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                              COINSURANCE AGREEMENT


                                     between


                    SECURITY LIFE OF DENVER INSURANCE COMPANY


                          (referred to as the Company)


                                       and


                            SCOTTISH RE (U.S.), INC.


                         (referred to as the Reinsurer)


                        Effective Date: December 31, 2004



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                                TABLE OF CONTENTS


                                                                            Page


ARTICLE I           DEFINITIONS................................................1
     Section 1.1.   Definitions................................................1

ARTICLE II          BASIS OF COINSURANCE AND BUSINESS COINSURED................4
     Section 2.1.   Coinsurance................................................4
     Section 2.2.   Reinsurance Coverage.......................................4
     Section 2.3.   Reserves...................................................4
     Section 2.4.   Insurance Contract and Reserve Assumption Changes..........5

ARTICLE III         TRANSFER OF ASSETS; ACCOUNTING; ADMINISTRATION.............5
     Section 3.1.   Payments by the Company....................................5
     Section 3.2.   Delayed Payments...........................................6
     Section 3.3.   Offset and Recoupment Rights...............................6
     Section 3.4.   Administration.............................................6
     Section 3.5    Certain Reports............................................6

ARTICLE IV          REINSURANCE CREDIT; SECURITY...............................7
     Section 4.1.   Licenses...................................................7
     Section 4.2.   Security...................................................7
     Section 4.3.   SLD Reserve Trust Agreement................................7
     Section 4.4.   Investment of Trust Assets.................................8
     Section 4.5.   Deposit of Assets..........................................8
     Section 4.6.   Adjustment of Security and Withdrawals.....................8
     Section 4.7.   Withdrawals by the Company.................................8
     Section 4.8.   Assets in Trust of the Company.............................9
     Section 4.9.   Compliance by the Company..................................9
     Section 4.10.  Reports....................................................9

ARTICLE V           OVERSIGHTS; COOPERATION; REGULATORY MATTERS................9
     Section 5.1.   Oversights.................................................9
     Section 5.2.   Cooperation...............................................10
     Section 5.3.   Regulatory Matters........................................10

ARTICLE VI          DAC TAX...................................................10
     Section 6.1.   Election..................................................10

ARTICLE VII         ARBITRATION...............................................12
     Section 7.1.   Arbitration...............................................12
     Section 7.2.   Arbitration Procedure.....................................12


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ARTICLE VIII        INSOLVENCY................................................13
     Section 8.1.   Insolvency of the Company.................................13

ARTICLE IX          DURATION; RECAPTURE.......................................13
     Section 9.1.   Duration..................................................13
     Section 9.2.   Survival..................................................14
     Section 9.3.   Recapture.................................................14
     Section 9.4.   Recapture Payments........................................14

ARTICLE X           INDEMNIFICATION...........................................14
     Section 10.1.  Reinsurer's Obligation to Indemnify.......................14
     Section 10.2.  Company's Obligation to Indemnify.........................15
     Section 10.3.  Certain Definitions and Procedures........................15

ARTICLE XI          MISCELLANEOUS.............................................15
     Section 11.1.  Notices...................................................15
     Section 11.2.  Entire Agreement..........................................16
     Section 11.3.  Captions..................................................16
     Section 11.4.  Governing Law and Jurisdiction............................16
     Section 11.5.  No Third Party Beneficiaries..............................16
     Section 11.6.  Expenses..................................................17
     Section 11.7.  Counterparts..............................................17
     Section 11.8.  Severability..............................................17
     Section 11.9.  Waiver of Jury Trial; Multiplied and Punitive Damages.....17
     Section 11.10. Treatment of Confidential Information.....................17
     Section 11.11. Assignment................................................18
     Section 11.12. Service of Process........................................18

ARTICLE XII         REPRESENTATIONS, WARRANTIES AND COVENANTS.................18
     Section 12.1.  Representations, Warranties, and Covenants of the
                    Reinsurer.................................................18


                                       ii

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                              COINSURANCE AGREEMENT

                  THIS COINSURANCE AGREEMENT (the "Agreement"), is made and
         entered into as of December 31, 2004 (the "Effective Date") by and
         between Security Life of Denver Insurance Company, a Colorado-domiciled
         life insurance company (the "Company") and Scottish Re (U.S.), Inc., a
         Delaware-domiciled life insurance company (the "Reinsurer").

                  WHEREAS, the Company, Security Life of Denver International
         Limited, a Bermuda insurance company ("SLDI" and, together with the
         Company, the "Sellers"), and Scottish Re Group Limited ("Purchaser"),
         the indirect parent corporation of Reinsurer, Newco and the Reinsurer,
         have entered into an Asset Purchase Agreement, dated as of October 17,
         2004 (the "Asset Purchase Agreement"), pursuant to which the Sellers
         have agreed to sell, and the Purchaser has agreed to purchase, the
         individual life reinsurance business and certain assets of Sellers;

                  WHEREAS, as contemplated by the Asset Purchase Agreement, the
         Company wishes to retrocede to the Reinsurer, and the Reinsurer wishes
         to indemnity reinsure, on a one-hundred percent (100%) coinsurance
         basis, the Covered Insurance Contracts (as hereinafter defined); and

                  WHEREAS, the Company wishes the Reinsurer to perform, or cause
         the performance of, certain administrative functions on behalf of the
         Company with respect to the Covered Insurance Contracts, and the
         Company and the Reinsurer have entered into an Administrative Services
         Agreement of even date herewith (the "Administrative Services
         Agreement") pursuant to which the Reinsurer shall provide, or cause the
         provision of, such administrative services;

                  NOW, THEREFORE, in consideration of the mutual and several
         promises and undertakings herein contained, and for other good and
         valuable consideration, the receipt and adequacy of which are hereby
         acknowledged, the Company and the Reinsurer agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

          Section 1.1. Definitions. Any capitalized term used but not defined
herein shall have the meaning set forth in the Asset Purchase Agreement. The
following terms shall have the respective meanings set forth below throughout
this Agreement:

          "Administrative Services Agreement" has the meaning set forth in the
preamble.

          "Affiliated Reinsurer" has the meaning set forth in the definition of
"Triggering Event".

          "Agreement" has the meaning set forth in the preamble.

          "Asset Purchase Agreement" has the meaning set forth in the preamble.


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          "Commissioner" means the Insurance Commissioner of the State of
Colorado.

          "Company" has the meaning set forth in the preamble.

          "Company Indemnified Parties" has the meaning set forth in Section
10.1 of this Agreement.

          "Confidential Information" means all documents and information
concerning one party, any of its Affiliates, the Reinsured Liabilities or the
Covered Insurance Contracts, including any information relating to any person
insured directly or indirectly under the Covered Insurance Contracts, furnished
to the other party or such other party's Affiliates or representatives in
connection with this Agreement or the transactions contemplated hereby, except
that Confidential Information shall not include information which: (a) at the
time of disclosure or thereafter is generally available to and known by the
public other than by way of a wrongful disclosure by a party hereto or by any
representative of a party hereto; (b) was available on a nonconfidential basis
from a source other than the parties hereto or their representatives, provided
that such source is not and was not bound by a confidentiality agreement with a
party hereto; or (c) was independently developed without violating any
obligations under this Agreement and without the use of any Confidential
Information.

          "Confidentiality Agreement" means that certain confidentiality
agreement dated May 4, 2004 by and between ING and Purchaser.

          "Covered Insurance Contracts" means (i) all Insurance Contracts that
are reinsurance agreements under which the reinsurance is assumed by the
Company, other than on a coinsurance funds withheld basis, modified coinsurance
basis or coinsurance/modified coinsurance basis, as listed on Schedule 1.1(a);
and (ii) all Post-Closing Insurance Contracts. The parties agree to update
Schedule 1.1(a) from time to time to reflect Covered Insurance Contracts entered
into in accordance with the terms of this Agreement or discovered after the
Effective Date.

          "Effective Date" means the effective date shown in the preamble of
this Agreement.

          "Eligible Assets" has the meaning set forth in Section 4.4 of this
Agreement.

          "Independent Accountant" has the meaning set forth in 6.1(f) of this
Agreement.

          "Post-Closing Insurance Contracts" has the meaning set forth in
Section 2.2 of this Agreement.

          "Premiums" means premiums, considerations, deposits and similar
receipts with respect to the Covered Insurance Contracts.

          "Recapture Date" has the meaning set forth in Section 9.3 of this
Agreement.

          "Reinsurer" has the meaning set forth in the preamble.


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          "Reinsurer Indemnified Parties" has the meaning set forth in Section
10.2 of this Agreement.

          "Required Balance" has the meaning set forth in Section 4.3 of this
Agreement.

          "Reserves" means the aggregate amount of reserves and other
liabilities with respect to the Covered Insurance Contracts that would be
appropriately includable in line items 1, 2, 3, 4.1, 4.2, 5, 6.1, 6.2, 6.3, 7,
8, 9.1, 9.2, 9.3, 10, 11, 12, 13, 14 (excluding any Excluded Tax Liability), 17,
18, 19, 24.2, 24.3, 24.6, 24.7, 25.02 and 25.03 except OPEB of the Liabilities,
Surplus and Other Funds page of the NAIC Annual Statement.

          "SAP" means the statutory accounting practices prescribed or permitted
by the insurance department of the State of Colorado.

          "Scottish Annuity & Life" means Scottish Annuity & Life Insurance
Company (Cayman) Ltd., a company organized under the laws of the Cayman Islands.

          "Scottish Re Group" means Scottish Re Group Limited, a holding company
organized under the laws of the Cayman Islands.

          "Triggering Event" means any of the following occurrences:

          (i) the existence of an insolvency, rehabilitation, conservation or
     comparable proceeding by or against the Reinsurer or any Affiliate of
     Reinsurer that at the time in question is reinsuring any of the Business
     (an "Affiliated Reinsurer"), Scottish Annuity & Life or Scottish Re Group;

          (ii) the risk based capital (under applicable Delaware Insurance Law
     requirements), calculated quarterly, of the Reinsurer or any Affiliated
     Reinsurer domiciled in the United States falls below 125% of the Company
     Action Level RBC, and is not increased to at least 125% within thirty (30)
     calendar days after the date upon which the Reinsurer is required to
     provide to the Company the report pursuant to Section 3.5 of this Agreement
     that would reflect such deficiency;

          (iii) the capital adequacy ratio (as currently calculated for Standard
     & Poor's as set forth on Schedule 1.1(b)), calculated quarterly, of
     consolidated Scottish Re Group or consolidated Scottish Annuity & Life
     falls below 100%, and is not increased to at least 100% within thirty (30)
     calendar days after the date upon which the Reinsurer is required to
     provide to the Company the report pursuant to Section 3.5 of this Agreement
     that would reflect such deficiency;

          (iv) there has been a material breach of any Reinsurance Agreement by
     the Reinsurer or an Affiliated Reinsurer, including, without limitation,
     failure to fund any trust as required, and such breach has not been cured
     within 30 days after notice; or

          (v) there has been a termination or amendment to any keepwell
     agreement described in Section 5.26 of the Asset Purchase Agreement without
     the Company's prior written consent, which consent shall not be
     unreasonably withheld.


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          "Termination Date" means the date on which this Agreement is
terminated in accordance with the terms and conditions of Article IX hereof.

          "UCC" means the New York Uniform Commercial Code.

                                   ARTICLE II
                   BASIS OF COINSURANCE AND BUSINESS COINSURED

          Section 2.1. Coinsurance.

          (a) Subject to the terms and conditions of this Agreement, the Company
hereby cedes on a coinsurance basis to the Reinsurer as of the Effective Date,
and the Reinsurer hereby accepts and agrees to assume and indemnity reinsure on
a coinsurance basis as of the Effective Date, one hundred percent (100%) of all
Reinsured Liabilities arising under or relating to the Covered Insurance
Contracts. This Agreement is an agreement for indemnity reinsurance solely
between the Company and the Reinsurer and shall not create any legal
relationship whatsoever between the Reinsurer and any Person other than the
Company. The reinsurance effected under this Agreement shall be maintained in
force, without reduction, unless such reinsurance is terminated or reduced as
provided herein.

          (b) On and after the Effective Date, the Reinsurer will have the
responsibility for paying to or on behalf of the Company, as and when due, all
Reinsured Liabilities arising under or attributable to the Covered Insurance
Contracts.

          Section 2.2. Reinsurance Coverage. In no event shall the reinsurance
provided hereunder with respect to a particular Covered Insurance Contract be in
force and binding unless such Covered Insurance Contract is in force and binding
as of the Effective Date; provided, however, that the Covered Insurance
Contracts reinsured hereunder shall include (a) all lapsed or surrendered
insurance contracts subject to the reinsurance hereunder, that are Covered
Insurance Contracts reinstated in accordance with their terms on and after the
Effective Date; (b) all final Insurance Contracts that were under negotiation or
otherwise in process on the Effective Date and that are entered into by the
Company at the request of the Reinsurer, during the period commencing on the
Effective Date and ending on the 120th day following the Effective Date (the
"Post-Closing Insurance Contracts"); and (c) all Unexecuted Assumed Reinsurance
Contracts of the Company other than on a coinsurance funds withheld basis,
modified coinsurance basis or coinsurance/modified coinsurance basis. Upon the
reinstatement of any lapsed or surrendered Covered Insurance Contract, or the
execution of any Post-Closing Insurance Contract, such reinstated Covered
Insurance Contract or Post-Closing Insurance Contract shall be automatically
reinsured hereunder, when, and to the extent that, the Company is liable under
such reinstated Covered Insurance Contract or Post-Closing Insurance Contract.

          Section 2.3. Reserves. On and after the Effective Date, the Reinsurer
shall establish and maintain as a liability on its statutory financial
statements, Reserves for the Covered Insurance Contracts ceded hereunder,
calculated consistent with (a) the reserve requirements, SAP and actuarial
principles applicable to the Company under Colorado Law; and (b) otherwise in
accordance with any valuation bases and methods of determining Reserves that may
be provided in the Covered Insurance Contracts. The Reinsurer shall provide the
Company,


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no later than forty-five (45) calendar days after the end of each calendar year,
with copies of all actuarial opinions and actuarial memoranda and all reserve
evaluations pertaining to the Reserves for the Covered Insurance Contracts,
including, without limitation, any actuarial opinions and reserve evaluations
performed by independent actuaries, auditors or other outside consultants. The
Company agrees that the Reserves that it establishes and maintains on its
statutory financial statements filed with the State of Colorado with respect to
the Covered Insurance Contracts shall be consistent with the Reserves
established by the Reinsurer; provided, however, that the Company may, at its
own cost at any time, upon reasonable notice to the Reinsurer following the
Effective Date, examine the Books and Records, and any other books and records
that would have been included in the Books and Records had they been in
existence on the Effective Date, maintained by the Reinsurer in accordance with
the terms of this Agreement, and review the Reinsurer's reserve procedures. If
as a result of such examination the Company believes that the Reserves are not
consistent with the requirements of clauses (a) and (b) of the first sentence of
this Section 2.3 in all material respects, the Reinsurer shall, at the Company's
request and expense, obtain and deliver to the Company an actuarial opinion as
to the adequacy of the Reserves for the Covered Insurance Contracts, produced by
an independent actuary reasonably acceptable to the Company. In the event that
the actuarial opinion so rendered reasonably indicates a material inadequacy in
the Reserves for the Covered Insurance Contracts or in the Reinsurer's reserve
procedures, the Reinsurer shall promptly adjust the amount of the Reserves for
the Covered Insurance Contracts and implement appropriate changes to its reserve
procedures so as to avoid inadequacies in future periods; provided, however, the
Reinsurer shall have the right to contest the findings of such actuarial opinion
in accordance with the provisions of Article VII.

          Section 2.4. Insurance Contract and Reserve Assumption Changes. The
Company shall not change (a) the terms and conditions of any Covered Insurance
Contracts or (b) the assumptions and methods used to establish the Reserves
attributable to the Covered Insurance Contracts, except as required by
Applicable Law, and the Company shall notify the Reinsurer promptly upon
becoming aware of the requirement to effect any such change and provide the
Reinsurer the opportunity to contest such requirement.

                                  ARTICLE III
                 TRANSFER OF ASSETS; ACCOUNTING; ADMINISTRATION

          Section 3.1. Payments by the Company.

          (a) As consideration for the Reinsurer's agreement to provide
reinsurance pursuant to the Reinsurance Agreements between the Company and the
Reinsurer, the Company is transferring, on the Effective Date, to the Reinsurer,
the SLD Reserve Trust Account and the SLD Security Trust Account, as
appropriate, as an initial reinsurance premium, the Transferred Statutory
Assets, Investment Assets and cash having a value determined in accordance with
Section 2.4(c) of the Asset Purchase Agreement.

          (b) The Reinsurer shall be entitled, as additional reinsurance
premium, to immediate payment of amounts equal to Premiums received by the
Company on and after the Effective Date that are attributable to the Covered
Insurance Contracts; provided, however, that following the occurrence of a
Triggering Event, the Company shall be entitled to retain such


<PAGE>

amounts as funds withheld under this Agreement, provided further, however, that
such funds may be used by the Company as set forth in Section 4.7 of this
Agreement, and any amount remaining upon termination of this Agreement pursuant
to Section 9.1, other than as a result of a recapture, shall be paid to the
Reinsurer. Any funds withheld pursuant to this Section 3.1(b) shall be credited
against the Required Balance. For the avoidance of doubt, the parties
acknowledge and agree that the Company retains all right, title and interest to
all Premiums and other amounts received with respect to the Covered Insurance
Contracts, subject to its contractual obligations under this Agreement to pay
corresponding amounts over to the Reinsurer.

          (c) To the extent that the Company recovers amounts from any third
party relating to the Business attributable to the Covered Insurance Contracts
(including, without limitation, Premiums in arrears from a policyholder or
ceding company with respect to a reinstated Covered Insurance Contract,
litigation recoveries, premium and reinsurance recoverables), the Company shall,
immediately upon receipt of any such amounts, transfer such amounts to the
Reinsurer and provide the Reinsurer with any pertinent information that the
Company may have relating thereto.

          Section 3.2. Delayed Payments. If there is a delayed settlement of any
payment due hereunder, interest will accrue on such payment at the 180-Day
Treasury Rate then in effect until settlement is made. For purposes of this
Section 3.2, a payment will be considered overdue, and such interest will begin
to accrue, on the first day immediately following the date such payment is due.
For greater clarity, (i) a payment shall be deemed to be due hereunder on the
last date on which such payment may be timely made under the applicable
provision, and (ii) interest will not accrue on any payment due the Reinsurer
hereunder unless the delayed settlement thereof was caused by the Company.

          Section 3.3. Offset and Recoupment Rights. Any debits or credits
incurred on and after the Effective Date in favor of or against either the
Company or Reinsurer with respect to this Agreement or any other reinsurance
agreements or trust agreements that constitute Related Agreements or otherwise
are deemed mutual debits or credits, as the case may be, shall be set off and
recouped, and only the net balance shall be allowed or paid. This Section 3.3
shall apply notwithstanding the existence of any insolvency, rehabilitation,
conservatorship or comparable proceeding by or against the Company or the
Reinsurer.

          Section 3.4. Administration. The Reinsurer will administer, or cause
the administration of, the Covered Insurance Contracts and provide quarterly
accountings with respect thereto to the Company in accordance with the
Administrative Services Agreement. All reports, remittances and payments due to
or from a party hereto shall be made in accordance with the procedures set forth
in the Administrative Services Agreement.

          Section 3.5 Certain Reports. (a) Not later than sixty (60) calendar
days after the end of each calendar year, and forty-five (45) days after the end
of any calendar quarter other than the quarter ending on December 31, the
Reinsurer shall provide to the Company a calculation of (x) the risk based
capital of the Reinsurer and each other entity identified in Clause (ii) of the
definition of the Triggering Event, and (y) the capital adequacy ratio
calculated as set


<PAGE>

forth on Schedule 1.1(b) of the entities identified in Clause (iii) of the
definition of Triggering Event. Each such calculation shall include reasonable
supporting detail.

          (b) The Reinsurer shall also provide written notice of the occurrence
of any Triggering Event within two (2) Business Days after its occurrence. The
Company may, at its own expense, review Reinsurer's or an Affiliated Reinsurer's
books and records to the extent reasonably necessary to confirm the calculations
provided by Reinsurer pursuant to this Section 3.5(a). In addition, Reinsurer
shall cooperate fully with the Company and promptly respond to the Company's
reasonable inquiries from time to time concerning the determination of whether a
Triggering Event has occurred.

                                   ARTICLE IV
                          REINSURANCE CREDIT; SECURITY

          Section 4.1. Licenses. At all times during the term of this Agreement,
the Reinsurer shall hold and maintain all licenses and authorizations required
under Applicable Law or otherwise take all action that may be necessary (i) so
that the Company shall receive full reserve credits for reinsurance ceded under
this Agreement in the statutory financial statement filed with the Commissioner,
and in statutory financial statements required to be filed with regulatory
authority(ies) in such other jurisdictions in which the Company must file such
statements, and (ii) to perform its obligations hereunder.

          Section 4.2. Security. In accordance with the Asset Purchase
Agreement, the Reinsurer, as grantor, is creating the SLD Reserve Trust Account
with a trustee approved by the Company, naming the Company as sole beneficiary
thereof. The SLD Reserve Trust Account shall initially be funded with Investment
Assets and cash transferred from the Company. In accordance with the SLD Reserve
Trust Agreement, the Reinsurer hereby pledges the assets in the SLD Trust
Account, including its residual interest therein, to perfect a first priority
security interest in favor of the Company under Article 9 of the UCC. During the
term of the SLD Reserve Trust Agreement, the Reinsurer shall not, and shall
direct that the trustee shall not, grant or cause to be created in favor of any
third person any security interest whatsoever in any of the assets in the SLD
Trust Accounts or in the residual interest therein.

          Section 4.3. SLD Reserve Trust Agreement. The trustee shall hold
assets in the SLD Reserve Trust Account pursuant to the terms of the SLD Reserve
Trust Agreement. The SLD Reserve Trust Account shall be established and
maintained in compliance with all requirements of Colorado Insurance Laws and
Regulations or any successor provision and all other applicable laws governing
the Company's right to take financial statement credit for reinsurance under
this Agreement. The parties hereto acknowledge and agree that the provisions of
this Article IV are intended to provide the Company with such credit. In the
event that the Company is not permitted to take such credit for reinsurance
because any provision of this Agreement is determined not to comply with
Colorado Insurance Laws and Regulations or other Applicable Law, the parties
hereto agree to reasonably cooperate to amend this Agreement to provide such
credit. The fair market value of assets in the SLD Reserve Trust Account shall
be not less than the amount required (determined pursuant to SAP) in order for
the Company to receive full statutory reserve credit for the retrocession of the
Insurance Contracts which the


<PAGE>

Company has ceded hereunder and on a coinsurance basis under the other
Reinsurance Agreements between the Company and the Reinsurer (the "Required
Balance").

          Section 4.4. Investment of Trust Assets. The assets held in the SLD
Reserve Trust Account shall be valued at their fair market value as of the date
as of which such assets are required to be valued. The assets that may be held
in the SLD Reserve Trust Account (the "Eligible Assets") shall consist of cash,
certificates of deposit issued by a U.S. bank and payable in U.S. dollars and
investments of the type permitted by Colorado Insurance Law; provided, that (i)
each such investment that is a security is issued by an institution that is not
the Reinsurer, the Company or an Affiliate of either party, and (ii) such
investments comply with the requirements specified by the Eligible Asset
Guidelines as set forth on Schedule 4.4.

          Section 4.5. Deposit of Assets. Prior to depositing assets in the SLD
Reserve Trust Account, Reinsurer will execute assignments or endorsements in
blank, or transfer legal title to the trustee of all shares, obligations or any
other assets requiring assignments, in order that the Company, or the trustee
upon the direction of the Company, may whenever necessary negotiate these assets
without the consent or signature from the Reinsurer or any other entity.

          Section 4.6. Adjustment of Security and Withdrawals. The Reinsurer
shall maintain Eligible Assets in the SLD Reserve Trust Account with an
aggregate fair market value at least equal the Required Balance. The amount of
assets held in the SLD Reserve Trust Account shall be adjusted following the end
of each calendar quarter.

          (a) If the aggregate fair market value of the Eligible Assets held in
the SLD Reserve Trust Account at the end of any calendar quarter is less than
the Required Balance, the Reinsurer shall, no later than 15 calendar days
following delivery of the reserve report included in the quarterly report
provided pursuant to the Administrative Services Agreement, transfer additional
Eligible Assets to the SLD Reserve Trust Account so that the aggregate fair
market value of the Eligible Assets held in the SLD Reserve Trust Account is not
less than the Required Balance.

          (b) If the aggregate fair market value of the Eligible Assets in the
SLD Reserve Trust Account at the end of any calendar quarter exceeds 102% of the
Required Balance, then the Reinsurer shall have the right to seek approval
(which shall not be unreasonably or arbitrarily withheld) from the Company to
withdraw the excess. For the purposes of the foregoing sentence, in the event
that a Triggering Event has occurred, the parties acknowledge and agree that it
shall not be unreasonable for the Company to withhold its consent to any such
withdrawal.

          Section 4.7. Withdrawals by the Company. The Company may withdraw the
assets held in the SLD Reserve Trust Account at any time and from time to time,
notwithstanding any other provisions of this Agreement, and assets withdrawn
from such SLD Reserve Trust Account shall be utilized and applied by the Company
(or any successor by operation of law of the Company, including, but not limited
to, any liquidator, rehabilitator, receiver or conservator of the Company),
without diminution because of insolvency on the part of the Company or the
Reinsurer; provided however, that following any such withdrawal the Company (or
any successor by operation of law of the Company, including, but not limited to,

<PAGE>

any liquidator, rehabilitator, receiver or conservator of the Company) may only
apply such assets for one or more of the following purposes:

          (a) to pay, or reimburse the Company for payment of, Premiums received
by Reinsurer hereunder which are to be returned to policyholders or ceding
companies because of cancellations of Covered Insurance Contracts reinsured
hereunder and any other "Covered Insurance Contracts" under any other
Reinsurance Agreements between the Company and the Reinsurer that are reinsured
on a coinsurance basis;

          (b) to pay, or reimburse the Company for payment of, surrenders,
benefits, losses or other amounts payable pursuant to the provisions of the
Covered Insurance Contracts reinsured hereunder and any other "Covered Insurance
Contracts" under any other Reinsurance Agreements between the Company and the
Reinsurer that are reinsured on a coinsurance basis; and

          (c) to fund an account with the Company in an amount no less than the
deduction, for reinsurance ceded, from the Company's liabilities for the
reserves to be maintained with respect to the Covered Insurance Contracts
reinsured hereunder and any other "Covered Insurance Contracts" under any other
Reinsurance Agreements between the Company and the Reinsurer that are reinsured
on a coinsurance basis.

          Section 4.8. Assets in Trust of the Company. Any assets deposited into
an account of the Company (or any successor by operation of law of the Company,
including, but not limited to, any liquidator, rehabilitator, receiver or
conservator of the Company) pursuant to Section 4.7(c), and any interest or
other earnings thereon shall be held by the Company (or any successor by
operation of law of the Company, including, but not limited to, any liquidator,
rehabilitator, receiver or conservator of the Company) in trust for the benefit
of the Reinsurer, subject to the Company's right to apply such assets to amounts
due and payable by the Reinsurer to the Company under this Agreement, and shall
at all times be maintained, separate and apart from any assets of the Company,
for the sole purpose of funding the payments and reimbursements described in
Sections 4.7(a) through (c), inclusive, of this Article IV.

          Section 4.9. Compliance by the Company. The Company (or any successor
by operation of law of the Company, including, but not limited to, any
liquidator, rehabilitator, receiver or conservator of the Company) shall ensure
that any assets held in trust pursuant to Section 4.7(c) comply with the
provisions of Sections 4.4, 4.7(a) and 4.7(b) in accordance with its fiduciary
obligations as trustee with respect to such amounts.

          Section 4.10. Reports. At the Company's request, the Reinsurer shall
provide the Company with its annual and quarterly statutory financial statements
filed with state insurance regulators and a copy of its audited statutory
financial statements along with the audit report thereon.

                                   ARTICLE V
                   OVERSIGHTS; COOPERATION; REGULATORY MATTERS

          Section 5.1. Oversights. Inadvertent delays, errors or omissions made
in connection with this Agreement or any transaction hereunder shall not relieve
either party from


<PAGE>

any liability which would have attached had such delay, error or omission not
occurred, provided always that such error or omission is rectified as soon as
possible after discovery, and provided, further, that the party making such
error or omission or responsible for such delay shall be responsible for any
additional liability which attaches as a result. If (a) the failure of either
party to comply with any provision of this Agreement is unintentional or the
result of a misunderstanding or oversight and (b) such failure to comply is
promptly rectified, both parties shall be restored as closely as possible to the
positions they would have occupied if no error or oversight had occurred.

          Section 5.2. Cooperation. Each party hereto shall cooperate fully with
the other in all reasonable respects in order to accomplish the objectives of
this Agreement.

          Section 5.3. Regulatory Matters. If the Company or the Reinsurer
receives notice of, or otherwise becomes aware of, any regulatory inquiry,
investigation or proceeding relating to the Covered Insurance Contracts, the
Company or the Reinsurer, as applicable, shall promptly notify the other party
thereof, whereupon the parties shall cooperate in good faith and use their
respective commercially reasonable efforts to resolve such matter in a mutually
satisfactory manner, in light of all the relevant business, regulatory and legal
facts and circumstances.

                                   ARTICLE VI
                                     DAC TAX

          Section 6.1. Election.

          (a) All uncapitalized terms used herein shall have the meanings set
forth in the regulations under Section 848 of the Code.

          (b) Each of the Company and the Reinsurer acknowledges that it is
subject to taxation under Subchapter L of the Code and hereby makes the election
contemplated by Section 1.848-2(g)(8) of the Treasury Regulations with respect
to this Agreement. Each of the Company and the Reinsurer (i) agrees that such
election is effective for the taxable year of each party that includes the
Effective Date and for all subsequent years during which this Agreement remains
in effect and (ii) warrants that it will take no action to revoke the election.

          (c) Pursuant to Section 1.848-2(g)(8) of the Treasury Regulations,
each of the Company and the Reinsurer hereby agrees (i) to attach a schedule to
its federal income tax return for its first taxable year ending on or after the
Effective Date that identifies this Agreement as a reinsurance agreement for
which the joint election under Section 1.848-2(g)(8) has been made, (ii) that
the party with net positive consideration for this Agreement for each taxable
year will capitalize its specified policy acquisition expenses with respect to
this Agreement without regard to the general deductions limitation of Section
848(c)(1) of the Code, and (iii) to exchange information pertaining to the
amount of net consideration under this Agreement each year to ensure consistency
or as otherwise required by the Internal Revenue Service. The Reinsurer shall
prepare and execute duplicate copies of the schedule described in the preceding
sentence as soon as practicable after the Effective Date and submit them to the
Company for execution. The


<PAGE>

Company shall execute the copies and return one of them to the Reinsurer within
thirty (30) calendar days of the receipt of such copies.

          (d) The Company shall submit a schedule to the Reinsurer by May 1 of
each year of its calculation of the net consideration under this Agreement for
the preceding taxable year. This schedule of calculations shall be accompanied
by a statement signed by an authorized representative of the Company stating
that the Company shall report such net consideration in its federal income tax
return for the preceding taxable year.

          (e) The Reinsurer may contest such calculation by providing an
alternative calculation to the Company in writing within thirty (30) calendar
days after the date on which the Reinsurer receives the Company's calculation.
If the Reinsurer does not so notify the Company, the Reinsurer shall report the
net consideration under this Agreement as determined by the Company in the
Reinsurer's federal income tax return for the preceding taxable year.

          (f) If Reinsurer contests the Company's calculation of the net
consideration under this Agreement, the parties shall act in good faith to reach
an agreement as to the correct amount of net consideration within thirty (30)
calendar days after the date on which the Reinsurer submits its alternative
calculation. If Reinsurer and the Company reach an agreement as to the amount of
net consideration under this Agreement, each party shall report such amount in
its federal income tax return for the preceding taxable year.

          If, during such period, Reinsurer and the Company are unable to reach
an agreement, they shall promptly thereafter cause Deloitte & Touche USA LLP
(the "Independent Accountants") to promptly review (which review shall commence
no later than five (5) calendar days after the selection of the Independent
Accountants) this Agreement and the calculations of Reinsurer and the Company
for the purpose of calculating the net consideration under this Agreement. In
making such calculation, the Independent Accountants shall consider only those
items or amounts in the Company's calculation as to which the Reinsurer has
disagreed.

          The Independent Accountants shall deliver to Reinsurer and the
Company, as promptly as practicable (but no later than thirty (30) calendar days
after the commencement of their review), a report setting forth such
calculation, which calculation shall result in a net consideration between the
amount thereof shown in the Company's calculation delivered pursuant to Section
6.1(d) and the amount thereof shown in Reinsurer's calculation delivered
pursuant to Section 6.1(e). Such report shall be final and binding upon
Reinsurer and the Company. The fees, costs and expenses of the Independent
Accountants shall be borne (i) by the Company if the difference between the net
consideration as calculated by the Independent Accountants and the Company's
calculation delivered pursuant to Section 6.1(d) is greater than the difference
between the net consideration as calculated by the Independent Accountants and
Reinsurer's calculation delivered pursuant to Section 6.1(e), (ii) by the
Reinsurer if the first such difference is less than the second such difference,
and (iii) otherwise equally by Reinsurer and the Company.


<PAGE>

                                   ARTICLE VII
                                   ARBITRATION

          Section 7.1. Arbitration.

          (a) After the Closing Date, any dispute between the parties with
respect to the calculation of amounts that are to be calculated, reported, or
that may be audited pursuant to this Agreement (other than disputes relating to:
(i) the SLD Closing Statement and the assets to be transferred to the Reinsurer,
the SLD Reserve Trust Account and the SLD Security Trust Account pursuant to
Article II of the Asset Purchase Agreement, which shall be resolved in
accordance with the Asset Purchase Agreement; (ii) calculations relating to DAC
tax, which shall be resolved in accordance with Article VI hereof, or (iii)
matters relating to whether a Triggering Event has occurred), shall be decided
through negotiation and, if necessary, arbitration as set forth in Section 7.2.

          (b) The parties intend this Section 7.1 to be enforceable in
accordance with the Federal Arbitration Act (9 U.S.C., Section 1) including any
amendments to that Act which are subsequently adopted. In the event that either
party refuses to submit to arbitration as required by Section 7.1(a), the other
party may request the court specified in Section 11.5 to compel arbitration in
accordance with the Federal Arbitration Act.

          Section 7.2. Arbitration Procedure.

     The Company and Reinsurer intend that any dispute between them arising
under this Agreement (excluding those disputes identified in Section 7.1(a)) be
resolved without resort to any litigation. Accordingly, the Company and
Reinsurer agree that they will negotiate diligently and in good faith to agree
on a mutually satisfactory resolution of any such dispute; provided, however,
that if any such dispute cannot be so resolved by them within sixty (60)
calendar days (or such longer period as the parties may agree) after commencing
such negotiations, the Company and Reinsurer agree that they will submit such
dispute to arbitration in the manner specified in, and such arbitration
proceeding will be conducted in accordance with, the Supplementary Rules for the
Resolution of Intra-Industry U.S. Reinsurance and Insurance Disputes of the
American Arbitration Association.

     The arbitration hearing will be before a panel of three disinterested
arbitrators, each of whom must be a present or former officer of a life
insurance or life reinsurance company familiar with the life reinsurance
business, or other professionals with experience in life insurance or
reinsurance, provided that such professionals shall not have performed services
for either party within the previous five (5) years, and provided further that
no arbitrator shall be a former employee of the Company or any of its
Affiliates. The Company and Reinsurer will each appoint one arbitrator by
written notification to the other party within thirty (30) calendar days after
the date of the mailing of the notification initiating the arbitration. These
two arbitrators will then select the third arbitrator within sixty (60) calendar
days after the date of the mailing of the notification initiating arbitration.

     If either the Company or Reinsurer fails to appoint an arbitrator, or
should the two arbitrators be unable to agree upon the choice of a third
arbitrator, the president of the American


<PAGE>

Arbitration Association will appoint the necessary arbitrators within thirty
(30) calendar days after the request to do so.

     The arbitrators shall base their decision on the terms and conditions of
this Agreement. However, if the terms and conditions of this Agreement do not
explicitly dispose of an issue in dispute between the parties, the arbitrators
may base their decision on the customs and practices of the life insurance and
life reinsurance industry together with an interpretation of the law. The vote
or approval of a majority of the arbitrators will decide any question considered
by the arbitrators. The place of arbitration will be determined by the
arbitrators. Each decision (including without limitation each award) of the
arbitrators will be final and binding on all parties and will be nonappealable,
except that (at the request of either the Company or Reinsurer) any award of the
arbitrators may be confirmed (or, if appropriate, vacated) by a judgment entered
by the court specified in Section 11.4. No such award or judgment will bear
interest except as provided in Section 3.2. In no event may the arbitrators
award punitive or exemplary damages. Each party will be responsible for paying
(a) all fees and expenses charged by its respective counsel, accountants,
actuaries, and other representatives in conjunction with such arbitration and
(b) one-half of the fees and expenses charged by each arbitrator.

                                  ARTICLE VIII
                                   INSOLVENCY

          Section 8.1. Insolvency of the Company. In the event of the insolvency
of the Company, all coinsurance made, ceded, renewed or otherwise becoming
effective under this Agreement shall be payable by the Reinsurer directly to the
Company or to its statutory liquidator, receiver or statutory successor on the
basis of the liability of the Company under the Covered Insurance Contracts
without diminution because of the insolvency of the Company. It is understood,
however, that in the event of the insolvency of the Company, the liquidator,
receiver or statutory successor of the Company shall give written notice of the
pendency of a claim against the Company on a Covered Insurance Contract within a
reasonable period of time after such claim is filed in the insolvency
proceedings and that during the pendency of such claim the Reinsurer may
investigate such claim and interpose, at its own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses which it may deem
available to the Company or its liquidator, receiver or statutory successor. It
is further understood that the expense thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the Company as part of the
expense of liquidation to the extent of a proportionate share of the benefit
which may accrue to the Company solely as a result of the defense undertaken by
the Reinsurer.

                                   ARTICLE IX
                               DURATION; RECAPTURE

          Section 9.1. Duration. This Agreement shall continue in force until
such time as (i) the Company's liability with respect to all Covered Insurance
Contracts reinsured hereunder is terminated in accordance with their respective
terms, or the Company has elected to recapture the reinsurance of Covered
Insurance Contracts following the occurrence of a Triggering Event, and (ii) the
Company has received payments which discharge such liability in full in
accordance with the provisions of this Agreement. In no event shall the
interpretation of


<PAGE>

this Section 9.1 imply any unilateral right of the Reinsurer to terminate this
Agreement; provided, however, that in the event that the Company fails to timely
pay any material amount due the Reinsurer hereunder, and such amount remains
unpaid for thirty (30) days, the Reinsurer shall have the right to terminate
reinsurance hereunder provided, however, that the Reinsurer shall have provided
to the Colorado Insurance Commissioner ninety (90) calendar days written notice
prior to such termination. In such case, the provisions of Section 9.3 shall
apply as if the Termination Date were a Recapture Date and the Reinsurer shall
be relieved of all liability under this Agreement to make future payments to the
Company.

          Section 9.2. Survival. Notwithstanding the other provisions of this
Article IX, the terms and conditions of Articles I, VI and X and the provisions
of Sections 11.1, 11.4, 11.6, 11.9 and 11.10 shall remain in full force and
effect after the Termination Date.

          Section 9.3. Recapture. Upon the occurrence of a Triggering Event, the
Company shall have the right to recapture all, and not less than all, of the
reinsurance ceded under this Agreement, by providing the Reinsurer with written
notice of its intent to effect recapture. Recapture of the Covered Insurance
Contracts shall be effective on the tenth (10th) day following the day on which
the Company has provided the Reinsurer with such notice (the "Recapture Date").

          Section 9.4. Recapture Payments. On the Recapture Date, the Company
shall be entitled to withdraw the Required Balance from the SLD Reserve Trust as
consideration for assumption by the Company of the Reinsured Liabilities under
the recaptured Covered Insurance Contracts. In the event that the fair market
value of the assets in the SLD Reserve Trust exceeds the Required Balance, the
Company shall also be permitted to withdraw such assets if, and only to the
extent that, the fair market value of the assets in the SLD Security Trust
Account is less than the amount required by Exhibit A to the SLD Security Trust
Agreement on the Recapture Date. In addition, the Company shall be entitled to
withdraw the remaining balance in the SLD Security Trust Account less any
amounts owed to the Reinsurer under this Agreement as of the Recapture Date.

                                    ARTICLE X
                                 INDEMNIFICATION

          Section 10.1. Reinsurer's Obligation to Indemnify. The Reinsurer
hereby agrees to indemnify, defend and hold harmless the Company and its
Affiliates and their respective directors, officers and employees (collectively,
the "Company Indemnified Parties") from and against all losses, liabilities,
claims, expenses (including reasonable attorneys' fees and expenses) and damages
reasonably and actually incurred by the Company to the extent arising from (i)
any breach of the representations, warranties, and covenants of the Reinsurer
contained in this Agreement, except to the extent that such losses, liabilities,
claims, expenses (including reasonable attorneys' fees and expenses) and damages
are attributable to acts or omissions of a person who is a director, officer,
employee, agent, representative, successor, or permitted assign of the Company
or any of its Affiliates, unless such person is acting at the direction or
request of the Reinsurer, and (ii) any successful enforcement of this indemnity.


<PAGE>

          Section 10.2. Company's Obligation to Indemnify. The Company hereby
agrees to indemnify, defend and hold harmless the Reinsurer and its Affiliates
and their respective directors, officers and employees (collectively, the
"Reinsurer Indemnified Parties") from and against all losses, liabilities,
claims, expenses (including reasonable attorneys' fees and expenses) and damages
reasonably and actually incurred by the Reinsurer to the extent arising from (i)
any breach of the representations, warranties and covenants of the Company
contained in this Agreement, except to the extent that such losses, liabilities,
claims, expenses (including reasonable attorneys' fees and expenses) and damages
are attributable to acts or omissions of a person who is a director, officer,
employee (other than in such employee's capacity as an employee of the Company),
agent, representative, successor, or permitted assign of the Reinsurer or any of
its Affiliates, and (ii) any successful enforcement of this indemnity.

          Section 10.3. Certain Definitions and Procedures. In the event either
the Reinsurer or the Company shall have a claim for indemnity against the other
party under the terms of this Agreement, the parties shall follow the procedures
set forth in Article X of the Asset Purchase Agreement.

                                   ARTICLE XI
                                  MISCELLANEOUS

          Section 11.1. Notices. Any notice, request or other communication to
be given by any party hereunder shall be in writing and shall be delivered
personally, sent by registered or certified, postage prepaid, or by overnight
courier with written confirmation of delivery. Any such notice shall be deemed
given when so delivered personally, or if mailed, on the date shown on the
receipt therefor, or if sent by overnight courier, on the date shown on the
written confirmation of delivery. Such notices shall be given to the following
address:

To Company:                Security Life of Denver Insurance Company
                           Attention: President
                           c/o ING North America Insurance Corporation
                           5780 Powers Ferry Road NW
                           Atlanta, GA 30327


With a concurrent
copy to:                   B. Scott Burton
                           Corporate General Counsel
                           ING North America Insurance Corporation
                           5780 Powers Ferry Road NW
                           Atlanta, GA 30327


                           and


<PAGE>

                           David A. Massey, Esq.
                           Sutherland Asbill & Brennan LLP
                           1275 Pennsylvania Ave., NW
                           Washington, DC 20004-2415


To Reinsurer:              Scottish Re (U.S), Inc.
                           13840 Ballantyne Corporate Place, Suite 500
                           Charlotte, NC  28277
                           Attention:  General Counsel


With a copy to:            Stephen G. Rooney, Esq.
                           LeBoeuf, Lamb, Greene & MacRae, LLP
                           125 W. 55th Street
                           New York, NY 10019


          Section 11.2. Entire Agreement. This Agreement may not be amended or
modified in any respect whatsoever except by instrument in writing signed by the
parties hereto. This Agreement, the Asset Purchase Agreement, the other Related
Agreements and the Confidentiality Agreement, and other documents delivered
pursuant hereto, constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements
understanding negotiations, discussions, whether oral or written, of the parties
and there are no general or specific warranties, representations or other
agreements by or among the parties in connection with the entering into of this
Agreement or the subject matter hereof except as specifically set forth or
contemplated herein.

          Section 11.3. Captions. The captions of this Agreement are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.

          Section 11.4. Governing Law and Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado
applicable to contracts entered into therein, without reference to principles of
choice of law or conflicts of laws. Each party hereto irrevocably and
unconditionally submits to the exclusive jurisdiction of any State or Federal
Court sitting in Colorado, over any suit, action or proceeding arising out of or
relating to this Agreement. Each party hereto agrees that service of any
process, summons, notice or document by U.S. registered mail addressed to such
party shall be effective service of process for any action, suit or proceeding
brought against such party in such court. Each party hereto irrevocably and
unconditionally waives any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such
action, suit or proceeding brought in any such court has been brought in an
inconvenient forum. Each party hereto agrees that final judgment in any such
action, suit or proceeding brought in any such court shall be conclusive and
binding upon such party and may be enforced in any other courts to whose
jurisdiction such party may be subject, by suit upon such judgment.

          Section 11.5. No Third Party Beneficiaries. Except as otherwise
expressly set forth in any provision of this Agreement, nothing in this
Agreement is intended or shall be construed to give any Person, other than the
parties hereto, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.


<PAGE>

          Section 11.6. Expenses. Except as otherwise provided herein, the
parties hereto shall each bear their respective expenses incurred in connection
with the negotiation, preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including, without limitation, all
fees and expenses of counsel, actuaries and other representatives.

          Section 11.7. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto. Each counterpart may be delivered by facsimile transmission,
which transmission shall be deemed delivery of an originally executed document.

          Section 11.8. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction, so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. If any provision
of this Agreement is so broad as to be unenforceable, that provision shall be
interpreted to be only so broad as is enforceable.

          Section 11.9. Waiver of Jury Trial; Multiplied and Punitive Damages.
Each of the parties hereto irrevocably waives, with respect to any first party
action filed by the other party (but not as to any action by one party against
the other seeking indemnification for a third party claim against the party
initiating the action, to the extent that such damages may be recoverable as
part of the indemnification by the indemnified party) (i) any and all right to
trial by jury, and (ii) any right to punitive, incidental, consequential or
multiplied damages, either pursuant to common law or statute, in any legal
proceedings arising out of or related to this Agreement or the transactions
contemplated hereby.

          Section 11.10. Treatment of Confidential Information.

          (a) The parties agree that, other than as contemplated by this
Agreement and to the extent permitted or required to implement the transactions
contemplated by this Agreement, the parties will keep confidential and will not
use or disclose the other party's Confidential Information and the terms and
conditions of this Agreement, including, without limitation, the exhibits and
schedules hereto, except as otherwise required by Applicable Law or any order or
ruling of any state insurance regulatory authority, the Securities and Exchange
Commission or any other Governmental Authority.

          (b) The confidentiality obligations contained in this Agreement or in
any other agreement between the parties hereto, as they relate to the
reinsurance hereunder, shall not apply to the federal tax structure or federal
tax treatment of this Agreement and each party hereto may disclose to any and
all persons, without limitation of any kind, the federal tax structure and
federal tax treatment of this Agreement; provided, that such disclosure may not
be made until the earliest of (x) the date of the public announcement of
discussions relating to this Agreement,


<PAGE>

(y) the date of the public announcement of this Agreement, or (z) the date of
the execution of this Agreement. The preceding sentence is intended to cause
this Agreement to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose. Subject to the provision with respect to
disclosure in the first sentence of this subsection (b), each party hereto
acknowledges that it has no proprietary or exclusive rights to the federal tax
structure of this Agreement or any federal tax matter or federal tax idea
related to this Agreement.

          Section 11.11. Assignment. No party hereto may assign this Agreement
or any of its obligations hereunder without the prior written consent of the
other parties; provided, however, that this Agreement shall inure to the benefit
of and bind those who, by operation of law, become successors to the parties,
including, without limitation, any liquidator, rehabilitator, receiver or
conservator and any successor, merged or consolidated entity. The Reinsurer
shall be entitled to assign its administrative duties hereunder without the
prior written consent of the Company, unless the person or entity to whom such
duties are to be assigned is not, at the time of such assignment, a subsidiary
of the Reinsurer, in which event the Reinsurer shall obtain the prior written
consent of the Company, such consent not to be unreasonably withheld.

          Section 11.12. Service of Process. The Reinsurer hereby designates The
Corporation Trust Company as its true and lawful attorney upon whom may be
served any lawful process in any action, suit or proceeding instituted by or on
behalf of the Company. The Company hereby designates the Commissioner as its
true and lawful attorney upon whom may be served any lawful process in any
action, suit or proceeding instituted by or on behalf of the Reinsurer.

                                  ARTICLE XII
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

          Section 12.1. Representations, Warranties, and Covenants of the
Reinsurer. For purposes of perfecting the security interest in the SLD Reserve
Trust Account and the SLD Security Trust Account, the Reinsurer hereby
represents and warrants to the Company, and covenants for the benefit of the
Company, as follows:

          (a) The Reinsurer is (and, for the past five years, has been) a stock
insurance company organized under the laws of Delaware. From October 1999 to
January 2000, the chief executive office of the Reinsurer within the meaning of
section 9-307 of the UCC was located in Aurora, Colorado and thereafter the
chief executive office of the Reinsurer, within the meaning of section 9-307 of
the UCC, has been (and, immediately following the date hereof, will be) located
in Charlotte, North Carolina. The Reinsurer shall not change its jurisdiction of
organization or its chief executive office (within the meaning of section 9-307
of the UCC), except upon thirty (30) calendar days' prior written notice to the
Company. In the event that the Reinsurer changes its jurisdiction of
organization or the location of its chief executive office, it will only change
to a jurisdiction of organization or change the location of its chief executive
office to a jurisdiction in the United States. The Reinsurer's true corporate
name, as reflected in


<PAGE>

its organization documents of record in the State of Delaware, is (and, for the
past five years, has been) that set forth in the preamble hereto.

          (b) The Reinsurer owns and will own its interest in the assets in the
SLD Reserve Trust Account and the SLD Security Trust Account free and clear of
any security interest in, or lien or adverse claim on, such assets. From and
after the date hereof, the Reinsurer will not authorize the filing of any other
financing statement with respect to any asset in the SLD Reserve Trust Account
or the SLD Security Trust Account, nor authorize the granting of "control" (as
defined in the UCC) over any of such asset to any Person other than the Company.
From and after the date hereof, the Reinsurer will not grant any further
security interest in, or lien on, the assets in the SLD Reserve Trust Account or
the SLD Security Trust Account.

          (c) The Reinsurer will do, execute or otherwise authenticate,
acknowledge and deliver, or cause to be done, executed or otherwise
authenticated, acknowledged and delivered, such instruments of transfer or other
records, and take such other steps or actions, as the Company may reasonably
deem necessary to create, perfect or preserve the security interest granted to
the Company by Section 4.2 hereof and under the SLD Security Trust Agreement or
to ensure that such security interest remains prior to any and all other
security interests, liens or other interests of any other Person; and the
Reinsurer hereby authorizes the Company, in the Reinsurer's name or otherwise,
to take, or cause to be taken, any of the foregoing steps or actions upon any
failure by the Reinsurer to comply with any written request of the Company in
respect of any matter subject to this Section 12.1(c).

                [The rest of this page intentionally left blank.]


<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed effective December 31, 2004.

                                      SECURITY LIFE OF DENVER INSURANCE COMPANY


                                      By:  /s/ Mark Tullis
                                          --------------------------------------
                                      Name: Mark Tullis
                                      Title: President



                                      SCOTTISH RE (U.S.), INC.


                                      By:  /s/ Oscar Scofield
                                          --------------------------------------
                                      Name: Oscar Scofield
                                      Title: CEO/ President