Equitas Reinsurance Limited

IN FAVOUR OF THE CHARGEE THE OBLIGATIONS OF THE COMPANY TO THE NAMES (AS DEFINED ) IN RESPECT OF THEIR 1992 AND PRIOR BUS INESS (AS DEFINED) THAT IS AMERICAN BUSI NESS (AS DEFINED)

(I) TO PAY OR REIMBURSE THE BENEFICIARY (AS DEFINED) OR A SEPERATE TRUST MAINTAI NED FOR THE BENEFICIARY (AS DEFINED) FOR THE SHARE OF THE COMPANY OR EQUITAS LIM ITED (COLLECTIVELY, THE "GRANTOR") UNDER THE ILLINOIS COLLATERAL REINSURANCE ENT ERED INTO ON 3 SEPTEMBER 1996 (THE "COLL ARERAL REINSURANCE AGREEMENT") OF ANY LO SES OR ALLOCATED LOSS EXPENSES WHICH HAV E ALREADY BEEN PAID BY THE BENEFICARIES (AS DEFINED), BUT NOT RECOVERED FROM THE GRANTOR OR FOR UNEARNED PREMIUMS DUE TO THE BENEFICIARIES (AS DEFINED), IF NOT OTHERWISE PAID BY THE GRANTOR; AND (II) TO MAKE PAYMENT TO THE TRUST FUND ESTABL ISHED BY THE EQUITAS AMERICAN TRUST DEED ENTERED INTO BY, INTER ALIA, THE GRANTO R AND CITIBANK, N.A. ON THE 3 SEPTEMBER 1996 (THE "EATF") OF ANY AMOUNTS HELD IN THE ACCOUNT AND THE CASH ACCOUNT (AS DE FINED UNDER THE HEADING "SHORT PARTICULA RS OF ALL THE PROPERTY MORTGAGED OR CHAR GED) THAT EXCEED 102 PER CENT OF THE ACT UAL AMOUNT REQUIRED TO FUND THE OBLIGATI ONS (AS DEFINED) UNDER THE COLLATERAL RE INSURANCE AGREEMENT; AND (III) WHERE THE ILLINOIS ATTERNEY-IN-FACT, A STATUTORY REPRESENTATIVE OF THE BENEFICIARIES (AS DEFINED), HAS RECEIVED NOTIFICATION OF T ERMINATION OF THE ACCOUNT AND THE CASH A CCOUNT, AND WHERE THE GRANTOR'S OBLIGATI ONS UNDER THE COLLATERAL REINSURANCE AGR EEMENT REMAIN UNLIQUIDATED AND UNDISCHAR GED TEN DAYS PRIOR TO SUCH TERMINATION D ATE, TO WITHDRAW AMOUNTS EQUAL TO THE GR ANTOR'S OBLIGATIONS AND DEPOSIT THOSE AM OUNTS IN A SEPERATE ACCOUNT, IN THE NAME OF THE BENEFICIARIES (AS DEFINED) IN AN Y QUALIFIED UNITED STATES FINANCIAL INST ITUTION (AS DEFINED IN THE ILLINOIS INSU RANCE CODE) APART FROM ITS GENERAL ASSET S, IN TURST FOR SUCH USES AND PURPOSES A S SPECIFIED IN (I) AND (II) ABOVE AS MAY REMAIN EXECUTORY AFTER SUCH WITHDRAWAL AND FOR ANY PERIOD AFTER SUCH TERMINATIO N DATE.

THE PAYMENT TO OR FOR THE BENEFIT OF ROY AL TRUST CORPORATION OF CANADA (IN ITS C APACITY AS CANADIAN TRUSTEE OF THE LLOYD 'S CANADIAN TRUST FUND UNDER THE AMENDED AND RESTATED LLOYD'S CANADIAN TRUST DEE D DATED AS OF 26 SEPTEMBER 1995) OF THE COMPANY'S OR EQUITAS LIMITED'S SHARE OF ANY LOSS OR LIABILITY OR BOTH UNEARNED P REMIUM RESERVES AND OUTSTANDING LOSSES ( WHICH SHALL INCLUDE ALL LOSSES OF THE TY PE NORMALLY INCLUDED IN ACTUARIAL CALCUL ATION OF LOSES) SUSTAINED BY UNDERWRITIN G MEMBERS ("NAMES") OF THE SOCIETY INCOR PORATED UNDER THE LAWS OF THE UNITED KIN GDOM BY THE NAME OF LLOYD'S ("LLOYD'S") IN RESPECT OF CANADIAN 1992 AND PRIOR BU SINESS (AS DEFINED) PAYABLE BY THE COMPA NY UNDER A REINSURANCE AND RUN-OFF CONTR ACT ENTERED INTO BY IT ON 3 SEPTEMBER 19 96 (THE "REINSURANCE AGREEMENT")

(A) IN RELATION TO THE ASSETS OF THE $11 04.70 TRUST (AS DEFINED UNDER THE HEADIN G "PARTICULARS OF ALL THE PROPERTY MORTG AGED OR CHARGED), THE PURPOSES SPECIFIED IN THE 1104 TRUST AGREEMENT DATED 3 SEP TEMBER 1996, NAMELY: (I) TO PAY OR REIMB URSE THE BENEFICIARY OR A SEPERATE TRUST MAINTAINED FOR THE BENEFICIARY (AS DEFI NED) FOR THE SHARE OF THE COMPANY OR EQU ITAS LIMITED (COLLECTIVELY, THE "GRANTOR ") UNDER THE ILLINOIS COLLATERAL REINURA NCE ENTERED INTO ON 3 SEPTEMBER 1996 (TH E "COLLATERAL REINSURANCE AGREEMENT") OF ANY LOSSES OR ALLOCATED LOSS EXPENSES W HICH HAVE ALREADY BEEN PAID BY THE BENEF ICIARY (AS DEFINED), BUT NOT RECOVERED F ROM THE GRANTOR OR FOR UNEARNED PREMIUMS DUE TO THE BENEFICIARIES (AS DEFINED), IF NOT OTHERWISE PAID BY THE GRANTOR; AN D (II) TO MAKE PAYMENT TO THE TRUST FUND ESTABLISHED BY THE EQUITAS TRUST DEED E NTERED INTO BY, INTER ALIA, THE GRANTOR AND CITIBANK, N.A. ON 3 SEPTEMBER 1996 ( THE "EATF") OF ANY AMOUNTS HELD IN THE A CCOUNT AND THE CASH ACCOUNT (AS DEFINED UNDER THE HEADING "SHORT PARTICULARS OF ALL PROPERTY MORTGAGED OR CHARGED") THAT EXCEED 102 PER CENT OF THE ACTUAL AMOUN T REQUIRED TO FUND THE OBLIGATIONS (AS D EFINED) UNDER THE COLLATERAL REINSURANCE AGREEMENT; AND (III) WHERE THE ILLINIOS ATTORNEY-IN-FACT, A STATUTORY REPRESENT ATIVE OF THE BENEFICIARIES (AS DEFINED), HAS RECEIVED NOTIFICATION OF TERMINATIO N OF THE ACCOUNT AND THE CASH ACCOUNT, A ND WHERE THE GRANTOR'S OBLIGATIONS UNDER THE COLLATERAL REINSURANCE AGREEMENT RE MAIN UNLIQUIDATED TEN DAYS PRIOR TO SUCH TERMINATION DATE, TO WITHDRAW AMOUNTS E QUAL TO THE GRANTOR'S OBLIGATIONS AND DE POSIT THOSE AMOUNTS IN A SEPERATE ACCOUN T, IN THE NAME OF THE BENEFICIAIRES (AS DEFINED) IN ANY QUALIFIED UNITED STATES FINANCIAL INSTITUTION (AS DEFINED IN THE ILLINOIS INSURANCE CODE) APART FROM ITS GENERAL ASSETS, IN TRUST FOR SUCH USES AND PURPOSES AS SPECIFIED IN (I) AND (II ) ABOVE AS MAY REMAIN EXECUTORY AFTER SU CH WITHDRAWAL AND FOR ANY PERIOD AFTER S UCH TERMINATION DATE. (B) IN RELATION TO THE ASSETS OF THE SURPLUS TRUST (AS DEF INED UNDER THE HEADING "PARTICULARS OF A LL THE PROPERTY MORTGAGED OR CHARGED"), THE PURPOSES SPECIFIED IN THE SURPLUS TR UST AGREEMENT DATED 3 SEPTEMBER 1996, NA MELY, TO PAY ON BEHALF OF ANY BENEFICIAR Y (AS DEFINED) ILLINOIS INSURANCE AND RE INSURANCE LIABILITIES INCURRED BY THE BE NEFICIARY (AS DEFINED) AND NOT OTHERWISE PAID FROM OTHER SOURCES; HOWEVER, PAYME NT ON BEHALF OF ANY BENEFICIARY (AS DEFI NED) SHALL BE LIMITED TO THE AMOUNT OF P ROPERTY DEPOSITED BY THE GRANTOR IN THE ACCOUNT AND CASH ACCOUNT (BEING THE ACCO UNTS CONTAINING THE ASSETS DEPOSITED TO THE SURPLUS TRUST) ON BEHALF OF THAT BEN EFICIARY (AS DEFINED), AS DETERMINED BY THE ILLINOIS ATTERNEY-IN-FACT, THE STATU TORY REPRESENTATIVE OF THE BENEFICIARIES (AS DEFINED)