treasury
Consideration, as applicable, from the related Purchase Contracts by
substituting for such Notes or the Treasury Consideration, as the case may be,
Treasury Securities that will pay in the aggregate an amount equal to the
aggregate Stated Amount of such Normal Units. Upon such separation, the Normal
Units will become Stripped Units. Each Stripped Unit will be comprised of (a) a
Purchase Contract and (b) a 1/40 undivided beneficial interest in a Treasury
Security, or, in the case of an opt-out pursuant to Section 6.4, the Cash
Consideration.

              WHEREAS, pursuant to the terms of the Purchase Contract Agreement
and the Purchase Contracts, the Holders, from time to time, of the Units have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Notes, any Treasury
Consideration and any Treasury Securities delivered in exchange therefor to
secure each Holder's obligations under the related Purchase Contract, as
provided herein and subject to the terms hereof.

              NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company,

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the Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Units, agree as follows:

                                   ARTICLE I

                                   DEFINITIONS
                                   -----------

              SECTION 1.1 DEFINITIONS. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:

              (a)    capitalized terms used but not defined herein are used as
defined in the Purchase Contract Agreement;

              (b)    the defined terms in this Agreement have the meanings
assigned to them in this Article and include the plural as well as the singular;
and

              (c)    the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.

              "AGREEMENT" means this agreement as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.

              "CASH CONSIDERATION" has the meaning specified in the Purchase
Contract Agreement.

              "CODE" has the meaning specified in Section 6.1 hereof.

              "COLLATERAL" has the meaning specified in Section 2.1(a) hereof.

              "COLLATERAL ACCOUNT" means the securities account (number 115392)
maintained at The Bank of New York, 101 Barclay Street, Floor 8W, New York, New
York 10286, in the name of "BNY PCA HOLD CERTSECUR XL CAP LTD COLLA/C" and any
successor account.

              "COLLATERAL AGENT" has the meaning specified in the first
paragraph of this Agreement.

              "COMPANY" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such pursuant to
the applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.

              "CUSTODIAL AGENT" has the meaning specified in the first paragraph
of this Agreement.

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              "INDENTURE" means the Indenture dated as of June 2, 2004 between
the Company and The Bank of New York, as trustee, as supplemented by the Third
Supplemental Indenture, dated as of December 9, 2005.

              "INTERMEDIARY" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.

              "PLEDGE" has the meaning specified in Section 2.1(c) hereof.

              "PLEDGED NOTES" has the meaning specified in Section 2.1(c)
hereof.

              "PLEDGED TREASURY CONSIDERATION" has the meaning specified in
Section 2.1(c) hereof.

              "PLEDGED TREASURY SECURITIES" has the meaning specified in Section
2.1(c) hereof.

              "PROCEEDS" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.

              "PURCHASE CONTRACT AGENT" has the meaning specified in the first
paragraph of this Agreement.

              "PURCHASE CONTRACT AGREEMENT" has the meaning specified in the
Recitals.

              "SECURITIES INTERMEDIARY" has the meaning specified in the first
paragraph of this Agreement.

              "SECURITY ENTITLEMENT" has the meaning set forth in Section
8-102(a)(17) of the Code.

              "SEPARATE NOTES" means any Notes that are not Pledged Notes.

              "TRADES REGULATIONS" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.

              "TRANSFER" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:

              (i)    in the case of Collateral consisting of certificated
       securities, delivery as provided in 8-301(a) of the UCC in appropriate
       physical form to the recipient accompanied by any duly executed
       instruments of transfer, assignments in blank, transfer tax stamps and
       any other documents necessary to constitute a legally valid transfer to
       the recipient; and

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              (ii)   in the case of Collateral consisting of security
       entitlements relating to securities maintained in book-entry form, by
       causing a "securities intermediary" (as defined in Section 8-102(a)(14)
       of the Code) to (a) credit such "security entitlement" (as defined in
       Section 8-102(a)(17) of the Code) to a "securities account" (as defined
       in Section 8-501(a) of the Code) maintained by or on behalf of the
       recipient and (b) to issue a confirmation to the recipient with respect
       to such credit. In the case of Collateral to be delivered to the
       Collateral Agent, the securities intermediary shall be the Securities
       Intermediary and the securities account shall be the Collateral Account.
       In addition, any Transfer of Treasury Securities and Treasury
       Consideration hereunder shall be made in accordance with the TRADES
       Regulations and other applicable law.

                                   ARTICLE II

                         PLEDGE; CONTROL AND PERFECTION
                         ------------------------------

              SECTION 2.1  THE PLEDGE. (a) The Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact hereby pledge and
grant to the Collateral Agent, for the benefit of the Company, as collateral
security for the payment and performance when due by such Holders of their
respective obligations to the Company under the related Purchase Contracts, a
security interest in, and right of set-off against, all of the right, title and
interest of the Purchase Contract Agent and such Holders in:

              (i)    the Notes constituting a part of the Units that have not
       been released by the Collateral Agent, other than a release to the
       Remarketing Agent in connection with a remarketing under Section 4.5
       hereof, to such Holders under the provisions of this Agreeement;

              (ii)   (A) the Treasury Consideration or Treasury Securities
       constituting a part of the Units, (B) any Treasury Securities delivered
       in exchange for any Notes or Treasury Consideration, as applicable, in
       accordance with Section 4.1 hereof, and (C) any Notes or Treasury
       Consideration, as applicable, delivered in exchange for any Treasury
       Securities in accordance with Section 4.2 hereof, in each case that have
       been Transferred to or otherwise received by the Collateral Agent and not
       released by the Collateral Agent, other than a release to the Remarketing
       Agent in connection with a remarketing under Section 4.5 hereof, to such
       Holders under the provisions of this Agreement;

              (iii)  the Collateral Account and all securities, financial
       assets, security entitlements, cash and other property credited thereto
       and all Security Entitlements related thereto;

              (iv)   upon the occurrence of a Special Event Redemption, the
       Treasury Portfolio Transferred to the Collateral Account;

              (v)    all Proceeds of the foregoing; and

              (vi)   all powers and rights now owned or hereafter acquired under
       or with respect to any of the foregoing (all of the foregoing,
       collectively, the "COLLATERAL").

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              (b)    Prior to or concurrently with the execution and delivery of
this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of
the Units, shall cause the Notes comprising a part of the Normal Units, which
will be subject to the Pledge set forth in this Section 2.1, to be Transferred
to the Collateral Agent for the benefit of the Company.

              (c)    The pledge provided in this Section 2.1 is herein referred
to as the "Pledge" and the Notes (including any Notes that are delivered
pursuant to Section 6.2 hereof), Treasury Consideration and Treasury Securities
subject to the Pledge, excluding any Notes, Treasury Consideration or Treasury
Securities released from the Pledge as provided in Sections 4.1, 4.2 and 4.3
hereof, respectively, are hereinafter referred to as "Pledged Notes," "Pledged
Treasury Consideration" and "Pledged Treasury Securities," respectively. Subject
to the Pledge and the provisions of Section 2.2 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. For purposes of
perfecting the Pledge under applicable law, including, to the extent applicable,
the TRADES Regulations or the Uniform Commercial Code as adopted and in effect
in any applicable jurisdiction, the Collateral Agent shall be the agent of the
Company as provided herein. Whenever directed by the Collateral Agent acting on
behalf of the Company, the Securities Intermediary shall have the right to
reregister in its name the Notes or any other securities held in physical form.

              (d)    Except as may be required in order to release Notes or
Treasury Consideration, as applicable, in connection with a Special Event
Redemption or with a Holder's election to convert its investment from a Normal
Unit to a Stripped Unit, or except as may be required in order to release
Treasury Securities in connection with a Holder's election to convert its
investment from a Stripped Unit to a Normal Unit, or except as otherwise
required to release Notes, Treasury Consideration or Treasury Securities as
specified herein, the Collateral Agent, shall not relinquish physical possession
of any certificate evidencing Notes, Treasury Securities or Treasury
Consideration, as applicable, prior to the termination of this Agreement. If it
becomes necessary for the Collateral Agent to relinquish physical possession of
a certificate in order to release a portion of the Notes evidenced thereby from
the Pledge, the Company shall use its commercially reasonable best efforts to
arrange for the Securities Intermediary to obtain physical possession of a
replacement certificate evidencing any Notes remaining subject to the Pledge
hereunder registered to the Securities Intermediary or endorsed in blank (or
accompanied by a bond power endorsed in blank) within fifteen calendar days of
the date the Securities Intermediary relinquished possession. The Securities
Intermediary shall promptly notify the Company and the Collateral Agent of its
inability to obtain possession of any such replacement certificate as required
hereby.

              (e)    Notwithstanding anything contained herein to the contrary,
for avoidance of doubt, (i) the cash payments at the rate of 5.25% per year of
the Stated Amount of the Notes and (ii) after a Special Event Redemption, the
quarterly payments with respect to the Treasury Consideration (as specified in
clause (B) of the definition of Treasury Consideration) that are a part of the
Normal Units to Holders of Normal Units shall not be subject to the Pledge and
therefore are not part of the Collateral.

              SECTION 2.2  DELIVERY, CONTROL AND PERFECTION. (a) The Purchase
Contract Agent shall immediately deliver to the Collateral Agent all
certificates or instruments

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representing the Collateral accompanied by stock or
bond powers duly executed in blank or other instruments of reasonable
satisfaction to the Collateral Agent.

              (b)    Except as provided in Section 5.1, at all times prior to
the termination of the Pledge, the Collateral Agent shall have sole control of
the Collateral Account, and the Securities Intermediary shall take instructions
and directions with respect to the Collateral Account solely from the Collateral
Agent. In connection with the Pledge granted in Section 2.1, and subject to the
other provisions of this Agreement, the Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, hereby authorize and
direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent may deliver pursuant to the terms hereof or upon the written
direction of the Company with respect to the Collateral Account, the Collateral
credited thereto and any Security Entitlements with respect thereto. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, assign, or otherwise deliver the
Notes, the Treasury Consideration and the Treasury Securities, and any Security
Entitlements with respect thereto, or sell, liquidate or dispose of such assets
through a broker designated by the Company, and to pay and deliver any income,
proceeds or other funds derived therefrom to the Company. The Collateral Agent
shall be the agent of the Company and shall act only in accordance with the
terms hereof or as otherwise directed in writing by the Company. Without
limiting the generality of the foregoing, the Collateral Agent shall issue
entitlement orders to the Securities Intermediary when and as required by the
terms hereof or as otherwise directed in writing by the Company.

              (c)    The Securities Intermediary hereby confirms and agrees
that:

              (i)    all securities or other property underlying any financial
       assets credited to the Collateral Account shall be registered in the name
       of the Securities Intermediary, or its nominee, endorsed to the
       Securities Intermediary, or its nominee, or in blank or credited to
       another Collateral Account maintained in the name of the Securities
       Intermediary and in no case will any financial asset credited to the
       Collateral Account be registered in the name of the Purchase Contract
       Agent, the Collateral Agent, the Company or any Holder, payable to the
       order of, or specially indorsed to, the Purchase Contract Agent, the
       Collateral Agent, the Company or any Holder except to the extent the
       foregoing have been specially endorsed to the Securities Intermediary or
       in blank;

              (ii)   all property delivered to the Securities Intermediary
       pursuant to this Agreement (including, without limitation, any Notes,
       Treasury Consideration or Treasury Securities) will be promptly credited
       to the Collateral Account;

              (iii)  the Collateral Account is an account to which financial
       assets are or may be credited, and the Securities Intermediary shall,
       subject to the terms of this Agreement, treat the Purchase Contract Agent
       as entitled to exercise the rights of any financial asset credited to the
       Collateral Account;

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              (iv)   the Securities Intermediary has not entered into, and until
       the termination of this Agreement will not enter into, any agreement with
       any other Person relating to the Collateral Account and/or any financial
       assets credited thereto pursuant to which it has agreed to comply with
       entitlement orders (as defined in Section 8-102(a)(8) of the Code) of
       such other Person; and

              (v)    the Securities Intermediary has not entered into, and until
       the termination of this Agreement will not enter into, any agreement with
       the Company, the Collateral Agent or the Purchase Contract Agent
       purporting to limit or condition the obligation of the Securities
       Intermediary to comply with entitlement orders as set forth in this
       Section 2.2 hereof.

              (d)    The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.

              (e)    In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement, as may be amended pursuant to Article IX hereof,
shall prevail.

              (f)    The Purchase Contract Agent hereby irrevocably constitutes
and appoints the Collateral Agent and the Company, with full power of
substitution, as the Purchase Contract Agent's attorney-in-fact to take on
behalf of, and in the name, place and stead of the Purchase Contract Agent and
the Holders, any action necessary or desirable to perfect and to keep perfected
the security interest in the Collateral referred to in Section 2.1. The grant of
such power-of-attorney shall not be deemed to require of the Collateral Agent
any specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder. Notwithstanding the foregoing, in no event shall the Collateral
Agent, the Custodial Agent, the Securities Intermediary or the Purchase Contract
Agent be responsible for the preparation or filing of any financing or
continuation statements in the appropriate jurisdictions or responsible for
maintenance or perfection of any security interest hereunder.

              (g)    The Purchase Contract Agent shall file with the United
States Internal Revenue Service and deliver to the Holders Forms 1099 (or
successor or comparable forms), to the extent required of it by law, with
respect to payments to the Holders.

                                  ARTICLE III

                             PAYMENTS ON COLLATERAL
                             ----------------------

              SECTION 3.1  PAYMENTS. So long as the Purchase Contract Agent is
the registered owner of the Pledged Notes, Pledged Treasury Consideration or
Pledged Treasury Securities, it shall receive all payments thereon. If the
Pledged Notes are reregistered such that the Collateral Agent becomes the
registered holder, all payments of the principal of, or interest or other
amounts on, the Pledged Notes and all payments of the principal of, or cash
distributions on, any Pledged Treasury Consideration or Pledged Treasury
Securities, that are received by the

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Collateral Agent and that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:

              (i)    in the case of (A) any interest payments with respect to
       the Pledged Notes or Pledged Treasury Consideration (including as
       specified in clause (B) of the definition of Treasury Consideration), as
       the case may be, with respect to Normal Units and (B) any payments with
       respect to any Notes or Treasury Consideration (including as specified in
       clause (A) of the definition of Treasury Consideration), as the case may
       be, that have been released from the Pledge pursuant to Section 4.3
       hereof, to the Purchase Contract Agent, for the benefit of the relevant
       Holders of the Normal Units, to the account designated by the Purchase
       Contract Agent for such purpose no later than 11:00 a.m., New York City
       time, on the Business Day such payment is received by the Collateral
       Agent (provided that in the event such payment or payment instructions
       are received by the Collateral Agent on a day that is not a Business Day
       or after 10:30 a.m., New York City time, on a Business Day, then such
       payment shall be made no later than 9:30 a.m., New York City time, on the
       next succeeding Business Day);

              (ii)   in the case of any payments with respect to any Treasury
       Securities that have been released from the Pledge pursuant to Section
       4.3 hereof to the Holders of the Stripped Units, to the accounts and in
       such amounts designated by the Purchase Contract Agent (subject to the
       Purchase Contract Agent receiving such information from the Holders) in
       writing for such purpose no later than 2:00 p.m., New York City time, on
       the Business Day such payment is received by the Collateral Agent
       (provided that in the event such payment or payment instructions are
       received by the Collateral Agent on a day that is not a Business Day or
       after 12:30 p.m., New York City time, on a Business Day, then such
       payment shall be made no later than 10:30 a.m., New York City time, on
       the next succeeding Business Day); any payment to be made directly to the
       Holders of such Stripped Units shall be subject to applicable federal
       withholding law, including the requirement that a Holder shall have
       provided to the Collateral Agent its certified taxpayer identification
       number by furnishing appropriate Forms W-9 (or such other forms as shall
       be applicable); and

              (iii)  in the case of payments in respect of any Pledged Notes,
       Pledged Treasury Consideration (as specified in clause (A) of the
       definition of Treasury Consideration) or Pledged Treasury Securities, as
       the case may be, to be paid upon settlement of such Holder's obligations
       to purchase Ordinary Shares under the Purchase Contract, to the Company
       on the Stock Purchase Date in accordance with the procedure set forth in
       Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the respective
       obligations of the Holders under the related Purchase Contracts and, to
       the extent such payments exceed the Purchase Price, to the Purchase
       Contract Agent for the benefit of the Holders.

              SECTION 3.2  APPLICATION OF PAYMENTS. All payments received by the
Purchase Contract Agent as provided herein shall be applied by the Purchase
Contract Agent pursuant to the provisions of the Purchase Contract Agreement.
If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any
payments of principal on account of any Notes or Treasury Consideration (which,
shall be as specified in clause (A) of the definition of Treasury
Consideration), as applicable, that, at the time of such payments, are Pledged
Notes or Pledged

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Treasury Consideration (which, shall be as specified in clause (A) of the
definition of Treasury Consideration), as the case may be, or a Holder of a
Stripped Unit shall receive any payments of principal on account of any Treasury
Securities that, at the time of such payment, are Pledged Treasury Securities,
the Purchase Contract Agent or such Holder shall hold the same as trustee of an
express trust for the benefit of the Company (and promptly deliver the same over
to the Company) for application to the obligations of the Holders under the
related Purchase Contracts, and the Holders shall acquire no right, title or
interest in any such payments of principal so received.

                                   ARTICLE IV

             SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES
             -------------------------------------------------------

              SECTION 4.1  COLLATERAL SUBSTITUTION AND THE CREATION OF STRIPPED
UNITS. At any time on or prior to the thirteenth Business Day immediately
preceding the Stock Purchase Date, a Holder of Normal Units shall have the right
to substitute Treasury Securities for the Pledged Notes or Pledged Treasury
Consideration, as the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units, in integral multiples
of 40 Normal Units, or after a Special Event Redemption, in integral multiples
of Normal Units so that Treasury Securities to be deposited and the Treasury
Consideration, as the case may be, to be released are in integral multiples of
$1,000, by (a) Transferring to the Collateral Agent Treasury Securities having
an aggregate principal amount equal to the aggregate Stated Amount of such
Normal Units and (b) delivering such Normal Units to the Purchase Contract
Agent, accompanied by a notice, substantially in the form of EXHIBIT B hereto,
to the Purchase Contract Agent, with a copy of such notice to the Company,
stating that such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the principal amount, the maturities
and the CUSIP numbers of the Treasury Securities Transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Notes or Pledged Treasury Consideration
related to such Normal Units, whereupon the Purchase Contract Agent shall
promptly give such instruction to the Collateral Agent, with a copy of such
instruction to the Company, in the form provided in EXHIBIT A. Upon receipt of
Treasury Securities from a Holder of Normal Units and the related instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Notes or Pledged Treasury Consideration and shall promptly Transfer such Pledged
Notes or Pledged Treasury Consideration free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent. All items
Transferred and/or substituted by any Holder pursuant to this Section 4.1,
Section 4.2 or any other Section of this Agreement shall be Transferred and/or
substituted free and clear of all liens, claims and encumbrances, except as
otherwise set forth herein.

              SECTION 4.2  COLLATERAL SUBSTITUTION AND THE RE-CREATION OF NORMAL
UNITS.

              (a)    At any time on or prior to the thirteenth Business Day
immediately preceding the Stock Purchase Date, a Holder of Stripped Units shall
have the right to reestablish Normal Units (a) consisting of the Purchase
Contracts and Notes in integral multiples of 40 Normal Units, or (b) after a
Special Event Redemption, consisting of the Purchase Contracts and the Treasury
Consideration (identified and calculated by reference to the Treasury
Consideration

                                       9
<PAGE>

then comprising Normal Units) or the appropriate portion of the Treasury
Portfolio in integral multiples of Stripped Units so that the Treasury
Consideration to be deposited and the Treasury Securities to be released are in
integral multiples of $1,000, by (x) Transferring to the Collateral Agent Notes
or the Treasury Consideration, as the case may be, then comprising such number
of Normal Units as is equal to such Stripped Units and (y) delivering such
Stripped Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of EXHIBIT B hereto, to the Purchase Contract Agent,
with a copy of such notice to the Company, stating that such Holder has
transferred Notes or Treasury Consideration to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury Securities
related to such Stripped Units, whereupon the Purchase Contract Agent shall give
such instruction to the Collateral Agent, with a copy of such instruction to the
Company, in the form provided in EXHIBIT A. Upon receipt of the Notes or the
Treasury Consideration, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Treasury Securities and shall promptly Transfer such Treasury Securities, free
and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.

              (b)    Holders of Stripped Units who reestablish Normal Units
shall be responsible for any fees or expenses payable to the Collateral Agent
for its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.

              SECTION 4.3  TERMINATION EVENT. (a) Upon receipt by the Collateral
Agent of written notice from the Company or the Purchase Contract Agent that
there has occurred a Termination Event and identifying the nature of the
Termination Event, the Collateral Agent shall release all Collateral from the
Pledge and shall promptly Transfer any Pledged Notes or Pledged Treasury
Consideration, as the case may be, and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Normal Units and
the Stripped Units, respectively, free and clear of any lien, pledge or security
interest or other interest created in favor of the Collateral Agent hereby.

              (b)    If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code or becoming subject to a petition
under clause (ii) of the definition of Bankruptcy Law, and if the Collateral
Agent shall fail for any reason to promptly effectuate, the release and Transfer
of all Pledged Notes, Pledged Treasury Consideration or Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent, shall:

              (i)    use its best efforts to obtain, at the expense of the
       Company, an opinion of a nationally recognized law firm reasonably
       acceptable to the Collateral Agent to the effect that, as a result of the
       Company's being the debtor in such a bankruptcy case or becoming subject
       to a petition under clause (ii) of the definition of Bankruptcy Law, the
       Collateral Agent will not be prohibited from releasing or Transferring
       the Collateral as provided in this Section 4.3, and shall deliver such
       opinion to the Collateral Agent within ten days after the occurrence of
       such Termination Event, and if (y) the Purchase Contract Agent shall be
       unable to obtain such opinion within ten days after the occurrence of
       such Termination Event or (z) the Collateral Agent shall continue, after
       delivery of such

                                       10
<PAGE>

       opinion, to refuse to effectuate the release and Transfer of all Pledged
       Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as
       the case may be, as provided in this Section 4.3, then the Purchase
       Contract Agent shall within fifteen days after the occurrence of such
       Termination Event commence an action or proceeding in the court with
       jurisdiction of the Company's case under the applicable Bankruptcy Law
       seeking an order requiring the Collateral Agent to effectuate the release
       and transfer of all Pledged Notes, Pledged Treasury Consideration or
       Pledged Treasury Securities, as the case may be, as provided by this
       Section 4.3; or

              (ii)   commence an action or proceeding like that described in
       subsection (i)(z) hereof within ten days after the occurrence of such
       Termination Event.

              SECTION 4.4  EARLY SETTLEMENT; MERGER EARLY SETTLEMENT; CASH
SETTLEMENT. Upon written notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Units have elected to effect Early Settlement,
Merger Early Settlement or Cash Settlement of their respective obligations under
the Purchase Contracts forming a part of such Units in accordance with the terms
of the Purchase Contracts and the Purchase Contract Agreement (setting forth the
number of such Purchase Contracts as to which such Holders have elected to
effect Early Settlement, Merger Early Settlement or Cash Settlement), and that
the Purchase Contract Agent has received from such Holders, and paid to the
Company as confirmed by written notice to the Collateral Agent by the Company,
the related Early Settlement Amounts, Merger Early Settlement Amounts or Cash
Settlement Amounts, as the case may be, pursuant to the terms of the Purchase
Contracts and the Purchase Contract Agreement and that all conditions to such
Early Settlement, Merger Early Settlement or Cash Settlement, as the case may
be, have been satisfied, then the Collateral Agent shall release from the Pledge
(a) Pledged Notes or Pledged Treasury Consideration, as the case may be, in the
case of a Holder of Normal Units or (b) Pledged Treasury Securities, in the case
of a Holder of Stripped Units, identified by the Purchase Contract Agent as
relating to such Purchase Contracts as to which such Holders have paid such
Early Settlement Amounts, Merger Early Settlement Amounts or Cash Settlement
Amounts, and shall Transfer all such Pledged Notes, Pledged Treasury
Consideration or Pledged Treasury Securities, as the case may be, free and clear
of the Pledge created hereby, to the Purchase Contract Agent for the benefit of
the Holders.

              SECTION 4.5  REMARKETING; APPLICATION OF PROCEEDS; SETTLEMENT. (a)
Pursuant to the Purchase Contract Agreement, the Purchase Contract Agent shall
notify, by 10:00 a.m., New York City time, on the second Business Day
immediately preceding the Remarketing Date, the Remarketing Agent and the
Collateral Agent of the aggregate principal amount of Notes comprising part of
Normal Units to be remarketed. The Collateral Agent shall, by 10:00 a.m., New
York City time, on the Business Day immediately preceding the Remarketing Date,
without any instruction from Holders of Normal Units, deliver (i) the Pledged
Notes to be remarketed to the Remarketing Agent for remarketing and (ii) the
remaining Pledged Notes to the Purchase Contract Agent for distribution to the
Holders that have elected not to participate in the remarketing in accordance
with the Purchase Contract Agreement. Upon completion of a successful
remarketing, after deducting as the remarketing fee an amount not exceeding 25
basis points (0.25%) of the Remarketing Value of such Pledged Notes, the
Remarketing Agent will deliver the proceeds of such remarketing to the
Collateral Agent for the benefit of the Company to be held in Trust for the
Company. Upon receipt of the proceeds following a successful

                                       11
<PAGE>

remarketing, (i) the Collateral Agent, for the benefit of the Company, shall
thereupon apply such proceeds in an amount equal to the aggregate Stated Amount
of the related Normal Units in direct settlement and satisfaction in full of
such Normal Units Holders' obligations to pay to the Company the Purchase Price
under the Purchase Contracts on the Stock Purchase Date and (ii) the remaining
portion, if any, of the proceeds of such successful remarketing shall be
distributed by the Remarketing Agent to the Purchase Contract Agent for payment
on a pro rata basis to such Normal Units Holders participating in such
remarketing.

              (b)    The Remarketing Agent shall agree to make one or more
attempts to remarket the Notes in accordance with the procedures set forth in
the Purchase Contract Agreement and the Remarketing Agreement between the
Remarketing Date and the last Subsequent Remarketing Date. If by 4:00 p.m., New
York City time, on the third Business Day immediately preceding the Stock
Purchase Date the Remarketing Agent has failed to remarket the Notes at a price
equal to 100.25% of the aggregate principal amount of the Notes participating in
the remarketing, the "Last Failed Remarketing" shall be deemed to have occurred.
In this case, the Remarketing Agent will agree to advise the Collateral Agent in
writing that it cannot remarket the related Pledged Notes of such Holders of
Normal Units and the Remarketing Agent will agree pursuant to the Remarketing
Agreement to return to the Collateral Agent the Notes delivered to it pursuant
to Section 4.5(a) within three Business Days of the Last Failed Remarketing. The
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, deliver or dispose of the Pledged Notes in accordance with the
Company's written instructions to satisfy in full, from any such disposition or
retention, such Holders' obligations to pay the Purchase Price for the Ordinary
Shares; provided that if upon the Last Failed Remarketing, the Collateral Agent
delivers or disposes of the Pledged Notes in accordance with the written
instructions of the Company, any accumulated and unpaid interest on such Notes
will become payable by the Company to the Purchase Contract Agent for payment to
the Holder of the Normal Units to which such Notes relate in accordance with the
Purchase Contract Agreement.

              (c)    In the event a Holder of Stripped Units has not made an
Early Settlement, Merger Early Settlement or Cash Settlement of the Purchase
Contracts underlying its Stripped Units, such Holder shall be deemed to have
elected to pay for the Ordinary Shares to be issued under such Purchase
Contracts from the payments received in respect of the related Pledged Treasury
Securities. Without receiving any instruction from any such Holder of Stripped
Units, the Collateral Agent shall apply such payments to the Company in
settlement of such Purchase Contracts on the Stock Purchase Date pursuant to
written instructions from the Purchase Contract Agent. In the event the payments
received in respect of the related Pledged Treasury Securities are in excess of
the aggregate Purchase Price of the Purchase Contracts being settled thereby,
the Collateral Agent shall distribute such excess, when received, to the
Purchase Contract Agent for payment to such Holders of Stripped Units.

              (d)    Pursuant to the Remarketing Agreement and the Purchase
Contract Agreement, on or prior to the thirteenth Business Day immediately
preceding the Stock Purchase Date, but no earlier than the sixteenth Business
Day immediately preceding the Stock Purchase Date, holders of Separate Notes may
elect to have their Separate Notes remarketed by delivering their Separate
Notes, together with a notice of such election, substantially in the form of
EXHIBIT C hereto, to the Custodial Agent. On the second Business Day immediately
prior to the

                                       12
<PAGE>

Remarketing Date, by 10:00 a.m., New York City time, the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of such Separate
Notes to be remarketed. The Custodial Agent will hold such Separate Notes in an
account separate from the Collateral Account. A holder of Separate Notes
electing to have its Separate Notes remarketed will also have the right to
withdraw such election by written notice to the Custodial Agent, substantially
in the form of EXHIBIT D hereto, on or prior to the thirteenth Business Day
immediately preceding the Stock Purchase Date, upon which notice the Custodial
Agent will return such Separate Notes to such holder. On the Business Day
immediately preceding the Remarketing Date, the Custodial Agent at the written
direction of the Remarketing Agent will deliver to the Remarketing Agent for
remarketing all Separate Notes delivered to the Custodial Agent pursuant to this
Section 4.5(d) and not withdrawn pursuant to the terms hereof prior to such
date. In the event of a successful remarketing, after deducting as the
remarketing fee an amount not exceeding 25 basis points (0.25%) of the
Remarketing Value of such Separate Notes, the Remarketing Agent will remit to
the Custodial Agent, for the benefit of the holders of such Separate Notes, the
portion of the proceeds from such remarketing equal to the amount calculated in
respect of such Separate Notes as set forth in Section 5.4(b) of the Purchase
Contract Agreement. If, despite using reasonable best efforts, the Remarketing
Agent advises the Custodial Agent in writing that there has been a Last Failed
Remarketing, the Remarketing Agent will promptly return such Notes to the
Custodial Agent for redelivery to the holders of such Separate Notes. For
purposes of this Section 4.5(d), a "holder" of Separate Notes shall mean the
Person in whose name such Separate Notes are registered on the books of the
registrar for the Notes.

                                   ARTICLE V

                             VOTING RIGHTS -- NOTES
                             ----------------------

              SECTION 5.1  EXERCISE BY PURCHASE CONTRACT AGENT. The Purchase
Contract Agent may exercise, or refrain from exercising, any and all voting and
other consensual rights pertaining to the Pledged Notes or any part thereof for
any purpose not inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided that the Purchase
Contract Agent shall not exercise or, as the case may be, shall not refrain from
exercising such right if, in the judgment of the Company, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Notes; and provided, further, that the Purchase Contract Agent shall
give the Company and the Collateral Agent at least five Business Days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Notes, including notice of any
meeting at which holders of Notes are entitled to vote or solicitation of
consents, waivers or proxies of holders of Notes, the Collateral Agent shall use
reasonable efforts to send promptly to the Purchase Contract Agent such notice
or communication, and as soon as reasonably practicable after receipt of a
written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Notes (in form and substance satisfactory to the Collateral Agent)
as are prepared by the Purchase Contract Agent with respect to the Pledged
Notes.

                                       13
<PAGE>

                                   ARTICLE VI

                  RIGHTS AND REMEDIES; SPECIAL EVENT REDEMPTION
                  ---------------------------------------------

              SECTION 6.1  RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In
addition to the rights and remedies available at law or in equity, after an
event of default under any of the Purchase Contracts by a Holder thereof, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not the Code is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, at the direction of the Company (i)
retention of the Pledged Notes or other Collateral in full satisfaction of the
Holders' obligations under the Purchase Contracts or (ii) sale of the Pledged
Notes or other Collateral in one or more public or private sales or otherwise at
the written direction of the Company.

              (b)    Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent is
unable to make payments to the Company on account of any Pledged Treasury
Consideration or Pledged Treasury Securities as provided in Article III hereof
in full satisfaction of the obligations of the Holder of the Units of which such
Pledged Treasury Consideration or Pledged Treasury Securities, as applicable, is
a part under the related Purchase Contracts, any such inability to make a
payment shall constitute an event of default under the Purchase Contracts and
the Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities or such Pledged Treasury Consideration, as applicable, and
such obligations of such Holder, any and all of the rights and remedies
available to a secured party under the Code and the TRADES Regulations after
default by a debtor, and as otherwise granted herein or under any other law.

              (c)    Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) the principal
amount of, or interest on, the Pledged Notes, or (ii) the principal amount of
the Pledged Treasury Consideration or Pledged Treasury Securities, subject, in
each case, to the provisions of Article III.

              (d)    The Purchase Contract Agent, individually and as
attorney-in-fact for each Holder of Units, agrees that, from time to time, upon
the written request of the Company or the Collateral Agent (acting upon the
written request of the Company), the Purchase Contract Agent or such Holder
shall execute and deliver such further documents and do such other acts and
things as may be necessary, including as the Company or the Collateral Agent
(acting upon the written request of the Company) may reasonably request in order
to maintain the Pledge, and the perfection and priority thereof, and to confirm
the rights of the Collateral Agent hereunder. The Purchase Contract Agent shall
have no liability to any Holder for executing any documents or

                                       14
<PAGE>

taking any such acts requested by the Company or the Collateral Agent (acting
upon the written request of the Company) hereunder, except for liability for its
own grossly negligent act, its own grossly negligent failure to act, its own bad
faith or its own willful misconduct.

              SECTION 6.2  SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Notes, or Treasury Consideration, as the case
may be, for Collateral held by the Collateral Agent, such substitution shall not
constitute a novation of the security interest created hereby.

              SECTION 6.3  SPECIAL EVENT REDEMPTION. Upon the occurrence of a
Special Event Redemption prior to the Stock Purchase Date and the receipt of the
Redemption Price of the Pledged Notes by the Collateral Agent, the Collateral
Agent will, at the written direction of the Company, apply the Redemption Price
to purchase on behalf of the Holders of Normal Units the Treasury Portfolio. The
Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account
to secure the obligation of all Holders of Normal Units to purchase Ordinary
Shares of the Company under the Purchase Contracts constituting a part of such
Normal Units, in substitution for the Pledged Notes. Thereafter, the Collateral
Agent shall have such security interests, rights and obligations with respect to
the Treasury Portfolio as it had in respect of the Pledged Notes as provided in
Articles II, III, IV, V and VI, and any reference herein to the Notes shall be
deemed to be reference to such Treasury Portfolio, and any reference herein to
interest on the Notes shall be deemed to be a reference to corresponding
distributions on such Treasury Portfolio. Upon the occurrence of a Special Event
Redemption and the satisfaction of all terms and conditions related thereto as
forth in the Indenture, including receipt of the Redemption Price, the
Collateral Agent shall be authorized to surrender the Notes in accordance with
the provisions of the Indenture.

              SECTION 6.4  CASH RECEIVED FROM HOLDERS OF NORMAL UNITS NOT
PARTICIPATING IN THE REMARKETING. If a Holder of Normal Units shall opt not to
participate in the remarketing in accordance with the Purchase Contract
Agreement and upon the receipt by the Collateral Agent of the Cash Consideration
paid by such Holder sufficient to satisfy the Holder's obligations to the
Company under the related Purchase Contracts in full, the Collateral Agent shall
transfer such Cash Consideration to the Collateral Account to secure and be
applied in direct settlement and satisfaction in full of the obligations of such
Holder to purchase Ordinary Shares of the Company under the Purchase Contracts
constituting a part of such Normal Units. Thereupon, the Collateral Agent shall
deliver the related Pledged Notes to the Purchase Contract Agent on the Business
Day immediately preceding the first day of the Remarketing Period, free and
clear of any lien, claim and security interest created hereby. Thereafter, such
Units will be Stripped Units and the Collateral Agent shall have a first
priority perfected security interest in such Cash Consideration paid by such
Holder. In such event, all references in this Agreement, including for purposes
of Section 4.3, to the Treasury Securities or Pledged Treasury Securities shall
be deemed to include such Cash Consideration (the Cash Consideration subject to
the Pledge referred to as the "Pledged Cash Consideration") or Pledged Cash
Consideration, as the case may be, in addition to the Treasury Securities or
Pledged Treasury Securities, as the case may be, with respect to the applicable
Units.

                                       15
<PAGE>

                                  ARTICLE VII

                    REPRESENTATIONS AND WARRANTIES; COVENANTS
                    -----------------------------------------

              SECTION 7.1  REPRESENTATIONS AND WARRANTIES OF THE HOLDERS. The
Holders from time to time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the Purchase Contract Agent shall not
be liable for any representation or warranty made by or on behalf of a Holder),
hereby represent and warrant to the Collateral Agent, which representations and
warranties shall be deemed repeated on each day a Holder Transfers Collateral,
and on each day a person becomes a Holder, that:

              (a)    such Holder has the power to grant a security interest in
       and lien on the Collateral;

              (b)    such Holder is the sole beneficial owner of the Collateral
       and, in the case of Collateral delivered in physical form, is the sole
       holder of such Collateral and is the sole beneficial owner of, or has the
       right to Transfer, the Collateral it Transfers to the Collateral Agent,
       free and clear of any security interest, lien, encumbrance, call,
       liability to pay money or other restriction other than the security
       interest and lien granted under Section 2.1;

              (c)    upon the Transfer of the Collateral to the Collateral
       Account, the Collateral Agent, for the benefit of the Company, will have
       a valid and perfected first priority security interest therein (assuming
       that any central clearing operation or any Intermediary or other entity
       not within the control of the Holder involved in the Transfer of the
       Collateral, including the Collateral Agent, gives the notices and takes
       the action required of it hereunder and under applicable law for
       perfection of that interest and assuming the establishment and exercise
       of control pursuant to Section 2.2); and

              (d)    the execution and performance by the Holder of its
       obligations under this Agreement will not result in the creation of any
       security interest, lien or other encumbrance on the Collateral other than
       the security interest and lien granted under Section 2.1 or violate any
       provision of any existing law or regulation applicable to it or of any
       mortgage, charge, pledge, indenture, contract or undertaking to which it
       is a party or which is binding on it or any of its assets.

              SECTION 7.2  REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL
AGENT, CUSTODIAL AGENT AND SECURITIES INTERMEDIARY. The Collateral Agent,
Custodial Agent and Securities Intermediary (each an "Agent") hereby represents
and warrants:

              (a)    The Collateral Agent, Custodial Agent and Securities
       Intermediary is a banking corporation duly organized and existing under
       the laws of the State of New York;

              (b)    The Securities Intermediary is a "securities intermediary"
       as defined in Article 8-102(a)(14) of the Code and the Collateral Account
       is a "securities account" as such term is defined in Section 8-501(a) of
       the Code;

                                       16
<PAGE>

              (c)    The execution, delivery and performance by the Collateral
       Agent, the Custodial Agent and the Securities Intermediary of this
       Agreement have each been duly authorized by all necessary corporate
       action on the part of each such Agent; this Agreement has been duly
       executed and delivered by the Collateral Agent, the Custodial Agent and
       the Securities Intermediary and constitutes a valid and legally binding
       obligation of each of the Agents, enforceable against such Agents in
       accordance with its terms, subject, as to enforcement, to bankruptcy,
       insolvency, reorganization and other laws of general applicability
       relating to or affecting creditors' rights and to general equity
       principles;

              (d)    The execution, delivery and performance by the Collateral
       Agent, the Custodial Agent and the Securities Intermediary of this
       Agreement do not violate or constitute a breach of the Articles of
       Incorporation or By-Laws of any of such Agents; and

              (e)    No consent of any federal or state banking authority having
       regulatory authority over the Agents in their individual capacity is
       required for the execution and delivery of, or performance by the Agents
       of their respective obligations under, this Agreement.

              SECTION 7.3  COVENANTS. The Holders from time to time, acting
through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any covenant
made by or on behalf of a Holder), hereby covenant to the Collateral Agent that
for so long as the Collateral remains subject to the Pledge:

              (a)    neither the Purchase Contract Agent nor such Holders will
       create or purport to create or allow to subsist any mortgage, charge,
       lien, pledge or any other security interest whatsoever over the
       Collateral or any part of it other than pursuant to this Agreement; and

              (b)    neither the Purchase Contract Agent nor such Holders will
       sell or otherwise dispose (or attempt to dispose) of the Collateral or
       any part of it except for the beneficial interest therein, subject to the
       pledge hereunder, transferred in connection with the Transfer of the
       Units.

                                  ARTICLE VIII

                              THE COLLATERAL AGENT
                              --------------------

              SECTION 8.1  APPOINTMENT, POWERS AND IMMUNITIES. (a) The
Collateral Agent, the Custodial Agent or the Securities Intermediary shall act
as agent for the Company hereunder with such powers as are specifically vested
in the Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be, by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto. Each of the Collateral Agent, the
Custodial Agent and the Securities Intermediary:

                                       17
<PAGE>

              (i)    shall have no duties or responsibilities except those
       expressly set forth in this Agreement and no implied covenants or
       obligations shall be inferred from this Agreement against any of them,
       nor shall any of them be bound by the provisions of any agreement by any
       party hereto beyond the specific terms hereof;

              (ii)   shall not be responsible for any recitals contained in this
       Agreement, or in any certificate or other document referred to or
       provided for in, or received by it under, this Agreement, the Units or
       the Purchase Contract Agreement, or for the value, validity,
       effectiveness, genuineness, enforceability or sufficiency of this
       Agreement (other than as against the Collateral Agent, the Custodial
       Agent or the Securities Intermediary, as the case may be), the Units or
       the Purchase Contract Agreement or any other document referred to or
       provided for herein or therein or for any failure by the Company or any
       other Person (except the Collateral Agent, the Custodial Agent or the
       Securities Intermediary, as the case may be) to perform any of its
       obligations hereunder or thereunder or, except as expressly required
       hereby, for the existence, validity, perfection, priority or maintenance
       of any security interest created hereunder;

              (iii)  shall not be required to initiate or conduct any litigation
       or collection proceedings hereunder (except in the case of the Collateral
       Agent, pursuant to written directions furnished under Section 8.2 hereof,
       subject to Section 8.6 hereof);

              (iv)   shall not be responsible for any action taken or omitted to
       be taken by it hereunder or under any other document or instrument
       referred to or provided for herein or in connection herewith or
       therewith, except for its own gross negligence, bad faith or willful
       misconduct;

              (v)    shall not be required to advise any party as to selling or
       retaining, or taking or refraining from taking any action with respect
       to, the Units or other property deposited hereunder;

              (vi)   may perform any of their duties hereunder directly or by or
       through agents or attorneys appointed with due care;

              (vii)  shall be entitled to consult with counsel and to act in
       full reliance upon the advice of such counsel concerning matters
       pertaining to the agencies created hereby and its duties hereunder, and
       shall not be liable for any action taken or omitted to be taken by it in
       good faith and in reliance upon and in accordance with the reasonable
       advice of counsel selected by it;

              (viii) shall not be liable with respect to any action taken by it
       in good faith in accordance with any direction of the Company or its
       agents except for its own gross negligence or willful misconduct; and

              (ix)   shall not be liable for any failure or delay in the
       performance of its obligations hereunder because of circumstances beyond
       its control, including, but not limited to, acts of God, flood, war
       (whether declared or undeclared), terrorism, fire, riot, embargo,
       government action, including any laws, ordinances, regulations,
       governmental

                                       18
<PAGE>

       action or the like which delay, restrict or prohibit the providing of
       services contemplated by this Agreement.

              Subject to the foregoing, during the term of this Agreement, each
of the Collateral Agent, the Custodial Agent and the Securities Intermediary, in
connection with the safekeeping and preservation of the Collateral hereunder,
shall use the same standard of care it applies for similar property held for its
own account.

              (b)    No provision of this Agreement shall require the Collateral
       Agent, the Custodial Agent or the Securities Intermediary to expend or
       risk its own funds or otherwise incur any financial liability in the
       performance of any of its duties hereunder. In no event shall the
       Collateral Agent, the Custodial Agent or the Securities Intermediary be
       liable for any amount in excess of the value of the Collateral.
       Notwithstanding the foregoing, the Collateral Agent, the Custodial Agent,
       the Purchase Contract Agent and Securities Intermediary, each in its
       individual capacity, hereby waive any right of set-off, banker's lien,
       liens or perfection rights as securities intermediary or any counterclaim
       with respect to any of the Collateral.

              (c)    The Collateral Agent, Custodial Agent and Securities
       Intermediary shall have no liability whatsoever for the action or
       inaction of any Clearing Agency or any book-entry system thereof. In no
       event shall any Clearing Agency or any book-entry system thereof be
       deemed an agent or subcustodian of the Collateral Agent, Custodial Agent
       and Securities Intermediary.

              SECTION 8.2  INSTRUCTIONS OF THE COMPANY. The Company shall have
the right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, or of
exercising any power conferred on the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided that
(i) such direction shall be in writing and shall not conflict with the
provisions of any law or of this Agreement and (ii) the Collateral Agent, the
Custodial Agent and the Securities Intermediary shall each receive indemnity
reasonably satisfactory to it as provided herein. Nothing in this Section 8.2
shall impair the right of each of the Collateral Agent, the Custodial Agent or
the Securities Intermediary in its discretion to take any action or omit to take
any action which it deems proper and which is not inconsistent with such
direction.

              SECTION 8.3  RELIANCE. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent, in absence of bad faith, shall be
entitled conclusively to rely upon any certification, order, judgment,
instructions, opinion, notice or other communication (including, without
limitation, any thereof by telephone or facsimile) reasonably believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons (without being required to determine the correctness of
any fact stated therein), and upon advice and written statements of legal
counsel and other experts selected by the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be. As to any matters not
expressly provided for by this Agreement, the Collateral Agent, the Custodial
Agent and the

                                       19
<PAGE>

Securities Intermediary shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with written instructions given
by the Company in accordance with this Agreement.

              SECTION 8.4  RIGHTS IN OTHER CAPACITIES. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of Units
and any holder of Separate Notes (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent, the Custodial
Agent or the Securities Intermediary, as the case may be, and the Collateral
Agent, the Custodial Agent and the Securities Intermediary and their affiliates
may accept fees and other consideration from the Purchase Contract Agent, any
Holder of Units or any holder of Separate Notes without having to account for
the same to the Company; provided that each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent covenants and agrees with the Company
that it shall not accept, receive or permit there to be created in favor of
itself (and waives any right of set-off or banker's lien with respect to) and
shall take no affirmative action to permit there to be created in favor of any
other Person, any security interest, lien or other encumbrance of any kind in or
upon the Collateral and the Collateral shall not be commingled with any other
assets of any such Person.

              SECTION 8.5  NON-RELIANCE ON COLLATERAL AGENT. None of the
Securities Intermediary, the Custodial Agent or the Collateral Agent shall be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Units of this Agreement, the Purchase
Contract Agreement, the Units or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Purchase Contract
Agent or any Holder of Units. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not have any duty or responsibility to provide the
Company or the Remarketing Agent with any credit or other information concerning
the affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Units or any holder of Separate Notes (or any of their respective
subsidiaries or affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.

              SECTION 8.6  COMPENSATION AND INDEMNITY. The Company agrees:

              (a)    to pay each of the Collateral Agent, the Custodial Agent
and the Securities Intermediary from time to time such compensation as shall be
agreed in writing between the Company and the Collateral Agent, Custodial Agent
or the Securities Intermediary, as the case may be, for all services rendered by
each of them hereunder; and

              (b)    to indemnify the Collateral Agent, the Custodial Agent and
the Securities Intermediary and their officers, directors and agents for, and to
hold each of them harmless from and against, any loss, liability, claim, damage
or reasonable out-of-pocket expense incurred without gross negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of its powers and duties under this Agreement,
including the reasonable out-of-pocket costs and expenses (including reasonable
fees and

                                       20
<PAGE>

expenses of one counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties or
collecting such amounts. The Collateral Agent, the Custodial Agent and the
Securities Intermediary upon actual knowledge of a Responsible Officer thereof
shall each promptly notify the Company of any third party claim which may give
rise to the indemnity hereunder and give the Company the opportunity to control
the defense of such claim with counsel reasonably satisfactory to the
indemnified party, provided no conflict of interest exists (if such a conflict
of interests exists, the Collateral Agent, the Custodial Agent and the
Securities Intermediary will be entitled to one separate counsel at any one time
payable by the Company), and if the Company so elects to assume such defense,
the Company shall in good faith defend the Collateral Agent, the Custodial Agent
or the Securities Intermediary (in which case all attorney's fees and expenses
shall be borne by the Company). No compromise or settlement of any claims may be
effected by any party without the other parties' consent (which consent shall
not be unreasonably withheld) unless (i) there is no finding or omission of any
violation of law and no effect on any other claims that may be made against any
of such other parties and (ii) the sole relief provided is monetary damages that
are paid in full by the party seeking the compromise or settlement. The
provisions of this Section 8.6(b) shall survive the termination of this
Agreement or the resignation or removal of the Collateral Agent, the Custodial
Agent or the Securities Intermediary.

              SECTION 8.7  FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent, Custodial Agent and the
Securities Intermediary shall be entitled, after prompt notice to the Company
and the Purchase Contract Agent, at its sole option, to refuse to comply with
any and all claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and neither the
Collateral Agent, Custodial Agent nor the Securities Intermediary shall be or
become liable in any way to any of the parties hereto for its failure or refusal
to comply with such conflicting claims, demands or instructions. The Collateral
Agent, Custodial Agent and the Securities Intermediary shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
reasonably satisfactory to the Collateral Agent, Custodial Agent or the
Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, shall have
received security or an indemnity reasonably satisfactory to the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be,
sufficient to save the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Collateral Agent,
Custodial Agent or the Securities Intermediary, as the case may be, may incur by
reason of its acting without bad faith, willful misconduct or negligence. The
Collateral Agent, Custodial Agent or the Securities Intermediary may, but shall
not be required, in addition elect to commence an interpleader action or seek
other judicial relief or orders at the expense of the Company as the Collateral
Agent, Custodial Agent or the Securities Intermediary, as the case may be, may
deem necessary. Notwithstanding anything contained herein to the contrary,
neither the Collateral Agent, Custodial Agent nor the Securities Intermediary
shall be required to take any action that is in the reasonable opinion of its
counsel contrary to law or to the terms of this Agreement, or which would in its
reasonable opinion subject it or any of its officers, employees or directors to
liability.

                                       21
<PAGE>

              SECTION 8.8  RESIGNATION; REPLACEMENT OF COLLATERAL AGENT,
CUSTODIAL AGENT OR SECURITIES INTERMEDIARY. Subject to the appointment and
acceptance of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as provided below, (a) the Collateral Agent, Custodial Agent or
the Securities Intermediary may resign at any time by giving notice thereof to
the Company and the Purchase Contract Agent as attorney-in-fact for the Holders
of Units, (b) the Collateral Agent, Custodial Agent or the Securities
Intermediary may be removed at any time by the Company (with or without cause)
by notice to the Purchase Contract Agent and the Collateral Agent, the Custodial
Agent and the Securities Intermediary and (c) if the Collateral Agent, Custodial
Agent or the Securities Intermediary fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent, Custodial
Agent or the Securities Intermediary may be removed by the Purchase Contract
Agent. The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent, the Custodial Agent or the Securities
Intermediary pursuant to clause (c) of the immediately preceding sentence. Upon
notice of any such resignation or removal, the Company shall have the right to
appoint a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. If no successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall have been so
appointed and shall have accepted such appointment within 30 days after any
notice of such resignation or such removal, then the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, may at the
Company's expense petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be. Upon removal of the Collateral Agent,
Custodial Agent or Securities Intermediary, no fees paid to the retiring
Collateral Agent, Custodial Agent or Securities Intermediary pursuant to Section
8.6(a) of this Agreement shall be refunded. Each successor Collateral Agent,
Custodial Agent and the Securities Intermediary shall be a bank which has an
office or agency in New York, New York with a combined capital and surplus of at
least $50,000,000 or any affiliate of a bank holding company having such capital
and surplus. Upon the acceptance of any appointment as Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, such successor shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, and the retiring
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, upon payment of any of its unpaid fees and expenses, shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor. The retiring Collateral Agent,
Custodial Agent or Securities Intermediary shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent, Custodial Agent
or Securities Intermediary hereunder. After any retiring Collateral Agent's,
Custodial Agent's or Securities Intermediary's resignation hereunder as
Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of
this Section 8.8, and Section 8.6 hereof, shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Collateral Agent, Custodial Agent or Securities Intermediary.
Any resignation or removal of the Collateral Agent hereunder shall be deemed for
all purposes of this Agreement as the simultaneous resignation or removal of the
Custodial Agent and the Securities Intermediary hereunder.

                                       22
<PAGE>

              So long as it meets the requirements of this Section 8.8, any
corporation into which the Collateral Agent, the Custodial Agent or the
Securities Intermediary, in its individual capacity, may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Collateral Agent in its
individual capacity shall be a party, or any corporation to which substantially
all the corporate trust business of the Collateral Agent in its individual
capacity may be transferred, shall be the Collateral Agent, the Custodial Agent,
or the Securities Intermediary, as the case may be, respectively, under this
Agreement without further act.

              SECTION 8.9  RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral
Agent shall have the right to appoint agents or advisors in connection with any
of its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors reasonably selected in good faith. The appointment of agents (other
than legal counsel) pursuant to this Section 8.9 shall be subject to prior
written consent of the Company.

              SECTION 8.10 SURVIVAL. The provisions of this Article VIII shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent, the Custodial Agent or the Securities Intermediary.

              SECTION 8.11 EXCULPATION. Anything in this Agreement to the
contrary notwithstanding, in no event shall any of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their officers, employees or
agents be liable under this Agreement to any third party for indirect, special,
punitive or consequential loss or damage of any kind whatsoever, including lost
profits or loss of business, relating to, arising from or in connection with
this Agreement, whether or not the likelihood of such loss or damage was known
to the Collateral Agent, the Custodial Agent or the Securities Intermediary, or
any of them, incurred without any act or deed that is found to be attributable
to negligence, bad faith or willful misconduct on the part of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.

              In no event shall the any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of services contemplated by this
Agreement.

              SECTION 8.12 LIMITATION ON DUTY OF THE COLLATERAL AGENT, THE
CUSTODIAL AGENT, THE SECURITIES INTERMEDIARY AND THE PURCHASE CONTRACT AGENT IN
RESPECT OF COLLATERAL; INDEMNIFICATION. (a) Beyond the exercise of reasonable
care in the custody thereof and as expressly set forth in this Agreement or in
the Code, each of the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent shall have no duty as to any
Collateral in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and each of the Collateral
Agent, the Custodial Agent, the Securities Intermediary and, except for the
responsibilities expressly set forth in this Agreement or under the Code, the

                                       23
<PAGE>

Purchase Contract Agent shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. Each of the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be deemed to have exercised reasonable care in the custody
of the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property and shall not be
liable or responsible for any loss or diminution in the value of any of the
Collateral, by reason of the act or omission of any carrier, forwarding agency
or other agent or bailee selected by each of the Collateral Agent, the Custodial
Agent, the Securities Intermediary and the Purchase Contract Agent in good
faith.

              (b)    Each of the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall not be responsible
for the existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Liens in any of the
Collateral, whether impaired by operation of law or by reason of any of any
action or omission to act on its part hereunder, except to the extent such
action or omission constitutes negligence, bad faith or willful misconduct on
the part of each of the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, for the validity or sufficiency of
the Collateral or any agreement or assignment contained therein, for the
validity of the title of the Company to the Collateral, for insuring the
Collateral or for the payment of taxes, charges, assessments or Liens upon the
Collateral or otherwise as to the maintenance of the Collateral.

              (c)    Each of the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall have no duty to
act outside of the United States in respect of any Collateral located in the
jurisdiction other than the United States.

                                   ARTICLE IX

                                    AMENDMENT
                                    ---------

              SECTION 9.1  AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders or the holders of any Separate Notes, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:

              (i)    to evidence the succession of another Person to the
       Company, and the assumption by any such successor of the covenants of the
       Company; or

              (ii)   to add covenants of the Company for the benefit of the
       Holders, or to surrender any right or power herein conferred upon the
       Company so long as such covenants or such surrender do not adversely
       affect the validity, perfection or priority of the security interests
       granted or created hereunder; or

                                       24
<PAGE>

              (iii)  to evidence and provide for the acceptance of appointment
       hereunder by a successor Collateral Agent, Custodial Agent, Securities
       Intermediary or Purchase Contract Agent; or

              (iv)   to cure any ambiguity, to correct or supplement any
       provisions herein which may be inconsistent with any other such
       provisions herein, or to make any other provisions with respect to such
       matters or questions arising under this Agreement, provided such action
       shall not adversely affect the interests of the Holders.

              SECTION 9.2  AMENDMENT WITH CONSENT OF HOLDERS. With the consent
of the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, the
Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the
Securities Intermediary may amend this Agreement for the purpose of modifying in
any manner the provisions of this Agreement or the rights of the Holders in
respect of the Units; provided that no such amendment shall, as to any Holder of
an Outstanding Unit adversely affected thereby, without the consent of such
Holder,

              (i)    change the amount or type of Collateral underlying a Unit
       (except for the rights of holders of Normal Units to substitute the
       Treasury Securities for the Pledged Notes or the Pledged Treasury
       Consideration, as the case may be, or the rights of Holders of Stripped
       Units to substitute Notes or the Treasury Consideration, as applicable,
       for the Pledged Treasury Securities), impair the right of the Holder of
       any Unit to receive distributions on the underlying Collateral or
       otherwise adversely affect the Holder's rights in or to such Collateral;
       or

              (ii)   otherwise effect any action that would require the consent
       of the Holder of each Outstanding Unit affected thereby pursuant to the
       Purchase Contract Agreement if such action were effected by an agreement
       supplemental thereto; or

              (iii)  reduce the percentage of Purchase Contracts the consent of
       whose Holders is required for any such amendment;

provided that if any amendment or proposal referred to above would adversely
affect only the Normal Units or the Stripped Units, then only the affected class
of Holders as of the record date for the Holders entitled to vote thereon will
be entitled to vote on or consent to such amendment or proposal.

       It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

              SECTION 9.3  EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Article IX, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be provided with
and (subject to Section 8.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to the Purchase
Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such

                                       25
<PAGE>

amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied and, in the case of an amendment pursuant to Section 9.1, that such
amendment does not adversely affect the validity, perfection or priority of the
security interests granted or created hereunder.

              SECTION 9.4  EFFECT OF AMENDMENTS. Upon the execution of any
amendment under this Article IX, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.

              SECTION 9.5  REFERENCE TO AMENDMENTS. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Article IX may, and shall if required by the
Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Certificates so modified as to conform, in the opinion of the Collateral Agent,
the Purchase Contract Agent and the Company, to any such amendment may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in accordance with the
Purchase Contract Agreement in exchange for outstanding Certificates.

                                   ARTICLE X

                                  MISCELLANEOUS
                                  -------------

              SECTION 10.1 NO WAIVER. No failure on the part of any party hereto
or any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

              SECTION 10.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent, the Custodial Agent and the
Holders from time to time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and maintenance of the
Collateral Account, which law, for purposes of the Code, shall be deemed to be
the law governing all Security Entitlements related thereto. In addition, such
parties agree that, for purposes of the Code, New York shall be the Securities
Intermediary's jurisdiction. The Company, the Collateral Agent

                                       26
<PAGE>

and the Holders from time to time of the Units, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in the Borough of Manhattan in
New York City for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The Company,
the Collateral Agent and the Holders from time to time of the Units, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. The Company hereby designates
and appoints CT Corporation System, 111 Eighth Avenue, New York, New York 10011
as its authorized agent upon which process may be served in any legal suit,
action or proceeding arising out of or relating to this Agreement which may be
instituted in any federal or state court in the Borough of Manhattan, The City
of New York, New York, and agrees that service of process upon such agent, and
written notice of said service to the Company by the Person serving the same,
shall be deemed in every respect effective service of process upon the Company
in any such suit, action or proceeding and further designates its domicile, the
domicile of CT Corporation System specified above and any domicile CT
Corporation System may have in the future as its domicile to receive any notice
hereunder (including service of process). If for any reason CT Corporation
System (or any successor agent for this purpose) shall cease to act as agent for
service of process as provided above, the Company will promptly appoint a
successor agent for this purpose reasonably acceptable to the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Purchase Contract
Agent. The Company agrees to take any and all actions as may be necessary to
maintain such designation and appointment of such agent in full force and
effect.

              SECTION 10.3 JUDGMENT CURRENCY. The Company agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Purchase Contract
Agent could purchase in The City of New York the requisite amount of the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which a final unappealable judgment is given and (b) its
obligations under this Agreement to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Agreement. For purpose of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or obligated by law, regulation or executive
order to be closed.

              SECTION 10.4 NOTICES. Unless otherwise stated herein, all notices,
requests, instructions, consents and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing (including, without
limitation, by telecopy) and, if sent to the Company, will be mailed, delivered
or telecopied to XL House, One Bermudiana Road, Hamilton HM11, Bermuda,
Attention: Paul S. Giordano (fax no.: (441) 292-5280); or if sent to the
Purchase

                                       27
<PAGE>

Contract Agent as attorney-in-fact of the Holders from time to time of the
Units, will be mailed, delivered or telefaxed to 101 Barclay Street, Floor 8W,
New York, New York 10286, Attention: Corporate Trust Administration (fax no.:
(212) 815-5707); or if sent to the Collateral Agent, Custodial Agent and
Securities Intermediary, will be mailed, delivered or telefaxed to 101 Barclay
Street, Floor 8W, New York, New York 10286, Attention: Corporate Trust
Administration (fax no.: (212) 815-5707), or as to any party, at such other
address as shall be designated by such party in a notice to the other parties.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when personally delivered or, in the case of a
mailed notice or notice transmitted by telecopier, upon receipt, in each case
given or addressed as aforesaid.

              SECTION 10.5 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Purchase Contract Agent, and the Holders from time to time
of the Units, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.

              SECTION 10.6 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.

              SECTION 10.7 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

              SECTION 10.8 EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent, the Securities Intermediary and the Custodial Agent for:

              (a)    all reasonable out-of-pocket costs and all reasonable
expenses of the Collateral Agent, the Custodial Agent and the Securities
Intermediary (including, without limitation, the reasonable fees and expenses of
one counsel to the Collateral Agent, the Custodial Agent and the Securities
Intermediary), in connection with (i) the negotiation, preparation, execution
and delivery or performance of this Agreement and (ii) any modification,
supplement or waiver of any of the terms of this Agreement;

              (b)    all reasonable costs and expenses of the Collateral Agent,
the Custodial Agent and the Securities Intermediary (including, without
limitation, reasonable fees and expenses of one counsel) in connection with (i)
any enforcement or proceedings resulting or incurred in connection with causing
any Holder of Units to satisfy its obligations under the Purchase Contracts
forming a part of the Units and (ii) the enforcement of this Section 10.7; and

              (c)    all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any

                                       28
<PAGE>

other document referred to herein and all costs, expenses, taxes, assessments
and other charges, if any, incurred in connection with any filing, registration,
recording or perfection of any security interest to the extent contemplated
hereby.

              SECTION 10.9 SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent and security interests hereunder, and all obligations of the
Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:

              (a)    any lack of validity or enforceability of any provision of
the Purchase Contracts or the Units or any other agreement or instrument
relating thereto;

              (b)    any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Units under the related Purchase Contracts, or any
other amendment or waiver of any term of, or any consent to any departure from
any requirement of, the Purchase Contract Agreement or any Purchase Contract or
any other agreement or instrument relating thereto; or

              (c)    any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a pledgor.

              SECTION 10.10 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

              SECTION 10.11 INCORPORATION BY REFERENCE. Each of the Company, the
Collateral Agent and the Securities Intermediary agrees that the Purchase
Contract Agent is, in acting hereunder with respect to the Company, entitled to
all rights, privileges, benefits, protections, immunities and indemnities
provided to it under the Purchase Contract Agreement.

                                       29
<PAGE>

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

                                   XL CAPITAL LTD

                                   By:  /s/ Kirstin Romann Gould
                                      ----------------------------------------
                                      Name:  Kirstin Romann Gould
                                      Title: Senior Vice President, Chief
                                             Corporate Legal Officer and
                                             Secretary

                                   THE BANK OF NEW YORK,
                                     as Purchase Contract Agent and
                                     as attorney-in-fact of the Holders
                                     from time to time of the Units

                                   By:   /s/ Kisha A. Holder
                                       ---------------------------------------
                                       Name:  Kisha A. Holder
                                       Title: Assistant Vice President

<PAGE>

                                         THE BANK OF NEW YORK,
                                           as Collateral Agent, Custodial
                                           Agent and Securities Intermediary

                                         By:  /s/ Kisha A. Holder
                                            ------------------------------------
                                            Name:  Kisha A. Holder
                                            Title: Assistant Vice President

                                       2
<PAGE>

                                                                       EXHIBIT A

          INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT

The Bank of New York
101 Barclay Street
Floor 8W
New York, New York 10286

Attention: Corporate Trust Administration

                            Re:     7.00% EQUITY SECURITY UNITS
                                    OF XL CAPITAL LTD (THE "COMPANY")

              We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of December 9, 2005 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Units listed below (the "Holder") has elected to substitute [$________
aggregate principal amount of Treasury Securities (CUSIP No. 912820 JW 8)]
[$________ aggregate principal amount of Notes or $__________ aggregate
principal amount of Treasury Consideration (CUSIP No. [________]) in exchange
for the related [Pledged Notes or Pledged Treasury Consideration] [Pledged
Treasury Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Notes or the Treasury Consideration] to you, as Collateral Agent.
We hereby instruct you, upon receipt of such [Pledged Treasury Securities]
[Pledged Notes or Pledged Treasury Consideration], to release the [Notes or the
Treasury Consideration] [Treasury Securities] related to such [Normal Units]
[Stripped Units] to us in accordance with the Holder's instructions. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.

Date: _____________________

                                         The Bank of New York,
                                         as Purchase Contract Agent

                                         By: ___________________________________
                                             Name:
                                             Title:

                                      A-1
<PAGE>

              Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Notes or Treasury Consideration] for the
[Pledged Notes or the Pledged Treasury Consideration] [Pledged Treasury
Securities]:

Name: ______________________________

Social Security or other Taxpayer
Identification Number, if any: ___________________

Address: __________________________________________________________

                                      A-2
<PAGE>

                                                                       EXHIBIT B

                     INSTRUCTION TO PURCHASE CONTRACT AGENT

The Bank of New York,
  as Purchase Contract Agent
101 Barclay Street
Floor 8W
New York, New York 10286

Attention: Institutional Trust Services

                   Re:     7.00% EQUITY SECURITY UNITS
                           OF XL CAPITAL LTD (THE "COMPANY")

              The undersigned Holder hereby notifies you that it has delivered
to The Bank of New York, as Collateral Agent, [$_________ aggregate principal
amount of Treasury Securities (CUSIP No. 912820 JW 8)] [$_________ aggregate
principal amount of Notes or $___________ principal amount of Treasury
Consideration (CUSIP No. [__________]) in exchange for the related [Pledged
Notes or Pledged Treasury Consideration] [Pledged Treasury Securities] held by
the Collateral Agent, in accordance with Section [4.1][4.2] of the Pledge
Agreement, dated as of December 9, 2005 (the "Pledge Agreement"), among you, the
Company and the Collateral Agent. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Notes or the Pledged Treasury Consideration] [Pledged
Treasury Securities] related to such [Normal Units] [Stripped Units].
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.

Date: ___________________

Signature: ______________________________________

Signature Guarantee: _____________________________

Please print name and address of Registered Holder: ________________________

Name: __________________________

Social Security or other Taxpayer
Identification Number, if any: ________________________

Address: ________________________________________________________

                                      B-1
<PAGE>

                                                                       EXHIBIT C

              INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

The Bank of New York
101 Barclay Street
Floor 8W
New York, New York 10286

Attention: Corporate Trust Administration

                   Re:  5.25% NOTES DUE 2011 OF XL CAPITAL LTD

              The undersigned hereby notifies you in accordance with Section
4.5(d) of the Pledge Agreement, dated as of December 9, 2005 (the "Pledge
Agreement"), among XL Capital Ltd, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units
from time to time, that the undersigned elects to deliver on the fourth Business
Day immediately preceding the Remarketing Date commencing on February _, 2009
$__________ aggregate principal amount of Notes for delivery to the Remarketing
Agent for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Notes tendered hereby.

              The undersigned hereby instructs you, upon receipt of the proceeds
of such remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of the Last Failed Remarketing upon receipt of the Notes tendered herewith
from the Remarketing Agent, to deliver such Notes to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."

              With this notice, the undersigned hereby (i) represents and
warrants that the undersigned has full power and authority to tender, sell,
assign and transfer the Notes tendered hereby and that the undersigned is the
record owner of any Notes tendered herewith in physical form or a participant in
The Depository Trust Company ("DTC") and the beneficial owner of any Notes
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 4.5(d) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.

                                      C-1
<PAGE>

Date: _________________

Signature: ______________________________

Signature Guarantee: ______________________

Name: __________________________________
(Please Print)

Address: __________________________________
(Please Print)

Zip Code: __________________________________

Country: ______________________________________

Telecopy (include country code if outside U.S.): __________________________

Telephone (include country code if outside U.S.): ______________________________

(Tax Identification or Social Security Number): _______________________________

A. PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.

Name(s): __________________________________
(Please Print)

Address: __________________________________
(Please Print)

Zip Code: __________________________________

Country: __________________________________

Telecopy (include country code if outside U.S.): _____________________________

Telephone (include country code if outside U.S.): ____________________________

(Special Identification or Social Security Number): ___________________________

B. DELIVERY INSTRUCTIONS

In the event of the Last Failed Remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.

                                      C-2
<PAGE>

Name(s): __________________________________
(Please Print)

Address: __________________________________
(Please Print)

Zip Code: _________________________________

Country: __________________________________

Telecopy (include country code if outside U.S.): ______________________________

Telephone (include country code if outside U.S.): _____________________________

(Special Identification or Social Security Number): ___________________________

In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party: __________________________

DTC Account Number: _____________________________

                                      C-3
<PAGE>

                                                                       EXHIBIT D

                    INSTRUCTION TO CUSTODIAL AGENT REGARDING
                           WITHDRAWAL FROM REMARKETING

The Bank of New York
101 Barclay Street
Floor 8W
New York, New York 10286

Attention: Corporate Trust Administration

                   Re:  5.25% NOTES DUE 2011 OF XL CAPITAL LTD

              The undersigned hereby notifies you in accordance with Section
4.5(d) of Pledge Agreement, dated as of December 9, 2005 (the "Pledge
Agreement"), among XL Capital Ltd, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units
from time to time, that the undersigned elects to withdraw the $__________
aggregate principal amount of Notes delivered to the Custodial Agent on
_________, 2009 for remarketing pursuant to Section 4.5(d) of the Pledge
Agreement. The undersigned hereby instructs you to return such Notes to the
undersigned in accordance with the undersigned's instructions. With this notice,
undersigned hereby agrees to be bound by the terms and conditions 4.5(d) of the
Pledge Agreement. Capitalized terms used herein but shall have the meaning set
forth in the Pledge Agreement.

Date: _________________

Signature: ________________________________

Signature Guarantee: ______________________

Name: _____________________________________
(Please Print)

Address: __________________________________
(Please Print)

Zip Code: _________________________________

Country: __________________________________

Telecopy (include country code if outside U.S.): ______________________________

Telephone (include country code if outside U.S.): _____________________________

                                      D-1
<PAGE>

(Tax Identification or Social Security Number): _______________________________

A. DELIVERY INSTRUCTIONS

In the event of [a/the Last] Failed Remarketing, Notes which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.

Name(s): __________________________________
(Please Print)

Address: __________________________________
(Please Print)

Zip Code: _________________________________

Country: __________________________________

Telecopy (include country code if outside U.S.): ______________________________

Telephone (include country code if outside U.S.): _____________________________

(Special Identification or Social Security Number): ___________________________

In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party: __________________________

DTC Account Number: _____________________________

                                      D-2EXHIBIT 4.5

                                 XL CAPITAL LTD

                          FORM OF REMARKETING AGREEMENT

  [NOTE: FORM TO BE REVISED, AS APPROPRIATE, TO REFLECT SECURITIES ACT REFORM]

       REMARKETING AGREEMENT, dated as of [_________ __], 2009 (the "Agreement")
by and between XL Capital Ltd, a Cayman Islands exempted limited company (the
"Company"), and [________] (the "Remarketing Agent"), and confirmed and accepted
by The Bank of New York, not individually but solely as Purchase Contract Agent
(the "Purchase Contract Agent") and as attorney-in-fact of the Holders of
Purchase Contracts (as defined in the Purchase Contract Agreement (as defined
herein)).

       WHEREAS, the Company issued an aggregate of 29,800,000 of its Normal
Units (the "Normal Units") under the Purchase Contract Agreement, dated as of
December 9, 2005, by and between the Purchase Contract Agent and the Company
(the "Purchase Contract Agreement"); and

       WHEREAS, the 5.25% Senior Notes due 2011 forming a part of the Units (the
"Notes") have been pledged pursuant to the Pledge Agreement (the "Pledge
Agreement"), dated as of December 9, 2005, by and among the Company, The Bank of
New York, as collateral agent (the "Collateral Agent"), custodial agent and
securities intermediary and The Bank of New York, as Purchase Contract Agent, to
secure the obligations of Holders of Normal Units under the related Purchase
Contracts on the Stock Purchase Date; and

       WHEREAS, the Remarketing Agent will attempt on February 3, 2009 (the
"Remarketing Date") to remarket all of (i) the Notes of Holders of Normal Units
and (ii) the Separate Notes of Holders who elect to participate in the
remarketing, pursuant respectively to the procedures set forth in Section 5.4(b)
of the Purchase Contract Agreement, Section 4.5(d) of the Pledge Agreement and
Sections 2.19 and 2.20 of the Third Supplemental Indenture, dated as of December
9, 2005, between the Company and The Bank of New York, as trustee (the
"Supplemental Indenture"), to the Indenture, dated as of June 2, 2004 (the "Base
Indenture"), between the Company and The Bank of New York, as trustee (each of
which Sections is incorporated herein by reference); and

       WHEREAS, in the event the remarketing on the Remarketing Date is
unsuccessful, the Remarketing Agent will remarket the Notes to be included in
the remarketing on February 4, 2009, and, if necessary, will attempt to remarket
such Notes on February 5, 2009 and, if necessary, will attempt to remarket such
Notes on February 6, 2009 and, if necessary, will attempt to remarket such Notes
on February 9, 2009 and, if

<PAGE>

necessary, will attempt to remarket such Notes on February 10, 2009 and, if
necessary, will attempt to remarket such Notes on February 11, 2009 (any such
date after the Remarketing Date on which a subsequent remarketing is attempted,
a "Subsequent Remarketing Date"); and

       WHEREAS, in the event of a successful remarketing on the Remarketing Date
or any Subsequent Remarketing Date, as the case may be, the applicable interest
rate on the Remarketed Notes (as defined below) included in such successful
remarketing will be reset on the settlement date of such Remarketing Date or
Subsequent Remarketing Date to the rate determined by the Remarketing Agent in
good faith that will result in the aggregate market value of the Remarketed
Notes to equal 100.25% of the aggregate principal amount of such Remarketed
Notes, as of such Remarketing Date or Subsequent Remarketing Date (the "Reset
Rate"), provided that the Reset Rate shall be limited to the maximum rate
permitted by applicable law; and

       WHEREAS, the Company has requested [________] to act as the Remarketing
Agent, and as such to perform the services described herein; and

       WHEREAS, [________] is willing to act as the Remarketing Agent and as
such to perform such duties on the terms and conditions expressly set forth
herein;

       NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:

Section 1.    DEFINITIONS.

       (a)    Capitalized terms used and not defined in this Agreement, in the
recitals hereto or in the paragraph preceding such recitals shall have the
meanings assigned to them in the Purchase Contract Agreement or, if not therein
defined, the Pledge Agreement.

       (b)    As used in this Agreement, the following terms have the following
meanings:

              "Preliminary Prospectus" means any preliminary prospectus relating
       to the Remarketed Notes included in the Registration Statement (including
       any preliminary prospectus supplement), including the documents
       incorporated by reference therein as of the date of such Preliminary
       Prospectus; and any reference to any amendment or supplement to such
       Preliminary Prospectus shall be deemed to refer to and include any
       documents filed after the date of such Preliminary Prospectus, under the
       Exchange Act, and incorporated by reference in such Preliminary
       Prospectus.

              "Prospectus" means the prospectus relating to the Remarketed Notes
       (including any prospectus supplement), in the form in which first filed,
       or transmitted for filing, with the Commission after the effective date
       of the Registration Statement pursuant to Rule 424(b), including the
       documents incorporated by reference therein as of the date of such
       Prospectus; and any

                                       2
<PAGE>

       reference to any amendment or supplement to such Prospectus shall be
       deemed to refer to and include any documents filed after the date of such
       Prospectus, under the Exchange Act, and incorporated by reference in such
       Prospectus.

              "Registration Statement" means a registration statement under the
       Securities Act of 1933, as amended (the "Securities Act") filed and
       prepared by the Company covering, inter alia, the Remarketing of the
       Remarketed Notes pursuant to Section 5(a) hereunder, including all
       exhibits thereto and the documents incorporated by reference in the
       prospectus contained in such registration statement, and any
       post-effective amendments thereto.

              "Remarketed Notes" means the Pledged Notes and the Separate Notes,
       if any, subject to Remarketing as identified to the Remarketing Agent by
       the Purchase Contract Agent and the Custodial Agent, respectively, prior
       to 10:00 a.m., New York City time, on the Business Day immediately
       preceding the Remarketing Date, and shall include: (a) the Notes of the
       Holders of Normal Units who have not notified the Purchase Contract Agent
       prior to 5:00 p.m. on the thirteenth Business Day prior to the Stock
       Purchase Date of their intention to effect a Cash Settlement of the
       related Purchase Contracts pursuant to the terms of the Purchase Contract
       Agreement or who have so notified the Purchase Contract Agent but failed
       to make the required cash payment on the thirteenth Business Day prior to
       the Stock Purchase Date pursuant to the terms of the Purchase Contract
       Agreement, and (b) the Separate Notes of the holders of Separate Notes,
       if any, who have elected to have their Separate Notes be remarketed in
       such Remarketing pursuant to the terms of the Purchase Contract Agreement
       and the Supplemental Indenture.

              "Remarketing" means the remarketing of the Remarketed Notes
       pursuant to this Remarketing Agreement

              "Remarketing Agent" means [________] appointed as the Remarketing
       Agent by the Company pursuant to Section 2(a) hereof.

              "Remarketing Materials" means the Preliminary Prospectus and the
       Prospectus furnished by the Company to the Remarketing Agent for
       distribution to investors in connection with the Remarketing.

              "Transaction Documents" means this Agreement, the Purchase
       Contract Agreement, the Pledge Agreement, the Indenture and the
       Supplemental Indenture, in each case as amended or supplemented from time
       to time.

                                       3
<PAGE>

Section 2.    APPOINTMENT AND OBLIGATIONS OF REMARKETING AGENT.

       (a)    The Company hereby appoints [________] and [________] hereby
accepts such appointment, (i) as the Remarketing Agent to determine, in
consultation with the Company, in the manner provided for herein, in the
Purchase Contract Agreement and in the Notes, the Reset Rate that, in the
opinion of the Remarketing Agent, will, when applied to the Remarketed Notes,
enable the aggregate market value of the Remarketed Notes equal 100.25% of the
aggregate principal amount of such Remarketed Notes as of the Remarketing Date
or as of any Subsequent Remarketing Date, as the case may be, and (ii) as the
exclusive Remarketing Agent (subject to the right of such Remarketing Agent to
appoint additional remarketing agents hereunder as described below) to remarket
the Remarketed Notes to be included in the remarketing on the Remarketing Date,
and, if necessary, on February 4, 2009 and, if necessary, on February 5, 2009
and, if necessary, on February 6, 2009 and, if necessary, on February 9, 2009
and, on February 10, 2009 and, if necessary, on February 11, 2009, as the case
may be. The Remarketing Agent shall have the right, on 15 Business Days' notice
to the Company, to appoint one or more additional remarketing agents so long as
any such additional remarketing agents shall be reasonably acceptable to the
Company; provided that any such appointment shall not increase the Remarketing
Fee (as defined in Section 4 hereof). Upon any such appointment, the parties
shall enter into an appropriate amendment to this Agreement to reflect the
addition of any such additional remarketing agent.

       (b)    Subject to the terms and conditions set forth herein and in the
Purchase Contract Agreement, the Remarketing Agent shall use its reasonable best
efforts to (i) remarket on the Remarketing Date the Remarketed Notes at the
Reset Rate, (ii) in the event the Remarketing Agent cannot establish such a
Reset Rate on the Remarketing Date, attempt to remarket such Notes on February
4, 2005, and, if necessary, on February 5, 2009 and, if necessary, on February
6, 2009 and, if necessary, on February 9, 2009 and, if necessary, on February
10, 2009 and, if necessary, on February 11, 2009, in each case at the Reset Rate
and (iii) in the event of a Last Failed Remarketing, promptly return the Pledged
Notes, if any, included in such Last Failed Remarketing to the Collateral Agent
to be held by the Collateral Agent in accordance with Section 4.5(b) of the
Pledge Agreement (which Section is incorporated herein by reference) and return
any Separate Notes included in the remarketing to the Custodial Agent in
accordance with Section 4.5(d) of the Pledge Agreement, Section 5.4(b)(ii) of
the Purchase Contract Agreement and Section 2.19 of the Supplemental Indenture
(which Sections are incorporated herein by reference). After deducting the fee
specified in Section 4 below, the proceeds of any such successful remarketing
shall be delivered to the Purchase Contract Agent or the Custodial Agent, as
applicable, in accordance with Sections 4.5(a) and 4.5(d) of the Pledge
Agreement (which Section is incorporated herein by reference) and Section 5.4(b)
of the Purchase Contract Agreement (which Section is incorporated herein by
reference). The right of each Holder of Normal Units or Separate Notes to have
Notes included in any remarketing shall be subject to the conditions that (i)
the Remarketing Agent conducts a remarketing on such date pursuant to the terms
of this Agreement, (ii) the Notes included in a remarketing have not been called
for redemption upon the occurrence

                                       4
<PAGE>

of a Special Event, (iii) the Remarketing Agent is able to find a purchaser or
purchasers for the Remarketed Notes at the Reset Rate and (iv) such purchaser or
purchasers deliver the purchase price therefor to the Remarketing Agent as and
when required.

       (c)    It is understood and agreed that the Remarketing Agent shall not
have any obligation whatsoever to purchase any Notes, whether in a remarketing
held on the Remarketing Date or on any Subsequent Remarketing Date or otherwise,
and shall in no way be obligated to provide funds to make payment upon tender of
Notes for remarketing or to otherwise expend or risk its own funds or incur or
be exposed to financial liability in the performance of its duties under this
Agreement, and, without limitation of the foregoing, the Remarketing Agent shall
not be deemed an underwriter of the Remarketed Notes. The Company shall not be
obligated in any case to provide funds to make payment upon delivery of Notes
for remarketing.

       (d)    The Remarketing Agent shall also, if required by the Securities
Act or the rules and regulations promulgated thereunder, deliver to each
purchaser a Prospectus in connection with the Remarketing.

       (e)    If, by 4:30 p.m., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all Remarketed Notes included in the
Remarketing, a failed Remarketing (the "Failed Remarketing") shall be deemed to
have occurred, and the Remarketing Agent shall so advise by telephone the
Depositary and the Company.

       (f)    The Remarketing Agent shall advise, by telephone, the Company of
the Reset Rate determined in a Successful Remarketing (as defined in Section 4
hereof) as soon as practicable after such determination.

       (g)    By approximately 4:30 p.m., New York City time, on the Trading Day
following the Remarketing Date, PROVIDED that there has not been a Failed
Remarketing, the Remarketing Agent shall advise, by telephone, (i) the
Depositary of the Reset Rate determined in the Remarketing and the number of
Remarketed Notes sold in the Remarketing, (ii) each purchaser (or the Depositary
Participant thereof) of the Reset Rate and the number of Remarketed Notes such
purchaser is to purchase and (iii) each purchaser to give instructions to its
Depositary Participant to pay the purchase price on the Settlement Date in same
day funds against delivery of the Remarketed Notes purchased through the
facilities of the Depositary.

                                       5
<PAGE>

Section 3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

       The Company represents and warrants to the Remarketing Agent (i) on and
as of the date any Remarketing Materials are first distributed in connection
with the Remarketing (the "Commencement Date"), (ii) on and as of the
Remarketing Date or any Subsequent Remarketing Date and (iii) on and as of the
settlement date relating to such Remarketing Date or Subsequent Remarketing Date
(the "Settlement Date"), that:

       (a)    Each of the representations and warranties of the Company as set
forth in Sections 2(a) through 2(gg) of the Underwriting Agreement dated
December 6, 2005 (the "Underwriting Agreement") among the Company and the
Underwriters identified in Schedule I thereto, was true and correct when made on
December 6, 2005; [Note: representations and warranties similar to those
contained in the Underwriting Agreement to be included and agreed upon; provided
that for purposes of such representations and warranties, any reference in such
sections of the Underwriting Agreement to (i) the "Registration Statement", the
"Prospectus" or the "Preliminary Prospectus" shall be deemed to refer to such
terms as defined herein and (ii) the "Closing Date" shall be deemed to refer to
the applicable Remarketing Date or Subsequent Remarketing Date.]

       (b)    The Registration Statement, if any, in the form heretofore
delivered or to be delivered to the Remarketing Agent, has been declared
effective by the Commission in such form; and no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission.

       (c)    The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

       (d)    The Registration Statement, if any, conforms (and the Prospectus,
if any, and any further amendments or supplements to the Registration Statement
or the Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform) in all material respects to the requirements
of the Securities Act, the Trust Indenture Act of 1939, as amended, and the
rules and regulations promulgated thereunder, and the Registration Statement and
the Remarketing Materials (and any

                                       6
<PAGE>

amendment or supplement thereto) as of their respective effective or filing
dates and as of the Commencement Date, applicable Remarketing Date or Subsequent
Remarketing Date and Settlement Date do not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided that no representation and warranty is made as to any statement of
eligibility on Form T-1 filed or incorporated by reference as part of the
Registration Statement or the Remarketing Materials, or as to information
relating to the Remarketing Agent or the Holders of the Remarketed Notes
contained in or omitted from the Registration Statement or the Remarketing
Materials in reliance upon and in conformity with written information furnished
to the Company by the Remarketing Agent expressly for use therein.

       (e)    This Agreement has been duly authorized, executed and delivered by
the Company.

       (f)    The Remarketed Notes will conform to the descriptions thereof
contained in the Prospectus and in any other Remarketing Materials.

       (g)    No Event of Default (as defined in the Indenture, as supplemented
by the Supplemental Indenture) has occurred and is continuing.

Section 4.    FEES.

       In the event of a successful remarketing in which the Remarketed Notes
are sold for an aggregate amount that is equal to 100.25% of the aggregate
principal amount of the Remarketed Notes (a "Successful Remarketing"), the
Remarketing Agent shall retain as a remarketing fee (the "Remarketing Fee") an
amount not exceeding 25 basis points (0.25%) of the Remarketing Value of the
Remarketed Notes in accordance with Section 5.4(b) of the Purchase Contract
Agreement and Section 2.19 of the Supplemental Indenture.

Section 5.    COVENANTS OF THE COMPANY.

       (a)    The Company covenants and agrees as follows:

              1.     If and to the extent the Remarketed Notes are required (in
              the view of counsel, which need not be in the form of a written
              opinion, for either the Remarketing Agent or the Company) to be
              registered under the Securities Act as in effect at the time of
              the Remarketing,

                     i.     to prepare the Registration Statement and the
                            Prospectus, to file any such Prospectus pursuant to
                            the Securities Act within the period required by the
                            Securities Act and the rules and regulations
                            thereunder and to use commercially reasonable
                            efforts to cause the Registration Statement to be
                            declared effective by the Commission

                                       7
<PAGE>

                            prior to the second Business Day immediately
                            preceding the Remarketing Date;

                     ii.    to file promptly with the Commission any amendment
                            to the Registration Statement or the Prospectus or
                            any supplement to the Prospectus that may, in the
                            reasonable judgment of the Company, be required by
                            the Securities Act or requested by the Commission;

                     iii.   to advise the Remarketing Agent, promptly after it
                            receives notice thereof, of the time when any
                            amendment to the Registration Statement has been
                            filed or becomes effective or any supplement to the
                            Prospectus or any amended Prospectus has been filed
                            and to furnish the Remarketing Agent with copies
                            thereof;

                     iv.    to advise the Remarketing Agent, promptly after it
                            receives notice thereof, of the issuance by the
                            Commission of any stop order or of any order
                            preventing or suspending the use of the Prospectus,
                            of the suspension of the qualification of any of the
                            Remarketed Notes for offering or sale in any
                            jurisdiction, of the initiation or threatening of
                            any proceeding for any such purpose, or of any
                            request by the Commission for the amending or
                            supplementing of the Registration Statement or the
                            Prospectus or for additional information, and, in
                            the event of the issuance of any stop order or of
                            any order preventing or suspending the use of any
                            Prospectus or suspending any such qualification, to
                            use promptly its best efforts to obtain its
                            withdrawal;

                     v.     to furnish promptly to the Remarketing Agent such
                            copies of the following documents as the Remarketing
                            Agent shall reasonably request: (A) conformed copies
                            of the Registration Statement as originally filed
                            with the Commission and each amendment thereto (in
                            each case excluding exhibits); (B) the Preliminary
                            Prospectus and any amended or supplemented
                            Preliminary Prospectus, (C) the Prospectus and any
                            amended or supplemented Prospectus; and (D) any
                            document incorporated by reference in the Prospectus
                            (excluding exhibits thereto); and, if at any time
                            when delivery of a Prospectus is required in
                            connection with the Remarketing, any event shall
                            have occurred as a result of which the Prospectus as
                            then amended or supplemented would include any
                            untrue statement of a material fact or omit to state
                            any material fact necessary in order to make the
                            statements therein, in the light of the
                            circumstances under which they were made when such
                            Prospectus is delivered, not misleading, or if for
                            any other reason it shall be necessary during such
                            same period to amend or supplement the Prospectus or
                            to file under the Exchange Act any document
                            incorporated by reference in the Prospectus in order
                            to comply

                                       8
<PAGE>

                            with the Securities Act or the Exchange Act, to
                            notify the Remarketing Agent and, upon its request,
                            to file such document and to prepare and furnish
                            without charge to the Remarketing Agent and to any
                            dealer in securities as many copies as the
                            Remarketing Agent may from time to time reasonably
                            request of an amended or supplemented Prospectus
                            that will correct such statement or omission or
                            effect such compliance;

                     vi.    prior to filing with the Commission (A) any
                            amendment to the Registration Statement or
                            supplement to the Prospectus or (B) any Prospectus
                            pursuant to Rule 424 under the Securities Act, to
                            furnish a copy thereof to the Remarketing Agent and
                            counsel to the Remarketing Agent;

                     vii.   as soon as practicable, but in any event not later
                            than eighteen months, after the effective date of
                            the Registration Statement, to make "generally
                            available to its security holders" an "earnings
                            statement" of the Company and its subsidiaries
                            complying with (which need not be audited) Section
                            11(a) of the Securities Act and the rules and
                            regulations thereunder (including, at the option of
                            the Company, Rule 158 under the Securities Act). The
                            terms "Generally Available to its Security Holders"
                            and "Earnings Statement" shall have the meanings set
                            forth in Rule 158 under the Securities Act; and

                     viii.  to take such action as the Remarketing Agent may
                            reasonably request in order to qualify the
                            Remarketed Notes for offer and sale under the
                            securities or "blue sky" laws of such jurisdictions
                            as the Remarketing Agent may reasonably request;
                            provided that in no event shall the Company be
                            required to qualify as a foreign corporation or to
                            file a general consent to service of process in any
                            jurisdiction.

                     2.     To pay: (1) the costs incident to the preparation
                     and printing of the Registration Statement, if any, any
                     Prospectus and any other Remarketing Materials and any
                     amendments or supplements thereto; (2) the costs of
                     distributing the Registration Statement, if any, any
                     Prospectus and any other Remarketing Materials and any
                     amendments or supplements thereto; (3) any fees and
                     expenses of qualifying the Remarketed Notes under the
                     securities laws of the several jurisdictions as provided in
                     Section 5(a)(9) and of preparing, printing and distributing
                     a Blue Sky Memorandum, if any (including any related fees
                     and expenses of counsel to the Remarketing Agent); (4) all
                     other costs and expenses incident to the performance of the
                     obligations of the Company hereunder and the Remarketing
                     Agent hereunder; and (5) the reasonable fees and expenses
                     of

                                       9
<PAGE>

                     one counsel to the Remarketing Agent in connection with
                     their duties hereunder.

                     3.     To furnish the Remarketing Agent with such
                     information and documents as the Remarketing Agent may
                     reasonably request in connection with the transactions
                     contemplated hereby, and to make reasonably available to
                     the Remarketing Agent and any accountant, attorney or other
                     advisor retained by the Remarketing Agent such information
                     that parties would customarily require in connection with a
                     due diligence investigation conducted in accordance with
                     applicable securities laws.

              (b)    The Remarketing Agent covenants and agrees as follows:

                     1.     that it will not disseminate any written material
                     for or in connection with the Remarketing other than the
                     Remarketing Materials and agrees that it will not make any
                     written statements in connection with the Remarketing,
                     other than statements that are set forth in the Remarketing
                     Materials unless authorized in advance by the Company;

                     2.     that it will not distribute the Remarketing
                     Materials if it has been notified by the Company in writing
                     of (i) the occurrence of any event, or the discovery of any
                     fact, that could reasonably be expected to cause any
                     representation or warranty contained in this Agreement to
                     be untrue or inaccurate in any material respect, (ii) the
                     issuance of any comment or stop order or the taking of any
                     other action by the Commission or any other governmental or
                     regulatory agency with respect to the Remarketing
                     Materials, (iii) the occurrence of any event, or the
                     discovery of any fact, that could reasonably be expected to
                     cause the Company to amend or supplement the Remarketing
                     Materials and (iv) the occurrence of any event, or the
                     discovery of any fact, that would cause the Remarketing
                     Materials to contain any untrue statement of a material
                     fact or omit to state therein a material fact necessary to
                     make the statements therein, in light of the circumstances
                     under which they were made, not misleading;

                     3.     that if, and for so long as the Notes are in the
                     possession of the Remarketing Agent prior to the settlement
                     of the Purchase Contracts, (i) the Remarketing Agent will
                     hold such Notes for the sole benefit of the Company, (ii)
                     such Notes will continue to constitute Collateral (as
                     defined in the Pledge Agreement and (iii) the Company will
                     retain all of the rights, privileges and benefits with
                     respect thereto as described in the Pledge Agreement.

                                       10
<PAGE>

Section 6.    REPLACEMENT AND RESIGNATION OF REMARKETING AGENT.

       (a)    The Company may replace [_______] as the Remarketing Agent by
giving notice prior to 3:00 p.m., New York City time on the [eleventh] Business
Day immediately prior to the Remarketing Date. Upon providing such notice, the
Company shall use all reasonable best efforts to appoint such a successor and to
enter into a remarketing agreement with such successor as soon as reasonably
practicable.

       (b)    [________] may resign at any time and be discharged from its
duties and obligations hereunder as the Remarketing Agent by giving notice prior
to 3:00 p.m., New York City time on the [eleventh] Business Day immediately
prior to the Remarketing Date. Upon receiving notice from the Remarketing Agent
that it wishes to resign hereunder, the Company shall use all reasonable best
efforts to appoint such a successor and enter into a remarketing agreement with
it as soon as reasonably practicable.

       (c)    The Company shall give the Purchase Contract Agent, the Collateral
Agent, the Custodial Agent and the Trustee prompt written notice of any
replacement of the Remarketing Agent pursuant to this section.

       (d)    The Remarketing Agent shall give the Purchase Contract Agent, the
Collateral Agent, the Custodial Agent and the Trustee prompt written notice of
its resignation pursuant to this section.

       (e)    Notwithstanding the above, no such resignation nor any such
removal shall become effective until the Company shall have appointed (with
notice to the Purchase Contract Agent, the Custodial Agent, the Collateral Agent
and the Trustee) at least one nationally recognized broker-dealer as successor
Remarketing Agent and such successor Remarketing Agent shall have entered into a
remarketing agreement with the Company, in which it shall have agreed to conduct
the remarketing in accordance with this Agreement in all material respects.

Section 7.    DEALING IN THE SECURITIES.

       The Remarketing Agent, when acting hereunder or when acting in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold or deal in any of the Notes, Normal Units, Stripped Units or any
other securities of the Company; provided, however, that in buying, selling,
holding, or dealing in any of the Notes, Normal Units, Stripped Units or any
other securities of the Company, the Remarketing Agent may not violate any of
its duties under this Agreement. With respect to any Notes, Normal Units,
Stripped Units or any other securities of the Company owned by it, the
Remarketing Agent may exercise any vote or join in any action with like effect
as if it did not act in any capacity hereunder. The Remarketing Agent, in its
individual capacity, either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Company as freely as if
it did not act in any capacity hereunder.

                                       11
<PAGE>

       The Company or its affiliates may, to the extent permitted by law,
purchase any Notes that are remarketed by the Remarketing Agent.

Section 8.    CONDITIONS TO THE REMARKETING AGENT'S OBLIGATIONS.

              The obligations of the Remarketing Agent hereunder shall be
subject to the following conditions:

       (a)    The Prospectus, if any, shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement, if any, or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission.

       (b)    (1) Trading generally shall not have been suspended or materially
limited on the New York Stock Exchange, (2) trading of any securities of the
Company shall not have been materially suspended or limited on the New York
Stock Exchange, (3) a general moratorium on commercial banking activities in New
York, the Cayman Islands or Bermuda shall not have been declared by the relevant
authorities and there shall not have occurred a material disruption in
commercial banking or securities settlement or clearance services in the United
States or other relevant jurisdiction, or (4) there shall not have occurred a
material adverse change in the financial markets, any outbreak or escalation of
hostilities involving the United States, the Cayman Islands or Bermuda or the
declaration by the United States, the Cayman Islands or Bermuda of a national
emergency or war or other calamity or crisis, if the effect of any such event
specified in this clause (4) in the judgment of the Remarketing Agent makes it
impracticable or inadvisable to proceed with the Remarketing or the delivery of
the Remarketed Notes on the terms and in the manner contemplated in the
Transaction Documents.

       (c)    The representations and warranties of the Company contained herein
shall be true and correct in all material respects on and as of the Remarketing
Date, and the Company, the Purchase Contract Agent and the Collateral Agent
shall have performed in all material respects all covenants and agreements
contained herein or in the Purchase Contract Agreement or Pledge Agreement to be
performed on their part at or prior to the Remarketing Date.

       (d)    The Company shall have furnished to the Remarketing Agent a
certificate, dated the Remarketing Date, of the Chief Executive Officer and the
Treasurer satisfactory to the Remarketing Agent stating that: (1) no order
suspending the effectiveness of the Registration Statement, if any, or
prohibiting the sale of the Remarketed Notes is in effect, and no proceedings
for such purpose are pending before or, to the knowledge of such officers,
threatened by the Commission and (2) the representations and warranties of the
Company in Section 3 of this Agreement are true and correct on and as of the
Remarketing Date and the Company has performed in all material respects all
covenants and agreements contained herein to be performed on its part at or
prior to such Remarketing Date.

                                       12
<PAGE>

       (e)    On the Remarketing Date, the Remarketing Agent shall have received
a letter addressed to the Remarketing Agent and dated such date, in form and
substance satisfactory to the Remarketing Agent, of PricewaterhouseCoopers LLP,
the independent accountants of the Company, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
with respect to certain financial information contained in the Remarketing
Materials, if any.

       (f)    Each of (1) the General Counsel to the Company, (2) Cahill Gordon
& Reindel LLP, counsel to the Company, (3) Appleby Spurling Hunter, Cayman
Islands counsel to the Company and (4) Emmet, Marvin & Martin, LLP, counsel to
the Purchase Contract Agent and Collateral Agent, shall have furnished to the
Remarketing Agent its opinion, addressed to the Remarketing Agent and dated the
Remarketing Date, in form and substance reasonably satisfactory to the
Remarketing Agent addressing such matters as are set forth in such counsel's
opinion furnished pursuant to Sections 7(c), 7(d), 7(e) and 7(f) of the
Underwriting Agreement except that such opinions (i) shall appropriately address
the Remarketing Agreement and, as to the enforceability of the securities, such
opinions shall be limited to the Remarketed Notes and (ii) may be adapted as
necessary to relate to the Remarketing Materials, if any, or to any changed
circumstances or events occurring subsequent to the date of this Agreement, such
adaptations being reasonably acceptable to counsel to the Remarketing Agent.

       (g)    [________], counsel for the Remarketing Agent, shall have
furnished to the Remarketing Agent its opinion, addressed to the Remarketing
Agent and dated the applicable Remarketing Date, in form and substance
satisfactory to the Remarketing Agent.

       (h)    There shall not have been, since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition (financial or otherwise), business, properties or results of
operations of the Company and its subsidiaries taken as a whole.

Section 9.    TERMINATION OF REMARKETING AGREEMENT.

         This Agreement shall automatically terminate (i) as to the Remarketing
Agent on the effective date of the resignation or removal of the Remarketing
Agent pursuant to Section 6 and (ii) on the earlier of (x) any Special Event
Redemption Date and (y) the Stock Purchase Date. If this Agreement is terminated
pursuant to any of the other provisions hereof, except as otherwise provided
herein, the Company shall not be under any liability to the Remarketing Agent
and the Remarketing Agent shall not be under any liability to the Company,
except that if this Agreement is terminated by the Remarketing Agent because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Remarketing Agent for all of its out-of-pocket expenses (including the
reasonable fees and disbursements of its counsel) reasonably incurred by it.
Section 10, Section 11, Section 12 and Section 14 hereof shall survive the
termination of this Agreement or the resignation or removal of the Remarketing
Agent.

                                       13
<PAGE>

Section 10.   REMARKETING AGENT'S PERFORMANCE; DUTY OF CARE.

       The duties and obligations of the Remarketing Agent shall be determined
solely by the express provisions of this Agreement and the Transaction
Documents. No implied covenants or obligations of or against the Remarketing
Agent shall be read into this Agreement or any of the Transactions Documents. In
the absence of willful misconduct, bad faith or gross negligence on the part of
the Remarketing Agent, the Remarketing Agent may conclusively rely upon any
document furnished to it which purports to conform to the requirements hereunder
as to the truth of the statements expressed therein. The Remarketing Agent shall
be protected in acting upon any document or communication reasonably believed by
it to be signed, presented or made by the proper party or parties. The
Remarketing Agent shall not have any obligation to determine whether there is
any limitation under applicable law on the Reset Rate on the Remarketed Notes
or, if there is any such limitation, the maximum permissible Reset Rate on the
Remarketed Notes, and it shall rely solely upon timely written notice from the
Company pursuant to Section 2(a) hereof as to whether or not there is any such
limitation and, if so, the maximum permissible Reset Rate. The Remarketing Agent
shall not incur any liability under this Agreement to any beneficial owner or
holder of Remarketed Notes, or other securities, either in its individual
capacity or as Remarketing Agent, as the case may be, for any action or failure
to act in connection with the remarketing of the Remarketed Notes or otherwise
in connection with the transactions contemplated by this Agreement, except to
the extent that such liability has, by final judicial determination, resulted
from the willful misconduct, bad faith or gross negligence of the Remarketing
Agent or from its failure to fulfill its express obligations hereunder. The
provisions of this Section 10 shall survive any termination of this Agreement
and shall also continue to apply to every Remarketing Agent notwithstanding its
resignation or removal. The Remarketing Agent will act as the agent of the
Holders.

Section 11.   INDEMNIFICATION.

       (a)    The Company will indemnify and hold harmless the Remarketing
Agent, against any losses, claims, damages or liabilities to which the
Remarketing Agent may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus, or any amendments or supplement thereto, or any related Preliminary
Prospectus or preliminary prospectus supplement or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Remarketing Agent for any legal expenses of one counsel
(in addition to any local counsel) engaged reasonably incurred by the
Remarketing Agent in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission from any of such

                                       14
<PAGE>

documents in reliance upon and in conformity with written information furnished
to the Company by the Remarketing Agent specifically for use therein.

       (b)    The Remarketing Agent will indemnify and hold harmless the
Company, its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement thereto,
or any related Preliminary Prospectus or Preliminary Prospectus supplement, or
any other Remarketing Materials, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by the
Remarketing Agent specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided that in no case will the Remarketing Agent
be liable or responsible for any amount in excess of the fee paid to the
Remarketing Agent pursuant to Section 4.

       (c)    Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In the case of parties
indemnified pursuant to subsection (a) above, counsel to the indemnified parties
shall be selected by the Remarketing Agent. In case any such action shall be
brought against the indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation (as set forth below). Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying

                                       15
<PAGE>

party to represent the indemnified party would present such counsel with a
conflict of interest; (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or the indemnified party which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 11 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

Section 12.   CONTRIBUTION.

       (a)    If the indemnification provided for in Section 11 is unavailable
to or insufficient to hold harmless an indemnified party under Sections 11(a) or
11(b), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Remarketing Agent on the other
from the offering of the Remarketed Notes or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportions as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Remarketing Agent on the other in connection with the statements of omissions
which resulted in such losses, claims, damages or liabilities as well as any
relevant equitable considerations. The relative benefits received by the Company
on one hand and the Remarketing Agent on the other hand in connection with the
Remarketing shall be deemed to be in the same proportions as the total net
proceeds of the Remarketed Notes less the fee paid to the Remarketing Agent on
the one hand and the fee paid to the Remarketing Agent on the other hand bear to
the total net proceeds of the Remarketed Notes. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact

                                       16
<PAGE>

relates to information supplied by the Company on the one hand or the
Remarketing Agent on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Remarketing Agent agree that it would not be just
and equitable if contribution pursuant to this subsection (a) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(a). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (a) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (a), the Remarketing Agent shall not be required
to contribute any amount in excess of the amount by which the fees received by
it under Section 4 exceeds the amount of any damages which the Remarketing Agent
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

       (b)    The obligations of the Company under Section 11 and this Section
12 shall be in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Remarketing Agent and to each person, if any, who controls the
Remarketing Agent within the meaning of the Securities Act; and the obligations
of the Remarketing Agent under Section 11 and this Section 12 shall be in
addition to any liability which the Remarketing Agent may otherwise have and
shall extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who signed the Registration Statement
and to each person, if any, who controls the Company within the meaning of the
Securities Act.

       (c)    The indemnity and contribution provisions contained in Section 11
and this Section 12 and the representations, warranties and other statements of
the Company contained in this Agreement shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Remarketing Agent or any person controlling the
Remarketing Agent, or the Company, its officers or director or any controlling
person of the Company, and the completion of the Remarketing.

Section 13.   PERSONS ENTITLED TO BENEFIT OF AGREEMENT.

       This Agreement shall inure to the benefit of and be binding upon each
party hereto and its respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
Remarketing Agent and the person or persons, if any, who control the Remarketing
Agent within the meaning of Section 15 of the Securities Act and (y) the
indemnity agreement of the Remarketing Agent contained in Section 11(b) of this
Agreement shall be deemed to be for the benefit of the Company's directors and
officers who sign the Registration Statement, if any, and any person controlling
the Company within the meaning of Section 15 of

                                       17
<PAGE>

the Securities Act. Nothing contained in this Agreement is intended or shall be
construed to give any person, other than the persons referred to herein, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.

Section 14.   GOVERNING LAW; SUBMISSION TO JURISDICTION; JUDGMENT CURRENCY.

       THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

       The Company irrevocably (i) agrees that any legal suit, action or
proceeding against the Company brought by the Remarketing Agent or by any person
who controls the Remarketing Agent arising out of or based upon this Agreement
or the transactions contemplated hereby or thereby may be instituted in the
federal district court for the Southern District of New York and the New York
County Court, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the exclusive jurisdiction of such courts in any
such suit, action or proceeding. The Company has appointed CT Corporation
System, New York, New York, as its authorized agent (the "Authorized Agent")
upon whom process may be served in any such action arising out of or based on
this Agreement or the transactions contemplated hereby or thereby which may be
instituted in the federal district court for the Southern District of New York
and the New York County Court by the Remarketing Agent or by any person who
controls the Remarketing Agent, expressly consents to the jurisdiction of any
such court in respect of any such action, and waives any other requirements of
or objections to personal jurisdiction with respect thereto. Such appointment
shall be irrevocable. The Company represents and warrants that the Authorized
Agent has agreed to act as such agent for service of process and agrees to take
any and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment in full force
and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every respect,
effective service of process upon the Company.

       In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company will indemnify the Remarketing
Agent against any loss incurred by the Remarketing Agent as a result of any
variation between (i) the rate of exchange at which the United States dollar
amount is converted into the judgment currency for the purpose of such judgment
or order and (ii) the rate of exchange at which the Remarketing Agent is able to
purchase United States dollars with the amount of judgment currency actually
received by the Remarketing Agent. The foregoing indemnity shall constitute a
separate and independent obligation of the Company and

                                       18
<PAGE>

shall continue in full force and effect notwithstanding any such judgment or
order aforesaid. The term "rate of exchange" shall include any premiums and
costs of exchange payable in connection with the purchase of or conversion into
United States dollars.

Section 15.   SURVIVAL.

       The respective indemnities, representations, warranties and agreements of
the Company and the Remarketing Agent contained in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, shall survive any
Remarketing and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.

Section 16.   SUCCESSORS AND ASSIGNS.

       The rights and obligations of the Company hereunder may not be assigned
or delegated to any other Person without the prior written consent of the
Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder
may not be assigned or delegated to any other Person (other than an affiliate of
the Remarketing Agent) without the prior written consent of the Company.

Section 17.   HEADINGS.

       Section headings have been inserted in this Agreement as a matter of
convenience of reference only, and such section headings are not a part of this
Agreement and will not be used in the interpretation of any provision of this
Agreement.

Section 18.   SEVERABILITY.

       If any provision of this Agreement is invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or
public policy or for any other reason, then, to the extent permitted by law,
such circumstances shall not have the effect of rendering the provision in
question invalid, inoperative or unenforceable in any other case, circumstances
or jurisdiction, or of rendering any other provision or provisions of this
Agreement, as the case may be, invalid, inoperative or unenforceable to any
extent whatsoever.

Section 19.   COUNTERPARTS.

       This Agreement may be executed in counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same
document.

Section 20.   AMENDMENTS.

       This Agreement may be amended only by an instrument in writing signed by
the Company and the Remarketing Agent.

                                       19
<PAGE>

Section 21.   NOTICES.

       Unless otherwise specified, any notices, requests, consents or other
communications given or made hereunder shall be made in writing or transmitted
by any standard form of telecommunication, including telephone or telecopy, and
confirmed in writing. All written notices and confirmations of notices by
telecommunication shall be deemed to have been validly given or made when
delivered or mailed, registered or certified mail, return receipt requested and
postage prepaid. All such notices, requests, consents or other communications
shall be addressed as follows: if to the Company, to XL Capital Ltd, XL House,
One Bermudiana Road, Hamilton HM11, Bermuda, fax number: (441) 292-5280,
Attention: General Counsel; if to the Remarketing Agent, to [________],
[________], [________], fax number [________], Attention: General Counsel; if to
the Collateral Agent, to The Bank of New York, [________], [________], fax
number [________], Attention: [________]; and if to the Purchase Contract Agent,
to The Bank of New York, [________], [________], fax number [________],
Attention: [________], or to such other address as any of the above shall
specify to the others in writing.

                                       20
<PAGE>

       IN WITNESS WHEREOF, each of the Company, the Purchase Contract Agent and
the Remarketing Agent has caused this Agreement to be executed in its name and
on its behalf by one of its duly authorized signatories as of the date first
above written.

                                        XL CAPITAL LTD

                                        By: ______________________________
                                            Name:
                                            Title:

                                       21
<PAGE>

                                        [________], as Remarketing Agent

                                        By: _______________________________
                                            Name:
                                            Title:

CONFIRMED AND ACCEPTED:

THE BANK OF NEW YORK
not individually but solely as Purchase Contract Agent
and as attorney-in-fact for the Holders of the Purchase Contracts

By:__________________________
    Name:
    Title:

                                       22

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