DATED AS OF

                                  JUNE 25, 2004



                              PXRE REINSURANCE LTD.

                                   AS BORROWER



                                BARCLAYS BANK PLC

                                    AS ISSUER



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                                  $100,000,000



                       LETTER OF CREDIT FACILITY AGREEMENT

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{PAGE}



                                    CONTENTS

CLAUSE                                                                      PAGE

1.     Definitions............................................................1

2.     The Letter Of Credit Facility..........................................9

3.     Change In Circumstances...............................................13

4.     Conditions Precedent..................................................16

5.     Representations And Warranties........................................18

6.     Covenants.............................................................22

7.     Defaults..............................................................26

8.     Acceleration, Waivers, Amendments And Remedies........................28

9.     General Provisions....................................................29

10.    Set-Off...............................................................32

11.    Benefit Of Agreement..................................................32

12.    Notices...............................................................33



SCHEDULE 1 AUTHORIZED OFFICERS OF THE BORROWER...............................34



EXHIBIT A FORM OF LETTER OF CREDIT...........................................35



EXHIBIT B FORM OF LC APPLICATION.............................................37



EXHIBIT C FORM OF COMPLIANCE CERTIFICATE.....................................39



EXHIBIT D FORM OF ADJUSTED COLLATERAL VALUE CERTIFICATE......................40



SIGNATURES



{PAGE}



THIS CREDIT AGREEMENT dated as of June 25, 2004



BETWEEN:



(1) PXRE REINSURANCE LTD., a corporation organized under the laws of Bermuda,

    as Borrower; and



(2) BARCLAYS BANK PLC, as Issuer.



RECITALS:



(A) The Borrower has requested the Issuer to make available to the Borrower a

    standby letter of credit issuance facility in the aggregate principal amount

    of up to $100,000,000 to support the reinsurance of business of the Borrower

    in the United States.



(B) The Issuer is willing to extend such standby letter of credit issuance

    facility on the terms and conditions set forth below.



NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein

contained, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the Borrower and the Issuer hereby

agree as follows:



1.  DEFINITIONS



    As used in this Agreement:



    "ACCOUNT CONTROL AGREEMENT" means the Account Control Agreement dated June ,

    2004 among the Borrower, the Issuer and the Custodian, or any other account

    control agreement among the Borrower, the Issuer and a custodian approved by

    the Issuer, as it may be amended, modified or restated and in effect from

    time to time.



    "ADJUSTED COLLATERAL VALUE" means the amount calculated as follows:



(i)   OECD Government Bonds: 95% of market value;



(ii)  MBS Securities: 90.9% of market value;



(iii) Corporate Bonds: 90.9% of market value; and



(iv)  Cash: 100%



    Notwithstanding the above, no more than 50% of the Adjusted Collateral Value

    may be comprised of Corporate Bonds and no more than 10% of Adjusted

    Collateral Value may be from any one corporate issuer or any Affiliate of

    such corporate issuer.



    "AFFILIATE" of any Person means any other Person directly or indirectly

    controlling, controlled by or under common control with such Person.



    "AGGREGATE FACILITY LC COMMITMENT" means the commitment of the Issuer to

    issue Facility LCs from time to time issued or outstanding under Clause 2

    (The Letter of Credit Facility), in an aggregate amount not to exceed

    $100,000,000 at any time outstanding, as such amount may be decreased from

    time to time pursuant to the terms hereof.



                                     - 1 -

{PAGE}



    "AGREEMENT" means this credit agreement, as it may be amended, modified or

    restated and in effect from time to time.



    "AGREEMENT ACCOUNTING PRINCIPLES" means (x) with respect to the Borrower's

    parent holding company, the U.S. generally accepted accounting principles as

    in effect from time to time, (y) with respect to the Borrower, Bermuda

    statutory accounting principles and (z) with respect to any Subsidiary, the

    accounting principles which such Subsidiary is required by law or regulation

    to apply to the preparation of its financial statements.



    "AUTHORIZED OFFICER" means, with respect to the Borrower, any two of the

    individuals, acting jointly, listed on Schedule 1 (Authorized Officers) as

    such Schedule may be supplemented or modified from time to time by the

    Borrower.



    "BORROWER" means PXRE Reinsurance Ltd., a corporation organized under the

    laws of Bermuda, and its successors and assigns.



    "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks

    are open in London for the conduct of substantially all of their commercial

    lending activities, interbank wire transfers can be made on the Fedwire

    system and dealings in Dollars are carried on in the London interbank

    market.



    "CASH" means immediately available funds denominated in Dollars and credited

    to an account in the name of the Borrower at the New York branch of the

    Issuer and to which the Borrower is alone beneficially entitled and for so

    long as the Issuer has a perfected security interest thereon under security

    documents satisfactory to the Issuer.



    "CEDING COMPANY" means an insurance or reinsurance company (including,

    without limitation, any reinsurance or insurance company that is a

    Wholly-Owned Subsidiary of the Borrower) that has, pursuant to an Insurance

    Contract or a Reinsurance Contract with the Borrower, agreed with the

    Borrower that the Borrower, as reinsurer, shall assume certain liabilities

    of such insurance or reinsurance company under an Insurance Contract.



    "CHANGE" is defined in Clause 3.2 (Changes in Capital Adequacy Regulations).



    "CHANGE IN CONTROL" means the acquisition by any Person, or two or more

    Persons acting in concert, of beneficial ownership (within the meaning of

    Rule 13d-3 of the Securities and Exchange Commission under the Securities

    Exchange Act of 1934) of 40% or more of the outstanding shares of voting

    stock of the Borrower.



    "CHANGE IN LAW" is defined in Clause 3.1 (Yield Protection).



    "CLAUSE" means a numbered Clause of this Agreement, unless another document

    is specifically referenced.



    "CODE" means the Internal Revenue Code of 1986, as amended, reformed or

    otherwise modified from time to time.



    "COLLATERAL" means at any time Cash, OECD Government Bonds, MBS Securities

    and Corporate Bonds.



                                     - 2 -

{PAGE}



    "COLLATERAL DOCUMENTS" means all agreements, instruments and other documents

    now or hereafter executed and delivered by the Borrower pursuant to which

    liens and security interests in collateral are granted to secure the

    Obligations, including, without limitation, the Security Agreement, the

    Account Control Agreement, the Custody Agreement, UCC-1 Financing

    Statements, security documents securing a pledge over Cash in favor of the

    Issuer and any documentation delivered pursuant to Clause 2.9 (Facility LC

    Collateral Account) with respect to the Facility LC Collateral Account.



    "COLLATERAL SHORTFALL AMOUNT" is defined in Clause 8.1 (Acceleration;

    Facility LC Collateral Account).



    "COMMITMENT" means the Facility LC Commitment.



    "CONTINGENT OBLIGATION" of a Person means any agreement, undertaking or

    arrangement by which such Person assumes, guarantees, endorses, contingently

    agrees to purchase or provide funds for the payment of, or otherwise becomes

    or is contingently liable upon, the obligation or liability of any other

    Person, or agrees to maintain the net worth or working capital or other

    financial condition of any other Person, or otherwise assures any creditor

    of any other Person against loss, including, without limitation, any comfort

    letter, operating agreement, take or pay contract or application for a

    Facility LC or other Letter of Credit, but excluding the Reimbursement

    Obligations, obligations in respect of the endorsement of instruments for

    deposit or collection in the ordinary course of business, obligations in

    respect of Insurance Contracts and Reinsurance Contracts issued or entered

    into in the ordinary course of business and obligations in respect of the

    extension of guaranties in the ordinary course of business to insureds of

    the obligations of insurers under Insurance Contracts and Reinsurance

    Contracts.



    "CONTROLLED GROUP" means all members of a controlled group of corporations

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