Document:

Tax Deed of Covenant

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                           WORLD-WIDE HOLDINGS LIMITED

                          DATED AS OF DECEMBER 31, 2001

                         PACIFIC LIFE INSURANCE COMPANY

                                       and

                     SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.

                              TAX DEED OF COVENANT

                        relating to the sale and purchase
                    of the whole of the issued share capital
                         of WORLD-WIDE HOLDINGS LIMITED

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                                 Reference - ACT

                              TAX DEED OF COVENANT

This deed is made as of December 31, 2001.

Between

(1)  PACIFIC LIFE INSURANCE COMPANY a company registered in California, United
     States at 700 Newport Center Drive, Newport Beach, California CA92660-6397,
     United States (the "Seller"); and

(2)  SCOTTISH ANNUITY & LIFE HOLDINGS, Ltd. a company registered in the Cayman
     Islands at Maples and Calder, Ugland House, South Church Street, P.O. Box
     309 G.T., Grand Cayman, Cayman Islands, B.W.I. (the "Buyer").

Recitals

By an agreement (the "Agreement") dated August 6, 2001, as amended, and made
between the Seller and the Buyer, the Seller agreed to sell the whole of the
issued share capital of World-Wide Holdings Limited, a company registered and
incorporated in accordance with the laws of England and Wales having
registration number 2145545 and its registered address at Old Bank House, Thames
Street, Windsor, Berkshire SL4 1PZ, United Kingdom, to the Buyer and the Seller
agreed on the Closing Date of such sale to enter into this Deed.

It is agreed as follows:

1.   Interpretation

     1.1  In this Deed words and expressions defined in the Agreement have the
          same meaning except where otherwise provided or unless there is
          something in the subject matter or context which is inconsistent with
          them.

     1.2  "Auditors" means the auditors for the time being of the relevant Group
          Company;

     1.3  "Covenantors' Reliefs" means any Relief or right to repayment of
          Taxation which is or becomes available to any Group Company in respect
          of or by reference to any period or part of a period prior to the
          Closing Date other than a Purchaser's Relief;

     1.4  "Group Company" means either Holdings or the Company, and "Group"
          means both of them.

     1.5  "Event" means the existence of any state of affairs and any payment,
          transaction, act, omission or occurrence of whatever nature whether or
          not a Group Company or the Buyer is a party thereto and for the
          avoidance of doubt includes:

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          1.5.1   the execution of the Agreement and closing of the sale of
                  the Shares to the Buyer; and

          1.5.2   the death of any person; and references to an Event
                  occurring on or before the Closing Date shall include an
                  Event deemed, pursuant to any Taxation Statute, to occur or
                  which is otherwise treated or regarded as occurring on or
                  before the Closing Date. References to an Event which
                  occurred on or before the Closing Date include the combined
                  result of two or more Events all of which occurred on or
                  before the Closing Date.

     1.6  "Liability for Taxation" means any liability of a Group Company to
          make an actual payment of or in respect of Taxation whether or not the
          same is primarily payable by the Group Company and whether or not the
          Group Company has or may have any right of reimbursement against any
          other person or persons and shall also include:

          1.6.1   the Loss of any Relief where such Relief has been taken into
                  account in computing and so reducing or eliminating any
                  provision for deferred Tax which appears in the 2000 Company
                  Financials (or which but for such Relief would have appeared
                  in the 2000 Company Financials) or where such Relief was
                  treated as an asset of the Group in the 2000 Company
                  Financials or was taken into account in computing any
                  deferred Tax asset which appears in the 2000 Company
                  Financials in which case the amount of the Liability for
                  Taxation shall be the amount of Taxation which would (on the
                  basis of Tax rates current at the Balance Sheet Date) have
                  been saved but for such Loss assuming for this purpose that
                  the Company had sufficient profit or was otherwise in a
                  position to use the relief;

          1.6.2   the Loss of any right to repayment of Taxation (including
                  any repayment supplement) which was treated as an asset in
                  the 2000 Company Financials in which case the amount of the
                  Liability for Taxation shall be the amount of the right to
                  repayment and any related repayment supplement; and

          1.6.3   the set off or use against income, profits or gains earned,
                  accrued or received or against any Tax chargeable in respect
                  of an event occurring on or before the Closing Date of any
                  Relief or right to repayment of taxation (including any
                  repayment supplement) which is not available before the
                  Closing Date but arises after the Closing Date in
                  circumstances where, but for such set off or use, a Group
                  Company would have had a liability to make an actual payment
                  of or in respect of Taxation for which the Buyer would have
                  been able to make a claim against the Seller under this Deed
                  in which case the amount of the Liability for Taxation shall
                  be the amount of Taxation saved by a Group Company as a
                  result of such set off or use.

     1.7  "Loss" means any reduction, modification, loss, counteraction,
          nullification, utilisation, disallowance or claw back for whatever
          reason.

     1.8  "Purchaser's Relief" means any Relief or right to repayment of
          Taxation as is mentioned in clauses 1.6.1 to 1.6.3.

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     1.9  "Relevant Company" means any company other than a Group Company, the
          Buyer and any company that may be treated as being a member of the
          same group of companies as the Buyer or as being associated with the
          Buyer for the purposes of the Tax that has given rise to the Liability
          for Taxation under clause 2.1.2.

     1.10 "Relief" means any loss, relief, allowance, credit, exemption or set
          off in respect of Taxation or any deduction in computing income,
          profits or gains for the purposes of Taxation.

     1.11 "Tax" or "Taxation" means:

          1.11.1  all forms of Taxation (both direct and indirect) including
                  and without limitation any charge, tax, duty, levy, impost,
                  withholding or liability wherever chargeable imposed for
                  support of national, state, federal, municipal or local
                  government or any other person and whether of the UK or any
                  other jurisdiction; and

          1.11.2  any penalty, fine, surcharge, interest, charges or costs
                  payable in connection with any taxation within clause 1.11.1
                  above.

     1.12 "Tax Claim" means any assessment, self assessment, notice, demand,
          letter or other document issued or action taken by or on behalf of any
          Taxation Authority from which it appears that a Group Company or the
          Buyer is or may be subject to a Liability for Taxation or other
          liability in respect of which the Seller are or may be liable under
          this Deed.

     1.13 "Taxation Authority" means the Inland Revenue, Customs & Excise,
          Department of Social Security and any other governmental or other
          authority whatsoever competent to impose any Taxation whether in the
          United Kingdom or elsewhere.

     1.14 "Taxation Statute" means any directive, statute, enactment, law or
          regulation wheresoever enacted or issued, coming into force or entered
          into providing for imposing any Taxation and shall include orders,
          regulations, instruments, by-laws or other subordinate legislation
          made under the relevant statute or statutory provision and any
          directive, statute, enactment, law, order, regulation or provision
          which amends, extends, consolidates or replaces the same or which has
          been amended, extended, consolidated or replaced by the same.

     1.15 Headings are for convenience only and shall not affect the
          construction of this Deed.

     1.16 References to gross receipts, income, profits or gains earned, accrued
          or received shall include any gross receipts, income, profits or gains
          deemed pursuant to the relevant Taxation Statute to have been or
          treated or regarded as earned, accrued or received.

     1.17 Unless the context otherwise requires the singular shall include the
          plural and vice versa, the masculine shall include the feminine and
          references to persons shall include bodies corporate, unincorporated
          associations and partnerships in each case whether or not having
          separate legal personality.

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2.   Covenant

     2.1  Subject as hereinafter provided the Seller hereby covenants to pay to
          the Buyer an amount equal to:

          2.1.1   any Liability for Taxation resulting from or by reference to
                  any Event occurring on or before the Closing Date or in
                  respect of any gross receipts, income, profits or gains
                  earned, accrued or received by the Group Company in question
                  on or before the Closing Date;

          2.1.2   any Liability for Taxation for which the Group Company in
                  question would not have been liable but for being treated as
                  being or having been a member of the same group as or
                  associated with any Relevant Company on or prior to the
                  Closing Date for the purposes of any Tax; and

          2.1.3   all costs and expenses reasonably and properly incurred and
                  payable by a Group Company or the Buyer in connection with
                  any action taken to avoid, resist or settle any Tax Claim,
                  Liability for Taxation or otherwise taking or defending any
                  action under this Deed.

3.   Limitation of Sellers Liability

     3.1  The covenant given by clause 2 above shall not cover any Liability for
          Taxation:

          3.1.1   to the extent that a provision or reserve in respect thereof
                  was made in the 2000 Company Financials;

          3.1.2   to the extent that such Liability for Taxation arises from
                  any gross receipts, income, profits or gains earned, accrued
                  or received, Event, act or transaction of a Group Company to
                  which the Liability for Taxation relates in the ordinary
                  course of its trading of the Group Company since the Balance
                  Sheet Date;

          3.1.3   to the extent that such Liability for Taxation arises or is
                  increased wholly as a result of any decision of any court or
                  tribunal or the coming into force of or any change in any
                  enactment, law, regulation, directive, requirement or any
                  published practice of any government, government department
                  or agency or regulatory body (including but not limited to
                  extra statutory concessions of any Taxation Authority) after
                  the date hereof;

          3.1.4   to the extent recovery (less costs and expenses) has been
                  made by the Buyer or a Group Company under the Agreement in
                  respect of the same subject matter;

          3.1.5   to the extent that such Liability for Taxation would not
                  have arisen but for a voluntary act or transaction carried
                  out by the Buyer or a Group Company after the date hereof
                  otherwise than in the ordinary course of business or
                  otherwise than pursuant to a legally binding obligation
                  created on or before the date hereof, wherein either such
                  case such act or transaction was carried out without the
                  consent of the Seller and where the Buyer or a Group Company
                  knew or ought reasonably to have known that such act or
                  transaction would give rise to such Liability for Taxation;

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          3.1.6   except in the case of fraudulent conduct unless written
                  notice of such Liability for Taxation or any Tax Claim which
                  may give rise to such Liability for Taxation specifying in
                  reasonable detail the circumstances giving or which may give
                  rise to such Liability for Taxation and the amount thereof
                  has been served on the Seller on or prior to the seventh
                  anniversary of the Closing Date;

          3.1.7   in respect of stamp duty or stamp duty reserve Tax payable
                  on the transfer or agreement to transfer the Shares pursuant
                  to the Agreement;

          3.1.8   to the extent that the Liability for Taxation has been made
                  good or otherwise compensated for or extinguished at no
                  expense to the Buyer or a Group Company;

          3.1.9   where the Liability for Taxation is attributable to a Group
                  Company ceasing to be entitled to the small companies' rate
                  of corporation tax;

          3.1.10  to the extent that the Liability for Taxation arises or is
                  increased as a consequence of the failure of the Buyer to
                  comply with or procure the compliance of a Group Company
                  with their respective obligations under clauses 4 (disputes
                  and conduct of Tax claims), 7 (recovery from other persons),
                  and 8 (corporation Tax returns);

          3.1.11  to the extent that the Auditors of the relevant Group
                  Company confirm that a specific amount in respect of that
                  Liability for Taxation was taken into account in computing
                  any provision or reserve for deferred Taxation in the 2000
                  Company Financials;

          3.1.12  to the extent that the Liability for Taxation has been paid
                  or otherwise extinguished on or before the Closing Date;

          3.1.13  to the extent that the Liability for Taxation can be
                  discharged at no cost to the Group Company in question by
                  the surrender of a Relief by the Seller to the Group Company
                  in question;

          3.1.14  to the extent that any Covenantors' Reliefs are available to
                  relieve or mitigate that Liability for Taxation or would
                  have been available but for the application of any of
                  sections 245, 245A, 245B or 768 ICTA 1988 in so far as the
                  Loss of any of the Covenantors' Reliefs arises as a result
                  of an Event occurring after Completion and any Relief that
                  is so available in relation to more than one Liability for
                  Taxation to which this Deed applies shall be deemed, so far
                  as possible, to be used in such a way as to reduce to the
                  maximum extent possible the Seller's total liability
                  hereunder;

          3.1.15  the Liability for Taxation arises or is increased as a
                  result of any increase in the rates of Taxation or variation
                  in the method of applying or calculating the rate of
                  Taxation made after the Closing Date with retrospective
                  effect;

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          3.1.16  the Liability for Taxation comprises interest or penalties
                  arising by virtue of an underpayment of Tax prior to
                  Completion, insofar as such underpayment would not have been
                  an underpayment but for any event or events occurring wholly
                  after the Closing Date;

          3.1.17  the Liability for Taxation arises or is increased as a
                  result of any change made after Completion to the accounting
                  period or the accounting policy or practice of or applicable
                  to the Buyer or any Group Company after the Closing Date;

          3.1.18  the Liability for Taxation would not have arisen or would
                  have been reduced or eliminated but for:

                  (i)   the making of a claim, election, surrender or
                        disclaimer or the giving of a notice or consent or
                        the doing of any other thing by any Group Company
                        or any other person connected with any of them
                        (other than the making giving or doing of which
                        was taken in to account in computing any provision
                        or reserve for Taxation in the 2000 Company
                        Financials under or in connection with a provision
                        of an enactment of regulation relating to Taxation
                        otherwise than at the written direction of the
                        Seller; or

                  (ii)  the failure or omission on the part of any Group
                        Company or any other person connected with any of
                        them to make any such valid claim, election,
                        surrender or disclaimer or give any notice or
                        consent or do any other thing the making or giving
                        or doing of which was disclosed to the Buyer as
                        taken into account in computing any provision or
                        reserve for Taxation in 2000 Company Financials;

          3.1.19  the matter giving rise to the Liability for Taxation is an
                  amount for which the Buyer or relevant Group Company has a
                  right of recovery against, or an indemnity from, a person
                  other than the Seller or a Relevant Company;

          3.1.20  the Liability for Taxation arises or is increased by any
                  voluntary act of the Buyer or a Group Company after the
                  Closing Date which has the result that any instalment of
                  corporation Tax (within the meaning of section 6 of the
                  Taxes Act 1988) paid prior to the Closing Date pursuant to
                  the Corporation Tax (Instalment Payments) (Large Companies)
                  Regulations 1998 is insufficient.

          and for the purposes of this clause 3 only "Liability for Taxation"
          shall be deemed to include a liability or loss falling within clause
          2.1.3 above.

     3.2  The Seller shall have no liability to the Buyer under any part of this
          Deed in respect of any non-availability, inability to use, or loss or
          restriction of any Relief ("failure of relief") where such failure of
          relief does not give rise to a Tax liability to which clause 2
          applies.

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4.   Disputes and Conduct of Tax Claims

     4.1  If the Buyer or a Group Company shall become aware of a Tax Claim of
          which the Seller is not then aware, the Buyer shall or shall procure
          that a Group Company shall within 14 days thereafter give written
          notice thereof to the Seller.

     4.2  If the Seller shall indemnify a Group Company and/or (as the case
          shall require) the Buyer to the Buyer's reasonable satisfaction
          against all liabilities, reasonable costs, damages or reasonable
          expenses which may be incurred thereby including any additional
          Liability for Taxation, the Buyer shall and shall procure that a Group
          Company shall take such action as the Seller may reasonably request by
          notice in writing given to a Group Company and the Buyer to avoid,
          dispute, defend, resist, appeal, postpone or compromise any Tax Claim
          (such a Tax Claim where action is so requested being hereinafter
          referred to as a "Dispute"). Provided that neither a Group Company nor
          the Buyer shall be obliged to appeal or procure an appeal against any
          assessment to Taxation raised on either of them if, the Seller has
          been given written notice of the receipt of such assessment the Buyer
          has not at least 5 Business Days prior to the last day for filing
          notice of appeal received instructions in writing from the Seller to
          do so.

     4.3  If the Seller does not request the Buyer or a Group Company to take
          any action under clause 4.2 of this Deed or fails to indemnify the
          Buyer and a Group Company to the Buyer's reasonable satisfaction
          within a period of time (commencing with the date of the notice given
          to the Seller) that is reasonable having regard to the nature of the
          Tax Claim and the existence of any time limit in relation to avoiding,
          disputing, defending, resisting, appealing or compromising such Tax
          Claim and which period shall not in any event exceed a period of 90
          days or the Dispute concerns fraudulent conduct, the Buyer or Company
          shall have the conduct of the Dispute absolutely (without prejudice to
          its rights under this Deed) and shall be free to pay or settle the Tax
          Claim on such reasonable terms as the Buyer or a Group Company may in
          its absolute discretion consider fit.

     4.4  Subject to sub-clause 4.3, if the Seller indemnifies the Buyer and a
          Group Company in accordance with clause 4.2, the conduct of a Dispute
          shall be delegated to the Seller upon the following terms (or such
          other terms as may be agreed from time to time between the Buyer and
          the Seller):

          4.4.1   the Buyer shall promptly be kept fully informed of all
                  matters pertaining to a Dispute and shall be entitled to see
                  and keep copies of all correspondence and notes or other
                  written records of telephone conversations or meeting and,
                  in the event that there is no written record, shall be given
                  a report of all telephone conversations with any Taxation
                  Authority to the extent that it relates to a Dispute;

          4.4.2   the appointment of solicitors or other professional advisers
                  to any Group Company shall be subject to the approval of the
                  Buyer, such approval not to be unreasonably withheld;

          4.4.3   all written communications pertaining to the Dispute which
                  are to be transmitted to the relevant Taxation Authority
                  shall first be submitted to the Buyer and a Group Company
                  for approval and shall only be finally

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                  transmitted if such approval is given, which approval is not
                  to be unreasonably withheld or delayed; and

          4.4.4   the Seller shall make no settlement or compromise of the
                  Dispute or agree to any matter in the conduct of the Dispute
                  which is likely to affect the amount of any material future
                  Liability for Taxation of a Group Company or of the Buyer
                  without the prior approval of a Group Company and the Buyer
                  (as may be appropriate), such approval not to be
                  unreasonably withheld or delayed.

     4.5  Neither the Buyer nor a Group Company shall be subject to any claim by
          or liability to the Seller for non-compliance with any of the
          foregoing provisions of this clause 4 if the Buyer or a Group Company
          has bona fide acted in accordance with the instructions of the Seller.

5.   Payment Date and Interest

     5.1  Where the Seller is liable to make any payment under clause 2, the due
          date for the making of that payment (the "Due Date") shall be the
          later of the date falling seven days after the Buyer has served a
          notice on the Seller demanding that payment and:

          5.1.1   in a case that involves an actual payment of Taxation by a
                  Group Company, the date on which the Taxation in question
                  would have had to have been paid to the relevant Taxation
                  Authority in order to prevent a liability to a fine,
                  surcharge or penalty from arising in respect of the
                  Liability for Taxation in question; or

          5.1.2   in any case that involves a Liability for Taxation falling
                  within clause 1.6.1 the last date upon which the Taxation is
                  or would have been required to be paid to the relevant
                  Taxation Authority in respect of the period in which the
                  Loss of the Relief occurs (assuming for this purpose that a
                  Group Company had sufficient profits or was otherwise in a
                  position to use the Relief); or

          5.1.3   in any case that involves a Liability for Taxation falling
                  within Clause 1.6.2 the date upon which the repayment was
                  due from the relevant Taxation Authority; or

          5.1.4   in any case that involves a Liability for Taxation falling
                  within clause 1.6.3 the date upon which the Taxation saved
                  by a Group Company is or would have been required to be paid
                  to the relevant Taxation Authority.

     5.2  Any dispute as to the amount specified in any notice served on the
          Seller under clause 5.1.2, 5.1.3 or 5.1.4 shall be determined by the
          Auditors of a Group Company for the time being, acting as experts and
          not as arbitrators (the costs of that determination being shared
          equally the Seller and the Buyer).

     5.3  If any sums required to be paid by the Seller under this Deed are not
          paid on the Due Date, then, except to the extent that the Seller's
          liability under clause 2 compensates the Buyer for the late payment by
          virtue of it extending to interest and penalties, such sums

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          shall bear interest (which shall accrue from day to day after as well
          as before any judgment for the same) at the rate equal to the base
          rate from time to time of Buyer's bank or (in the absence thereof) at
          such similar rate as the Buyer shall select from the day following the
          Due Date up to and including the day of actual payment of such sums
          such interest to be compounded quarterly.

6.   Taxation of Payments

     6.1  Any sum payable by the Seller to the Buyer under this Deed shall be
          paid free and clear of any deduction or withholding whatsoever, save
          only as may be required by law.

     6.2  If any deduction or withholding is required by law to be made from any
          payment by the Seller under this Deed (other than a payment made
          pursuant to clause 5.3) or if (ignoring any Relief) the Buyer is
          subject to Taxation in respect of such payment the Seller shall
          increase the amount of the payment by such additional amount as is
          necessary to ensure that the net amount received and retained by the
          Buyer (after taking account of all deductions or withholdings or
          Taxation) is equal to the amount which it would have received and
          retained had the payment in question not been subject to any
          deductions or withholdings or Taxation.

7.   Recovery from other persons

     7.1  Where the Buyer or a Group Company is or becomes entitled to recover
          from some other person not being the Buyer a Group Company or any
          other company within the same group of companies as the Buyer or a
          Group Company (i) any amount or Relief which is referable to a
          Liability for Taxation which has resulted in a payment being made by
          the Seller under this Deed; or (ii) any amount or Relief which is
          referable to any deduction or withholding under clause 6.2, the Buyer
          shall or procure that a Group Company shall:

          7.1.1   notify the Seller of its entitlement; and

          7.1.2   if required by the Seller and, subject to the Buyer and a
                  Group Company being secured and indemnified by the Seller
                  against any Taxation that may be suffered on receipt of that
                  amount and any costs and expenses incurred in recovering
                  that amount or obtaining that Relief, take or procure that a
                  Group Company takes all reasonable steps to enforce that
                  recovery or right.

     7.2  If the Buyer or a Group Company recovers or obtains any amount or
          Relief referred to in clause 7.1 the Buyer shall account to the Seller
          for:

          7.2.1   any amount recovered (including any related interest or
                  related repayment supplement) less any Taxation suffered in
                  respect of that amount and any costs and expenses incurred
                  in recovering that amount (save to the extent that that
                  amount has already been made good by the Seller under
                  sub-clause 7.1.2) within five Business Days of the date of
                  recovery; and

          7.2.2   in the case of a Relief, the Purchaser shall, within five
                  Business Days of the date on which Taxation would otherwise
                  have been payable had

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                  such credit not been available, pay to the Covenantor an
                  amount equal to the amount of such Taxation;

          subject to a maximum of the aggregates of the amounts paid by the
          Seller under clause 2 and clause 6 in respect of the Liability for
          Taxation in question.

8.   Over-provisions and Savings

     8.1  If the Buyer discovers (or is made aware) that any provision for
          Taxation in the 2000 Company Financials (excluding any provision for
          deferred tax) may prove to be an over-provision (an "Over-provision")
          or any Liability for Taxation which may result in a payment under this
          Deed by the Seller may give rise to a saving of Taxation by any Group
          Company (a "Saving"), it shall or shall procure that the Group Company
          give full details to the Seller. The Buyer shall (at the Seller's
          request and expense) procure that the Auditors certify the amount of
          the Over-provision or the value of the Saving.

     8.2  In the case of a Saving, the Buyer will as soon as reasonably
          practicable after the amount of the Saving is certified by the
          Auditors in accordance with clause 8.1 repay to the Seller the lesser
          of:

          8.2.1   the amount of the Saving (as determined by the Auditors)
                  less any costs incurred by the Group Companies or the Buyer;
                  and

          8.2.2   the amount paid by the Seller under clause 2 in respect of
                  the Liability for Taxation which gave rise to the Saving
                  less any part of the amount previously repaid to the Seller
                  under any provision of this Deed or otherwise.

     8.3  In the case of an Over-provision, the Buyer shall as soon as
          reasonably practicable after the amount of the Over-provision is
          certified by the Auditors in accordance with clause 8.1:

          8.3.1   set off the Over-provision against any payment then due from
                  the Sellers under this Deed;

          8.3.2   to the extent there is an excess, refund to the Sellers any
                  previous payment or payments made by the Sellers under this
                  Deed; and

          8.3.3   to the extent the excess referred to in clause 8.3.2 is not
                  exhausted under that clause, the remainder of that excess
                  shall be carried forward and set off against any future
                  payment or payments which become due from the Covenantors
                  under this Deed.

     8.4  Where any such certification as is mentioned in clause 8.1 has been
          made, the Seller or the Buyer (in either case at the expense of the
          person requesting the review) may request the Auditors to review such
          certification in the light of all relevant circumstances, including
          any facts which have become known only since such certification, and
          to certify whether such certification remains correct or whether, in
          the light of those circumstances, the amount that was the subject of
          such certification should be amended.

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     8.5  If the Auditors certify under clause 8.4 that an amount previously
          certified should be amended, that amended amount shall be substituted
          for the purposes of clauses 8.2 and 8.3 as the amount of the
          Over-provision or Saving (as appropriate) in respect of the
          certification in question in place of the amount originally certified,
          and such adjusting payment (if any) as may be required by virtue of
          the above-mentioned substitution shall be made as soon as practicable
          by the Buyer or (as the case may be) to the Seller.

     8.6  For the purposes of this clause, an Over-provision is a provision for
          Taxation in the 2000 Company Financials (excluding a provision for
          deferred taxation) which is or proves to be an Over-provision.

9.   Corporation Tax Returns

     9.1  The Seller or its authorised agent shall at the Seller's cost and
          expense prepare the corporation Tax returns and computations of a
          Group Company for all accounting periods ended on or prior to the
          Balance Sheet Date, to the extent that the same shall not have been
          prepared before the Closing Date, and submit them to the Buyer.

     9.2  The Buyer shall procure that the returns and computations mentioned in
          clause 9.1 shall be authorised, signed and submitted to H.M. Inspector
          of Taxes without amendment or with such amendments as the Buyer
          reasonably considers to be necessary and shall give the Seller or its
          agents all such assistance as may reasonably be required (at the
          Seller's cost and expense) to agree those returns and computations
          with H.M. Inspector of Taxes provided that the Buyer shall not be
          obliged to take any such action as is mentioned in this clause 9.2 in
          relation to any return that is not full, true and accurate in all
          material respects.

     9.3  The Seller or its duly authorised agents shall at the Seller's cost
          and expense prepare all documentation and shall have conduct of all
          matters (including correspondence) relating to the corporation Tax
          returns and computations of a Group Company for all accounting periods
          ended on or prior to the Balance Sheet Date provided that the Seller
          shall not without the prior written consent of the Buyer (not to be
          unreasonably withheld or delayed) transmit any communication (written
          or otherwise) to H.M. Inspector of Taxes or agree any matter with H.M.
          Inspector of Taxes.

     9.4  The Buyer shall procure that a Group Company, affords such access to
          its books, accounts and records as is necessary and reasonable to
          enable the Seller or its duly authorised agents to prepare the
          corporation Tax returns and computations of a Group Company for all
          accounting periods ended on or before the Balance Sheet Date and
          conduct matters relating to them in accordance with this clause 9.

     9.5  The Seller shall take all reasonable steps to ensure that the
          corporation Tax returns and computations of a Group Company for all
          accounting periods ended on or before the Balance Sheet Date are
          prepared and agreed with H.M. Inspector of Taxes as soon as possible.

10.  General

     10.1 The provisions of clauses 9.1 (Coordination of Tax Deed Covenant and
          the Agreement), 11.1 (Consent to Jurisdiction and Service of Process),
          11.2 (Notices),

                                       12

<PAGE>

          11.8 (Interpretation) and 11.11 (Counterparts) of the Agreement shall
          apply mutatis mutandis to this Deed.

     10.2 The benefit of this Deed may be assigned by the Buyer only with the
          prior written consent of the Covenantors (such consent not to be
          unreasonably withheld or delayed).

     10.3 The Buyer hereby covenants with the Seller to pay to the Seller by way
          of adjustment to the consideration for the sale of the Shares, an
          amount equivalent to any Taxation for which the Seller or any other
          person falling within section 767A(2) of Taxes Act 1988 ("ICTA")
          become liable by virtue of the operation of sections 767A, 767AA and
          767B of ICTA in circumstances where the taxpayer company (as referred
          to in section 767A(1)) is any Group Company. The covenant contained in
          this clause 10.3 shall:

          10.3.1  extend to any reasonable costs incurred by the Seller or
                  such person in connection with such taxation or a claim
                  under clause 10.3;

          10.3.2  not apply to Taxation to the extent that the Buyer could
                  claim payment in respect of it under clause 2; and

          10.3.3  not apply to Taxation which has been recovered under section
                  767B(2) of ICTA (and the Seller shall procure that no such
                  recovery is sought to the extent that payment is made
                  hereunder).

     10.4 This Deed shall be governed by and construed in accordance with the
          laws of New York. The parties irrevocably submit to the exclusive
          jurisdiction of the Courts of New York in respect of any claim,
          dispute or difference arising out of or in connection with this Deed

                                       13

<PAGE>

This deed has been entered into on the date stated at the beginning of this
document.

Signed as a Deed by:                   )
Pacific Life Insurance Company         )
presence of:                           )  /s/ Sharon A. Cheever
                                          --------------------------
                                              Sharon A. Cheever
                                              Vice President, Investment Counsel

                                          /s/ Audrey L. Milfs
                                          --------------------------
                                              Audrey L. Milfs
                                              Vice President and Secretary

Signed as a Deed by:                   )
Scottish Annuity & Life Holdings, Ltd. )
presence of:                           )   /s/ Scott E. Willkomm
                                           --------------------------
                                               Scott E. Willkomm
                                               President and Chief Financial
                                                 Officer

                                       14[Pacific Life Letterhead]

Scottish Annuity & Life Holdings, Ltd.
Crown House, 3rd Floor
4 Par-la-Ville Road
Hamilton, Bermuda HM12

Dear Sir or Madam:

     For purposes of this letter agreement (this "Letter Agreement"), reference
is hereby made to that certain Share Purchase Agreement dated August 6, 2001, by
and between Scottish Annuity & Life Holdings Ltd. ("Buyer") and Pacific Life
Insurance Company ("Seller") (such agreement, as heretofore amended, the "SPA").
Any capitalized term used herein and not otherwise defined herein shall have the
meaning ascribed to such term in the SPA.

         Seller hereby proposes the following arrangement to Buyer:

     1. On or before April 30, 2002, Holdings shall advise Seller in writing of
(a) Holdings' consolidated pretax net income for the twelve months ending
December 31, 2001 as determined in accordance with accounting principles
generally accepted in the United States ("Holdings' 2001 Calendar Year US GAAP
Consolidated Net Income"), (b) Holdings' United Kingdom ("UK") consolidated
statutory taxable income attributable to Holdings' and the Company's business
operations during the taxable year ending September 30, 2001 (the "2001 Tax
Year") as determined without taking into account any income attributable to the
release by Holdings or the Company of any amounts from investment reserves
maintained by Holdings or the Company ("Holdings' 2001 Regular Taxable Income"),
and (c) Holdings' UK consolidated income tax liability payable with respect to
Holdings' 2001 Regular Taxable Income, exclusive of any tax liability
attributable to the release of any amounts from investment reserves ("Holdings'
2001 Regular Tax Liability").

     2. On or before May 31, 2002, Seller shall advise Buyer in writing of (a)
the portion of Holdings' 2001 Calendar Year US GAAP Consolidated Net Income with
respect to which Seller must pay United States ("US") income taxes ("2001
Subpart F Income") and (b) Seller's US tax liability with respect to such 2001
Subpart F Income (the "2001 Subpart F Tax Liability").

     3. If Seller's 2001 Subpart F Tax Liability exceeds Holdings' 2001 Regular
Tax Liability (such excess, the "Buyer Adjustment Amount"), the following shall
apply: (a) the amount of the Buyer Adjustment Amount shall first be applied to
reduce any payment due from Seller to Buyer pursuant to paragraph 5 hereof, and
(b) the excess (if any) of the Buyer Adjustment Amount over the Seller
Adjustment Amount (as defined in paragraph 4 hereof) shall be paid by Buyer to
Seller, as an adjustment of the purchase consideration under the SPA, by the
delivery to Seller of additional Buyer Shares having a value equal to such
excess, with such value to be based on the value of the Buyer Shares used in
determining the Purchase Share Consideration under the SPA. Any payment of
additional Buyer Shares pursuant to the foregoing clause (b) hereof shall be
made on or before June 10, 2002. Notwithstanding the foregoing, for all purposes
of this Letter Agreement the parties agree that Seller's 2001 Subpart F Tax
Liability shall not exceed US $1,629,400, and, accordingly, Buyer shall have no
liability to Seller under this paragraph 3 if Holdings' 2001 Regular Tax
Liability equals or exceeds US $1,629,400 (which, for avoidance of doubt, would
be a Holdings' 2001 Regular Tax Liability of 1,140,000 UK pounds at an exchange
rate of 1.4293 US dollars for 1 pound sterling).

     4. For purposes of this Letter Agreement, the term "Seller Adjustment
Amount" shall mean the following:

     (a) If Holdings' 2001 Regular Tax Liability is US $815,000 or less, the
Seller Adjustment Amount shall equal 50% of Holdings' 2001 Regular Tax
Liability.

     (b) If Holdings' 2001 Regular Tax Liability exceeds US $815,000 but does
not exceed US $1,629,400, the Seller Adjustment Amount shall be US $408,000.

     (c) If Holdings' 2001 Regular Tax Liability exceeds US $1,629,400, the
Seller Adjustment Amount shall be US $408,000 plus 100% of the amount by which
Holdings' 2001 Regular Tax Liability exceeds US $1,629,400.

     5. On or before June 10, 2002, Seller shall make a purchase price
adjustment payment to Buyer equal to the excess (if any) of the Seller
Adjustment Amount over the Buyer Adjustment Amount. Such payment shall be
treated as an adjustment of the purchase consideration under the SPA and shall
be made in cash.

     6. The parties agree that the threshold for Damages in the amount of US
$1,000,000 as set forth in Section 8.2(d)(iii) of the SPA shall be reduced by
the amount described in subparagraph (a), (b) or (c) hereinbelow, whichever is
applicable:

     (a) If Holdings' 2001 Regular Tax Liability is US $815,000 or less, an
amount equal to 25% of Holdings' 2001 Regular Tax Liability; or

     (b) If Holdings' 2001 Regular Tax Liability exceeds US $815,000 but does
not exceed US $1,629,400, an amount equal to the sum of US $203,750 plus 50% of
the amount by which Holdings' 2001 Regular Tax Liability exceeds US $815,000; or

     (c) If Holdings' 2001 Regular Tax Liability exceeds US $1,629,400, an
amount equal to US $610,950.

     Such Damages threshold shall be reduced in the same manner as if the amount
specified in subparagraph (a), (b) or (c), as applicable, constituted a claim
for Damages.

     7. For all purposes of this Letter Agreement, the exchange rate to be used
for determining the British pound sterling equivalent of any amount of US
dollars shall be 1.4293 US dollars to 1 British pound sterling.

     8. The parties agree to cooperate to the fullest extent possible (a) in
exchanging information and tax liability estimates relative to the information
to be exchanged between Buyer and Seller pursuant to paragraphs 1 and 2 hereof,
(b) to reduce the aggregate amount of Seller's 2001 Subpart F Tax Liability and
Holdings' 2001 Regular Tax Liability, and (c) in correcting any discrepancies
between any estimated tax liabilities and actual tax liabilities.

     9. Holdings will (a) pay or cause to be paid the Holdings' 2001 Regular Tax
Liability on or before the date as of which it is obligated to do so under
applicable UK tax laws, and (b) furnish to Seller evidence, reasonably
acceptable to Seller, that such taxes have been paid.

     If the foregoing is acceptable, please execute this Letter Agreement where
indicated below and return to the undersigned one copy of this Letter Agreement
as executed by Buyer.

                                     Very truly yours,

                                     PACIFIC LIFE INSURANCE COMPANY

                                     By: /s/ R. Lee Wirthlin
                                         -------------------------------------
                                             R. Lee Wirthlin
                                             Vice President, Tax

                                     By: /s/ Sharon A. Cheever
                                         -------------------------------------
                                             Sharon A. Cheever
                                             Vice President, Assistant Secretary

AGREED

SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.

By:  /s/ Scott E. Willkomm                   Dated:  December 28, 2001
     --------------------------------
         Scott E. Willkomm
         President and Chief Financial
           Officer

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