Document:

Exhibit 4.13

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                                     FORM OF

                               GUARANTEE AGREEMENT

                                     BETWEEN

                     SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.

                                  as Guarantor

                                       AND

                         THE BANK OF NEW YORK (DELAWARE)

                         as Preferred Guarantee Trustee

                                       OF

                      SCOTTISH HOLDINGS STATUTORY TRUST III

                              Dated as of _________

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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I.    DEFINITIONS......................................................1

         SECTION 1.01.  Definitions and Interpretation.........................1

ARTICLE II.   TRUST INDENTURE ACT..............................................4

         SECTION 2.01.  Trust Indenture Act; Application.......................4
         SECTION 2.02.  List of Holders........................................4
         SECTION 2.03.  Reports by the Preferred Guarantee Trustee.............4
         SECTION 2.04.  Periodic Reports to Preferred Guarantee Trustee........4
         SECTION 2.05.  Evidence of Compliance with Conditions Precedent.......5
         SECTION 2.06.  Events of Default; Waiver..............................5
         SECTION 2.07.  Event of Default; Notice...............................5
         SECTION 2.08.  Conflicting Interests..................................5

ARTICLE III.  POWERS, DUTIES AND RIGHTS OF THE PREFERRED GUARANTEE TRUSTEE.....6

         SECTION 3.01.  Powers and Duties of the Preferred Guarantee Trustee...6
         SECTION 3.02.  Certain Rights of Preferred Guarantee Trustee..........7
         SECTION 3.03.  Not Responsible for Recitals or Issuance of Guarantee..9

ARTICLE IV.   PREFERRED GUARANTEE TRUSTEE......................................9

         SECTION 4.01.  Preferred Guarantee Trustee; Eligibility...............9
         SECTION 4.02.  Appointment, Removal and Resignation of the Preferred
                        Guarantee Trustee.....................................10

ARTICLE V.    GUARANTEE.......................................................11

         SECTION 5.01.  Guarantee.............................................11
         SECTION 5.02.  Waiver of Notice and Demand...........................11
         SECTION 5.03.  Obligations Not Affected..............................11
         SECTION 5.04.  Rights of Holders.....................................12
         SECTION 5.05.  Guarantee of Payment..................................12
         SECTION 5.06.  Subrogation...........................................12
         SECTION 5.07.  Independent Obligations...............................12

ARTICLE VI.   LIMITATION OF TRANSACTIONS; SUBORDINATION.......................13

         SECTION 6.01.  Limitations of Transactions...........................13
         SECTION 6.02.  Ranking...............................................13

ARTICLE VII.  TERMINATION.....................................................13

         SECTION 7.01.  Termination...........................................13

ARTICLE VIII. INDEMNIFICATION.................................................13

         SECTION 8.01.  Exculpation...........................................13
         SECTION 8.02.  Indemnification.......................................14

ARTICLE IX.   MISCELLANEOUS...................................................14

         SECTION 9.01.  Successors and Assigns................................14
         SECTION 9.02.  Amendments............................................15
         SECTION 9.03.  Notices...............................................15
         SECTION 9.04.  Benefit...............................................15
         SECTION 9.05.  Governing Law.........................................16

                                       iii

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                                REFERENCE TABLE*

                     Section _________ of ______ Section of
                        Trust Indenture Act Guarantee of
                           1939, as amended Agreement

310(a).......................................................  4.01(a)
310(b).......................................................  4.01(c), 2.08
310(c).......................................................  Inapplicable
311(a).......................................................  2.02(b)
311(b).......................................................  2.02(b)
311(c).......................................................  Inapplicable
312(a).......................................................  2.02(a)
312(b).......................................................  2.02(b)
313..........................................................  2.03
314(a).......................................................  2.04
314(b).......................................................  Inapplicable
314(c).......................................................  2.05
314(d).......................................................  Inapplicable
314(e).......................................................  1.01, 2.05, 3.02
314(f).......................................................  .01, 3.02
315(a).......................................................  3.01(d)
315(b).......................................................  2.07
315(c).......................................................  3.01
315(d).......................................................  3.01(d)
316(a).......................................................  1.01, 2.06, 5.04
316(b).......................................................  5.03
316(c).......................................................  8.02
317(a).......................................................  Inapplicable
317(b).......................................................  Inapplicable
318(a).......................................................  2.01(b)
318(b).......................................................  2.01
318(c).......................................................  2.01(a)

* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.

                                       iv

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                               GUARANTEE AGREEMENT

          This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of ______, is executed and delivered by Scottish Annuity & Life Holdings,
Ltd., a Cayman Islands exempted company (the "Guarantor"), to The Bank of New
York (Delaware), as trustee (the "Preferred Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of Scottish Holdings Statutory Trust III, a Delaware
statutory trust (the "Issuer").

          WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______ among the Trustees named therein, the
Guarantor, as Sponsor, and the Holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing $______ aggregate
liquidation amount of its ______ % ______ Securities (liquidation amount of
$______ per preferred security) (the "Preferred Securities") representing
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Declaration;

          WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the sale by the Issuer of its
Common Securities, will be used to purchase the Debentures (as defined in the
Declaration) of the Guarantor which will be deposited with The Bank of New York
(Delaware), as Property Trustee under the Declaration, as Trust Property (as
defined in the Declaration);

          WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein; and

          WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an event of default (as
defined in the Indenture) has occurred and is continuing, the Guarantee Payments
under the Common Securities Guarantee are subordinated to the rights of Holders
of Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.

          NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders from time to time of the Preferred
Securities.

                                   ARTICLE I.
                                   DEFINITIONS

     SECTION 1.01. Definitions and Interpretation. In this Preferred Securities
Guarantee, unless the context otherwise requires:

<PAGE>

          (a) capitalized terms used in this Preferred Securities Guarantee but
     not defined in the preamble above have the respective meanings assigned to
     them in this Section 1.01;

          (b) a term defined anywhere in this Preferred Securities Guarantee has
     the same meaning throughout;

          (c) all references to "the Preferred Securities Guarantee" or "this
     Guarantee" are to this Preferred Securities Guarantee as modified,
     supplemented or amended from time to time;

          (d) all references in this Preferred Securities Guarantee to Articles
     and Sections are to Articles and Sections of this Preferred Securities
     Guarantee unless otherwise specified;

          (e) a term defined in the Trust Indenture Act has the same meaning
     when used in this Preferred Securities Guarantee unless otherwise defined
     in this Preferred Securities Guarantee or unless the context otherwise
     requires; and

          (f) a reference to the singular includes the plural and vice versa.

          "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

          "Common Securities" means the common securities representing undivided
beneficial interests in the assets of the Issuer and having the rights provided
therefor in the Declaration.

          "Covered Person" means any Holder or beneficial owner of Preferred
Securities.

          "Event of Default" shall have the meaning specified in Section 2.06
(a).

          "Guarantee Payments" means the following payments, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by or on behalf of the Issuer pursuant to the Declaration or by the
Guarantor pursuant to the Indenture: (i) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, to the extent the
Issuer shall have funds available therefor, (ii) the redemption price (the
"Redemption Price") and all accrued and unpaid Distributions to the date of
redemption to the extent the Issuer shall have funds available therefor, and
(iii) upon a voluntary or involuntary dissolution and liquidation of the Issuer
(other than in connection with a Distribution of Debentures to Holders of such
Preferred Securities or the redemption of all such Preferred Securities), the
lesser of (a) the aggregate of the liquidation amount of $[ ] per Preferred
Security plus all accrued and unpaid Distributions on the Preferred Securities
to the date of payment, to the extent the Issuer shall have funds available
therefor and (b) the amount of assets of the Issuer remaining available for

                                       2

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Distribution to Holders of Preferred Securities upon a dissolution and
liquidation of the Issuer (in either case, the "Liquidation Distribution"). If
an event of default under the Indenture has occurred and is continuing, the
rights of holders of the Common Securities to receive payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments.

          "Holder" means a Person in whose name a Preferred Security is
registered in the Securities Register; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Preferred Guarantee Trustee or any Affiliate of the
Guarantor or the Preferred Guarantee Trustee.

          "Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.

          "Indenture" means the Junior Subordinated Indenture dated as of
_______, 2003, as amended or supplemented from time to time, between Scottish
Annuity & Life Holdings, Ltd. and The Bank of New York, as trustee thereunder.

          "List of Holders" has the meaning specified in Section 2.02(a).

          "Majority in liquidation amount of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holders of more
than 50% of the aggregate liquidation amount of all then outstanding Preferred
Securities issued by the Issuer.

          "Officers' Certificate" means a certificate signed by the Chairman,
the President, or any Senior or Executive Vice President and the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Guarantor.

          "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

          "Preferred Guarantee Trustee" means ______ , as trustee hereunder,
until a Successor Preferred Guarantee Trustee (as defined below) has been
appointed and has accepted such appointment pursuant to the terms of this
Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.

          "Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any Vice President, any Assistant Vice President, any Trust Officer or
Assistant Trust Officer or any other officer of Corporate Trust Administration
of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.

          "Senior Indebtedness" means Senior Indebtedness as defined in the
Indenture.

                                       3

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          "Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.01.

          "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939, as so amended.

                                  ARTICLE II.
                               TRUST INDENTURE ACT

     SECTION 2.01. Trust Indenture Act; Application.

     (a) This Preferred Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Preferred Securities
Guarantee and shall, to the extent applicable, be governed by such provisions.

     (b) If, and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

     SECTION 2.02. List of Holders.

     (a) The Guarantor shall provide the Preferred Guarantee Trustee (i) within
14 days after each record date for the payment of Distributions (as defined in
the Declaration), a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") as of a date; provided that the Guarantor shall
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Preferred
Guarantee Trustee by the Guarantor, and (ii) at any other time, within 30 days
of receipt by the Guarantor of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to the Preferred
Guarantee Trustee. The Preferred Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

     (b) The Preferred Guarantee Trustee shall comply with its obligations under
Sections 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

     SECTION 2.03. Reports by the Preferred Guarantee Trustee. Within 60 days
after May 15 of each year, the Preferred Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.

     SECTION 2.04. Periodic Reports to Preferred Guarantee Trustee. The
Guarantor shall provide to the Preferred Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form and
manner and at the times required by Section 314 of the Trust Indenture Act.

                                       4

<PAGE>

     SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Preferred Securities Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.

     SECTION 2.06. Events of Default; Waiver.

     (a) An Event of Default means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee;
provided, that except with respect to a default resulting from a failure to pay
any Guarantee Payment, the Guarantor shall have received notice of such default
and shall not have cured such default within 60 days after receipt of such
notice.

     (b) The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Preferred Securities Guarantee, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.

     SECTION 2.07. Event of Default; Notice.

     (a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to the
Preferred Guarantee Trustee, unless such defaults have been cured before the
giving of such notice; provided that, except in the case of a default in the
payment of a Guarantee Payment, the Preferred Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Preferred Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.

     (b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice, of such
Event of Default.

     SECTION 2.08. Conflicting Interests. The Declaration shall be deemed to be
specifically described in this Preferred Securities Guarantee for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.

                                       5

<PAGE>

                                  ARTICLE III.
          POWERS, DUTIES AND RIGHTS OF THE PREFERRED GUARANTEE TRUSTEE

     SECTION 3.01. Powers and Duties of the Preferred Guarantee Trustee.

     (a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.04(iv) or to
a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee
upon acceptance by such Successor Preferred Guarantee Trustee of its appointment
hereunder and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.

     (b) If an Event of Default has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.

     (c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred and is continuing (and has not been cured
or waived pursuant to Section 2.06), the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use in the conduct of his or her own affairs.

     (d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:

          (i) prior to the occurrence of any Event of Default and after the
     curing or waiving of all such Events of Default that may have occurred:

               (A) the duties and obligations of the Preferred Guarantee Trustee
          shall be determined solely by the express provisions of this Preferred
          Securities Guarantee, and the Preferred Guarantee Trustee shall not be
          liable except for the performance of such duties and obligations as
          are specifically set forth in this Preferred Securities Guarantee, and
          no implied covenants or obligations shall be read into this Preferred
          Securities Guarantee against the Preferred Guarantee Trustee; and

               (B) in the absence of bad faith on the part of the Preferred
          Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
          rely, as to the truth of the statements and the correctness of the
          opinions expressed therein, upon any certificates or opinions
          furnished to the Preferred Guarantee Trustee and

                                       6

<PAGE>

          conforming to the requirements of this Preferred Securities Guarantee;
          but in the case of any such certificates or opinions that by any
          provision hereof or of the Trust Indenture Act are specifically
          required to be furnished to the Preferred Guarantee Trustee, the
          Preferred Guarantee Trustee shall be under a duty to examine the same
          to determine whether or not they conform to the requirements of this
          Preferred Securities Guarantee;

          (ii) the Preferred Guarantee Trustee shall not be liable for any error
     of judgment made in good faith by a Responsible Officer of the Preferred
     Guarantee Trustee, unless it shall be proved that the Preferred Guarantee
     Trustee was negligent in ascertaining the pertinent facts upon which such
     judgment was made;

          (iii) the Preferred Guarantee Trustee shall not be liable with respect
     to any action taken or omitted to be taken by it in good faith in
     accordance with the direction of the Holders of a Majority in liquidation
     amount of the Preferred Securities relating to the time, method and place
     of conducting any proceeding for any remedy available to the Preferred
     Guarantee Trustee, or exercising any trust or power conferred upon the
     Preferred Guarantee Trustee under this Preferred Securities Guarantee; and

          (iv) no provision of this Preferred Securities Guarantee shall require
     the Preferred Guarantee Trustee to expend or risk its own funds or
     otherwise incur financial liability in the performance of any of its duties
     or in the exercise of any of its rights or powers, if the Preferred
     Guarantee Trustee shall have reasonable grounds for believing that the
     repayment of such funds or liability is not reasonably assured to it under
     the terms of this Preferred Securities Guarantee or reasonable indemnity
     against such risk or liability is not reasonably assured to it.

     SECTION 3.02. Certain Rights of Preferred Guarantee Trustee.

     (a) Subject to the provisions of Section 3.01:

          (i) The Preferred Guarantee Trustee may conclusively rely and shall be
     fully protected in acting or refraining from acting upon any resolution,
     certificate, statement, instrument, opinion, report, notice, request,
     direction, consent, order, bond, debenture, note, other evidence of
     indebtedness or other paper or document believed by it to be genuine and to
     have been signed, sent or presented by the proper party or parties.

          (ii) Any request, direction, order, demand or act of the Guarantor
     contemplated by this Preferred Securities Guarantee shall be sufficiently
     evidenced by an Officers' Certificate unless otherwise prescribed herein.

          (iii) Whenever, in the administration of this Preferred Securities
     Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
     matter be proved or established before taking, suffering or omitting to
     take any action hereunder, the Preferred Guarantee Trustee (unless other
     evidence is herein specifically prescribed) may, in the absence of bad
     faith on its part, request and conclusively rely upon an Officers'
     Certificate which, upon receipt of such request from the Preferred
     Guarantee Trustee, shall be promptly delivered by the Guarantor.

                                       7

<PAGE>

          (iv) the Preferred Guarantee Trustee shall have no duty to see to any
     recording, filing or registration of any instrument (or any rerecording,
     refiling or registration thereof);

          (v) The Preferred Guarantee Trustee may consult with legal counsel of
     its choice or other experts, and the advice of such experts within the
     scope of such expert's area of expertise or Opinion of Counsel with respect
     to legal matters shall be full and complete authorization and protection in
     respect of any action taken, suffered or omitted to be taken by it
     hereunder in good faith and in accordance with such advice or opinion. Such
     legal counsel may be legal counsel to the Guarantor or any of its
     Affiliates and may include any of its employees. The Preferred Guarantee
     Trustee shall have the right at any time to seek instructions concerning
     the administration of this Preferred Securities Guarantee from any court of
     competent jurisdiction.

          (vi) The Preferred Guarantee Trustee shall be under no obligation to
     exercise any of the rights or powers vested in it by this Preferred
     Securities Guarantee at the request or direction of any Holder, unless such
     Holder shall have provided to the Preferred Guarantee Trustee such
     reasonable indemnity as would satisfy a reasonable person in the position
     of the Preferred Guarantee Trustee, against the costs, expenses (including
     attorneys' fees and expenses) and liabilities that might be incurred by it
     in complying with such request or direction; provided that, nothing
     contained in this Section 3.02(a)(v) shall be taken to relieve the
     Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
     its obligation to exercise the rights and powers vested in it by this
     Preferred Securities Guarantee.

          (vii) The Preferred Guarantee Trustee shall not be bound to make any
     investigation into the facts or matters stated in any resolution,
     certificate, statement, instrument, opinion, report, notice, request,
     direction, consent, order, bond, debenture, note, other evidence of
     indebtedness or other paper or document, but the Preferred Guarantee
     Trustee, in its discretion, may make such further inquiry or investigation
     into such facts or matters as it may see fit.

          (viii) The Preferred Guarantee Trustee may execute any of the trusts
     or powers hereunder or perform any duties hereunder either directly or by
     or through its agents or attorneys, and the Preferred Guarantee Trustee
     shall not be responsible for any misconduct or negligence on the part of
     any such agent or attorney appointed with due care by it hereunder.

          (ix) Any action taken by the Preferred Guarantee Trustee or its agents
     hereunder shall bind the Holders of the Preferred Securities, and the
     signature of the Preferred Guarantee Trustee or its agents alone shall be
     sufficient and effective to perform any such action. No third party shall
     be required to inquire as to the authority of the Preferred Guarantee
     Trustee to so act or as to its compliance with any of the terms and
     provisions of this Preferred Securities Guarantee, both of which shall be
     conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
     taking such action.

                                       8

<PAGE>

          (x) Whenever in the administration of this Preferred Securities
     Guarantee the Preferred Guarantee Trustee shall deem it desirable to
     receive instructions with respect to enforcing any remedy or right or
     taking any other action hereunder, the Preferred Guarantee Trustee (A) may
     request instructions from the Holders, (B) may refrain from enforcing such
     remedy or right or taking such other action until such instructions are
     received, and (C) shall be protected in acting in accordance with such
     instructions.

          (xi) The Preferred Guarantee Trustee shall not be liable for any
     action taken or omitted by it in good faith and believed by it to be
     authorized or within the discretion, rights or powers conferred upon it by
     the Subordinated Indenture.

     (b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty to act in
accordance with such power and authority.

     SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee. The
Recitals contained in this Preferred Securities Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representations as to the validity or sufficiency of this Preferred
Securities Guarantee.

                                  ARTICLE IV.
                           PREFERRED GUARANTEE TRUSTEE

     SECTION 4.01. Preferred Guarantee Trustee; Eligibility.

     (a) There shall at all times be a Preferred Guarantee Trustee which shall:

          (i) not be an Affiliate of the Guarantor; and

          (ii) be a Person that is eligible pursuant to the Trust Indenture Act
     to act as such and has a combined capital and surplus of at least fifty
     million U.S. dollars ($50,000,000), and shall be a corporation meeting the
     requirements of Section 310(a) of the Trust Indenture Act. If such
     corporation publishes reports of condition at least annually, pursuant to
     law or to the requirements of the supervising or examining authority, then,
     for the purposes of this Section and to the extent permitted by the Trust
     Indenture Act, the combined capital and surplus of such corporation shall
     be deemed to be its combined capital and surplus as set forth in its most
     recent report of condition so published.

     (b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).

                                       9

<PAGE>

     (c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act. In determining whether the Preferred Guarantee Trustee has a "conflicting
interest" within the meaning of Section 310(b)(1) of the Trust Indenture Act,
the provisions contained in the proviso to Section 310(b)(1) of the Trust
Indenture Act and the Preferred Guarantee Trustee's Statement of Eligibility on
Form T-1 shall be deemed incorporated herein.

     SECTION 4.02. Appointment, Removal and Resignation of the Preferred
Guarantee Trustee.

     (a) Subject to Section 4.02(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.

     (b) The Preferred Guarantee Trustee shall not be removed until a new,
eligible Preferred Guarantee Trustee has been appointed (a "Successor Preferred
Guarantee Trustee") and has accepted such appointment and assumed the applicable
obligations hereunder by written instrument executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor.

     (c) The Preferred Guarantee Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument in writing executed by the
Preferred Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.

     (d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Preferred Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Preferred
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee.

     (e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.

     (f) Upon termination of this Preferred Securities Guarantee or registration
of the Preferred Guarantee Trustee pursuant to this Section 4.02, the Guarantor
shall pay to the Preferred Guarantee Trustee all amounts accrued and owing to
the Preferred Guarantee Trustee on the date of such termination, removal or
registration.

     (g) The Preferred Guarantee Trustee may engage in any merger, conversation,
consolidation or sale of all or substantially all of its corporate trust
business, provided that the Successor Preferred Guarantee Trustee shall be
otherwise qualified and eligible under this Capital Securities Guarantee
Agreement.

                                       10

<PAGE>

                                   ARTICLE V.
                                    GUARANTEE

     SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders of the Outstanding Preferred Securities the
Guarantee Payments (without duplication of amounts theretofore paid by or on
behalf of the Issuer pursuant to the Declaration or by the Guarantor pursuant to
the Indenture), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.

     SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Preferred Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Preferred Guarantee Trustee, the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

     SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:

     (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

     (b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from an Extension Period on the Debentures as so
provided in the Indenture), Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities;

     (c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

     (e) any invalidity of, or detect or deficiency in, the Preferred
Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

                                       11

<PAGE>

     (g) to the extent permitted by law, any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

     SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges that:
(i) this Preferred Securities Guarantee will be deposited with the Preferred
Guarantee Trustee to be held for the benefit of the Holders; (ii) the Preferred
Guarantee Trustee has the right to enforce this Preferred Securities Guarantee
on behalf of the Holders; (iii) the Holders of a Majority in liquidation amount
of the Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercise or direct
the exercise of any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee; and (iv) any Holder may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Preferred Securities Guarantee, without first instituting a
legal proceeding against the Preferred Guarantee Trustee, the Issuer or any
other Person.

     SECTION 5.05. Guarantee of Payment. This Preferred Securities Guarantee
creates a guarantee of payment and not of collection (i.e., the guaranteed party
may institute a legal proceeding directly against the Guarantor to enforce its
rights under the Preferred Securities Guarantee without first instituting a
legal proceeding against any other person or entity). This Preferred Securities
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not previously paid or upon Distribution to the Holders of
the Preferred Securities of the corresponding series of Debentures as provided
in the Declaration.

     SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Preferred Securities Guarantee and shall
have the right to waive payment by the Issuer pursuant to Section 5.01;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

     SECTION 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.03
hereof.

                                       12

<PAGE>

                                   ARTICLE VI.
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

     SECTION 6.01. Limitations of Transactions. So long as any Preferred
Securities remain outstanding, if there shall have occurred an Event of Default,
an event that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default under the Indenture or an exercise by the
Guarantor of its right to defer payment of interest as provided in the Indenture
and such deferral period, or any extension thereof, shall be continuing, then
(a) the Guarantor shall not declare or pay any dividend on, or make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its share capital (other than share dividends
paid by the Guarantor which share dividends consist of shares of the same class
as that on which the dividend is being paid), (b) the Guarantor shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities issued by the Guarantor which rank pari passu with
or junior to the Debentures and (c) shall not make any guarantee payments with
respect to the foregoing (other than pursuant to this Preferred Securities
Guarantee).

     SECTION 6.02. Ranking. This Preferred Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, except any
liabilities that may be made pari passu or junior expressly by their terms, (ii)
pari passu with the most senior preferred or preference shares now or hereafter
issued by the Guarantor and with any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred or preference shares or preferred
security of any Affiliate of the Guarantor, and (iii) senior to the Guarantor's
ordinary shares.

                                  ARTICLE VII.
                                   TERMINATION

     SECTION 7.01. Termination. This Preferred Securities Guarantee shall
terminate and be of no further force and effect upon full payment of the
Redemption Price or Liquidation Distribution for the Preferred Securities or
upon Distribution of the Debentures to the Holders of the Preferred Securities.
This Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of the Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or this Preferred Securities Guarantee.

                                 ARTICLE VIII.
                                 INDEMNIFICATION

     SECTION 8.01. Exculpation.

     (a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified

                                       13

<PAGE>

Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.

     (b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.

     SECTION 8.02. Indemnification.

     (a) To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Preferred Securities Guarantee,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.

     (b) To the fullest extent permitted by applicable law, reasonable expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.02(a).

     (c) The obligation to indemnify as set forth in this Section 8.02 shall
survive the termination of the Preferred Securities Guarantee.

                                  ARTICLE IX.
                                  MISCELLANEOUS

     SECTION 9.01. Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. The Guarantor may not consolidate with or merge with or into, or
sell, convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety (either in one transaction or a series of
transactions) to, any Person unless permitted under Article Eight of the
Indenture. In connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eight of the Indenture the Person
formed by or

                                       14

<PAGE>

surviving such consolidation or merger or to which such sale, conveyance,
transfer or lease shall have been made, if other than the Guarantor, shall
expressly assume all of the obligations of the Guarantor hereunder and under the
Declaration.

     SECTION 9.02. Amendments. Except with respect to any changes which do not
adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Preferred Securities
Guarantee may only be amended with the prior approval of the Holders of a
Majority in liquidation amount of the Preferred Securities (excluding any
Preferred Securities held by the Guarantor or an Affiliate thereof). The
provisions of Article VI of the Declaration concerning meetings of the Holders
shall apply to the giving of such approval.

     SECTION 9.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing and delivered, telecopied
or mailed by first class mail, postage prepaid, as follows:

     (a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice of to the Holders:

                  Scottish Annuity & Life Holdings, Ltd.
                  P. O. Box 2939
                  Crown House, Third Floor
                  4 Par-la-Ville Road
                  Hamilton HM MX, Bermuda

     (b) if given to the Issuer, in care of the Preferred Guarantee Trustee, at
the Issuer's (and the Preferred Guarantee Trustee's) address set forth below or
such other address as the Preferred Guarantee Trustee on behalf of the Issuer
may give notice to the Holders:

                  Scottish Holdings Statutory Trust III
                  c/o Scottish Annuity & Life Holdings, Ltd.
                  P. O. Box 2939
                  Crown House, Third Floor
                  4 Par-la-Ville Road
                  Hamilton HM MX, Bermuda

     (c) if given to any Holder, at the address set forth in the Securities
Register.

All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

     SECTION 9.04. Benefit. This Preferred Securities Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Preferred
Securities.

                                       15

<PAGE>

     SECTION 9.05. Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

     THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                   SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
                                        as Guarantor

                                   By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                   The Bank of New York
                                        as Preferred Guarantee Trustee

                                   By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                       16Exhibit 4.14

================================================================================

                     SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.

                                       AND

                              THE BANK OF NEW YORK,

                                  as Depositary

                                       AND

                         HOLDERS OF DEPOSITARY RECEIPTS

                                     FORM OF

                                DEPOSIT AGREEMENT

                             Dated as of ____, 200__

================================================================================

<PAGE>

<TABLE>
<CAPTION>
                                      TABLE OF CONTENTS

<S>                   <C>
ARTICLE I             DEFINITIONS..........................................................1

ARTICLE II            FORM OF RECEIPTS,  DEPOSIT OF PREFERRED SHARES,  EXECUTION
                      AND  DELIVERY,   TRANSFER,   SURRENDER,   REDEMPTION   AND
                      CONVERSION OF RECEIPTS ..............................................2

   Section 2.01.      Form and Transfer of Receipts........................................2
   Section 2.02.      Deposit of Preferred Shares; Execution and Delivery of
                        Receipts in Respect Thereof .......................................3
   Section 2.03.      Redemption and Conversion of Preferred Shares........................4
   Section 2.04.      Register of Transfer of Receipts.....................................6
   Section 2.05.      Combination and Split-ups of Receipts................................6
   Section 2.06.      Surrender of Receipts and Withdrawal of Preferred Shares.............7
   Section 2.07.      Limitations on Execution and Delivery, Transfer, Split-up,
                        Combination,  Surrender  and  Exchange of  Receipts  and
                        Withdrawal or Deposit of Preferred Shares .........................8
   Section 2.08.      Lost Receipts, etc...................................................8
   Section 2.09.      Cancellation and Destruction of Surrendered Receipts.................8

ARTICLE III           CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY...........9

   Section 3.01.      Filing Proofs, Certificates and Other Information....................9
   Section 3.02.      Payment of Taxes or Other Governmental Charges.......................9
   Section 3.03.      Withholding..........................................................9
   Section 3.04.      Representations and Warranties as to Ordinary Shares.................9

ARTICLE IV            THE PREFERRED SHARES, NOTICES.......................................10

   Section 4.01.      Cash Distributions..................................................10
   Section 4.02.      Distributions Other Than Cash.......................................10
   Section 4.03.      Subscription Rights, Preferences or Privileges......................10
   Section 4.04.      Notice of Dividends, Fixing of Record Date for Holders of
                        Receipts .........................................................11
   Section 4.05.      Voting Rights.......................................................12
   Section 4.06.      Changes Affecting Preferred Shares and  Reclassifications,
                        Recapitalizations, etc. ..........................................12
   Section 4.07.      Reports.............................................................12
   Section 4.08.      Lists of Receipt Holders............................................12

ARTICLE V             THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND
                      THE COMPANY                                                         13
   Section 5.01.      Maintenance of Offices,  Agencies,  Transfer  Books by the
                        Depositary; the Registrar ........................................13
   Section 5.02.      Prevention or Delay in Performance by the Depositary, the
                        Depositary's Agents, the Registrar or the Company ................13
   Section 5.03.      Obligations of the Depositary, the Depositary's Agents,
                        the Registrar and the Company ....................................14
</TABLE>

                                             -i-

<PAGE>

<TABLE>
<CAPTION>
<S>                   <C>
   Section 5.04.      Resignation and Removal of the Depositary, Appointment of
                        Successor Depositary .............................................15
   Section 5.05.      Corporate Notices and Reports.......................................16
   Section 5.06.      Deposit of Preferred Shares by the Company..........................16
   Section 5.07.      Indemnification by the Company......................................16
   Section 5.08.      Fees, Charges and Expenses..........................................16

ARTICLE VI            AMENDMENT AND TERMINATION...........................................17

   Section 6.01.      Amendment...........................................................17
   Section 6.02.      Termination.........................................................17

ARTICLE VII           MISCELLANEOUS.......................................................18

   Section 7.01.      Counterparts........................................................18
   Section 7.02.      Exclusive Benefits of Parties.......................................18
   Section 7.03.      Invalidity of Provisions............................................18
   Section 7.04.      Notices.............................................................18
   Section 7.05.      Depositary's Agents.................................................19
   Section 7.06.      Holders of Receipts Are Parties.....................................19
   Section 7.07.      Governing Law.......................................................19
   Section 7.08.      Headings............................................................19
</TABLE>

                                             ii

<PAGE>

                                DEPOSIT AGREEMENT

          DEPOSIT AGREEMENT, dated as of _____,200__, among Scottish Annuity &
Life Holdings, Ltd., a Cayman Islands exempted company (the "Company"), The Bank
of New York, a New York banking corporation, as Depositary (the "Depositary"),
and all holders from time to time of Receipts issued hereunder.

                              W I T N E S S E T H:

          WHEREAS, the Company desires to provide as hereinafter set forth in
this Deposit Agreement, for the deposit of shares of Preferred Shares (as
hereinafter defined) with the Depositary (as hereinafter defined), as agent for
the beneficial owners of the Preferred Shares, for the purposes set forth in
this Deposit Agreement and for the issuance hereunder of the Receipts evidencing
Depositary Shares (as hereinafter defined) representing an interest in the
Preferred Shares so deposited;

          NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:

                                   ARTICLE I

                                   DEFINITIONS

          The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:

          "Certificate" shall mean the document evidencing the, preferences and
rights of the Preferred Shares adopted by the Board of Directors of the Company
establishing the Preferred Shares as a series of preferred shares of the
Company.

          "Corporate Office" shall mean the office of the Depositary in New
York, New York at which at any particular time its business in respect of
matters governed by this Deposit Agreement shall be administered, which at the
date of this Deposit Agreement is located at One Wall Street, New York, New York
10286.

          "Deposit Agreement" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time.

          "Depositary Share" shall mean the rights evidenced by the Receipts
executed and delivered hereunder, including the interests in Preferred Shares
granted to holders of Receipts pursuant to the terms and conditions of the
Deposit Agreement. Each Depositary Share shall represent an interest in [insert
fractional interest] of a share of Preferred Shares deposited with the
Depositary hereunder and the same proportionate interest in any and all other
property received by the Depositary in respect of such share of Preferred Shares
and held under this Deposit Agreement. Subject to the terms of this Deposit
Agreement, each record holder of a Receipt evidencing a Depositary Share or
Shares is entitled, proportionately, to all the rights, preferences and
privileges of the Preferred Shares represented by such Depositary Share or
Shares, including the dividend, voting and liquidation rights contained in the
applicable

<Page>

Certificate, and to the benefits of all obligations and duties of the Company in
respect of the Preferred Shares under the Memorandum of Association (including
the applicable Certificate).

          "Depositary's Agent" shall mean an agent appointed by the Depositary
as provided, and for the purposes specified, in Section 7.05.

          "Memorandum of Association" shall mean the Memorandum of Association,
as amended and restated from time to time, of the Company.

          "New York Office" shall mean the facility maintained by the Depositary
in the Borough of Manhattan, The City of New York for accepting, executing and
delivering Receipts and other instruments prior to processing such instruments
at the Corporate Office, which facility at the date of this Deposit Agreement is
located at [One Wall Street, New York, New York 10286].

          "Ordinary Shares" shall mean the Company's Ordinary Shares, par value
$0.01 per share.

          "Preferred Shares " shall mean shares of the Company's _____ Preferred
Shares, $0.01 par value per share.

          "Receipt" shall mean one of the depositary receipts issued hereunder,
whether in definitive or temporary form, evidencing one or more Depositary
Shares.

          "Record holder" or "Holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books maintained by or on
behalf of the Depositary for such purpose.

          "Registrar" shall mean any bank or trust company appointed to register
ownership and transfers of Receipts as herein provided.

          "Securities Act" shall mean the Securities Act of 1933, as amended.

                                   ARTICLE II

                 FORM OF RECEIPTS, DEPOSIT OF PREFERRED SHARES,
                  EXECUTION AND DELIVERY, TRANSFER, SURRENDER,
                      REDEMPTION AND CONVERSION OF RECEIPTS

          Section 2.01  Form and Transfer of Receipts. Definitive Receipts shall
be engraved or printed or lithographed on steel-engraved borders and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Pending the preparation of definitive Receipts, the
Depositary, upon the written order of the Company delivered in compliance with
Section 2.02, shall execute and deliver temporary Receipts which are printed,
lithographed, typewritten, mimeographed or otherwise substantially of the tenor
of the definitive Receipts in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
persons executing such Receipts may determine, as evidenced by their execution
of such Receipts. If temporary Receipts are issued, the Company and the
Depositary will cause definitive Receipts to be prepared without unreasonable
delay. After the preparation of

                                      -2-
<PAGE>

definitive Receipts, the temporary Receipts shall be exchangeable for definitive
Receipts upon surrender of the temporary Receipts at the Corporate Office, the
New York Office, or such other office as the Depositary may designate, without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Receipts, the Depositary shall execute and deliver in exchange
therefor definitive Receipts representing the same number of Depositary Shares
as represented by the surrendered temporary Receipt or Receipts. Such exchange
shall be made at the Company's expense and without any charge thereof. Until so
exchanged, the temporary Receipts shall in all respects be entitled to the same
benefits under this Deposit Agreement, and with respect to the Preferred Shares,
as definitive Receipts.

          Receipts shall be executed by the Depositary by the manual signature
of a duly authorized signatory of the Depositary; provided, however, that such
signature may be a facsimile if a Registrar (other than the Depositary) shall
have countersigned the Receipts by manual signature of a duly authorized
signatory of the Registrar. No Receipt shall be entitled to any benefits under
this Deposit Agreement or be valid or obligatory for any purpose unless it shall
have been executed as provided in the preceding sentence. The Depositary shall
record on its books each Receipt executed as provided above and delivered as
hereinafter provided. Receipts bearing the facsimile signature of anyone who was
at any time a duly authorized officer of the Depositary shall bind the
Depositary, notwithstanding that such officer has ceased to hold such office
prior to the delivery of such Receipts.

          Receipts may be issued in denominations of any number of whole
Depositary Shares.

          Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Preferred Shares or the Depositary Shares may
be listed or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Receipts are subject
by reason of the date of issuance of the Preferred Shares or otherwise.

          Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer shall be transferable by delivery with the same effect as
in the case of a negotiable instrument; provided, however, that the Depositary
may, notwithstanding any notice to the contrary, treat the record holder thereof
at such time as the absolute owner thereof for the purpose of determining the
person entitled to distributions of dividends or other distributions or to any
notice provided for in this Deposit Agreement and for all other purposes.

          Section 2.02. Deposit of Preferred Shares; Execution and Delivery of
Receipts in Respect Thereof. Subject to the terms and conditions of this Deposit
Agreement, the Company or any holder of Preferred Shares may deposit such
Preferred Shares under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Preferred Shares to be deposited, properly
endorsed or accompanied, if required by the Depositary, by a properly executed
instrument of transfer in form satisfactory to the Depositary, together with (i)
all such certifications as may be required by the Depositary in accordance with
the provisions of this Deposit Agreement and (ii) a written order of the Company
or such holder, as the case may be,

                                      -3-
<PAGE>

directing the Depositary to execute and deliver to or upon the written order of
the person or persons stated in such order a Receipt or Receipts for the number
of Depositary Shares representing such deposited Preferred Shares.

          Upon receipt by the Depositary of a certificate or certificates for
Preferred Shares deposited in accordance with the provisions of this Section,
together with the other documents required as above specified, and upon
recordation of the Preferred Shares so deposited on the books of the Company in
the name of the Depositary or its nominee, the Depositary, subject to the terms
and conditions of this Deposit Agreement, shall execute and deliver, to or upon
the order of the person or persons named in the written order delivered to the
Depositary referred to in the first paragraph of this Section, a Receipt or
Receipts for the number of Depositary Shares relating to the Preferred Shares so
deposited and registered in such name or names as may be requested by such
person or persons. The Depositary shall execute and deliver such Receipt or
Receipts at the Corporate Office, the New York Office, or such other office, if
any, as the Depositary may designate. Delivery at other offices shall be at the
risk and expense of the person requesting such delivery.

          The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.

          Section 2.03. Redemption and Conversion of Preferred Shares.1 Whenever
the Company shall elect to redeem or be required to convert shares of Preferred
Shares into shares of Ordinary Shares in accordance with the applicable
Certificate, it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary not less than 5 business days'
prior notice of the proposed date of the mailing of a notice of redemption or
conversion of Preferred Shares and the simultaneous redemption or conversion of
the Depositary Shares representing the Preferred Shares to be redeemed or
converted and of the number of such shares of Preferred Shares held by the
Depositary to be redeemed or converted. The Depositary shall, as directed by the
Company in writing, mail, first class postage prepaid, notice of the redemption
or conversion of Preferred Shares and the proposed simultaneous redemption or
conversion of the Depositary Shares representing the Preferred Shares to be
redeemed or converted, not less than 30 and not more than 60 days prior to the
date fixed for redemption or conversion of such Preferred Shares and Depositary
Shares, to the record holders of the Receipts evidencing the Depositary Shares
to be so redeemed or converted, at the addresses of such holders as the same
appear on the records of the Depositary; provided, that if the effectiveness of
a Merger or Consolidation (as defined in the applicable Certificate) makes it
impracticable to provide at least 30 days' notice, the Depositary shall provide
such notice as soon as practicable prior to such effectiveness. Any such notice
shall also be published in the same manner as notices of redemption or
conversion of Preferred Shares are required to be published pursuant to the
applicable Certificate. Notwithstanding the foregoing, neither failure to mail
or publish any such notice to one or more such holders nor any defect in any
notice shall affect the sufficiency of the proceedings for redemption or
conversion. The Company shall provide the Depositary with such notice, and each
such notice shall state: the redemption or conversion date; the number

------------------------
1      This section to be modified to discuss specific redemption or conversion
terms of the Preferred Shares, if any.

                                      -4-
<PAGE>

of Depositary Shares to be redeemed or converted; if fewer than all the
Depositary Shares held by any holder are to be redeemed, the number of such
Depositary Shares held by such holder to be so redeemed; in the case of a call
for redemption, the call price payable upon redemption; whether the Company is
exercising any option in the applicable Certificate to deliver shares of
Ordinary Shares in lieu of any cash consideration and the method used to
calculate the number of such shares; the place or places where Receipts
evidencing Depositary Shares to be redeemed or converted are to be surrendered
for redemption or conversion; whether the Company is depositing with a bank or
trust company on or before the redemption or conversion date, the shares of
Ordinary Shares and cash, if any, payable by the Company and the proposed date
of such deposit; the amount of accrued and unpaid dividends payable per share of
Preferred Shares to be redeemed or converted to and including such redemption or
conversion date, as the case may be, and that dividends in respect of the
Preferred Shares represented by the Depositary Shares to be redeemed or
converted will cease to accrue on such redemption or conversion date (unless the
Company shall default in delivering shares of Ordinary Shares and cash, if any,
at the time and place specified in such notice).

          On the date of any such redemption or conversion, the Depositary shall
surrender the certificate or certificates held by the Depositary evidencing the
number of shares of Preferred Shares to be redeemed or converted in the manner
specified in the notice of redemption or conversion of Preferred Shares provided
by the Company pursuant to the applicable Certificate. The Depositary shall,
thereafter, redeem or convert the number of Depositary Shares representing such
redeemed or converted Preferred Shares upon the surrender of Receipts evidencing
such Depositary Shares in the manner provided in the notice sent to record
holders of Receipts; provided, that the Depositary shall have received, upon
surrendering such certificate or certificates as aforesaid, a sufficient number
of shares of Ordinary Shares to convert or redeem such number of Depositary
Shares (including, in the event that the Company elects pursuant to the
applicable Certificate to exercise any option to deliver shares of Ordinary
Shares in lieu of any cash consideration payable on the Effective Date (as
defined in the applicable Certificate) of any Merger or Consolidation, a number
of shares of Ordinary Shares equal to such cash consideration (as determined in
the manner set forth in the applicable Certificate)), plus any accrued and
unpaid dividends payable with respect thereto to and including the date of any
such redemption or conversion and any other cash consideration payable on the
Effective Date of a Merger or Consolidation (other than any dividends or other
cash consideration payable on the Effective Date of a Merger or Consolidation
that the Company has elected to pay in shares of Ordinary Shares pursuant to the
applicable Certificate) as instructed and calculated by the Company. In case
fewer than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed shall be selected by the Depositary by lot or
on a pro rata basis.

          Notice having been mailed by the Depositary as aforesaid, from and
after the redemption or conversion date (unless the Company shall have failed to
redeem or convert the shares of Preferred Shares to be redeemed or converted by
it upon the surrender of the certificate or certificates therefor by the
Depositary as described in the preceding paragraph), the Depositary Shares
called for redemption or subject to conversion shall be deemed no longer to be
outstanding and all rights of the holders of Receipts evidencing such Depositary
Shares (except the right to receive the shares of Ordinary Shares and cash, if
any, payable upon redemption or conversion upon surrender of such Receipts)
shall, to the extent of such Depositary Shares, cease

                                      -5-
<PAGE>

and terminate. Upon surrender in accordance with said notice of the Receipts
evidencing such Depositary Shares (properly endorsed or assigned for transfer,
if the Depositary shall so require), such Depositary Shares shall be converted
into or redeemed for shares of Ordinary Shares at a rate equal to [insert
fractional interest] of the number of shares of Ordinary Shares delivered, and
the holders thereof shall be entitled to [insert fractional interest] of the
cash, if any, payable, in respect of the shares of Preferred Shares pursuant to
the applicable Certificate. The foregoing shall be subject further to the terms
and conditions of the applicable Certificate.

          If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the shares of Ordinary
Shares and all accrued and unpaid dividends to and including the date fixed for
redemption payable in respect of the Depositary Shares called for redemption, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.

          To the extent that Depositary Shares are converted into or redeemed
for shares of Ordinary Shares and all of such shares of Ordinary Shares cannot
be distributed to the record holders of Receipts converted or called for
redemption without creating fractional interests in such shares, the Depositary
may, with the consent of the Company, adopt such method as it deems equitable
and practicable for the purpose of effecting such distribution, including the
sale (at public or private sale) of such shares of Ordinary Shares at such place
or places and upon such terms as it may deem proper, and the net proceeds of any
such sale shall, subject to Section 3.02, be distributed or made available for
distribution to such record holders that would otherwise receive fractional
interests in such shares of Ordinary Shares.

          The Depositary shall not be required (a) to issue, transfer or
exchange any Receipts for a period beginning at the opening of business 15 days
next preceding any selection of Depositary Shares and Preferred Shares to be
redeemed and ending at the close of business on the day of the mailing of notice
of redemption of Depositary Shares or (b) to transfer or exchange for another
Receipt any Receipt evidencing Depositary Shares called or being called for
redemption, in whole or in part, or subject to conversion except as provided in
the second preceding paragraph of this Section 2.03.

          Section 2.04. Register of Transfer of Receipts. Subject to the terms
and conditions of this Deposit Agreement, the Depositary shall register on its
books from time to time transfers of Receipts upon any surrender thereof at the
Corporate Office, the New York Office or such other office as the Depositary may
designate for such purpose, by the record holder in person or by a duly
authorized attorney, properly endorsed or accompanied by a properly executed
instrument of transfer, together with evidence of the payment of any transfer
taxes as may be required by law. Upon such surrender, the Depositary shall
execute a new Receipt or Receipts and deliver the same to or upon the order of
the person entitled thereto evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered.

          Section 2.05.Combination and Split-ups of Receipts. Upon surrender of
a Receipt or Receipts at the Corporate Office, the New York Office or such other
office as the Depositary may designate for the purpose of effecting a split-up
or combination of Receipts, subject to the terms and conditions of this Deposit
Agreement, the Depositary shall execute and deliver a new

                                      -6-
<PAGE>

Receipt or Receipts in the authorized denominations requested evidencing the
same aggregate number of Depositary Shares evidenced by the Receipt or Receipts
surrendered; provided, however, that the Depositary shall not issue any Receipt
evidencing a fractional Depositary Share.

          Section 2.06. Surrender of Receipts and Withdrawal of Preferred
Shares.2 Any holder of a Receipt or Receipts may withdraw any or all of the
Preferred Shares (but only in whole shares of Preferred Shares) represented by
the Depositary Shares evidenced by such Receipts and all money and other
property, if any, represented by such Depositary Shares by surrendering such
Receipt or Receipts at the Corporate Office, the New York Office or at such
other office as the Depositary may designate for such withdrawals. After such
surrender, without unreasonable delay, the Depositary shall deliver to such
holder, or to the person or persons designated by such holder as hereinafter
provided, the whole number of shares of Preferred Shares and all such money and
other property, if any, represented by the Depositary Shares evidenced by the
Receipt or Receipts so surrendered for withdrawal. If the Receipt or Receipts
delivered by the holder to the Depositary in connection with such withdrawal
shall evidence a number of Depositary Shares in excess of the number of whole
Depositary Shares representing the whole number of shares of Preferred Shares to
be withdrawn, the Depositary shall at the same time, in addition to such whole
number of shares of Preferred Shares and such money and other property, if any,
to be withdrawn, deliver to such holder, or (subject to Section 2.04) upon his
order, a new Receipt or Receipts evidencing such excess number of whole
Depositary Shares. Delivery of the Preferred Shares and such money and other
property being withdrawn may be made by the delivery of such certificates,
documents of title and other instruments as the Depositary may deem appropriate,
which, if required by the Depositary, shall be properly endorsed or accompanied
by proper instruments of transfer.

          If the Preferred Shares and the money and other property being
withdrawn are to be delivered to a person or persons other than the record
holder of the Receipt or Receipts being surrendered for withdrawal of Preferred
Shares, such holder shall execute and deliver to the Depositary a written order
so directing the Depositary and the Depositary may require that the Receipt or
Receipts surrendered by such holder for withdrawal of such shares of Preferred
Shares be properly endorsed in blank or accompanied by a properly executed
instrument of transfer in blank and that the signature on such instrument of
transfer be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended.

          The Depositary shall deliver the Preferred Shares and the money and
other property, if any, represented by the Depositary Shares evidenced by
Receipts surrendered for withdrawal, without unreasonable delay, at the office
at which such Receipts were surrendered, except that, at the request, risk and
expense of the holder surrendering such Receipt or Receipts and for the account
of the holder thereof, such delivery may be made, without unreasonable delay, at
such other place as may be designated by such holder.

------------------------
2      This Section to be modified to reflect any restrictions on withdrawal of
underlying securities.

                                      -7-
<PAGE>

          Section 2.07. Limitations on Execution and Delivery, Transfer,
Split-up, Combination, Surrender and Exchange of Receipts and Withdrawal or
Deposit of Preferred Shares. As a condition precedent to the execution and
delivery, registration of transfer, split-up, combination, surrender or exchange
of any Receipt, the delivery of any distribution thereon or the withdrawal or
deposit of Preferred Shares, the Depositary, any of the Depositary's Agents or
the Company may require any or all of the following: (i) payment to it of a sum
sufficient for the payment (or, in the event that the Depositary or the Company
shall have made such payment, the reimbursement to it) of any tax or other
governmental charge with respect thereto (including any such tax or charge with
respect to the Preferred Shares being deposited or withdrawn or with respect to
the Ordinary Shares or other securities or property of the Company being issued
upon conversion or redemption); (ii) production of proof satisfactory to it as
to the identity and genuineness of any signature; and (iii) compliance with such
reasonable regulations, if any, as the Depositary or the Company may establish
not inconsistent with the provisions of this Deposit Agreement.

          The deposit of Preferred Shares may be refused, the delivery of
Receipts against Preferred Shares or the registration of transfer, split-up,
combination, surrender or exchange of outstanding Receipts and the withdrawal of
deposited Preferred Shares may be suspended (i) during any period when the
register of shareholders of the Company is closed, (ii) if any such action is
deemed necessary or advisable by the Depositary, any of the Depositary's Agents
or the Company at any time or from time to time because of any requirement of
law or of any government or governmental body or commission, or under any
provision of this Deposit Agreement, or (iii) with the approval of the Company,
for any other reason. Without limitation of the foregoing, the Depositary shall
not knowingly accept for deposit under this Deposit Agreement any shares of
Preferred Shares that are required to be registered under the Securities Act
unless a registration statement under the Securities Act is in effect as to such
shares of Preferred Shares.

          Section 2.08. Lost Receipts, etc. In case any Receipt shall be
mutilated or destroyed or lost or stolen, the Depositary shall execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt or in lieu of and in substitution for such destroyed, lost or
stolen Receipt unless the Depositary has notice that such Receipt has been
acquired by a bona fide purchaser; provided, however, that the holder thereof
provides the Depositary with (i) evidence satisfactory to the Depositary of such
destruction, loss or theft of such Receipt, of the authenticity thereof and of
his ownership thereof, (ii) reasonable indemnification satisfactory to the
Depositary or the payment of any charges incurred by the Depositary in obtaining
insurance in lieu of such indemnification and (iii) payment of any expense
(including fees, charges and expenses of the Depositary) in connection with such
execution and delivery.

          Section 2.09..Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so cancelled.

                                      -8-
<PAGE>

                                  ARTICLE III

                         CERTAIN OBLIGATIONS OF HOLDERS
                           OF RECEIPTS AND THE COMPANY

          Section 3.01. Filing Proofs, Certificates and Other Information. Any
person presenting Preferred Shares for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence or other information,
to execute such certificates and to make such representations and warranties as
the Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company may withhold or delay the delivery of any Receipt, the
registration of transfer, redemption, conversion or exchange of any Receipt, the
withdrawal of the Preferred Shares represented by the Depositary Shares
evidenced by any Receipt or the distribution of any dividend or other
distribution until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.

          Section 3.02. Payment of Taxes or Other Governmental Charges. If any
tax or other governmental charge shall become payable by or on behalf of the
Depositary with respect to (i) any Receipt, (ii) the Depositary Shares evidenced
by such Receipt, (iii) the Preferred Shares (or fractional interest therein) or
other property represented by such Depositary Shares, or (iv) any transaction
referred to in Section 4.06, such tax (including transfer, issuance or
acquisition taxes, if any) or governmental charge shall be payable by the holder
of such Receipt, who shall pay the amount thereof to the Depositary. Until such
payment is made, registration of transfer of any Receipt or any split-up or
combination thereof or any withdrawal of the Preferred Shares or money or other
property, if any, represented by the Depositary Shares evidenced by such Receipt
may be refused, any dividend or other distribution may be withheld and any part
or all of the Preferred Shares or other property (including Ordinary Shares
received in connection with a conversion or redemption of Preferred Shares)
represented by the Depositary Shares evidenced by such Receipt may be sold for
the account of the holder thereof (after attempting by reasonable means to
notify such holder prior to such sale). Any dividend or other distribution so
withheld and the proceeds of any such sale may be applied to any payment of such
tax or other governmental charge, the holder of such Receipt remaining liable
for any deficiency.

          Section 3.03. Withholding. The Depositary shall act as the tax
withholding agent for any payments, distributions and exchanges made with
respect to the Depositary Shares and Receipts, and the Preferred Shares,
Ordinary Shares or other securities or assets represented thereby (collectively,
the "Securities"). The Depositary shall be responsible with respect to the
Securities for the timely (i) collection and deposit of any required withholding
or backup withholding tax, and (ii) filing of any information returns or other
documents with federal (and other applicable) taxing authorities.

          Section 3.04. Representations and Warranties as to Ordinary Shares. In
the case of the initial deposit of the Preferred Shares, the Company and, in the
case of subsequent deposits thereof, each person so depositing Preferred Shares
under this Deposit Agreement shall be deemed thereby to represent and warrant
that such Preferred Shares and each certificate therefor are valid and that the
person making such deposit is duly authorized to do so. Such

                                      -9-
<PAGE>

representations and warranties shall survive the deposit of the Preferred Shares
and the issuance of Receipts therefor.

                                   ARTICLE IV

                          THE PREFERRED SHARES, NOTICES

          Section 4.01. Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Preferred Shares,
the Depositary shall, subject to Section 3.02, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.04 such amounts of such
sum as are, as nearly as practicable, in proportion to the respective numbers of
Depositary Shares evidenced by the Receipts held by such holders; provided,
however, that in case the Company or the Depositary shall be required by law to
withhold and does withhold from any cash dividend or other cash distribution in
respect of the Preferred Shares an amount on account of taxes, the amount made
available for distribution or distributed in respect of Depositary Shares shall
be reduced accordingly. The Depositary shall distribute or make available for
distribution, as the case may be, only such amount, however, as can be
distributed without attributing to any owner of Depositary Shares a fraction of
one cent and any balance not so distributable shall be held by the Depositary
(without liability for interest thereon) and shall be added to and be treated as
part of the next sum received by the Depositary for distribution to record
holders of Receipts then outstanding.

          Section 4.02. Distributions Other Than Cash. Whenever the Depositary
shall receive any distribution other than cash, rights, preferences or
privileges upon the Preferred Shares, the Depositary shall, subject to Section
3.02, distribute to record holders of Receipts on the record date fixed pursuant
to Section 4.04 such amounts of the securities or property received by it as
are, as nearly as practicable, in proportion to the respective numbers of
Depositary Shares evidenced by the Receipts held by such holders, in any manner
that the Depositary and the Company may deem equitable and practicable for
accomplishing such distribution. If, in the opinion of the Company after
consultation with the Depositary, such distribution cannot be made
proportionately among such record holders, or if for any other reason (including
any tax withholding or securities law requirement), the Depositary deems, after
consultation with the Company, such distribution not to be feasible, the
Depositary may, with the approval of the Company which approval shall not be
unreasonably withheld, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including the sale (at public or
private sale) of the securities or property thus received, or any part thereof,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Section 3.02, be distributed or made
available for distribution, as the case may be, by the Depositary to record
holders of Receipts as provided by Section 4.01 in the case of a distribution
received in cash.

          Section 4.03. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Preferred Shares are registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Company shall instruct
(including by the issue

                                      -10-
<PAGE>

to such record holders of warrants representing such rights, preferences or
privileges); provided, however, that (a) if at the time of issue or offer of any
such rights, preferences or privileges the Company determines and instructs the
Depositary that it is not lawful or feasible to make such rights, preferences or
privileges available to some or all holders of Receipts (by the issue of
warrants or otherwise) or (b) if and to the extent instructed by holders of
Receipts who do not desire to exercise such rights, preferences or privileges,
the Depositary shall then, in each case, and if applicable laws or the terms of
such rights, preferences or privileges so permit, sell such rights, preferences
or privileges of such holders at public or private sale, at such place or places
and upon such terms as it may deem proper. The net proceeds of any such sale
shall be distributed by the Depositary to the record holders of Receipts
entitled thereto as provided by Section 4.01 in the case of a distribution
received in cash.

          If registration under the Securities Act of the securities to which
any rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold such securities, the Company shall promptly file
a registration statement pursuant to the Securities Act with respect to such
rights, preferences or privileges and securities and use its best efforts and
take all steps available to it to cause such registration statement to become
effective sufficiently in advance of the expiration of such rights, preferences
or privileges to enable such holders to exercise such rights, preferences or
privileges. In no event shall the Depositary make available to the holders of
Receipts any right, preference or privilege to subscribe for or to purchase any
securities unless and until such registration statement shall have become
effective or unless the offering and sale of such securities to such holders are
exempt from registration under the provisions of the Securities Act.

          If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its reasonable best efforts to take such action or obtain such authorization,
consent or permit sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges.

          Section 4.04. Notice of Dividends, Fixing of Record Date for Holders
of Receipts. Whenever (i) any cash dividend or other cash distribution shall
become payable, or any distribution other than cash shall be made, or any
rights, preferences or privileges shall at any time be offered, with respect to
the Preferred Shares, or (ii) the Depositary shall receive notice of any meeting
at which holders of Preferred Shares are entitled to vote or of which holders of
Preferred Shares are entitled to notice or of the mandatory conversion of, or
any election on the part of the Company to call for the redemption of, any
shares of Preferred Shares, the Company shall in each such instance fix a record
date (which shall be the same date as the record date fixed by the Company with
respect to the Preferred Shares) for the determination of the holders of
Receipts (x) who shall be entitled to receive such dividend, distribution,
rights, preferences or privileges or the net proceeds of the sale thereof, or
(y) who shall be entitled to give instructions for the exercise of voting rights
at any such meeting or to receive notice of such meeting or of such conversion
or redemption. The Company shall advise the Depositary of all such record dates.

                                      -11-
<PAGE>

          Section 4.05. Voting Rights. Upon receipt of notice of any meeting at
which the holders of Preferred Shares are entitled to vote, the Depositary
shall, as soon as practicable thereafter, mail to the record holders of Receipts
a notice, which shall be provided by the Company and which shall contain (i)
such information as is contained in such notice of meeting, (ii) a statement
that the holders of Receipts at the close of business on a specified record date
fixed pursuant to Section 4.04 will be entitled, subject to any applicable
provision of law, the Memorandum of Association (including the applicable
Certificate), to instruct the Depositary as to the exercise of the voting rights
pertaining to the Preferred Shares represented by their respective Depositary
Shares and (iii) a brief statement as to the manner in which such instructions
may be given. Upon the written request of a holder of a Receipt on such record
date, the Depositary shall endeavor insofar as practicable to vote or cause to
be voted the Preferred Shares represented by the Depositary Shares evidenced by
such Receipt in accordance with the instructions set forth in such request. The
Company hereby agrees to take all reasonable action that may be deemed necessary
by the Depositary in order to enable the Depositary to vote such Preferred
Shares or cause such Preferred Shares to be voted. In the absence of specific
instructions from the holder of a Receipt, the Depositary will abstain from
voting to the extent of the Preferred Shares represented by the Depositary
Shares evidenced by such Receipt.

          Section 4.06. Changes Affecting Preferred Shares and
Reclassifications, Recapitalizations, etc. Upon any split-up, consolidation or
any other reclassification of Preferred Shares, or upon any recapitalization,
reorganization, merger, amalgamation or consolidation affecting the Company or
to which it is a party (other than a Merger or Consolidation) or sale of all or
substantially all of the Company's assets, the Depositary shall treat any shares
of Preferred Shares or other securities or property (including cash) that shall
be received by the Depositary in exchange for or upon conversion of or in
respect of the Preferred Shares as new deposited property under this Deposit
Agreement, and Receipts then outstanding shall thenceforth represent the
proportionate interests of holders thereof in the new deposited property so
received in exchange for or upon conversion or in respect of such Preferred
Shares. In any such case the Depositary may, in its discretion, with the
approval of the Company, execute and deliver additional Receipts, or may call
for the surrender of all outstanding Receipts to be exchanged for new Receipts
specifically describing such new deposited property.

          Section 4.07. Reports. The Depositary shall make available for
inspection by holders of Receipts at the Corporate Office, the New York Office
and at such other places as it may from time to time deem advisable during
normal business hours any reports and communications received from the Company
that are received by the Depositary as the holder of Preferred Shares.

          Section 4.08. Lists of Receipt Holders. Promptly upon request from
time to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.
At the expense of the Company, the Company shall have the right to inspect
transfer and registration records of the Depositary, any Depositary's Agent or
the Registrar, take copies thereof and require the Depositary, any Depositary's
Agent or the Registrar to supply copies of such portions of such records as the
Company may request.

                                      -12-
<PAGE>

                                   ARTICLE V.

                    THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
                          THE REGISTRAR AND THE COMPANY

          Section 5.01. Maintenance of Offices, Agencies, Transfer Books by the
Depositary; the Registrar. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain (i) at the New York
Office facilities for the execution and delivery, registration, registration of
transfer, surrender and exchange, split-up, combination, redemption and
conversion of Receipts and deposit and withdrawal of Preferred Shares and (ii)
at the Corporate Office and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration, registration of transfer, surrender
and exchange, split-up, combination, conversion and redemption of Receipts and
deposit and withdrawal of Preferred Shares, all in accordance with the
provisions of this Deposit Agreement.

          The Depositary shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all reasonable times shall
be open for inspection by the record holders of Receipts; provided that any such
holder requesting to exercise such right shall certify to the Depositary that
such inspection shall be for a proper purpose reasonably related to such
person's interest as an owner of Depositary Shares. The Depositary shall consult
with the Company upon receipt of any request for inspection. The Depositary may
close such books, at any time or from time to time, when deemed expedient by it
in connection with the performance of its duties hereunder.

          If the Receipts or the Depositary Shares evidenced thereby or the
Preferred Shares represented by such Depositary Shares shall be listed on one or
more stock exchanges, the Depositary shall, with the approval of the Company,
appoint a Registrar for registry of such Receipts or Depositary Shares in
accordance with the requirements of such exchange or exchanges. Such Registrar
(which may be the Depositary if so permitted by the requirements of such
exchange or exchanges) may be removed and a substitute registrar appointed by
the Depositary upon the request or with the approval of the Company. In
addition, if the Receipts, such Depositary Shares or such Preferred Shares are
listed on one or more stock exchanges, the Depositary will, at the request of
the Company, arrange such facilities for the delivery, registration,
registration of transfer, surrender and exchange, split-up, combination,
redemption or conversion of such Receipts, such Depositary Shares or such
Preferred Shares as may be required by law or applicable stock exchange
regulations.

          Section 5.02. Prevention or Delay in Performance by the Depositary,
the Depositary's Agents, the Registrar or the Company. Neither the Depositary
nor any Depositary's Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt, if by reason of any provision of any
present or future law or regulation thereunder of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Registrar or any Depositary's Agent, by reason of any provision, present or
future, of the Memorandum of Association (including the applicable Certificate)
or, in the case of the Company, the Depositary, the Registrar or any
Depositary's Agent, by reason of any act of God or war or other circumstances
beyond the control of the relevant party, the Depositary, any Depositary's
Agent, the Registrar or the Company shall be prevented or forbidden from doing
or performing any act

                                      -13-
<PAGE>

or thing that the terms of this Deposit Agreement provide shall be done or
performed; nor shall the Depositary, any Depositary's Agent, the Registrar or
the Company incur any liability to any holder of a Receipt (i) by reason of any
nonperformance or delay, caused as aforesaid, in the performance of any act or
thing that the terms of this Deposit Agreement provide shall or may be done or
performed, or (ii) by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement except, in the case of the
Depositary, any Depositary's Agent or the Registrar, if any such exercise or
failure to exercise discretion is caused by its negligence or bad faith.

          Section 5.03. Obligations of the Depositary, the Depositary's Agents,
the Registrar and the Company. The Company assumes no obligation and shall be
subject to no liability under this Deposit Agreement or the Receipts to holders
or other persons, except to perform in good faith such obligations as are
specifically set forth and undertaken by it to perform in this Deposit
Agreement. Each of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject to no liability under this Deposit
Agreement or the Receipts to holders or other persons, except to perform such
obligations as are specifically set forth and undertaken by it to perform in
this Deposit Agreement without negligence or bad faith.

          Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding with respect to Preferred Shares,
Depositary Shares, Receipts or Ordinary Shares that in its opinion may involve
it in expense or liability, unless indemnity satisfactory to it against all
expense and liability be furnished as often as may be required.

          Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be liable for any action or any failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Preferred Shares for deposit, any holder of a Receipt or any
other person believed by it in good faith to be competent to give such advice or
information. The Depositary, any Depositary's Agent, the Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.

          The Depositary, the Registrar and any Depositary's Agent may own and
deal in any class of securities of the Company and its affiliates and in
Receipts or Depositary Shares. The Depositary may also act as transfer agent or
registrar of any of the securities of the Company and its affiliates.

          It is intended that neither the Depositary nor any Depositary's Agent
shall be deemed to be an "issuer" of the Preferred Shares, the Depositary
Shares, the Receipts or the Ordinary Shares issued upon conversion or redemption
of the Preferred Shares under the federal securities laws or applicable state
securities laws, it being expressly understood and agreed that the Depositary
and any Depositary's Agent are acting only in a ministerial capacity as
Depositary for the Preferred Shares; provided, however, that the Depositary
agrees to comply with all information reporting and withholding requirements
applicable to it under law or this Deposit Agreement in its capacity as
Depositary.

                                      -14-
<PAGE>

          Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent makes any representation or has any
responsibility as to the validity of the Registration Statement pursuant to
which the Depositary Shares are registered under the Securities Act, the
Preferred Shares, the Depositary Shares or any instruments referred to therein
or herein, or as to the correctness of any statement made therein or herein;
provided, however, that the Depositary is responsible for its representations in
this Deposit Agreement.

          The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Preferred Shares at any time deposited with the Depositary
hereunder or of the Depositary Shares, as to the validity or sufficiency of this
Deposit Agreement, as to the value of the Depositary Shares or as to any right,
title or interest of the record holders of Receipts in and to the Depositary
Shares except that the Depositary hereby represents and warrants as follows: (i)
the Depositary has been duly organized and is validly existing and in good
standing under the laws of the State of New York, with full power, authority and
legal right under such law to execute, deliver and carry out the terms of this
Deposit Agreement; (ii) this Deposit Agreement has been duly authorized,
executed and delivered by the Depositary; and (iii) this Deposit Agreement
constitutes a valid and binding obligation of the Depositary, enforceable
against the Depositary in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law). The
Depositary shall not be accountable for the use or application by the Company of
the Depositary Shares or the Receipts or the proceeds thereof.

          Section 5.04. Resignation and Removal of the Depositary, Appointment
of Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice via registered mail of its election to do so
delivered to the Company, such resignation to take effect upon the appointment
of a successor depositary and its acceptance of such appointment as hereinafter
provided.

          The Depositary may at any time be removed by the Company by written
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.

          In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within sixty (60) days after the delivery of the
notice of resignation or removal, as the case may be, appoint a successor
depositary, which shall be a bank or trust company, or an affiliate of a bank or
trust company, having its principal office in the United States of America and
having a combined capital and surplus of at least $50,000,000. If a successor
depositary shall not have been appointed in sixty (60) days, the resigning or
removed Depositary may petition a court of competent jurisdiction to appoint a
successor depositary. Every successor depositary shall execute and deliver to
its predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and

                                      -15-
<PAGE>

obligations of its predecessor and for all purposes shall be the Depositary
under this Deposit Agreement, and such predecessor, upon payment of all sums due
it and on the written request of the Company, shall promptly execute and deliver
an instrument transferring to such successor all rights and powers of such
predecessor hereunder, shall duly assign, transfer and deliver all rights, title
and interest in the Preferred Shares and any moneys or property held hereunder
to such successor and shall deliver to such successor a list of the record
holders of all outstanding Receipts. Any successor depositary shall promptly
mail notice of its appointment to the record holders of Receipts.

          Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
depositary may execute the Receipts either in the name of the predecessor
depositary or in the name of the successor depositary.

          Section 5.05. Corporate Notices and Reports. The Company agrees that
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at the
address recorded in the Depositary's books, copies of all notices and reports
(including financial statements) required by law, by the rules of any national
securities exchange upon which the Preferred Shares, the Depositary Shares or
the Receipts are listed or by the Memorandum of Association (including the
applicable Certificate) to be furnished by the Company to holders of Preferred
Shares. Such transmission will be at the Company's expense and the Company will
provide the Depositary with such number of copies of such documents as the
Depositary may reasonably request. In addition, the Depositary will transmit to
the record holders of Receipts at the Company's expense such other documents as
may be requested by the Company.

          Section 5.06. Deposit of Preferred Shares by the Company. The Company
agrees with the Depositary that neither the Company nor any company controlled
by the Company will at any time deposit any Preferred Shares if such Preferred
Shares are required to be registered under the provisions of the Securities Act
and no registration statement is at such time in effect as to such Preferred
Shares.

          Section 5.07. Indemnification by the Company. The Company agrees to
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, any liability, costs and expenses (including
reasonable fees and expenses of counsel) that may arise out of or in connection
with its acting as Depositary, Depositary's Agent or Registrar, respectively,
under this Deposit Agreement and the Receipts, except for any liability arising
out of negligence, bad faith or willful misconduct on the part of any such
person or persons.

          Section 5.08. Fees, Charges and Expenses. No fees, charges and
expenses of the Depositary or any Depositary's Agent hereunder or of any
Registrar shall be payable by any person other than the Company, except for any
taxes and other governmental charges and except as provided in this Deposit
Agreement. If, at the request of a holder of a Receipt, the Depositary incurs
fees, charges or expenses for which it is not otherwise liable hereunder, such
holder or other person will be liable for such fees, charges and expenses. All
other fees, charges and expenses of the Depositary and any Depositary's Agent
hereunder and of any Registrar (including, in each case, reasonable fees and
expenses of counsel) incident to the performance of

                                      -16-
<PAGE>

their respective obligations hereunder will be paid from time to time upon
consultation and agreement between the Depositary and the Company as to the
amount and nature of such fees, charges and expenses.

                                   ARTICLE VI

                            AMENDMENT AND TERMINATION

          Section 6.01. Amendment. The form of the Receipts and any provision of
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable. Any amendment that shall impose or increase any
fees, taxes or charges payable by holders of Receipts (other than taxes and
other governmental charges, fees and other expenses payable by holders pursuant
to the terms hereof or of the Receipts), or that shall otherwise prejudice any
substantial existing right of holders of Receipts, shall not become effective as
to outstanding Receipts until the expiration of ninety (90) days after notice of
such amendment shall have been given to the record holders of outstanding
Receipts. Every holder of an outstanding Receipt at the time any such amendment
becomes effective shall be deemed, by continuing to hold such Receipt, to
consent and agree to such amendment and to be bound by this Deposit Agreement as
amended thereby. In no event shall any amendment impair the right, subject to
the provisions of Sections 2.03, 2.06 and 2.07 and Article III, of any owner of
any Depositary Shares to surrender the Receipt evidencing such Depositary Shares
with instructions to the Depositary to deliver to the holder the Preferred
Shares and all money and other property, if any, represented thereby, except in
order to comply with mandatory provisions of applicable law.

          Section 6.02. Termination. Whenever so directed by the Company, the
Depositary will terminate this Deposit Agreement by mailing notice of such
termination to the record holders of all Receipts then outstanding at least
thirty (30) days prior to the date fixed in such notice for such termination.
The Depositary may likewise terminate this Deposit Agreement if at any time
sixty (60) days shall have expired after the Depositary shall have delivered to
the Company a written notice of its election to resign and a successor
depositary shall not have been appointed and accepted its appointment as
provided in Section 5.04.

          If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the holders
thereof and shall not give any further notices (other than notice of such
termination) or perform any further acts under this Deposit Agreement, except as
provided below and that the Depositary shall continue to collect dividends and
other distributions pertaining to Preferred Shares, shall sell rights,
preferences or privileges as provided in this Deposit Agreement and shall
continue to deliver the Preferred Shares and any money and other property
represented by Receipts, without liability for interest thereon, upon surrender
thereof by the holders thereof. At any time after the expiration of two years
from the date of termination, the Depositary may sell Preferred Shares then held
hereunder at public or private sale, at such places and upon such terms as it
deems proper and may thereafter hold in a segregated account the net proceeds of
any such sale, together with any money and other property held by it hereunder,
without liability for interest, for the benefit, pro rata in accordance with
their holdings, of the holders of Receipts that have not heretofore been
surrendered. After making

                                      -17-
<PAGE>

such sale, the Depositary shall be discharged from all obligations under this
Deposit Agreement except to account for such net proceeds and money and other
property. Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 5.07 and 5.08. In the event this Deposit Agreement is terminated, the
Company hereby agrees to use its best efforts to list the underlying Preferred
Shares on the New York Stock Exchange, Inc.

                                   ARTICLE VII

                                  MISCELLANEOUS

          Section 7.01. Counterparts. This Deposit Agreement may be executed by
the Company and the Depositary in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Deposit Agreement. Copies of this Deposit Agreement
shall be filed with the Depositary and the Depositary's Agents and shall be open
to inspection during business hours at the Corporate Office and the New York
Office and the respective offices of the Depositary's Agents, if any, by any
holder of a Receipt.

          Section 7.02. Exclusive Benefits of Parties. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.

          Section 7.03. Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.

          Section 7.04. Notices. Any notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or telex
or telecopier confirmed by letter, addressed to the Company at P.O. Box 2939,
Crown House, Third Floor, 4 Par-la-Ville Road, Hamilton HM MX, Bermuda, or at
any other place to which the Company may have transferred its principal
executive office.

          Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Depositary at the Corporate Office.

          Any notices given to any record holder of a Receipt hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to such record holder at the address of such
record holder as it appears on the books of the Depositary or, if such holder

                                      -18-
<PAGE>

shall have filed with the Depositary a written request that notices intended for
such holder be mailed to some other address, at the address designated in such
request.

          Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telegram or telex or telecopier message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company may,
however, act upon any telegram or telex or telecopier message received by it
from the other or from any holder of a Receipt, notwithstanding that such
telegram or telex or telecopier message shall not subsequently be confirmed by
letter as aforesaid.

          Section 7.05. Depositary's Agents. The Depositary may, with the
approval of the Company which approval shall not be unreasonably withheld, from
time to time appoint one or more Depositary's Agents to act in any respect for
the Depositary for the purposes of this Deposit Agreement and may vary or
terminate the appointment of such Depositary's Agents.

          Section 7.06. Holders of Receipts Are Parties. Notwithstanding that
holders of Receipts have not executed and delivered this Deposit Agreement or
any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions, and be entitled to all of the benefits, hereof and of the
Receipts by acceptance of delivery of Receipts.

          Section 7.07. Governing Law. This Deposit Agreement and the Receipts
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the law of the State of New
York without giving effect to principles of conflict of laws.

          Section 7.08. Headings. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or to have any bearing upon the meaning or interpretation
of any provision contained herein or in the Receipts.

                                      -19-
<PAGE>

          IN WITNESS WHEREOF, Scottish Annuity & Life Holdings, Ltd. and The
Bank of New York have duly executed this Deposit Agreement as of the day and
year first above set forth and all holders of Receipts shall become parties
hereto by and upon acceptance by them of delivery of Receipts issued in
accordance with the terms hereof.

                     SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
Attest:

By:                                          By:
   ---------------------------------           ---------------------------------
                                               Authorized Officer

                              THE BANK OF NEW YORK
Attest:

By:                                          By:
   ---------------------------------           ---------------------------------
                                               Authorized Signatory

                                      -20-
<PAGE>

                                                                       EXHIBIT A

DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES
EACH REPRESENTING [INSERT FRACTIONAL INTEREST] OF A SHARE OF
__________ PREFERRED
SHARES

OF

SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.

(A Holding Company Incorporated under the Laws of the Cayman Islands)

No.

          The Bank of New York (the "Depositary") hereby certifies that
_________ is the registered owner of ________ Depositary Shares (the "Depositary
Shares"), each Depositary Share representing [insert fractional interest] of a
share of ________ Preferred Shares, $0.01 par value per share (the "Preferred
Shares"), of Scottish Annuity & Life Holdings, Ltd., a holding company organized
under the laws of the Cayman Islands (the "Company"), and the same proportionate
interest in any and all other property received by the Depositary in respect of
such shares of Preferred Shares and held by the Depositary under the Deposit
Agreement, dated as of ______,____ (the "Deposit Agreement"), among the Company,
the Depositary and all holders from time to time, of Receipts. Subject to the
terms of the Deposit Agreement, each owner of a Depositary Share is entitled,
proportionately, to all the rights, preferences and privileges of the Preferred
Shares represented thereby, including the dividend, voting, liquidation and
other rights contained in the Certificate of Designations establishing the
rights, preferences, privileges and limitations of the Preferred Shares (the
"Certificate"), copies of which are on file at the office of the Depositary at
which at any particular time its business in respect of matters governed by the
Deposit Agreement shall be administered, which at the time of the execution of
the Deposit Agreement is located at One Wall Street, New York, New York 10286
(the "Corporate Office").

          This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any purpose
unless this Receipt shall have been executed manually or, if a Registrar for the
Receipts (other than the Depositary) shall have been appointed, by facsimile by
the Depositary by the signature of a duly authorized signatory and, if executed
by facsimile signature of the Depositary, shall have been countersigned manually
by such Registrar by the signature of a duly authorized signatory.

THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED PREFERRED
SHARES. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE
COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS
EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES
OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF

                                      A-1
<PAGE>

ANY PREFERRED SHARES AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT
AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE
DEPOSIT AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT,
TITLE OR INTEREST OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE
DEPOSITARY SHARES.

          This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.

Dated:

The Bank of New York,
as Depositary and Registrar

By:
   ---------------------------
   Authorized Signatory

                                      A-2
<PAGE>

                                [FORM OF REVERSE
                             OF DEPOSITARY RECEIPT]

          Depositary Receipts, of which this Receipt is one, are made available
upon the terms and conditions set forth in the Deposit Agreement. The Deposit
Agreement (copies of which are on file at the Corporate Office, the office
maintained by the Depositary in the Borough of Manhattan, the City of New York
which at the time of the execution of the Deposit Agreement is located at One
Wall Street, New York, New York 10286 (the "New York Office") and at the office
of any agent of the Depositary) sets forth the rights of holders of Receipts and
the rights and duties of the Depositary. The statements made on the face and the
reverse of this Receipt are summaries of certain provisions of the Deposit
Agreement and are subject to the detailed provisions thereof, to which reference
is hereby made.

          The Company will furnish to any holder of this Receipt without charge,
upon request addressed to its executive office, a full statement of the
designation, relative rights, preferences and limitations of the shares of each
authorized class, and of each class of preferred shares authorized to be issued,
so far as the same may have been fixed, and a statement of the authority of the
Board of Directors of the Company to designate and fix the relative rights,
preferences and limitations of other classes.

                                      A-3
<PAGE>

                               FORM OF ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____ the within Receipt and all rights and interests represented
by the Depositary Shares evidenced thereby, and hereby irrevocably constitutes
and appoints _______ his attorney, to transfer the same on the books of the
within-named Depositary, with full power of substitution in the premises.

Dated:                                  Signature:
                                                  ------------------------------
                                                  NOTE: The signature to this
                                                  assignment must correspond
                                                  with the name as written upon
                                                  the face of the Receipt in
                                                  every particular, without
                                                  alteration or enlargement, or
                                                  any change whatever.

                                      A-4

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