Equitas Limited

TWENTY MILLION US DOLLARS OR LESS DUE OR TO BECOME DUE UNDER THE TERMS OF THE AF OREMENTIONED INSTRUMENT CREATING OR EVID ENCING THE CHARGE

All monies

All monies

ALL PRESENT AND FUTURE LIABILITIES OWED BY THE CHARGOR TO THE TRUSTEE AS TRUSTEE FOR THE POLICY HOLDERS IN RESPECT OF CL AIMS FOR LOSS IN RESPECT OF THE AUSTRALI AN POLICIES AND IN RESPECT OF THE AUSTRA LIAN LIABILITIES.

(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 REI NSURANCE LIMITED (COLLECTIVELY, THE "GRA NTOR") UNDER THE ILLINOIS COLLATERAL REI NSURANCE ENTERED INTO ON 3 SEPTEMBER 199 6 (THE "COLLARERAL REINSURANCE AGREEMENT ") OF ANY LOSES OR ALLOCATED LOSS EXPENS ES WHICH HAVE ALREADY BEEN PAID BY THE B ENEFICARIES (AS DEFINED), BUT NOT RECOVE RED FROM THE GRANTOR OR FOR UNEARNED PRE MIUMS DUE TO THE BENEFICIARIES (AS DEFIN ED), IF NOT OTHERWISE PAID BY THE GRANTO R; AND (II) TO MAKE PAYMENT TO THE TRUST FUND ESTABLISHED BY THE EQUITAS AMERICA N TRUST DEED ENTERED INTO BY, INTER ALIA , THE GRANTOR AND CITIBANK, N.A. ON THE 3 SEPTEMBER 1996 (THE "EATF") OF ANY AMO UNTS HELD IN THE ACCOUNT AND THE CASH AC COUNT (AS DEFINED UNDER THE HEADING "SHO RT PARTICULARS OF ALL THE PROPERTY MORTG AGED OR CHARGED) THAT EXCEED 102 PER CEN T OF THE ACTUAL AMOUNT REQUIRED TO FUND THE OBLIGATIONS (AS DEFINED) UNDER THE C OLLATERAL REINSURANCE AGREEMENT; AND (II I) WHERE THE ILLINOIS ATTERNEY-IN-FACT, A STATUTORY REPRESENTATIVE OF THE BENEFI CIARIES (AS DEFINED), HAS RECEIVED NOTIF ICATION OF TERMINATION OF THE ACCOUNT AN D THE CASH ACCOUNT, AND WHERE THE GRANTO R'S OBLIGATIONS UNDER THE COLLATERAL REI NSURANCE AGREEMENT REMAIN UNLIQUIDATED A ND UNDISCHARGED TEN DAYS PRIOR TO SUCH T ERMINATION DATE, TO WITHDRAW AMOUNTS EQU AL TO THE GRANTOR'S OBLIGATIONS AND DEPO SIT THOSE AMOUNTS IN A SEPERATE ACCOUNT, IN THE NAME OF THE BENEFICIARIES (AS DE FINED) IN ANY QUALIFIED UNITED STATES FI NANCIAL INSTITUTION (AS DEFINED IN THE I LLINOIS INSURANCE CODE) APART FROM ITS G ENERAL ASSETS, IN TURST FOR SUCH USES AN D PURPOSES AS SPECIFIED IN (I) AND (II) ABOVE AS MAY REMAIN EXECUTORY AFTER SUCH WITHDRAWAL AND FOR ANY PERIOD AFTER SUC H TERMINATION DATE.

IN FAVOUR OF THE CHARGEE THE OBLIGATIONS OF EQUITAS REINSURANCE LIMITED TO THE N AMES (AS DEFINED) IN RESPECT OF THEIR 19 92 AND PRIOR BUSINESS (AS DEFINED) THAT IS AMERICAN BUSINESS (AS DEFINED)

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 REINSURANCE LIMITED 'S SHARE OF ANY LOSS OR LIABILITY OR BOT H UNEARNED PREMIUM RESERVES AND OUTSTAND ING LOSSES (WHICH SHALL INCLUDE ALL LOSS ES OF THE TYPE NORMALLY INCLUDED IN ACTU ARIAL CALCULATION OF LOSES) SUSTAINED BY UNDERWRITING MEMBERS ("NAMES") OF THE S OCIETY INCORPORATED UNDER THE LAWS OF TH E UNITED KINGDOM BY THE NAME OF LLOYD'S ("LLOYD'S") IN RESPECT OF CANADIAN 1992 AND PRIOR BUSINESS (AS DEFINED) PAYABLE BY THE COMPANY UNDER A REINSURANCE AND R UN-OFF CONTRACT ENTERED INTO BY IT ON 3 SEPTEMBER 1996 (THE "REINSURANCE AGREEME NT")

ANY AND ALL CREDIT OBLIGATIONS AND ANY A ND ALL PRESENT AND FUTURE ACTUAL OR CONT INGENT OBLIGATIONS DUE OR TO BECOME DUE FROM THE COMPANY TO THE BANK UNDER OR PU RSUANT TO THE SECURITY AGREEMENT