THIS WARRANT  INSTRUMENT is executed on 14 February 2003 by LONDON  PACIFIC
GROUP LIMITED,  a company  incorporated in Jersey with  registered  number 30810
whose registered  office is at 6 Minden House,  Minden Place, St Helier,  Jersey
(the "Company").

WHEREAS:

     The Company  has, by a resolution  of its board of  directors  passed on 20
December 2002,  resolved,  inter alia, to enter into this Instrument which, upon
execution and delivery,  shall constitute binding  obligations of the Company in
accordance with its terms.

NOW THIS INSTRUMENT WITNESSES as follows:

1.   Definitions and Interpretation

     1.1  Definitions


In this Instrument and the Schedule the following  words and expressions  shall,
except to the extent that the context  otherwise  requires,  have the  following
meanings:


"Conditions"        means the terms  and  conditions  in the form set out in the
                    Schedule  to be  endorsed  on or  attached  to  the  Warrant
                    Certificates;


"Exercise Notice"   means  the  exercise  notice  in  the  form  set  out in the
                    Schedule  to be  endorsed  on or  attached  to  the  Warrant
                    Certificates;



"Ordinary Shares"   means  ordinary  shares of Five United  States  cents (USc5)
                    each in the capital of the Company  and, in the event of any
                    sub-division,  consolidation  or  reclassification  of  such
                    ordinary  shares,  the  ordinary  shares  of such  different
                    nominal   value  or  the   reclassified   shares   resulting
                    therefrom;

"Register"          means the register of Warrantholders kept by or on behalf of
                    the Company in accordance with clause 5;

"Registrar""        means any person or persons  appointed by the Company as its
                    registrar in connection with the Warrants from time to time;

"Warrant            means  a certificate  substantially in  the  form set out in
Certificate"        the  Schedule to be issued by the Company to a Warrantholder
                    as prima facie evidence of title to a Warrant or Warrants;

"Warrantholder(s)"  means in relation to any Warrant,  the person or persons who
                    is or are for the time being  entered in the Register as the
                    holder or joint holders of that Warrant; and
<PAGE>

"Warrants"          means the warrants  created by this  Instrument for the time
                    being  outstanding  entitling the holders of each Warrant to
                    subscribe  for Ordinary  Shares on the terms set out in this
                    Instrument.

     1.2  Unless the context otherwise  requires,  words and expressions defined
          in the  Companies  Act  1985  shall  bear the  same  meanings  in this
          Instrument.

     1.3  References in this Instrument to clauses, sub-clauses and the Schedule
          shall be construed as references to the clauses and  sub-clauses of or
          to the Schedule to this  Instrument  and any reference to a sub-clause
          shall be construed as a reference  to the relevant  sub-clause  of the
          clause in which such reference appears.

     1.4  Headings  are inserted  for  convenience  only and shall be ignored in
          construing this Instrument.

     1.5  References to any statutory  provision  shall be deemed to include any
          statutory provision or re-enactment thereof.

     1.6  Words  denoting the singular  number shall include the plural  number,
          words  denoting the  masculine  gender shall  include the feminine and
          words denoting  persons shall include  corporations  and  partnerships
          and, in each case, vice versa.

2.   The Warrants

     2.1  The maximum number of Warrants to be issued hereunder is 1,933,172.

     2.2  The Company  shall perform and observe the  Conditions  and shall give
          effect to the  subscription  rights set out therein  and the  Warrants
          shall be held  subject to and with the benefit of the  Conditions  and
          such  subscription   rights  all  of  which  shall  be  deemed  to  be
          incorporated  in this  Instrument  and shall be binding on the Company
          and the Warrantholders and all persons claiming through or under them.

3.   Warrant Certificates

     3.1  The Warrant  Certificates shall be in the form or substantially in the
          form set out in the  Schedule  and  shall  have  endorsed  thereon  or
          attached thereto the Conditions and an Exercise Notice.

     3.2  The  Warrant  Certificates  shall be  issued  in  accordance  with the
          provisions  of the Articles of  Association  for the time being of the
          Company  relating to the issue of  certificates  for securities of the
          Company.

     3.3  Every   Warrantholder   shall  be  entitled  to  receive  one  Warrant
          Certificate  for the  Warrants  held by him but so that joint  holders
          shall be entitled to one  Warrant  Certificate  only in respect of the
          Warrants  held  jointly by them  which  Warrant  Certificate  shall be
          delivered to that one of the joint  holders whose name stands first in
          the Register in respect of the joint  holding.  Where a  Warrantholder
          has
<PAGE>

          transferred  or  exercised  a part only of his  holding of Warrants he
          shall be  entitled  to a Warrant  Certificate  for the balance of such
          holding without charge.

     3.4  If a  Warrant  Certificate  is  mutilated,  defaced,  lost,  stolen or
          destroyed,  it shall, at the discretion of the Company, be replaced at
          the  office  of the  Registrar  on  payment  of such  expenses  as may
          reasonably be incurred in connection therewith and on such terms as to
          evidence,  indemnity  and/or  security  as the  Company  may  require.
          Mutilated or defaced Warrant  Certificates must be surrendered  before
          replacements will be issued.

4.   Fees, Duties and Taxes

     The Company will pay any stamp, issue, registration,  documentary and other
     fees, duties and taxes, including interest and penalties,  payable on or in
     connection with (i) the execution and delivery of this Instrument, (ii) the
     constitution  and issue of the  Warrants,  (iii) the issue of any  Ordinary
     Shares on exercise of the Warrants and (iv) any action properly taken by or
     on  behalf  of any  Warrantholder  to  enforce,  or to  resolve  any  doubt
     concerning, or for any other purpose in relation to, this Instrument.

5.   The Register

     5.1  The Company  shall at all times cause a register to be  maintained  in
          the Island of Jersey showing the number of Warrants for the time being
          in issue, the date of issue of the Warrant Certificates  together with
          the names and addresses of the  Warrantholders and of all transfers or
          changes of ownership of the Warrants.

     5.2  The provisions of the Articles of Association of the Company from time
          to time relating to the  registration,  transfer and  transmission  of
          certificated  shares shall,  mutatis mutandis,  apply to the Warrants,
          provided always that the Company shall in no circumstances  whatsoever
          be under any  obligation  to register any  transfer of any  Warrant(s)
          unless it is satisfied that (i) after such registration  there will be
          no more than ten registered  holders of the Warrants  outstanding  and
          (ii) any beneficial  holder of the Warrants after such registration is
          not a resident of the Island of Jersey for Jersey  income tax purposes
          (other than a  financial  institution  acting in the normal  course of
          business).

6.   Warranties


     The  Company hereby warrants to each of the Warrantholders that:

     (a)  as at the  date of  this  Instrument,  its  authorised  share  capital
          consists of 86,400,000  Ordinary Shares, of which 64,439,073  Ordinary
          Shares have been issued;

     (b)  it has sufficient  authorised but unissued  Ordinary Shares to satisfy
          in full all rights for the time being  outstanding of conversion into,
          subscription for, and other acquisition of Ordinary Shares,  including
          all the  Ordinary  Shares which would fall to be issued on exercise of
          the Warrants;
<PAGE>

     (c)  it has full power and authority to enter into this  Instrument and all
          necessary consents and approvals have been obtained in connection with
          the  execution  of  this   Instrument  and  the   performance  of  its
          obligations hereunder;

     (d)  this  Instrument has been duly executed by the Company and constitutes
          valid, binding and enforceable obligations of the Company;

     (e)  the Ordinary  Shares  falling to be issued on exercise of the Warrants
          can be issued  without any  requirements  for any consent or authority
          from any other person and are not subject to any pre-emption rights in
          favour of any other party.

7.   General

     7.1  No variation to the terms of this Instrument shall be effective unless
          agreed in writing between the Company and each of the Warrantholders.

     7.2  Any  notice  or  communication  to be  given  by  the  Company  to the
          Warrantholders  may be  delivered  or  sent by  ordinary  post to each
          Warrantholder's  last known  address or to its  registered  office and
          where a notice or  communication is sent by post it shall be deemed to
          have been  received on the second  business  day after having been put
          into the post properly addressed and stamped.

     7.3  Any notice to be given by the  Warrantholder  to the Company  shall be
          delivered or sent to the Company at its registered office and shall be
          effective upon receipt.

8.   Governing Law


     This  Instrument and the Schedule hereto shall be governed by and construed
     in accordance with English law.


IN WITNESS  whereof this  Instrument  has been duly executed by the Company as a
deed on the date set out above.

<PAGE>


                                  THE SCHEDULE

                           FORM OF WARRANT CERTIFICATE


No. of               Transfer No.         Date of                      Number of
Certificate                               Registration                 Warrants

[          ]         [           ]        [                 ]          [  ]


                               WARRANT CERTIFICATE

            Warrants to subscribe for ordinary shares of Usc5 each in

                          LONDON PACIFIC GROUP LIMITED
             (Incorporated in Jersey under Registered Number 30810)


Name of Warrantholder(s):

Address of Warrantholder(s):

Number of Warrants:


LONDON  PACIFIC  GROUP  LIMITED  (the  "Company")   hereby  certifies  that  the
above-named  Warrantholder(s)  is/are the registered  holder(s) of the number of
warrants to  subscribe  for  ordinary  shares in the capital of the Company (the
"Warrants")  shown above which were created  pursuant to an  Instrument  dated _
2003 (the "Instrument"). The Warrants are issued subject to and with the benefit
of the provisions of the Instrument and the terms and conditions  endorsed on or
attached  to this  Certificate  (the  "Conditions")  which  are  binding  on the
Company, the Warrantholder(s) and all persons claiming through or under them. So
long  as any of the  Warrants  remains  outstanding,  a copy  of the  Instrument
together  with a copy of the  Memorandum  and  Articles  of  Association  of the
Company will be available for  inspection by  Warrantholders  at the  registered
office of the Company.

No transfer of a Warrant  comprised in this  Certificate in accordance  with the
Conditions  will be  registered  until the  Certificate  is  surrendered  to the
Company or such person or persons  appointed by the Company as its  registrar in
connection with the Warrants from time to time.

EXECUTED as a DEED by                                )
LONDON PACIFIC GROUP LIMITED                )
acting by:                                           )


 Director                 .........................................

 Director/Secretary         .........................................

<PAGE>

                                 EXERCISE NOTICE


TO:      London Pacific Group Limited

I/We, the registered holder(s) of the Warrants represented by the within-written
Certificate,  hereby give notice of my/our  desire to exercise  my/our rights to
subscribe for fully paid ordinary shares of USc5 each in the Company  ("Ordinary
Shares")  in  respect of all  ...............  (Note  (i)) of such  Warrants  in
accordance with the Conditions printed hereon.

I/We  enclose a payment of  (pound)..................  (Note  (ii)) in favour of
London Pacific Group Limited.

I/We  agree to accept  the fully  paid  Ordinary  Shares  of the  Company  to be
allotted  pursuant thereto subject to the Memorandum and Articles of Association
of the Company.

I/We desire  (Note (iii)) of such  Ordinary  Shares to be  registered  in my/our
name(s)  and hereby  authorise  the entry of my/our  name(s) in the  Register of
Members in respect thereof.

I/We hereby  authorise  and direct you to allot  (Note  (iii)) of the fully paid
Ordinary  Shares to be issued  pursuant hereto to the person(s) who is/are named
in and who has/have signed the  acceptance(s) in the Form(s) of Nomination (Note
(iv)) which I/we have obtained and which is/are attached hereto.

I/We hereby  authorise  the despatch of (a) the  Certificates  in respect of the
Ordinary  Shares  to be  allotted  to  me/us  and (b) if  applicable  a  Warrant
Certificate in my/our name(s)
to..............................................................................
.................................................................................

Signature of Warrantholder(s)
.........................................................
.........................................................
.........................................................
.........................................................

(In the case of a joint holding all  Warrantholders  must sign. In the case of a
corporation  this form must either be under the Common Seal or under the hand of
a duly authorised officer or attorney of the corporation.)

Dated this [                  ] day of [                            ]

Notes:

(i) Delete or  complete as  appropriate.  If this space is left blank the Notice
will be deemed to relate to all the Warrants represented by this Certificate.

(ii) Enter the amount of your payment.  At the date of issue of the Warrants one
Warrant  entitled the holder to subscribe for 1 Ordinary Share in London Pacific
Group  Limited at a price of eleven point four three pence  ((pound)0.1143)  per
share subject to adjustment in accordance  with the  Conditions.  Warrantholders
will be notified of any such adjustment.

(iii)  Please  complete  as  appropriate.  If this  space is left blank all such
Ordinary Shares will be registered in your name(s).

(iv) If it is desired to nominate some other person(s) as the allottee(s) of all
or any of the Ordinary  Shares,  application  should be made to the registrar of
the Company for the  appropriate  Form(s) of Nomination  which must be completed
and lodged with this Certificate.
<PAGE>


                                 THE CONDITIONS

1.   Interpretation

     1.1  Definitions


In these Conditions except to the extent that the context otherwise requires:


"Auditors"          means the auditors for the time being of the Company;

"Board"             means the board of  directors  of the  Company  from time to
                    time;

"Business Day"      means any day (except Saturday and Sunday) on which banks in
                    London and New York are open for non-automated business;

"Current Market     means, in  respect of  an  Ordinary  Share  at a  particular
price"              date, the average of the middle market quotations  published
                    in the Stock  Exchange  Daily Official List for one Ordinary
                    Share (being an Ordinary Share carrying full  entitlement to
                    dividend)  for the five  consecutive  dealing days ending on
                    the dealing day  immediately  preceding  such date  PROVIDED
                    THAT if during some part of the said five dealing day period
                    the Ordinary  Shares shall have been quoted  ex-dividend and
                    during  some other part of that period the  Ordinary  Shares
                    shall have been quoted cum-dividend then:

                    (a)  if the Ordinary Shares to be issued do not rank for the
                         dividend in question,  the  quotations  on the dates on
                         which  the  Ordinary  Shares  shall  have  been  quoted
                         cum-dividend  shall for the purpose of this  definition
                         be deemed to be the amount thereof reduced by an amount
                         equal to the amount of that dividend per Ordinary Share
                         (excluding  any  associated tax credit and less the tax
                         (if any) falling to be deducted on payment thereof to a
                         resident of the United Kingdom); and

                    (b)  if the  Ordinary  Shares  to be  issued do rank for the
                         dividend in question,  the  quotations  on the dates on
                         which  the  Ordinary  Shares  shall  have  been  quoted
                         ex-dividend shall for the purpose of this definition be
                         deemed  to be the  amount  thereof  increased  by  such
                         similar amount;

                    and provided further that, if the Ordinary Shares on each of
                    the said five dealing days have been quoted  cum-dividend in
                    respect of a dividend  which has been  declared or announced
                    but the  Ordinary  Shares  to be  issued do not
<PAGE>

                    rank for the dividend,  the quotations on each of such dates
                    shall for the purpose of this definition be deemed to be the
                    amount  thereof  reduced by an amount equal to the amount of
                    that dividend per Ordinary  Share  (excluding any associated
                    tax credit and less the tax (if any)  falling to be deducted
                    on payment thereof to a resident of the United Kingdom);

"Exercise Date"     means   the  Business  Day   on  which  a  Warrant  is  duly
                    exercised in accordance with Condition 3 provided that, if a
                    cheque is  tendered  in payment in full of the  subscription
                    price, such cheque is cleared on first  presentation and, if
                    such  cheque  is not so  cleared,  the  date on  which  such
                    payment in full is actually received by the Company;

"Exercise Notice"   means the form of exercise notice endorsed on or attached to
                    each Warrant Certificate;

"Exercise           Period" means the period commencing on the date of execution
                    of this  Instrument and expiring on the seventh  anniversary
                    of the date of the Instrument;

"Listing"           means that the  Ordinary  Shares  have been  admitted to the
                    Official List and to trading on the London Stock  Exchange's
                    market for listed securities;

"London Stock       means London Stock Exchange plc;
Exchange"

"Ordinary Shares"   means  ordinary  shares of Five United  States  cents (USc5)
                    each in the capital of the Company  and, in the event of any
                    sub-division,  consolidation  or  reclassification  of  such
                    ordinary  shares,  the  ordinary  shares  of such  different
                    nominal   value  or  the   reclassified   shares   resulting
                    therefrom;

"Official List"     means the Official List of the UKLA;

"Record Date"       means,  in relation to any dividend or capital  distribution
                    in  respect  of the  Ordinary  Shares  or the  issue  of any
                    securities,  rights, options,  warrants or other entitlement
                    in  respect  thereof,  the date as of which the  holders  of
                    Ordinary  Shares must be entered on the register in order to
                    participate therein;

"Register"          means the register of Warrantholders kept by or on behalf of
                    the Company in accordance with Clause 5 of the Instrument;

"Registrars"        means any person or persons  appointed by the Company as its
                    registrars  in  connection  with the  Warrants  from time to
                    time;

"Subscription       means the sum payable upon the exercise  of each  Warrant,
Price"              being eleven point four three pence ((pound)0.1143)
<PAGE>

                    (subject to adjustment in accordance with Condition 6); and

"UKLA"              means the  Financial  Services  Authority in its capacity as
                    competent  authority for the purposes of Financial  Services
                    and Markets Act 2000.

     1.2  Unless the context otherwise  requires,  words and expressions defined
          in the  Companies  Act 1985  shall  bear the  same  meanings  in these
          Conditions.

     1.3  Headings  are inserted  for  convenience  only and shall be ignored in
          construing these Conditions.

     1.4  References to any statutory  provision  shall be deemed to include any
          statutory provision or re-enactment thereof.

     1.5  Words  denoting the singular  number shall include the plural  number,
          words  denoting the  masculine  gender shall  include the feminine and
          words denoting  persons shall include  corporations  and  partnerships
          and, in each case, vice versa.

     1.6  Any  determination  or adjustment made pursuant to these Conditions by
          the Auditors  shall be made by them as experts and not as arbiters and
          any such determination or adjustment shall be final and binding on the
          Company and each of the Warrantholders.

2.   Subscription rights


Subject  as  provided  in these  Conditions,  each  Warrant  shall  entitle  the
Warrantholder to subscribe for 1 Ordinary Share at the Subscription Price on any
Business Day during the Exercise Period.

3.   Exercise of Warrants


In order to  exercise  any  Warrant,  the  Warrantholder  must lodge the Warrant
Certificate  representing  that Warrant at the registered  office of the Company
(or at such  other  address  as the  Company  may from  time to time  notify  to
Warrantholders)  having duly completed the Exercise Notice thereon,  accompanied
by a remittance for the aggregate  Subscription Price for the relevant number of
Ordinary Shares in respect of which the Warrants are exercised payable to London
Pacific Group Limited. Once lodged, an Exercise Notice shall be irrevocable save
with the consent of the Board. The Warrantholder may also be required to produce
such other  evidence (if any) as may be reasonable to prove title to the Warrant
concerned.

4.   Ordinary Shares issued pursuant to exercise of Warrants

     4.1  Ordinary  Shares issued  pursuant to the exercise of a Warrant will be
          allotted  not later than 14 days  after,  and with  effect  from,  the
          relevant  Exercise  Date.  Certificates  in respect  of such  Ordinary
          Shares  will be  despatched,  free of  charge  and at the  risk of the
          person  entitled  thereto,  not later than 14 days  thereafter  to the
          person in whose name the Warrant is registered as at the Exercise Date
          or to such  other  persons  as
<PAGE>

          may be named in the form of nomination  available for the purpose from
          the  Registrars.  In the  event of the  exercise  of some  only of the
          Warrants comprised in a Warrant Certificate,  the Company shall at the
          same time issue, free of charge and at the risk of the person entitled
          thereto, a fresh Warrant  Certificate in the name of the Warrantholder
          for any balance of the Warrants which remain exercisable.

     4.2  Ordinary  Shares  allotted  pursuant to the exercise of a Warrant will
          rank in full for all dividends and other distributions  declared, made
          or paid after the relevant  Exercise  Date and pari passu in all other
          respects with the Ordinary Shares in issue at that date.

     4.3  No Warrantholder shall be entitled to an allotment of a fraction of an
          Ordinary Share.

5.   Lapse of Warrants

     5.1  Each Warrant shall lapse on the earliest of the following dates:

     5.1.1 the seventh anniversary of the date of the Instrument;

     5.1.2 the date on which  the  Warrantholder  notifies  the  Company  of its
           desire to cancel the Warrant held by such Warrantholder;

     5.1.3 the expiry of the period referred to in Condition 8;

     5.1.4 subject to Condition 8, the winding up of the Company.

6.   Adjustment of subscription rights

     6.1  In the event of any consolidation or sub-division of the share capital
          of the  Company or any  allotment  of  Ordinary  Shares  pursuant to a
          capitalisation of profits or reserves (including, without prejudice to
          the generality of the foregoing,  share premium  account) taking place
          after the date of this Instrument, the number of Ordinary Shares which
          may be  subscribed  on exercise of a Warrant  shall be adjusted in due
          proportion.

     6.2  Subject as hereinafter  provided,  the number of Ordinary Shares which
          may be  subscribed  on exercise of a Warrant  and/or the  Subscription
          Price  shall  also be  varied  in such  manner  as the  Board  and the
          Warrantholders  may agree or (failing such  agreement) as the Auditors
          shall at the request of either party confirm in writing to be in their
          opinion fair and reasonable upon the happening of any of the following
          events:

          (a)  the  offer or grant  of  warrants,  options  or other  rights  to
               subscribe for Ordinary  Shares (other than  warrants,  options or
               other rights granted  pursuant to any employees'  share scheme or
               options  granted to any  executive  director of the Company) at a
               price per Ordinary  Share which is less than 95 per cent.  of the
               Current  Market  Price  per  Ordinary  Share on the  dealing  day
               immediately  preceding the date of  announcement  of the offer or
               grant;
<PAGE>

          (b)  the issue of  securities  which by their  terms  are  convertible
               into, or exchangeable  for, or carry rights of subscription  for,
               Ordinary  Shares  (excluding  warrants,  options or other  rights
               granted  pursuant  to any  employees'  share  scheme  or  options
               granted  to any  executive  director  of the  Company)  where the
               consideration  per  Ordinary  Share  receivable  therefrom by the
               Company upon conversion, exchange or subscription is less than 95
               per cent. of the Current  Market Price per Ordinary  Share on the
               dealing day immediately preceding the date of announcement of the
               issue, or the modification of the rights of conversion,  exchange
               or  subscription  relating to such  securities so that  following
               such modification the consideration per Ordinary Share receivable
               by the Company upon conversion,  exchange or subscription is less
               than 95 per cent. of the Current  Market Price per Ordinary Share
               on the dealing day immediately preceding the date of announcement
               of the proposals for such modification; and

          (c)  the issue wholly for cash of Ordinary Shares (other than Ordinary
               Shares  issued on  exercise  of any  rights to  acquire  Ordinary
               Shares  or  upon  the  exercise  of the  Warrants  or  any  other
               securities  which  by  their  terms  are  convertible   into,  or
               exchangeable  for, or carry rights of subscription  for, Ordinary
               Shares,  or Ordinary  Shares  issued  pursuant to any  employees'
               share scheme or options granted to any executive  director of the
               Company) at a price per Ordinary  Share which is less than 95 per
               cent of the  Current  Market  Price  per  Ordinary  Share  on the
               dealing day immediately preceding the date of announcement of the
               issue;

     PROVIDED  THAT no such  adjustment  shall be made in  respect of any offer,
     grant or issue referred to in  sub-paragraphs  (a), (b) or (c) above unless
     the  Company  fails to make or to procure  that there is made a like offer,
     grant or issue to Warrantholders in accordance with Condition 6.5.

     6.3  The Company will forthwith notify the Warrantholders in writing of any
          adjustments  in the number of Ordinary  Shares which may be subscribed
          on exercise of a Warrant  and/or the  Subscription  Price  pursuant to
          this Condition 6.

     6.4  If the Company intends to make any distribution to all or the majority
          of the holders of the Ordinary Shares on the Register on a Record Date
          on which any Warrant remains outstanding, the Company shall notify the
          Warrantholders not less than 28 days in advance of the relevant Record
          Date.

     6.5  In the case of an offer,  grant,  issue or invitation,  which does not
          fall within  Condition  6.1, to all or the  majority of the holders of
          the  Ordinary  Shares on the  Register  on a Record  Date on which any
          Warrant  remains  outstanding,  the  Company  shall  make,  or use its
          reasonable  endeavours  to procure  that there is made,  a like offer,
          grant,  issue or invitation at the same time to each  Warrantholder as
          if his  subscription  rights had been  exercised  in full with  effect
          immediately  before such Record Date. If the Company is unable to make
          or procure that there is made a like offer, grant, issue or invitation
          to the  Warrantholders,  the Company shall give the Warrantholders the
          opportunity to exercise the Warrants in order to participate therein.
<PAGE>

7.   Transfer/Assignment

     7.1  Each Warrant will be registered and will be  transferable in whole but
          not in part by  instrument  of transfer in any usual or common form or
          in such other form as the Board may accept and may be under hand only.

     7.2  Subject to the foregoing,  the provisions of the Company's Articles of
          Association for the time being relating to the registration,  transfer
          and  transmission  of  shares  and the  issue of  certificates  shall,
          mutatis  mutandis,  apply to each  Warrant,  provided  always that the
          Company shall in no  circumstances  whatsoever be under any obligation
          to register any transfer of any Warrant(s) unless it is satisfied that
          (i) after such registration  there will be no more than ten registered
          holders of the Warrants  outstanding and (ii) any beneficial holder of
          the Warrants after such  registration  is not a resident of the Island
          of Jersey  for Jersey  income tax  purposes  (other  than a  financial
          institution acting in the normal course of business).

8.   Liquidation

8.1  If, whilst any of the Warrants remains outstanding, a special resolution is
     passed or an act of court made for the  winding up of the  Company it shall
     forthwith  give  notice  in  writing  thereof  to  all  Warrantholders  and
     thereupon each Warrantholder shall in respect of all or any of his Warrants
     (the "Relevant Warrants") be entitled within six weeks after the service of
     such  notice to elect by notice in writing to the  Company to be treated as
     if he had exercised the Relevant Warrants on the day immediately  preceding
     the  date of such  event  (such  notice  to be  effective  to be  given  by
     completing and signing the Exercise  Notice on the Warrant  Certificate and
     delivering such Warrant Certificate  (together with a form of nomination if
     required)  to the office of the  Registrar  within such period) and in that
     event,  each  Warrantholder  making such an  election  shall be entitled to
     participate  in the assets  available in the winding up pari passu with the
     Ordinary  Shareholders  as if he were the  holder  of the  Ordinary  Shares
     (including any fraction of an Ordinary Share) to which he would have become
     entitled had the Relevant  Warrants  been  exercised as aforesaid  less the
     Subscription  Price  which  would  have been  payable  on  exercise  of the
     Relevant Warrants. Subject to this Condition 8, the Warrants shall lapse in
     the event of the winding up of the Company.

9.   Change of Control

     9.1  If, whilst any of the Warrants remains outstanding,  any offer is made
          to all (or as nearly as may be  practicable  all) the  holders  of the
          Ordinary  Shares (or to all (or as nearly as may be  practicable  all)
          such holders other than the offeror  and/or any company  controlled by
          the offeror and/or persons associated,  connected or acting in concert
          with the  offeror) to acquire all or any of the  Ordinary  Shares (the
          "ordinary offer") and the Company becomes aware that the right to cast
          more than 50 per cent of the votes which may  ordinarily  be cast on a
          poll at a general  meeting of the Company has or will become vested in
          the  offeror  and/or any  company  controlled  by the  offeror  and/or
          persons associated, connected or acting in concert with the offeror (a
          "Relevant  Event") the  Company  shall give notice of that fact to all
          Warrantholders  within  14 days of its  becoming  so  aware  and  each
          Warrantholder may, within the period of 30 days after the date of such
          notice  exercise  his  subscription  rights in  respect  of all or any
          number of his  Warrants as he may specify.  Any Warrants  which remain
          outstanding following the expiry of such 30 day period shall lapse.
<PAGE>

     9.2  The  giving of notice  summoning  a meeting to  consider,  a scheme of
          arrangement  under the Companies  (Jersey) Law 1991  providing for the
          acquisition  by any person of all or any of the Ordinary  Shares shall
          be deemed to be the making of an offer.

10.  Undertakings

     10.1 The Company will at all times keep available sufficient authorised and
          unissued  Ordinary  Shares to  satisfy in full all rights for the time
          being  outstanding  of conversion  into,  subscription  for, and other
          acquisition of, Ordinary Shares.

     10.2 The Company shall not capitalise any profits or reserves other than by
          way of a capitalisation  issue made only to the Ordinary  Shareholders
          in the form of fully paid Ordinary Shares and (if so extended) in like
          proportions  to the holders of any other class of equity share capital
          of the Company in the form of fully paid Ordinary  Shares or shares of
          such  other  class of equity  share  capital,  or by reason  only of a
          holder  of  Ordinary   Shares   wholly  or  partially   foregoing  his
          entitlement  to a cash dividend and in lieu thereof the Company making
          an issue to him of fully paid Ordinary Shares by way of capitalisation
          of an amount  standing to the credit of the profit and loss account or
          any reserve equal to the amount of the cash dividend foregone.

     10.3 The Company shall not create or permit to be in issue any equity share
          capital which as regards voting,  dividends,  other  distributions  or
          return of capital has more  favourable  rights than those  attached to
          the Ordinary  Share  capital or any loan capital which by its terms is
          convertible   into,  or   exchangeable   for,  or  carries  rights  of
          subscription for any such equity share capital and (without  prejudice
          to the right of the Company to  consolidate  or  sub-divide  shares or
          convert  shares  into stock) it shall not,  without the prior  written
          consent of the Warrantholders, in any way alter the rights attached to
          all or any part of its equity share capital in issue from time to time
          or attach any special rights,  privileges or  restrictions  thereto or
          convert any issued share or loan  capital  into equity  share  capital
          except in accordance with the terms of issue thereof.

     10.4 The  Company  shall not do any act or thing if,  in  consequence,  the
          aggregate  nominal  amount of Ordinary  Shares  which would fall to be
          issued on  exercise  of each  Warrant  would  exceed the  Subscription
          Price.

     10.5 The Company shall send to all Warrantholders:

          (a)  a copy of every  consolidated  balance  sheet and profit and loss
               account of the  Company and of every  report and other  documents
               required by law to be annexed thereto together with a copy of the
               Auditor's report; and

          (b)  a copy of every  notice,  circular or other  document sent by the
               Company to the holders of Ordinary Shares


          in each case at the time of issue thereof to the  shareholders  of the
          Company.
<PAGE>

     10.6 Save where the Company's entire issued share capital is the subject of
          an  unconditional  offer,  the Company  will  (taking into account the
          fiduciary  duties  of the  directors  of the  Company)  use  its  best
          endeavours:

          (a)  for so long as any  Warrant  remains  outstanding,  to maintain a
               Listing for the Ordinary Shares; and

          (b)  to ensure that all the  Ordinary  Shares  allotted on exercise of
               the Warrants will, upon allotment, be admitted for Listing.


          Provided  that  (i)  in  the  event  that  the  Listing  is  not to be
          maintained  (except in such  circumstances as referred to elsewhere in
          Clause 10.6) consent is sought from the  Warrantholders,  such consent
          not to be  unreasonably  withheld or delayed and (ii) in such an event
          the Company and the Warrantholders shall use reasonable  endeavours to
          agree  that  the  Company  shall  enter  into a new  form  of  warrant
          instrument  conferring  on the  Warrantholders  comparable  rights and
          obligations  as set out herein,  amended to reflect the private status
          of the Company.

     10.7 The  Company  will  notify  the  Warrantholders   forthwith  upon  the
          announcement  of an ordinary  offer (as defined in  Condition  9.1) or
          upon the giving of notice  summoning a meeting to consider  any scheme
          of arrangement (as referred to in Condition 9.2).





EXECUTED as a DEED by                                )
LONDON PACIFIC GROUP LIMITED                         )
acting by:                                           )



            Director                   .........................................

            Director/Secretary         .........................................

<PAGE>


EDINBURGH
OUR REF        MAKP/SMK/BAN.13.559/CAR

DATE               14 February 2003

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                               WARRANT INSTRUMENT
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                          LONDON PACIFIC GROUP LIMITED
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