Document:

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                                  EXHIBIT 10.1
                               EXCHANGE AGREEMENT

      EXCHANGE AGREEMENT ("AGREEMENT") dated as of this 1st day of October, 2002
by and among HIGOAL DEVELOPMENT LIMITED, a Cayman Islands company ("HDL"), the
Shareholders of HDL identified on Schedule I hereto (the "HDL Shareholders"),
Wang Kuo An ("Wang"), as agent for the HDL Shareholders, and KID CASTLE
EDUCATIONAL CORPORATION, a Florida corporation ("KCEC").

                                    RECITALS

      WHEREAS, the HDL Shareholders hold 11,880,000 shares of common stock of
HDL (the "HDL SHARES"), which constitute all of the issued and outstanding
shares of HDL.

      WHEREAS, the HDL Shareholders and KCEC desire to effect the exchange of
the HDL Shares for 11,880,000 shares of common stock of KCEC (the "KCEC SHARES")
upon the terms and subject to the conditions set forth herein.

      NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and agreements hereinafter set forth, the
parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

      When used herein, the following terms shall have the meanings set forth
below:

      "AFFILIATE" means, with respect to any given Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

      "ASSETS" means all properties, assets, Contracts, business, goodwill and
rights of a Person as a going concern, of every kind, nature, character and
description, tangible and intangible, wherever located and whether or not
carried or reflected on the books and records of a Person on the Closing Date.

      "CONTRACT" means any contract, agreement, lease, license, arrangement,
commitment, sales order, purchase order or any claim or right or any benefit or
obligation arising thereunder or resulting therefrom and currently in effect,
whether oral or written.

      "DOLLARS" and "$" means dollars in lawful currency of the United States of
America.

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      "EMPLOYEE BENEFIT PLAN" means any (i) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan,
(ii) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (iii) qualified defined benefit retirement plan
or arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (iv) Employee Welfare Benefit Plan or material fringe
benefit plan or program.

      "EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA Section
3(2).

      "EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA Section
3(1).

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

      "EXCHANGE ACT" shall mean the United States Securities Exchange Act of
1934, as amended.

      "EXPORT CONTROL LAWS" shall mean all laws, now or hereafter in effect, and
in each case as amended or supplemented from time to time, and any judicial or
administrative interpretations thereof, relating to the export or re-export of
commodities and technologies. Export Control Laws include, but are not limited
to, the Export Administration Act of 1979 (24 U.S.C. Sections 2401-2420); the
International Emergency Economic Powers Act (50 U.S.C. Sections 1701-1706); the
Trading with the Enemy Act (50 U.S.C. Sections 1 et seq); the Arms Export
Control Act (22 U.S.C. Sections 2778, 2779); and the International Boycott
Provisions of Section 999 of the Code.

      "GAAP" shall mean generally accepted accounting principles in the United
States as of the date of this Agreement consistently applied.

      "INTELLECTUAL PROPERTY" means any and all (i) inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (ii)
trademarks, service marks, trade dress, logos, trade names, and corporate names,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (iii) copyrightable works,
whether or not registered, all copyrights, and all applications, registrations,
and renewals in connection therewith, (iv) mask works and all applications,
registrations, and renewals in connection therewith, (v) trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, blueprints, sketches,
storyboards, models, engineering drawings, specifications, customer and supplier
lists, pricing and cost information, and business and marketing plans and
proposals), (vi) computer software (including data and related documentation),
(vii) other proprietary rights and Know-how, (viii) copies and tangible
embodiments thereof (in whatever form or medium) and (ix) licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder.

      "KNOW-HOW" means any and all technical knowledge, proprietary rights,
patented or unpatented inventions, trade secrets, analytical methodology,
processes, data and all other

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information or experience possessed by, as the case may be, KCEC or HDL, or
which KCEC or HDL have the right to use.

      "LIABILITIES" means any direct or indirect liability, indebtedness, claim,
loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate
or inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, known or unknown, contingent or otherwise.

      "LIEN" means any mortgage, lien, pledge, charge, security interest,
license, lease, claim, restriction, option, conditional sale or installment
Contract or encumbrance of any kind.

      "PERSON" shall include an individual, a partnership, a corporation, a
limited liability company or a division or business unit thereof, a trust, an
unincorporated organization, a government or any department or agency thereof
and any other entity.

      "SECURITIES ACT" shall mean the United States Securities Act of 1933, as
amended.

                                  ARTICLE II.

                               EXCHANGE OF SHARES

      2.1. DELIVERY OF HDL SHARES. Upon the terms and subject to the conditions
of this Agreement, on the Closing Date, the HDL Shareholders shall sell,
transfer, assign and convey to KCEC, and KCEC shall acquire, the HDL Shares, and
the HDL Shareholders shall deliver to KCEC share certificates representing the
HDL Shares, duly endorsed to KCEC or accompanied by stock powers duly executed
in proper form for transfer.

      2.2. ISSUANCE OF KCEC SHARES. In consideration of and in exchange for the
HDL Shares, KCEC shall, at the Closing, allot and issue to the HDL Shareholders,
and the HDL Shareholders shall acquire, the KCEC Shares, and KCEC shall deliver
to the HDL Shareholders share certificates representing newly issued KCEC
Shares.

      2.3. ESCROW OF SHARES. Prior to the Closing, the HDL Shareholders shall
deliver to Piper Rudnick LLP (the "Escrow Agent") the certificate(s)
representing the HDL Shares and KCEC shall deliver to the Escrow Agent the
certificate(s) representing the KCEC Shares. The Escrow Agent shall release the
certificates representing the KCEC Shares to the HDL Shareholders and the
certificates representing the HDL Shares to KCEC upon Closing.

                                  ARTICLE III.

                                     CLOSING

      3.1. CLOSING. The closing (the "CLOSING") of the transactions contemplated
hereby shall be held at the offices of Piper Rudnick LLP located at 1251 Avenue
of the Americas, New York, New York, at 10:00 a.m., local time, on or before
October 31, 2002 or within five (5) days after the conditions contained in
Articles VII and VIII have been satisfied or waived or at such other place and
time as may be agreed upon by the parties hereto. The time and date of the

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Closing is referred to herein as the "CLOSING DATE." At the Closing, in addition
to the exchange of the HDL Shares and the KCEC Shares, the parties hereto shall
deliver such certificates, opinions and other documents as are specified in
Articles VII and VIII.

      3.2. TRANSFER TAXES. Each of the HDL Shareholders and KCEC, as the case
may be, shall be responsible for any transfer and similar taxes assessed or
payable by each of them in connection with the sale and transfer of the HDL
Shares or issuance of the KCEC Shares, as the case may be, and the transactions
contemplated hereby.

                                  ARTICLE IV.

                         REPRESENTATIONS AND WARRANTIES
                      OF HDL, THE HDL SHAREHOLDERS AND WANG

      HDL, WANG AND the HDL Shareholders, jointly and severally, represent and
warrant to, and agree with, KCEC as follows:

      4.1. ORGANIZATION.

            (a) HDL is a corporation duly organized, validly existing and in
good standing under the laws of the Cayman Islands. HDL has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. HDL is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the property owned, leased or operated by HDL or the nature of the
business conducted by it makes such qualification necessary. HDL has heretofore
made available to KCEC true, accurate and complete copies of HDL's of Memorandum
and Articles of Association as in effect on the date hereof and minutes of all
meetings of the stockholders and directors of HDL held through and including the
date of this Agreement. HDL is not in violation of any of the provisions of its
Memorandum and Articles of Association.

            (b) HDL has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors and, if necessary, the stockholders of HDL and no other
corporate proceedings on the part of HDL are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by HDL and constitutes the
legal, valid and binding obligations of HDL, enforceable against them in
accordance with its terms.

      4.2. CAPITALIZATION. HDL has authorized capital stock of 160,000,000
shares of Common Stock, par value $0.30 per share, of which 11,880,000 shares
are issued and outstanding as of the date hereof. All issued and outstanding
shares of capital stock of HDL have been duly authorized, validly issued, fully
paid, nonassessable and are free of preemptive rights. There are no other
convertible securities, options, warrants, subscription calls or other rights or
agreements, arrangements or commitments obligating HDL to issue, transfer or
sell any of its securities. None of such issued and outstanding shares is the
subject of any voting trust

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agreement or other agreement relating to the voting thereof or restricting in
any way the sale or transfer thereof.

      4.3. SHARE OWNERSHIP. The HDL Shareholders have full and valid title and
control of the HDL Shares free and clear of any Lien. None of the HDL Shares are
the subject of any voting trust agreement or other agreement relating to the
voting thereof or restricting in any way the sale or transfer thereof except for
this Agreement.

      4.4. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.

            (a) The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby will not, (i) conflict with
or violate any law, regulation, court order, judgment or decree, (ii) violate or
conflict with the Memorandum and Articles of Association of HDL, or (iii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination or cancellation of any Contract, permit, license or franchise to
which HDL is bound or affected, except for conflicts, violations, breaches or
defaults which, in the aggregate, would not have a material adverse effect on
the business, operations, Assets, Liabilities, condition (financial or
otherwise), results of operations or prospects (a "MATERIAL ADVERSE EFFECT") of
HDL.

            (b) The execution, delivery or performance of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
require any notice, report or other filing with any governmental authority,
domestic or foreign, or require any waiver, consent, approval or authorization
of any Person or any governmental or regulatory authority, domestic or foreign.

      4.5. [Internationally Omitted.]

      4.6. REAL AND PERSONAL PROPERTY. HDL has good and marketable title to, or
valid leasehold or license interests in, all real property or other Assets used
or held for use in the conduct of its business, including, without limitation,
the Assets reflected on its books and records or acquired after the date thereof
(other than those which have been disposed of in the ordinary course of business
since such date), free and clear of any Liens, other than Liens for taxes not
yet due and payable. All of the real property and Assets owned or leased by HDL
are in all material respects in working condition and repair, ordinary wear and
tear excepted.

      4.7. NO UNDISCLOSED LIABILITIES. HDL has had no direct or indirect
Liabilities, whether due or to become due, or arising out of transactions
entered into, or any state of facts existing on the date hereof which would have
a Material Adverse Effect on HDL.

      4.8. ABSENCE OF CERTAIN CHANGES. Since March 9, 2001, there has been no
material adverse change in the condition (financial or otherwise), Assets,
Liabilities, results of operations, business or prospects of HDL, and nothing
has occurred relative to the business or prospects of HDL which would have a
Material Adverse Effect on the future business of HDL.

      4.9. LITIGATION. No material investigation or review by any governmental
entity or regulatory body, foreign or domestic, with respect to HDL is pending
or, to the knowledge

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of HDL, threatened against HDL, and no governmental entity or regulatory body
has advised HDL of an intention to conduct the same. There is no claim, action,
suit, investigation or proceeding pending or, to the knowledge of HDL,
threatened against or affecting HDL at law or in equity or before any federal,
state, municipal or other governmental entity or regulatory body, or which
challenges the validity of this Agreement or any action taken or to be taken by
HDL pursuant to this Agreement. As of the date hereof, HDL is not subject to,
nor is there in existence, any outstanding judgment, award, order, writ,
injunction or decree of any court, governmental entity or regulatory body
relating to HDL which would have a material adverse effect on HDL.

      4.10. CONTRACTS. HDL has previously provided KCEC access to true, correct
and complete copies of all material Contracts to which HDL is a party. As to
such Contracts, (i) there are no existing breaches or defaults by HDL thereunder
or, to the knowledge of HDL, by the other parties to such Contracts; (ii) no
event, act or omission has occurred or, as a result of the consummation of the
transactions contemplated hereby, will occur which (with or without notice,
lapse of time or the happening or occurrence of any other event) would result in
a default by HDL thereunder or give cause for termination thereof, provided that
insofar as the foregoing representation involves the actions or omissions of
parties other than HDL, it shall be limited to the knowledge of HDL; (iii) none
of them will result in any loss to HDL upon completion or performance thereof;
and (iv) none of the parties to Contracts have expressed an indication to HDL of
their intention to cancel, renegotiate or exercise or not exercise any option
under any such Contracts as a result of the consummation of the transactions
contemplated hereby.

      4.11. INTELLECTUAL PROPERTY.

            (a) HDL owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary for the
operation of the business of HDL as proposed to be conducted. HDL has taken all
commercially reasonable action to maintain and protect each item of Intellectual
Property that it owns or uses.

            (b) HDL has not interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of third
parties, and HDL has not received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation or
violation (including any claim that HDL must license or refrain from using any
Intellectual Property rights of any third Person). To the knowledge of HDL, no
third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of any of HDL.

      4.12. LICENSES, PERMITS AND CONSENTS; COMPLIANCE WITH APPLICABLE LAW.

            (a) HDL has all licenses and permits which individually or in the
aggregate are material to the conduct of the business of HDL or any of its
employees by reason of such employee's activities on behalf of HDL under
applicable law or by any federal, state, local or foreign governmental entity or
regulatory body for the operation of the business of HDL, and all of such listed
licenses and permits are in full force and effect as of the date hereof. HDL has
not received notice and, to the knowledge of HDL, there is no reason to believe,
that any appropriate authority intends to cancel or terminate any of such
licenses or permits or that valid grounds for such cancellation or termination
currently exist.

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            (b) HDL is not in violation or breach of any, and the business and
operations of HDL comply in all material respects and are being conducted in
accordance with, all material governing laws, regulations and ordinances
applicable thereto and HDL is not in material violation of or in material
default under, any judgment, award, order, writ, injunction or decree of any
court, arbitration tribunal, governmental entity or regulatory body.

      4.13. SECURITIES LAW ACKNOWLEDGMENTS. The HDL Shareholders acknowledge
that the KCEC Shares are, and will be, offered and sold to the HDL Shareholders
in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws. The HDL Shareholders will not sell or
otherwise transfer the KCEC Shares without registration under the Securities Act
or an exemption therefrom, and fully understand and agree that the HDL
Shareholders or any such transferee must bear the economic risk of holding the
KCEC Shares for an indefinite period of time because, among other reasons, the
KCEC Shares have not been registered under the Securities Act or under the
securities laws of certain states and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless the securities are subsequently
registered under the Securities Act and under the applicable securities laws of
such states or unless an exemption from such registration is available in the
opinion of counsel for the holder, which counsel and opinion are reasonably
satisfactory to counsel for KCEC. The HDL Shareholders are acquiring the KCEC
Shares for the account of the HDL Shareholders for investment and not with a
view to resale or distribution except in compliance with the Securities Act.

      4.14. REGULATION S EXEMPTION. Each HDL Shareholder understands that the
KCEC Shares are being offered and sold to it in reliance on an exemption from
the registration requirements of United States federal and state securities laws
under Regulation S promulgated pursuant to the Securities Act and that KCEC is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgements and understandings of each HDL Shareholder set
forth herein in order to determine the applicability of such exemptions and the
suitability of each HDL Shareholder to acquire the KCEC Shares. In this regard,
each HDL Shareholder represents, warrants and agrees that:

            (a) Each HDL Shareholder is not a U.S. Person (as defined below) and
is not an affiliate (as defined in Rule 501(b) under the Securities Act) of the
Seller. A "U.S. person" means any one of the following:

            (i) any natural person resident in the United States;

            (ii) any partnership or corporation organized or incorporated under
      the laws of the United States;

            (iii) any estate of which any executor or administrator is a U.S.
      person;

            (iv) any trust of which any trustee is a U.S. person;

            (v) any agency or branch of a foreign entity located in the United
      States;

            (vi) any non-discretionary account or similar account (other than an
      estate or trust) held by a dealer or other fiduciary for the benefit or
      account of a U.S. person;

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            (vii) any discretionary account or similar account (other than an
      estate or trust) held by a dealer or other fiduciary organized,
      incorporated or (if an individual) resident in the United States; and

            (viii) any partnership or corporation if:

                        (1) organized or incorporated under the laws of any
                        foreign jurisdiction; and

                        (2) formed by a U.S. person principally for the purpose
                        of investing in securities not registered under the
                        Securities Act, unless it is organized or incorporated,
                        and owned, by accredited investors (as defined in Rule
                        501(a) under the Securities Act) who are not natural
                        persons, estates or trusts.

            (b) At the time of the origination of contact concerning this
Agreement and the date of the execution and delivery of this Agreement, each HDL
Shareholder was outside of the United States.

            (c) Each HDL Shareholder will not, during the period commencing on
the date of acquisition of the KCEC Shares and ending on the first anniversary
of such date, or such shorter period as may be permitted by Regulation S or
other applicable securities law (the "Restricted Period"), offer, sell, pledge
or otherwise transfer the shares in the United States, or to a U.S. person or
for the account or benefit of a U.S. person, or otherwise in a manner that is
not in compliance with Regulation S.

            (d) Each HDL Shareholder will, after expiration of the Restricted
Period, offer, sell, pledge or otherwise transfer the KCEC Shares only pursuant
to registration under the Securities Act or an available exemption therefrom
and, in accordance with all applicable state and foreign securities laws.

            (e) No HDL Shareholder has engaged in and prior to the expiration of
the Restricted Period will not engage in, any short selling of or any hedging
transaction with respect to the KCEC Shares within the United States, including
without limitation, any put, call or other option transaction, option writing or
equity swap.

            (f) No HDL Shareholder nor any person acting on its behalf has
engaged, nor will, during the Restricted Period, engage in any directed selling
efforts to any U.S. person with respect to the Shares and each HDL Shareholder
and any person acting on its behalf have complied and will comply with the
"offering restrictions" requirements of Regulation S under the Securities Act.

            (g) The transactions contemplated by this Agreement have not been
pre-arranged with a buyer located in the United States or with a U.S. person,
and are not part of a plan or scheme to evade the registration requirements of
the Securities Act.

            (h) No HDL Shareholder nor any person acting on its behalf has
undertaken or carried out any activity for the purpose of, or that could
reasonably be expected to have the

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effect of, conditioning the market in the United States, its territories or
possessions, for any of the KCEC Shares. Each HDL Shareholder agrees not to
cause any advertisement of the Shares to be published in any newspaper or
periodical or posted in any public place and not to issue any circular relating
to the KCEC Shares, except such advertisements that include the statements
required by Regulation S under the Securities Act, and only offshore and not in
the United States or its territories, and only in compliance with any local
applicable securities laws.

            (i) Each certificate representing the KCEC Shares shall be endorsed
with the following legends, in addition to any other legend required to be
placed thereon by applicable federal or state securities laws:

                        (A) "THE SHARES ARE BEING OFFERED TO INVESTORS WHO ARE
                        NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE
                        SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES
                        ACT")) AND WITHOUT REGISTRATION WITH THE UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
                        ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE
                        SECURITIES ACT."

                        (B) "TRANSFER OF THESE SHARES IS PROHIBITED, EXCEPT IN
                        ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT
                        TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
                        AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING
                        TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
                        WITH THE SECURITIES ACT."

            (j) Each HDL Shareholder consents to KCEC making a notation on its
records or giving instructions to any transfer agent of KCEC in order to
implement the restrictions on transfer of the Shares set forth in this Section
4.14.

            (k) Each HDL Shareholder agrees that it will not transfer the KCEC
Shares, and KCEC shall not be required to transfer the shares unless the
transferee executes a representation letter substantially in accordance with
Exhibit A hereto.

      4.15. FINDER'S FEE. There is no investment banker, broker, finder or other
intermediary which has been retained by, or is authorized to act on behalf of,
HDL, who might be entitled to any fee or commission from HDL, KCEC or their
Affiliates upon the consummation of the transactions contemplated hereby.

      4.16. ACCURACY OF REPRESENTATIONS. The representations and warranties made
by HDL, the HDL Shareholder and WANG in this Agreement, and in any certificate
or Schedule referenced hereby or attached hereto, do not contain, and will not
contain, any statement which is false or misleading with respect to any material
fact and do not and will not omit to state a

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material fact required to be stated herein or therein or necessary in order to
make the statements contained herein or therein not materially false or
misleading. There is no material fact or condition which could have a Material
Adverse Effect on HDL which has not been set forth in this Agreement or
described in the Schedules hereto.

                                   ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES
                                     OF KCEC

      KCEC, represents and warrants to, and agrees with, HDL and the HDL
Shareholders as follows:

      5.1. ORGANIZATION; AUTHORITY.

            (a) KCEC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida. KCEC has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. KCEC is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the property owned, leased or operated by KCEC or the nature of the
business conducted by it makes such qualification necessary. KCEC has heretofore
made available to HDL true, accurate and complete copies of KCEC's Articles of
Incorporation and By-Laws as in effect on the date hereof and minutes of all
meetings of the stockholders and directors of KCEC held through and including
the date of this Agreement. KCEC is not in violation of any of the provisions of
its Articles of Incorporation or By-Laws.

            (b) KCEC has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors and, if necessary, the stockholders of KCEC and no other
corporate proceedings on the part of KCEC are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.

            (c) This Agreement has been duly authorized, executed and delivered
by KCEC and constitutes the legal, valid and binding obligations of each of
them, enforceable against them in accordance with its terms. The issuance of the
KCEC Shares have been duly authorized by all required corporate action on the
part of KCEC. The KCEC Shares when issued and paid for in accordance with this
Agreement, will be validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof and will be free and clear
of all Liens.

      5.2. CAPITALIZATION. KCEC has authorized capital stock of 25,000,000
shares of Common Stock, no par value, of which 3,120,829 are issued and
outstanding as of the date hereof. A copy of the current stockholder list is
attached hereto as Schedule 5.2. All issued and outstanding shares of capital
stock of KCEC have been duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. There are no convertible
securities, options, warrants, subscription calls or other rights or agreements,
arrangements or commitments

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obligating KCEC to issue, transfer or sell any of its securities other than as
provided for in Section 8.5 hereto. All of such shares have been issued in
compliance with all Federal and State securities law. None of such issued and
outstanding shares is the subject of any voting trust agreement or other
agreement relating to the voting thereof or restricting in any way the sale or
transfer thereof.

      5.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.

            (a) The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby will not, (i) conflict with
or violate any law, regulation, court order, judgment or decree, (ii) violate or
conflict with the Articles of Incorporation or By-Laws of KCEC, or (iii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination or cancellation of any Contract, permit, license or franchise to
which KCEC is bound or affected, except for conflicts, violations, breaches or
defaults which, in the aggregate, would not have a Material Adverse Effect on
KCEC.

            (b) The execution, delivery or performance of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
require any notice, report or other filing with any governmental authority,
domestic or foreign, or require any waiver, consent, approval or authorization
of any Person or any governmental or regulatory authority, domestic or foreign.

      5.4. SEC REPORTS; FINANCIAL STATEMENTS.

            (a) KCEC has previously delivered to HDL true and complete copies of
its Form 10-SB dated June 29, 1999, Form 10-KSB for the fiscal year ended June
30, 2001 and its Forms 10-QSB for the quarters ended December 31, 2001 and March
31, 2002 (the "SEC REPORTS"), and all other documents (other than preliminary
material) that KCEC was required to file with the SEC since the effective date
of its Form 10-SB. Prior to the Closing Date, KCEC will have furnished HDL with
true and complete copies of any additional SEC Reports required to be filed by
KCEC, if any, with the SEC prior to the Closing Date. As of their respective
filing dates, the SEC Reports complied in all material respects with the
requirements of the Exchange Act or the Securities Act, as the case may be, and
none of the SEC Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which they
were made, not misleading, except to the extent corrected by a subsequently
filed SEC Document.

            (b) The financial statements of KCEC, including the notes thereto,
included in the SEC Reports, comply as to form in all material respects with
applicable accounting requirements and with respect to the published regulations
of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles consistently applied and fairly present the
financial position of KCEC at the dates thereof and for the periods to which
they relate.

            (c) Except and as to the extent reflected in the March 31, 2002
balance sheet of KCEC included in its March 31, 2002 10-QSB, KCEC did not have
any direct or indirect Liabilities, whether due or to become due, or arising out
of transactions entered into, or any state

                                       11
<PAGE>
of facts existing, on or prior to March 31, 2002 which would be required to be
reflected on the March 31, 2002 balance sheet in accordance with GAAP.

      5.5. REAL AND PERSONAL PROPERTY.

            (a) KCEC does not own any real property or lease any property which
is material to the operation of its business, would result in any material
liability if the lease were terminated prior to the expiration of the term
thereof or would interfere with the business of KCEC if it was required to
vacate such premises.

            (b) KCEC has good and marketable title to, or valid leasehold or
license interests in, all other Assets used or held for use in the conduct of
its business, including, without limitation, the Assets reflected on the books
and records or acquired after the date thereof (other than those which have been
disposed of in the ordinary course of business since such date), free and clear
of any Liens, Liens reflected on its books and records and Liens for Taxes not
yet due and payable. All of the Assets owned or leased by KCEC are in all
material respects in good condition and repair, ordinary wear and tear excepted,
and well maintained. There are no material capital expenditures currently
contemplated or necessary to maintain the current business of KCEC.

      5.6. NO UNDISCLOSED LIABILITIES. Except as set forth in KCEC's financial
statements KCEC had no direct or indirect Liabilities, whether due or to become
due, or arising out of transactions entered into, or any state of facts
existing, on the date hereof.

      5.7. ABSENCE OF CERTAIN CHANGES. Since June 30, 2001 there has been no
material adverse change in the condition (financial or otherwise), Assets,
Liabilities, results of operations, business or prospects of KCEC, and nothing
has occurred relative to the business or prospects of KCEC which would have a
Material Adverse Effect on the future business of KCEC.

      5.8. TAX MATTERS. KCEC has filed all tax returns required to be filed by
it (or has filed appropriate extensions therefor), has paid all taxes due
whether identified on the tax returns or otherwise, and has made appropriate
provision in the KCEC Financial Statements for any taxes not yet due, and all
such tax returns were true, correct and complete. None of the tax returns
described in the preceding sentence or otherwise filed by or on behalf of KCEC
contains or will contain a disclosure statement under Section 6661 of the Code
or any similar provision of state, local, foreign or other law. No assets of
KCEC, and no Assets used in the business of KCEC, are subject to any Liens for
taxes.

      5.9. ENTIRE BUSINESS. No portion of the business of KCEC is conducted by
any Affiliate of KCEC or any third party and all of the Assets necessary for the
conduct of the business of KCEC as presently conducted are owned by KCEC. All
such Assets are exclusively owned or leased and used by KCEC and its customers.

      5.10. LITIGATION. No material investigation or review by any governmental
entity or regulatory body, foreign or domestic, with respect to KCEC is pending
or, to the knowledge of KCEC, threatened against KCEC, and no governmental
entity or regulatory body has advised KCEC of an intention to conduct the same.
There is no claim, action, suit, investigation or proceeding pending or, to the
knowledge of KCEC, threatened against or affecting KCEC at law

                                       12
<PAGE>
or in equity or before any federal, state, municipal or other governmental
entity or regulatory body, or which challenges the validity of this Agreement or
any action taken or to be taken by KCEC pursuant to this Agreement. As of the
date hereof, KCEC is not subject to, nor is there in existence, any outstanding
judgment, award, order, writ, injunction or decree of any court, governmental
entity or regulatory body relating to KCEC which would have a Material Adverse
Effect on KCEC.

      5.11. EMPLOYEE BENEFIT PLANS. KCEC does not maintain or contribute to, or
is required to maintain or contribute to any Employee Benefit Plan. To the
knowledge of KCEC, KCEC does not contribute to, ever has contributed to, or ever
has been required to contribute to, any Multiemployer Plan or has any Liability
(including withdrawal Liability) under any Multiemployer Plan. KCEC does not
maintain or ever has maintained or contribute, ever has contributed, or ever has
been required to contribute to any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or their dependents
(other than in accordance with Code Section 4980B).

      5.12. CONTRACTS. KCEC has previously made available to HDL access to true,
correct and complete copies of all material Contracts to which KCEC is a party.
As to such Contracts, (i) there are no existing breaches or defaults by KCEC
thereunder or, to the knowledge of KCEC, by the other parties to such Contracts;
(ii) no event, act or omission has occurred or, as a result of the consummation
of the transactions contemplated hereby, will occur which (with or without
notice, lapse of time or the happening or occurrence of any other event) would
result in a default by KCEC thereunder or give cause for termination thereof,
provided that insofar as the foregoing representation involves the actions or
omissions of parties other than KCEC, it shall be limited to the knowledge of
KCEC; (iii) none of them will result in any loss to KCEC upon completion or
performance thereof; and (iv) none of the parties to Contracts have expressed an
indication to KCEC of their intention to cancel, renegotiate or exercise or not
exercise any option under any such Contracts as a result of the transactions
contemplated hereby.

      5.13. INTELLECTUAL PROPERTY.

            (a) KCEC owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary for the
operation of the businesses of KCEC and as proposed to be conducted. KCEC has
taken all necessary action to maintain and protect each item of Intellectual
Property that it owns or uses.

            (b) To the best knowledge of KCEC, KCEC has not interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties and KCEC has not received any
charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation or violation (including any claim that either
KCEC must license or refrain from using any Intellectual Property rights of any
third Person). To the knowledge of KCEC, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any Person.

                                       13
<PAGE>
      5.14. LICENSES, PERMITS AND CONSENTS; COMPLIANCE WITH APPLICABLE LAW.

            (a) KCEC has all licenses and permits which individually or in the
aggregate are material to the conduct of the business of KCEC or any of its
employees by reason of such employee's activities on behalf of KCEC under
applicable law or by any federal, state, local or foreign governmental entity or
regulatory body for the operation of the business of KCEC, and all of such
listed licenses and permits are in full force and effect as of the date hereof.
KCEC has not received notice and, to the knowledge of KCEC, there is no reason
to believe, that any appropriate authority intends to cancel or terminate any of
such licenses or permits or that valid grounds for such cancellation or
termination currently exist.

            (b) KCEC is not in violation or breach of any, and the business and
operations of KCEC comply in all material respects and are being conducted in
accordance with, all governing laws, regulations and ordinances applicable
thereto and KCEC is not in violation of or in default under, any judgment,
award, order, writ, injunction or decree of any court, arbitration tribunal,
governmental entity or regulatory body.

      5.15. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS KCEC and its respective
predecessors have at all times complied with, and KCEC is presently in
compliance with, all environmental, health, and safety requirements required by
applicable law.

      5.16. FINDER'S FEE. There is no investment banker, broker, finder or other
intermediary which has been retained by, or is authorized to act on behalf of,
KCEC or their respective Affiliates who might be entitled to any fee or
commission from KCEC, HDL or their respective Affiliates upon the consummation
of the transactions contemplated hereby or thereafter.

      5.17. ACCURACY OF REPRESENTATIONS. The representations and warranties made
by KCEC in this Agreement, and in any certificate or Schedule referenced hereby
or attached hereto, do not contain, and will not contain, any statement which is
false or misleading with respect to any material fact and do not and will not
omit to state a material fact required to be stated herein or therein or
necessary in order to make the statements contained herein or therein not
materially false or misleading. There is no material fact or condition which
could have a Material Adverse Effect on KCEC which has not been set forth in
this Agreement or described in the Schedules hereto.

                                  ARTICLE VI.
                                    COVENANTS

      6.1. CONDUCT OF BUSINESS OF KCEC AND HDL. From the date hereof to the
Closing Date, each of HDL and KCEC, shall:

            (i) conduct its business only in the ordinary course and in
      substantially the same manner as heretofore conducted;

            (ii) maintain and keep its Assets in good repair, working order and
      condition, except for ordinary wear and tear;

                                       14
<PAGE>
            (iii) use its best efforts to maintain and preserve its business
      organization intact, retain its present employees so that they will be
      available after the Closing Date, and maintain its relationships with its
      customers so that they will be preserved after the Closing Date; and

            (iv) not take any action which would cause the representations and
      warranties set forth herein to be untrue or which would have a Mutual
      Adverse Effect on the business of HDL or KCEC, as the case may be.

      6.2. NO SOLICITATION. Neither HDL or KCEC shall, and each shall direct and
otherwise cause their respective officers, directors, partners, financial
advisors, counsel, agents and Affiliates of such party not to, (i) directly or
indirectly solicit, encourage or facilitate (including by way of furnishing any
non-public information concerning HDL or KCEC, as the case may be) the
submission of proposals or offers from any Person other than HDL and KCEC
relating to any acquisition or purchase of all or a material part of the stock
or assets of, or any merger, consolidation or business combination with, HDL or
KCEC, as the case may be (an "ACQUISITION PROPOSAL"), or (ii) participate in any
discussions or negotiations regarding, or furnish any non-public information to
any Person other than the other parties hereto in connection with, any
Acquisition Proposal by any Person other than HDL, KCEC or their respective
Affiliates, as the case may be.

      6.3. ACCESS TO INFORMATION; CONFIDENTIALITY.

            (a) Between the date of this Agreement and the Closing Date, HDL, on
the one hand, and KCEC, on the other hand, shall give to the other(s) and their
respective lenders, officers, directors, financial advisors, counsel and other
agents access to all offices of HDL or KCEC, as the case may be, and to all of
its respective books and records, permit them to make such inspections as they
may require and shall cause HDL's or KCEC's respective officers, directors and
employees to furnish the other(s) and their prospective lenders, officers,
directors, financial advisors, counsel and other agents with such financial and
operating data and other information with respect to the business and properties
of HDL and KCEC or their prospective lenders, officers, directors, financial
advisors, counsel and other agents may from time to time reasonably request, and
as may be necessary to establish the performance by the parties hereto of their
covenants under this Agreement and the accuracy of their representations and
warranties herein, and in connection with the preparation of any filing or
submission to any governmental entity or regulatory body.

            (b) HDL, on the one hand, and KCEC, on the other hand, shall hold,
and shall use commercially reasonable efforts to cause their respective
officers, directors, partners, prospective lenders, financial advisors, counsel
and other agents to hold, in strict confidence, unless compelled to disclose by
judicial or administrative process, or, in the opinion of their counsel, by
other requirements of law, all documents and information concerning HDL or KCEC,
as the case may be, furnished to the other in connection with the transactions
contemplated by this Agreement (except to the extent that such information can
be shown to have been (i) in the public domain through no fault of HDL or any of
their respective Affiliates on the one hand, or KCEC or any of their Affiliates,
on the other hand; or (ii) later lawfully acquired without the breach of any
other agreement by a party hereto or their respective officers, directors,
partners, financial advisors, counsel and other agents from other sources) and
will not

                                       15
<PAGE>
release or disclose such information to any other Person, except its officers,
directors, prospective lenders, financial advisors, counsel and other agents in
connection with this Agreement. If the transactions contemplated by this
Agreement are not consummated, such confidence shall be maintained as
hereinbefore provided, and, if requested by any party hereto case may be, the
other(s) will, and will cause its officers, directors, partners, prospective
lenders, financial advisors, counsel and other agents to, return to the
requesting party all copies of written information furnished by or on its behalf
to the other(s) or their respective officers, directors, prospective lenders,
financial advisors, counsel and other agents.

      6.4. BEST EFFORTS. Subject to the terms and conditions herein provided,
each party hereto agrees to use commercially reasonable efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, including
making all required submissions or filings with governmental entities and
regulatory bodies, to consummate and make effective the transactions
contemplated by this Agreement. If, at any time after the Closing Date, any
further action is necessary or desirable to carry out the purposes of this
Agreement, the parties hereto or their officers, directors or representatives
shall take all such necessary action. Each party hereto shall execute any
additional instruments necessary to consummate the transactions contemplated
hereby.

      6.5. CONSENTS. Each party hereto shall use their best efforts to obtain,
at its expense, all consents, approvals and waivers of third Persons or
governmental entities or regulatory bodies required to consummate the
transactions contemplated hereby.

      6.6. PUBLIC ANNOUNCEMENTS. Each of the parties hereto will consult with
one another before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby and shall not,
except as may be required by law or any listing agreements with any national
securities exchange, issue any such press release or make any such public
statement without the approval of one another.

      6.7. CONTINUED EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES. From the
date hereof until the Closing Date, each of the parties shall use their
respective best efforts to conduct such parties' affairs in such a manner so
that, except as otherwise contemplated or permitted by this Agreement, the
representations and warranties contained in Articles III and IV shall continue
to be true and correct on and as of the Closing Date as if made on the Closing
Date and the parties shall promptly notify the others of any event, condition or
circumstance occurring from the date hereof through the Closing Date that would
constitute a violation or breach such party of any of such representations and
warranties.

      6.8. EXPENSES. Except as otherwise provided herein, whether or not the
transactions contemplated hereby are consummated, all expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
the obligation of the party incurring such expenses.

      6.9. RECAPITALIZATION. Prior to the Closing Date, KCEC shall effect a 50
to 1 reverse split of its issued and outstanding capital stock.

      6.10. POST EXCHANGE CAPITALIZATION. Immediately following the Closing
Date, the capitalization of KCEC, on a fully diluted basis, shall be as set
forth in Schedule 6.10.

                                       16
<PAGE>
                                  ARTICLE VII.

                       CONDITIONS PRECEDENT TO PERFORMANCE
                                     OF KCEC

      The obligations of KCEC under this Agreement are subject to the following
conditions which may be waived in whole or in part by KCEC at their election:

      7.1. BRING DOWN OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of HDL and the HDL Shareholders in this Agreement shall be true and
correct in all material respects on the date hereof and shall also be true and
correct in all material respects on the Closing Date with the same force and
effect as if made on and as of the Closing Date, and HDL and the HDL
Shareholders shall have performed or complied in all material respects with all
agreements, conditions and covenants required by this Agreement to be performed
or complied with by them on or before the Closing Date.

      7.2. AUTHORITY. HDL shall have delivered to KCEC a certificate of the
Secretary of HDL, certifying to the resolutions of the Board of Directors of HDL
authorizing the transactions contemplated hereby and certifying that such
resolutions have not been revoked, suspended or amended and remain in full force
and effect. KCEC shall have received all documents it may reasonably request
relating to the existence of HDL and the authority of HDL to enter into this
Agreement and to consummate the transactions contemplated hereby.

      7.3. MATERIAL ADVERSE CHANGES. There shall not have been, and on the
Closing Date there shall not be in existence, any event, condition or state of
facts which could reasonably be expected to result in, any material adverse
change in the condition (financial or otherwise), Assets, Liabilities, results
of operations, business or prospects of HDL, and KCEC shall have received a
certificate of the President of HDL to the foregoing effect.

      7.4. CONSENTS. HDL shall have obtained all approvals, authorizations and
consents required to consummate the transactions contemplated hereby upon terms
and subject to conditions satisfactory to KCEC in its sole discretion and such
approvals, authorizations and consents shall be in full force and effect. KCEC
shall have been furnished with appropriate evidence, reasonably satisfactory to
it and its counsel, of the granting of such approvals, authorizations and
consents.

      7.5. INJUNCTION. There shall be no effective injunction, writ or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided or which is
reasonably likely to have any material adverse effect of the condition
(financial or otherwise), Assets, Liabilities, results of operations, business
or prospects of HDL, taken as a whole.

                                       17
<PAGE>
                                 ARTICLE VIII.

                       CONDITIONS PRECEDENT TO PERFORMANCE
                         OF HDL AND THE HDL SHAREHOLDERS

      8.1. BRING DOWN OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of KCEC contained in this Agreement shall be true and correct in all
material respects on the date hereof and shall also be true and correct in all
material respects on and as at the Closing Date with the same force and effect
as if made on and as of the Closing Date, and KCEC shall have performed or
complied in all material respects with all agreements, conditions and covenants
required by this Agreement to be performed or complied with by them on or before
the Closing Date. HDL shall have received a certificate of the President of KCEC
to the foregoing effect.

      8.2. AUTHORITY. KCEC shall have delivered to HDL a certificate of the
Secretary of KCEC certifying to the resolutions of the Board of Directors of
KCEC authorizing the transactions contemplated hereby and certifying that such
resolutions have not been revoked, suspended or amended and remain in full force
and effect. HDL shall have received all other documents it may reasonably
request relating to the existence of KCEC and the authority of KCEC to enter
into this Agreement and to consummate the transactions contemplated hereby.

      8.3. RELEASES. KCEC shall have received releases from each of its
directors and officers from all claims which such directors and officers may
have against KCEC as of the Closing Date.

      8.4. PURCHASE AGREEMENT. As of Closing, KCEC shall have entered into an
agreement with Concourse Financial, Inc. ("Concourse") pursuant to which
Concourse shall, on a best efforts basis, purchase up to 6,000,000 shares of
common stock of KCEC pursuant to Rule 903 of Regulation S under the Securities
Act of 1933.

      8.5. CONSENTS. All approvals, authorizations and consents required by KCEC
to consummate the transactions contemplated hereby shall have been obtained on
terms and conditions satisfactory to HDL in its sole discretion and shall be in
full force and effect, and HDL shall have been furnished with appropriate
evidence, reasonably satisfactory to it and its counsel, of the granting of such
approvals, authorizations and consents.

      8.6. INJUNCTION. There shall be no effective injunction, writ or
preliminary restraining order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided.

                                  ARTICLE IX.

                     NATURE AND SURVIVAL OF REPRESENTATIONS,
                            WARRANTIES AND COVENANTS

      All statements contained herein or in any certificate, schedule or other
document delivered pursuant hereto shall be deemed representations and
warranties by the party delivering

                                       18
<PAGE>
the same. All representations and warranties and covenants shall survive the
Closing Date. All representations and warranties contained in this Agreement and
in the disclosure schedules or in any certificates or other documents delivered
pursuant hereto shall not be deemed to be waived or otherwise affected by any
prior knowledge of, or any investigation made by or on behalf of, any party
hereto. All covenants and agreements shall survive the consummation of the
transactions contemplated hereby.

                                   ARTICLE X.

                                 INDEMNIFICATION

            (a) HDL and the HDL Shareholders hereby agree to indemnify and hold
harmless KCEC and its respective Affiliates from and against any Liabilities,
damages, losses, claims, Liens, costs or expenses (including reasonable
attorneys' fees) of any nature (any or all of the foregoing are herein referred
to as "LOSS") insofar as a Loss (or actions in respect thereof), whether
existing or accruing prior or subsequent to the Closing Date, arises out of or
is based upon any misrepresentation (or alleged misrepresentation) or breach (or
alleged breach) of any of the warranties, covenants or agreements made by HDL
and the HDL Shareholders in this Agreement or in any certificate, Schedule,
document or Exhibit referenced hereby or attached hereto.

            (b) KCEC hereby agrees to indemnify and hold harmless HDL and the
HDL Shareholders from and against any Liabilities, damages, losses, claims,
Liens, costs or expenses (including reasonable attorneys' fees) of any nature
insofar as a Loss (or actions in respect thereof), whether existing or accruing
prior or subsequent to the Closing Date, arises out of or is based upon any
misrepresentation (or alleged misrepresentation) or breach (or alleged breach)
of any of the warranties, covenants or agreements made by KCEC in this Agreement
or in any certificate, Schedule, document or Exhibit referenced hereby or
attached hereto.

                                  ARTICLE XI.

                         TERMINATION; AMENDMENT; WAIVER

      11.1. TERMINATION. This Agreement and the transactions contemplated hereby
may be terminated at any time prior to the Closing:

            (a) by mutual written agreement of HDL, the HDL Shareholders and
KCEC;

            (b) by HDL and the HDL Shareholders, on the one hand, or KCEC, on
the other hand, as the case may be, if the Closing shall not have occurred on or
before October 31, 2002 so long as the party terminating this Agreement pursuant
to this Section 11.1 has not made any material misrepresentation or materially
breached a covenant, agreement or warranty contained herein;

            (c) by KCEC, on the one hand, or HDL and the HDL Shareholders, on
the other hand, if (i) the transactions contemplated hereby shall violate any
non-appealable final

                                       19
<PAGE>
order, decree or judgment of any court or governmental entity or regulatory body
having competent jurisdiction or (ii) there shall be a statute, rule or
regulation which makes the transactions contemplated hereby illegal or otherwise
prohibited; or

            (d) by HDL and the HDL Shareholders, on the one hand, and KCEC, on
the other hand, in the event the other makes a material misrepresentation or
breaches a covenant, agreement or warranty set forth in this Agreement, but such
non-misrepresenting or non-breaching party's election to terminate shall not
limit, waive or prejudice such party's remedies at law or in equity.

      In the event this Agreement is terminated as provided in Section 11.1(a),
(b) or (c), this Agreement shall become void and of no further force and effect
and no party hereto shall have any further liability to any other party hereto,
except that Sections 4.18, 5.16, 6.2, 6.3, 6.6 and 6.8 shall survive and
continue in full force and effect notwithstanding termination.

      11.2. AMENDMENT. This Agreement may be amended by action taken by the
parties hereto by an instrument in writing.

      11.3. EXTENSION; WAIVER. At any time prior to the Closing Date, HDL, the
HDL Shareholders, KCEC may (i) extend the time for the performance of any of the
obligations or other acts of the other; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document, certificate
or writing delivered pursuant hereto or thereto; and (iii) waive compliance with
any of the agreements or conditions contained herein. Any agreement on the part
of any party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed by or on behalf of such party.

                                  ARTICLE XII.

                                  MISCELLANEOUS

      12.1. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together with all
Schedules and Exhibits, constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, among the parties or between any of
them with respect to the subject matter hereof. All references to Sections,
Exhibits and Schedules shall be deemed references to such parts of this
Agreement unless the text requires otherwise. This Agreement shall not be
assigned by operation of law or otherwise.

      12.2. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made as of
the date delivered or mailed if delivered in person, by telecopy, cable,
telegram or telex, or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:

            if to KCEC:

                                       20
<PAGE>
                           Kid Castle Educational Corporation
                           7th Floor, 127-1 Sung-Chiang Road
                           Taipei, Taiwan, R.O.C.
                           Fax:
                           Attn:

            with a copy to:

                           Tony Tsai of Counsel
                           5 Fl., 216, Tun - Hwa S. Rd., SEC 2
                           Taipei 106, Taiwan
                           R.O.C.
                           Fax:     (   )
                           Attn:

            if to HDL:

                           Higoal Developments Limited
                           P.O. Box 2804
                           George Town, Grand Cayman, Cayman Islands
                           Fax:
                           Attn:

            with a copy to:

                           Conyers Dill & Pearman
                           2901, One Exchange Square
                           8 Connaught Place
                           Central, Hong Kong
                           Fax:     (852) 2845-9268 or (852)2596-0418
                           Attn:    Bernadette Chen

or to such other address as the Person to whom notices is given may have
previously furnished to the others in writing in the manner set forth above.

      12.3. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
applicable principles of conflicts of laws thereof.

      12.4. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, its successors and assigns.

      12.5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

      12.6. SPECIFIC PERFORMANCE. Irreparable damage would occur if any of the
provisions of this Agreement were not performed in accordance with the terms
hereof, and the parties shall

                                       21
<PAGE>
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.

      12.7. CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Schedules shall be deemed adequate to disclose an exception to a representation
or warranty made herein unless the Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). The parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant.

      12.8. SEVERABILITY. The provisions of this Agreement are severable and, in
the event that any court of competent jurisdiction shall determine that any one
or more of the provisions or part of a provision contained therein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement and the terms thereof shall be reformed
and construed as if such invalid or illegal or unenforceable provision, or part
of a provision, had never been contained herein, and such provisions or part
reformed so that it would be valid, legal and enforceable to the maximum extent
possible.

      12.9. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

                                       22
<PAGE>
      IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, or
individually, as the case may be, all as of the day and year first above
written.

                                        HIGOAL DEVELOPMENTS LIMITED

                                        By:           /s/ Wang Kuo An
                                           -------------------------------------
                                             Name:    Wang Kuo An
                                             Title:

                                        KID CASTLE EDUCATIONAL CORPORATION

                                        By:           /s/ Chien Hwa Liu
                                           -------------------------------------
                                             Name:    Chien Hwa Liu
                                             Title:

                                        HDL SHAREHOLDERS

                                        By:           /s/ Wang Kuo An
                                           -------------------------------------
                                             Name:    Wang Kuo An
                                             Title:   As Agent for each of the
                                             HDL Shareholders

                                       23
<PAGE>
                                  SCHEDULE 6.10

                          POST EXCHANGE CAPITALIZATION

HDL                          11,880,000

Investor Group                3,120,000

Concourse & Designees         6,000,000

                                       24<PAGE>
                                                                     Exhibit 4.2
                                                                  Execution Copy

                          SECOND SUPPLEMENTAL INDENTURE

                                 BY AND BETWEEN

                          RENAISSANCERE HOLDINGS LTD.,

                                    AS ISSUER

                                       AND

                      DEUTSCHE BANK TRUST COMPANY AMERICAS
                         (F/K/A BANKERS TRUST COMPANY),
                                   AS TRUSTEE

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

                          Dated as of January 31, 2003

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

                                  $100,000,000

                           RENAISSANCERE HOLDINGS LTD.

                          5.875% SENIOR NOTES DUE 2013
<PAGE>
                          SECOND SUPPLEMENTAL INDENTURE

         This Second Supplemental Indenture, dated as of January 31, 2003 (the
"Supplemental Indenture"), to the Indenture, dated as of July 1, 2001 (as
heretofore amended and supplemented, the "Original Indenture"), by and between
RenaissanceRe Holdings Ltd., a company duly organized and existing under the
laws of Bermuda, having its principal executive office located at Renaissance
House, 8-12 East Broadway, Pembroke HM 19, Hamilton, Bermuda (the "Company"), as
issuer, and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company),
a New York banking corporation, having its corporate trust office located at 60
Wall Street, MS NYC 60-2515, New York, New York 10005 (the "Trustee"), as
trustee, is effective upon the execution hereof by the parties hereto.

                                    RECITALS

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee the Original Indenture providing for the issuance from time to time of
its senior unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), unlimited as to principal amount;

         WHEREAS, the Original Indenture is incorporated herein by this
reference;

         WHEREAS, Section 3.1 of the Original Indenture provides that, with
respect to any series of Securities to be authenticated and delivered under the
Original Indenture, the terms of such series of Securities shall be established
by (i) a Board Resolution and Officers' Certificate or (ii) one or more
indentures supplemental to the Original Indenture;

         WHEREAS, the Company desires to create, under the Original Indenture, a
new series of Securities to be known as its 5.875% Senior Notes due 2013 (the
"Senior Notes"), the form and substance of such notes and the terms, provisions
and conditions thereof to be set forth as provided in the Original Indenture and
this Supplemental Indenture;

         WHEREAS, all conditions necessary to authorize the execution and
delivery of this Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed; and

         WHEREAS, the Original Indenture, as supplemented by this Supplemental
Indenture, is herein called the "Indenture";

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company and the Trustee mutually covenant and agree as follows:
<PAGE>
                                   Article I.

                                   DEFINITIONS

         Section 1.1. Definitions. The following defined terms used herein shall
have the meanings specified below. Capitalized term used herein without
definition shall have the respective meanings assigned such terms in the
Original Indenture.

                  "Discounted Present Value" shall have the meaning set forth in
         Section 2.4 of this Supplemental Indenture.

                  "Interest Payment Date" means, with respect to the Senior
         Notes only, August 15 and February 15 of each year.

                  "Make-Whole Premium" shall have the meaning set forth in
         Section 2.4 of this Supplemental Indenture.

                  "Redemption Date" shall have the meaning, with respect to the
         Senior Notes only, set forth in Section 2.4 of this Supplemental
         Indenture.

                  "Redemption Price" means, with respect to the Senior Notes
         only, the sum of (1) 100% of the outstanding principal amount of the
         Senior Notes being redeemed; plus (2) the applicable Make-Whole
         Premium.

                  "Regular Record Date" means, with respect to the Senior Notes
         only, the close of business on August 1 or February 1, as the case may
         be, immediately preceding each Interest Payment Date.

                                  Article II.

                GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES

         There is hereby established a new series of Securities under the
Original Indenture with the following terms:

         Section 2.1. Title. The title of the series is "5.875% Senior Notes due
2013".

         Section 2.2. Principal Amount. There are to be issued by the Company,
and authenticated and delivered by the Trustee on the date hereof $100,000,000
principal amount of Senior Notes, and such principal amount of Senior Notes may
be increased from time to time pursuant to Section 3.1 of the Original
Indenture. All Senior Notes need not be issued on the same date and such series
may be reopened at any time, without the consent of any Holder, for issuances of
additional Senior Notes, unlimited in principal amount, upon delivery by the
Company to the Trustee of either a Board Resolution and Officers' Certificate or
an indenture supplemental to the Indenture, setting forth the original issuance
date of such additional Senior Notes. The terms of any such additional Senior
Notes will be identical (except as to denomination and the date from which
interest shall accrue) to the terms of the Senior Notes initially issued,
authenticated and delivered on the date hereof. Any such additional Senior

                                      -2-
<PAGE>
Notes will, together with the previously issued Senior Notes, constitute a
single series of Securities under the Indenture.

         Section 2.3. Payment of Principal and Interest.

         (a) The principal of the Senior Notes shall be due on February 15,
2013, subject to the provisions of the Original Indenture relating to
acceleration of maturity. The Senior Notes will bear interest from January 31,
2003, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, at a rate of 5.875% per annum, payable semi-annually
in arrears on August 15 and February 15 of each year, commencing on August 15,
2003, and at Maturity. The Company will pay interest to the Persons in whose
names the Senior Notes are registered on the Regular Record Date for such
Interest Payment Date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

         (b) If any Interest Payment Date falls on a day that is not a Business
Day, the interest payment will be postponed to the next day that is a Business
Day, and no interest on such payment will accrue for the period from and after
such Interest Payment Date. If the maturity date of the Senior Notes falls on a
day that is not a Business Day, the payment of interest and principal may be
made on the next succeeding Business Day, and no interest on such payment will
accrue for the period from and after the maturity date. Interest payments for
the Senior Notes will include accrued interest from and including the date of
issue or from and including the last date in respect of which interest has been
paid, as the case may be, to, but excluding, the Interest Payment Date or the
date of maturity, as the case may be.

         (c) Payment of the principal and interest due at maturity of the Senior
Notes shall be made upon surrender of the Senior Notes at the Corporate Trust
Office of the Trustee. The principal of and interest on the Senior Notes shall
be paid in Dollars. Payments of principal of or interest on the Senior Notes
will be made, subject to such surrender where applicable, at the option of the
Company, (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or (ii) by wire transfer to
an account maintained by the payee with a bank located in the United States.

         Section 2.4. Optional Redemption.

         (a) The Senior Notes will be redeemable, at the option of the Company,
at any time in whole or from time to time in part, on not less than 30 nor more
than 60 days' prior notice to the Holders of the Senior Notes, on any date (a
"Redemption Date") prior to their maturity at the Redemption Price plus accrued
and unpaid interest on the principal amount of the Senior Notes being redeemed
to, but excluding, the Redemption Date. Installments of interest on the Senior
Notes for which the Redemption Date is after a Regular Record Date and on or
before the following Interest Payment Date shall be payable to the Holders of
such Senior Notes registered as such at the close of business on the Regular
Record Date therefor. In no event will the Redemption Price of the Senior Notes
ever be less than 100% of the principal amount of the Senior Notes being
redeemed plus accrued and unpaid interest thereon payable to the Holder thereof.

                                      -3-
<PAGE>
         "Make-Whole Premium" means an amount equal to the Discounted Present
Value calculated for any Senior Note subject to redemption less the unpaid
principal amount of such Senior Note; provided, however, that no Make-Whole
Premium shall be less than zero.

         "Discounted Present Value" of any Senior Note subject to redemption
shall be equal to the discounted present value of all principal and interest
payments scheduled to become due in respect of such Senior Note after the
Redemption Date, calculated using a discount rate equal to the sum of (1) the
yield to maturity on the United States treasury security having a maturity date
equal to the Stated Maturity of such Senior Note and trading in the secondary
market at the price closest to par and (2) 30 basis points; provided, however,
that if there is no United States treasury security having a maturity date equal
to the Stated Maturity of such Senior Note, such discount rate shall be
calculated using a yield to maturity interpolated or extrapolated on a
straight-line basis (rounding to the nearest month, if necessary) from the
yields to maturity for the two United States treasury securities having maturity
dates most closely corresponding to the Stated Maturity of such Senior Note and
trading in the secondary market at the price closest to par.

         (b) If less than all of the Senior Notes are to be redeemed, the Senior
Notes to be redeemed shall be selected by lot by The Depository Trust Company,
in the case of Senior Notes represented by a global Security, or by the Trustee
by a method the Trustee deems to be fair and appropriate, in the case of Senior
Notes that are not represented by a global Security.

         Section 2.5. Additional Events of Default. In addition to the Events of
Default set forth in Section 5.1 of the Original Indenture, each of the
following events shall also constitute an Event of Default with respect to the
Senior Notes:

         (a) if any event of default as defined in any mortgage, indenture or
instrument under which there may be issued, or by which there may be secured or
evidenced, any Indebtedness of the Company (including an Event of Default under
any other series of Securities), whether such Indebtedness now exists or shall
hereafter be created or incurred, shall happen and shall consist of default in
the payment of more than $50,000,000 in principal amount of such Indebtedness at
the maturity thereof (after giving effect to any applicable grace period) or
shall result in such Indebtedness in principal amount in excess of $50,000,000
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable, and such default shall not be cured or waived
or such acceleration shall not be rescinded or annulled within a period of 30
days after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of the Senior Notes,
a written notice specifying such event of default and requiring the Company to
cause such default to be cured or waived or to cause such acceleration to be
rescinded or annulled or to cause such Indebtedness to be discharged and stating
that such notice is a "Notice of Default" under the Indenture; or

         (b) the Company shall fail within 60 days to pay, bond or otherwise
discharge any uninsured judgment or court order for the payment of money in
excess of $50,000,000, which is not stayed on appeal or is not otherwise being
appropriately contested in good faith.

         Section 2.6. Form, Currency and Denominations. The Senior Notes shall
be issued in fully registered form, without coupons, in denominations of $1,000
and integral multiples

                                      -4-
<PAGE>
thereof. The Senior Notes will be issued in substantially the form set forth in
Exhibit A hereto. The Depositary with respect to the Senior Notes shall be The
Depository Trust Company.

         Section 2.7. Global Securities.

         (a) The Senior Notes will be issued in the form of one or more global
Securities registered in the name of the Depositary (which shall be The
Depository Trust Company) or its nominee. Except under the circumstances set
forth in Section 3.5 of the Original Indenture, the global Securities will not
be exchangeable for, and will not otherwise be issuable as, Senior Notes in
definitive form. Owners of beneficial interests in such a global Security will
not be considered the registered owners or Holders of Senior Notes for any
purpose.

         (b) No global Security representing a Senior Note shall be
exchangeable, except for another global Security of like denomination and tenor
to be registered in the name of the Depositary or its nominee or to a successor
Depositary or its nominee. Payment of principal of, any premium or interest on,
and any Additional Amounts in respect of, any Senior Note in global form shall
be made to the registered Holder thereof.

         Section 2.8. Ranking. The Senior Notes will represent the Company's
direct, unsecured obligations and will rank equally with all the Company's other
unsubordinated indebtedness.

         Section 2.9. Miscellaneous. The Company is not obligated to redeem or
purchase any Senior Notes pursuant to any sinking fund or analogous provision.
The Senior Notes will not be convertible into shares of Common Stock of the
Company and/or exchangeable for other securities. The amount of payments of
principal with respect to the Senior Notes shall not be determined with
reference to an index, formula or other method or methods. No Senior Notes are
issuable upon the exercise of warrants. Each of Section 4.2(2) of the Original
Indenture relating to defeasance and Section 4.2(3) of the Original Indenture
relating to covenant defeasance shall be applicable to the Senior Notes. Except
as set forth in Section 10.4 of the Original Indenture, there will be no
Additional Amount payable on the Senior Notes.

                                  Article III.

                            MISCELLANEOUS PROVISIONS

         Section 3.1. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture as supplemented by this Supplemental
Indenture shall be read, taken and construed as one and the same instrument.

         Section 3.2. Counterparts. This Supplemental Indenture may be executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.

         Section 3.3. Governing Law. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and performed in said state.

                                      -5-
<PAGE>
         Section 3.4. Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.

            [The remainder of this page is intentionally left blank.]

                                      -6-
<PAGE>
IN WITNESS WHEREOF, the Company has executed this Supplemental Indenture by the
signature of its authorized officer, and the Trustee has caused this
Supplemental Indenture to be executed in its corporate name by its authorized
officer, each as of the date above written.

Attest:                         RENAISSANCERE HOLDINGS LTD.

                                By:  /s/ John M. Lummis
                                     -----------------------------
                                     Name:  John M. Lummis
                                     Title: Executive Vice President and Chief
                                     Financial Officer

Attest:                         DEUTSCHE BANK TRUST COMPANY
                                AMERICAS, AS TRUSTEE

                                By:  /s/ Tracy Mantone
                                     -----------------------------
                                     Name:  Tracy Mantone
                                     Title: Assistant Vice President

[SEAL]

                                      -7-
<PAGE>
                                                                       EXHIBIT A

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO RENAISSANCERE
HOLDINGS LTD. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND SUCH
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR
NOTES IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER
NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE
OF SUCH SUCCESSOR.

                           RENAISSANCERE HOLDINGS LTD.
                           5.875% SENIOR NOTE DUE 2013

No. R-                                                   CUSIP No.: 75968N AB 7

Principal Amount:          $100,000,000

Regular Record Date:       August 1 or February 1, as the case may be,
                           immediately preceding each Interest Payment Date

Original Issue Date:       January 31, 2003

Maturity Date:             February 15, 2013

Interest Payment Dates:    August 15 and February 15

Interest Rate:             5.875% per annum

Authorized Denomination:   $1,000, or any integral multiple thereof

            RenaissanceRe Holdings Ltd., a company duly existing and organized
under the laws of Bermuda (the "Company", which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of ONE HUNDRED MILLION DOLLARS ($100,000,000) on the Maturity Date
shown above, and to pay interest thereon from the Original
<PAGE>
Issuance Date shown above, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on
each Interest Payment Date as specified above (including the Maturity Date),
commencing on August 15, 2003, at the rate of 5.875% per annum until the
principal hereof is paid or duly provided for. Interest not timely paid or
provided for shall, to the extent permitted by applicable laws, bear simple
interest at the rate of 5.875% per annum.

            The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date (including the Maturity Date) will, as provided in
the Indenture, be paid to the Person in whose name this Senior Note is
registered at the close of business on the Regular Record Date as specified
above next preceding each Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Senior Note is registered at the close of business on a Special Record
Date for the payment of such defaulted interest established by notice given by
or on behalf of the Company to the Holders of Senior Notes not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange, if
any, on which the Senior Notes shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.

            Payments of interest on this Senior Note will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for this Senior Note shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on this Senior Note is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that
is a Business Day, with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than a
Saturday or a Sunday or a day on which banking institutions in New York City are
authorized or required by law or executive order to remain closed.

            Payment of the principal of and interest due on the Maturity Date of
this Senior Note shall be made upon surrender of this Senior Note at the
Corporate Trust Office of the Trustee. The principal of and interest on this
Senior Note shall be paid in Dollars. Payments of interest will be made, subject
to such surrender where applicable, at the option of the Company, (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the payee with a bank located in the United States.

            REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SENIOR
NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

            Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Senior Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

                                      -2-
<PAGE>
            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.

Dated:

                                            RENAISSANCERE HOLDINGS LTD.

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

Attest:
       -------------------------------------
       Name:
       Title:

                                      -3-
<PAGE>
                          CERTIFICATE OF AUTHENTICATION

            This is one of the 5.875% Senior Notes due 2013 referred to in the
within-mentioned Indenture.

                                        DEUTSCHE BANK TRUST COMPANY AMERICAS,
                                        as Trustee

                                        By:
                                           ----------------------------------
                                                 Authorized Signatory

                                      -4-
<PAGE>
                             (Reverse Side of Note)

            This security is one of a duly authorized issue of debt securities
of the Company (hereinafter called the "Securities"), all issued or to be issued
under and pursuant to an Indenture, dated as of July 1, 2001, as supplemented
(the "Indenture"), between the Company and Deutsche Bank Trust Company Americas
(f/k/a/ Bankers Trust Company), as trustee (the "Trustee," which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto relating to this security (including, without
limitation, the Second Supplemental Indenture, dated as of January 31, 2003,
between the Company and the Trustee) reference is hereby made for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities issued thereunder and
of the terms upon which said Securities are, and are to be, authenticated and
delivered. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest at different rates and may otherwise vary as
provided in the Indenture or any indenture supplemental thereto. This security
is one of a series designated on the face as 5.875% Senior Notes due 2013 (the
"Senior Notes"), initially limited in aggregate principal amount to
$100,000,000, subject to increase as provided in Section 2.2 of the Second
Supplemental Indenture. Capitalized terms used herein for which no definition is
provided herein shall have the meanings set forth in the Indenture.

            While this Senior Note is represented by one or more global notes
registered in the name of DTC or its nominee, the Company will cause payments of
principal of, premium, if any, and interest on this Senior Note to be made to
DTC or its nominee, as the case may be, by wire transfer to the extent, in the
funds and in the manner required by agreements with, or regulations or
procedures prescribed from time to time by, DTC or its nominee, and otherwise in
accordance with such agreements, regulations and procedures.

            The Senior Notes will not have a sinking fund.

            The Senior Notes will be redeemable, at the option of the Company,
at any time in whole or from time to time in part, on not less than 30 nor more
than 60 days' prior notice to the holders of the Senior Notes to be redeemed, on
any date prior to their maturity at a price equal to the sum of: (1) 100% of the
outstanding principal amount of the Senior Notes being redeemed; plus (2) the
applicable Make-Whole Premium; plus (3) accrued and unpaid interest on the
principal amount of the Senior Notes being redeemed to, but excluding, the
Redemption Date. In no event will the Redemption Price of the Senior Notes ever
be less than 100% of the principal amount of the Senior Notes being redeemed
plus accrued and unpaid interest thereon payable to the Holder thereof.
Installments of interest on Senior Notes for which the Redemption Date is after
a Regular Record Date and on or before the following Interest Payment Date shall
be payable to the Holders of such Senior Notes registered as such at the close
of business on the Regular Record Date therefor.

            "Make-Whole Premium" means an amount equal to the Discounted Present
Value calculated for any Senior Note subject to redemption less the unpaid
principal amount of such Senior Note; provided, however, that no Make-Whole
Premium shall be less than zero.

                                      -5-
<PAGE>
            "Discounted Present Value" of any Senior Note subject to redemption
shall be equal to the discounted present value of all principal and interest
payments scheduled to become due in respect of such Senior Note after the
Redemption Date, calculated using a discount rate equal to the sum of (1) the
yield to maturity on the United States treasury security having a maturity date
equal to the Maturity Date of such Senior Note and trading in the secondary
market at the price closest to par and (2) 30 basis points; provided, however,
that if there is no United States treasury security having a maturity date equal
to the Maturity Date of such Senior Note, such discount rate shall be calculated
using a yield to maturity interpolated or extrapolated on a straight-line basis
(rounding to the nearest month, if necessary) from the yields to maturity for
the two United States treasury securities having maturity dates most closely
corresponding to the Maturity Date of such Senior Note and trading in the
secondary market at the price closest to par.

            If less than all of the Senior Notes are to be redeemed, the Senior
Notes to be redeemed shall be selected by lot by DTC, in the case of Senior
Notes represented by a global note, or by the Trustee by a method the Trustee
deems to be fair and appropriate, in the case of Senior Notes that are not
represented by a global note.

            The Indenture also contains provisions for defeasance at any time of
the entire indebtedness of the Senior Notes or of certain restrictive covenants
with respect to the Senior Notes, in each case upon compliance with certain
conditions set forth in the Indenture.

            If an Event of Default with respect to the Senior Notes shall occur
and be continuing, the principal of the Senior Notes may be declared due and
payable in the manner, with the effect and subject to the conditions provided in
the Indenture.

            The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Senior Notes to be affected under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in principal amount of the Senior Notes at
the time Outstanding affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority in principal amount of the
Senior Notes at the time Outstanding, on behalf of the Holders of all Senior
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Senior Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Senior Note and
of any Senior Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Senior Note.

            No reference herein to the Indenture and no provision of this Senior
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Senior Note at the times, place and rate, and in the coin or currency,
herein prescribed.

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Senior Note is registrable in the
Security Register, upon surrender of this Senior Note for registration of
transfer at the office or agency of the Company for such purpose,

                                      -6-
<PAGE>
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar and duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Senior Notes, of authorized denominations and of like tenor and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge or certain other expenses payable in
connection therewith.

            Prior to due presentment of this Senior Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Senior Note is registered as the owner
hereof for all purposes, whether or not this Senior Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

            The Senior Notes are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Senior Notes are exchangeable for a like aggregate principal amount of Senior
Notes of a different authorized denomination, as requested by the Holder
surrendering the same upon surrender of the Senior Note or Notes to be exchanged
at the office or agency of the Company.

            This Senior Note shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to agreements made and
performed in said state.

                                      -7-
<PAGE>
                                  ABBREVIATIONS

            The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:

TEN COM--as tenants in common   UNIF GIFT MIN ACT -          Custodian
                                                   ----------         -------
                                                     (Cust)           (Minor)
                                                   under Uniform Gifts to Minors
                                                   Act
                                                      --------------------------
                                                                         (State)

TEN ENT--as tenants by the entireties

JT TEN--as joint tenants with rights of
        survivorship and not as tenants
        in common

Additional abbreviations may also be used though not on the above list.

----------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
            (please insert Social Security or other identifying number of
------------
assignee)

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

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE

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

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

the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing

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

agent to transfer said Senior Note on the books of the Company with full power
of substitution in the premises.

Dated:
      ----------------------------              --------------------------------

                                                --------------------------------
                                                NOTICE: The signature to this
                                                assignment must correspond with
                                                the name as written upon the
                                                face of the within instrument in
                                                every particular without
                                                alteration or enlargement, or
                                                any change whatever.

                                      -8-

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