Document:

THE CYPRESS GROUP L.L.C.
                         65 East 55th Street, 28th Floor
                            New York, New York 10022

                                                         October 17, 2004

Scottish Re Group Limited
Crown House, 3rd Floor
4 Par-la-Ville Road
Hamilton, Bermuda HM 12

Ladies and Gentlemen:

          Reference is made to the Securities Purchase Agreement, dated the date
hereof (the "Purchase Agreement"), among Scottish Re Group Limited ("Scottish
Re"), Cypress Merchant B Partners II (Cayman) L.P. ("CMB II"), Cypress Merchant
Banking II-A C.V. ("CMB II-A"), Cypress Side-by-Side (Cayman) L.P. ("CSS") and
55th Street Partners II (Cayman) L.P. ("55th Street Partners" and, together with
CMB II, CMB II-A and CSS, the "Cypress Entities"). Terms not defined herein
shall have the meanings ascribed to them in the Purchase Agreement.

          CMB II hereby agrees that as promptly as practicable (but in no event
more than five business days) after the date of this letter agreement it will
mail the form attached hereto as Exhibit A to the five largest investors in CMB
II (each an "Investor" and collectively, the "Investors") and will request each
Investor to respond to such request for information within 15 days after the
date of such mailing. At the end of such 15 day period (the "Response
Deadline"), CMB II will forward to you all of the information (the "Investor
Information") it has received from the Investors in response to such request for
information. CMB II also agrees that it will complete and return to Scottish Re
a Cypress questionnaire (the "Cypress Questionnaire") in the form attached
hereto as Exhibit B by the Response Deadline with respect to the persons listed
in Annexes A and B hereto and any subsidiaries of, or investment funds managed
or advised by, such persons that Scottish Re identifies to CMB II in writing,
not later than 10 days after the date hereof, as being actual shareholders of
Scottish Re (the "Supplement"). If the Investor Information and the completed
Cypress Questionnaire indicate that, after giving effect to the purchase of the
Purchased Securities, the total Controlled Shares of the Cypress Entities would
be equal to 10% or more of the outstanding Ordinary Shares, then the Cypress
Entities and Scottish Re agree to decrease the number of Ordinary Shares to be
purchased pursuant to the terms of the Purchase Agreement to such number of
Ordinary Shares which would result in the total Controlled Shares of the Cypress
Entities upon consummation of the Closing being less than 10% of the outstanding
Ordinary Shares. In exchange for the decrease in the number of Ordinary Shares
to be purchased by the Cypress Entities at Closing, the Cypress Entities and
Scottish Re will increase the number of Class C Warrants to be purchased by a
corresponding amount. Notwithstanding the foregoing, if such decrease in the
number of Ordinary Shares to be purchased would result in the Cypress Entities
purchasing Ordinary Shares representing less than 8% of the outstanding Ordinary
Shares (after giving effect to such issuance), the Cypress Entities may elect,
by written notice given to Scottish Re not later than November 15, 2005, to
terminate

<PAGE>

the Purchase Agreement. If the Investor Information and the completed Cypress
Questionnaire indicate that, after giving effect to the purchase of the
Purchased Securities, the total Controlled Shares of the Cypress Entities would
be equal to less than 10% of the outstanding Ordinary Shares, then the Cypress
Entities and Scottish Re agree that such determination shall be binding and
conclusive for purposes of determining whether the issuance of the Purchased
Securities at the Closing is permitted by the Articles of Association of
Scottish Re, unless the Cypress Entities have actual knowledge of a change in
the ownership structure of the Cypress Entities.

          The parties expressly agree that except as required by law or legal
process, the terms and existence of this agreement, and the information provided
pursuant to the terms hereof, shall be kept confidential by the parties unless
required to be disclosed pursuant to the U.S. securities laws and shall not,
without the prior written consent of the Cypress Entities, be relied upon by any
person other than Scottish Re. Notwithstanding anything herein to the contrary,
any party to this agreement (and any employee, representative, or other agent of
any party to this agreement) may disclose to any and all persons, without
limitation of any kind, the U.S. federal income tax treatment and tax structure
of the transactions contemplated by this agreement (the "Transactions") and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure; provided,
however, that neither party (nor any employee, representative or other agent
thereof) shall disclose any information (a) that is not relevant to an
understanding of the U.S. federal income tax treatment or tax structure of the
Transactions, including the identity of any party to this agreement (or its
employees, representatives, or other agents) or other information that could
lead any person to determine such identity, (b) to the extent such disclosure
could result in a violation of any federal or state securities laws or (c) until
the earlier of (i) the date of the public announcement of discussions relating
to the Transactions, (ii) the date of the public announcement of the
Transactions and (iii) the date of the execution of an agreement to enter into
the Transactions.

          This letter shall be governed by and construed in accordance with the
laws of the State of New York.

                                        Very truly yours,

                                        2

<PAGE>

                    CYPRESS MERCHANT B PARTNERS II (CAYMAN) L.P.

                   By: Cypress Associates II (Cayman) L.P., its general partner

                       By: CMBP II (Cayman) Ltd., its general partner

                            By: /s/ Jeffrey P. Hughes
                                --------------------------
                                Name:  Jeffrey P. Hughes
                                Title: Director

                   CYPRESS MERCHANT BANKING II-A C.V.

                   By: Cypress Associates II (Cayman) L.P., its managing
                       general partner

                       By: CMBP II (Cayman) Ltd., its general partner

                            By: /s/ Jeffrey P. Hughes
                                --------------------------
                                Name:  Jeffrey P. Hughes
                                Title: Director

                   CYPRESS SIDE-BY-SIDE (CAYMAN) L.P.

                   By: Cypress Associates II (Cayman) L.P., its general partner

                       By: CMBP II (Cayman) Ltd., its general partner

                            By: /s/ Jeffrey P. Hughes
                                --------------------------
                                Name:  Jeffrey P. Hughes
                                Title: Director

                   55TH STREET PARTNERS II (CAYMAN) L.P.

                   By: Cypress Associates II (Cayman) L.P., its general partner

                       By: CMBP II (Cayman) Ltd., its general partner

                            By: /s/ Jeffrey P. Hughes
                                --------------------------
                                Name:  Jeffrey P. Hughes
                                Title: Director
                                Title:

                                        3

<PAGE>

ACCEPTED AND AGREED:

SCOTTISH RE GROUP LIMITED

By: /s/ Paul Goldean
    -------------------------------
    Name:  Paul Goldean
    Title: Executive Vice President
           and General Counsel<PAGE> 1

                              AGREEMENT AND RELEASE

This  AGREEMENT AND RELEASE,  dated  October 19th,  2004, is entered into by and
between CENTRAL BANCORP,  INC. (the "Company"),  CENTRAL  CO-OPERATIVE BANK (the
"Bank") (referred to collectively herein as "Central"), and MICHAEL K. DEVLIN.

WHEREAS, you have been an employee of Central; and

WHEREAS,  your employment  relationship with Central will terminate as set forth
below.

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:

1.   LAST DAY OF EMPLOYMENT.  You have voluntarily resigned from employment with
Central, and your last day of employment with Central was October 18th, 2004.

2.   PAYMENTS AND BENEFITS.  Provided you sign  and comply with your obligations
as stated in this  Agreement  and Release,  and do not  subsequently  revoke the
release  of  claims  contained  in  Paragraph  5 hereof  within  seven  (7) days
following  the date you sign this  Agreement  and Release,  Central will provide
certain severance  payments and benefits to you as set forth in Section B of the
attached  Appendix A to this  Agreement,  commencing on October 27th,  2004 (the
"Effective  Date") and continuing  thereafter as set forth in Appendix A. Except
as otherwise set forth in this  Agreement and Release and the attached  Appendix
A, from and after the  Effective  Date,  you will not be entitled to receive any
further compensation or benefits from Central.

3.   SEVERANCE  AGREEMENT.   You  acknowledge  and  agree  that   the  severance
agreement between you and Central,  dated as of February 25, 2002, is terminated
as of your last day of employment and Central will have no further obligation to
you under said severance agreement as of such date.

4.   RETURN OF PROPERTY.  On or before your last day of employment, you agree to
return to  Central  all of its  property,  including,  without  limitation,  all
proprietary information utilized during the course of your employment.

5.   RELEASE OF CLAIMS.

     (a)   In  consideration  of the payments and benefits provided in paragraph
     2 and Appendix A, you hereby agree,  for yourself,  your heirs,  executors,
     administrators,  successors  and  assigns  (hereinafter  referred to as the
     "Releasors")   that  you  fully  release  and  discharge  Central  and  its
     affiliates,  officers, directors, employees, agents, successors and assigns
     (all such persons and entities  hereinafter referred to as the "Releasees")
     from all claims,  demands,  lawsuits,  causes of action or

<PAGE> 2

     liabilities that you or the Releasors may presently have or may have in the
     future,  whether known or unknown,  arising out of your employment with, or
     separation  from,  Central  (except for any claims arising from a breach of
     this Agreement and Release)  ("Claims").  You further agree that the Claims
     you are releasing include, without limitation, claims arising under the Age
     Discrimination in Employment Act and Executive Order 11141,  which prohibit
     age discrimination in employment, and any federal, state, or local statute,
     regulation,  common law, or other law involving discrimination of any type.
     This  Agreement  and Release  does not affect your vested  rights,  if any,
     under any retirement  plans sponsored by Central in which you  participate,
     which survive unaffected by this Agreement and Release.

     (b)   You  further  agree that you will never institute a claim of any kind
     against the Releasees,  or those  associated with the Releasees,  including
     claims filed with the U.S. Equal Employment  Opportunity  Commission or any
     comparable  state or local agency,  as well as any state or federal  court,
     including, but not limited to, claims related in any way to your employment
     or  termination of employment  with Central.  If you violate this Agreement
     and Release by suing the Releasees or those  associated with the Releasees,
     you agree that you will pay all costs and  expenses of  defending  the suit
     incurred  by  the  Releasees  or  their  associates,  including  reasonable
     attorneys' fees.

     (c)   You further agree to cooperate with Central in the  resolution of any
     legal matters arising after the date of this Agreement and Release.

6.   CONSIDERATION OF AGREEMENT AND RELEASE PRIOR TO SIGNATURE.

     (a)   In  connection  with  your release of claims pursuant to paragraph 5,
     you  acknowledge  and agree that you have carefully read this paragraph and
     fully  understand all of its provisions,  including that you have agreed to
     release and forever  discharge the Releasees  from any legal action arising
     out of your  employment  or  termination  of employment  with Central.  You
     further acknowledge and agree that you have been advised to consult with an
     attorney  prior to releasing such claims and that you did so, if at all, to
     the extent you deemed appropriate.

     (b)   Before signing this Agreement and Release, you were not provided with
     the  opportunity to consider this Agreement and Release for twenty-one (21)
     calendar days before your termination date and you have voluntarily  waived
     this twenty-one (21) day  consideration  period.  You agree and acknowledge
     that:  (1) you have fully  considered  this  Agreement  and Release  before
     signing it; (2) you have  carefully  read and fully  understand  all of its
     provisions;  and (3) you are  entering  into  this  Agreement  and  Release
     voluntarily.

     (c)   Central  has  made no representations,  promises or agreements of any
     kind to you in connection  with your decision to release claims pursuant to
     this

                                       2

<PAGE> 3

     Agreement  and Release,  except for those set forth in this  Agreement  and
     Release and the attached Appendix A.

7.   REVOCATION PERIOD FOR  RELEASE OF CLAIMS.  The  release of claims contained
in  paragraph  5 hereof  is not  effective  or  enforceable  for  seven (7) days
following  the date you sign this  Agreement and Release and you may revoke such
release of claims during that time.  To do so, you must return a written  notice
of revocation by facsimile,  hand delivery or overnight mail to John D. Doherty,
Chairman,  President and Chief Executive  Officer,  Central  Bancorp,  Inc., 399
Highland Avenue, Somerville, Massachusetts 02144. This must be done prior to the
end of the seventh (7th) day after you sign this  Agreement and Release.  If Mr.
Doherty does not receive a written  revocation  by the end of this seven (7) day
period,  this Agreement and Release will become fully  enforceable at that time.
Any revocation of the release of claims contained in paragraph 5 will not affect
your  resignation and termination of employment  pursuant to paragraph 1 of this
Agreement and Release.

8.   WITHHOLDING.  Any and all payments listed in this Agreement and Release and
in the attached Appendix A shall be subject to such federal, state and local tax
withholding as properly  applies,  and to such deductions for withholding as may
be required under applicable tax laws.

9.   NON-DISPARAGEMENT.

     (a)   You  hereby  agree  that  you  will  not make, publish, distribute or
     permit to be made,  published or  distributed,  any remarks or  statements,
     whether oral,  written or in electronic form, that disparage Central or any
     current or former officer,  director or employee thereof,  except as may be
     required by law.  Nothing  herein shall  preclude  your  compliance  with a
     subpoena or other lawful process.

     (b)   Central  (for itself  and on behalf of its  officers  and  directors)
     covenants that it shall not make, publish, distribute or permit to be made,
     published or distributed, any remarks or statements,  whether oral, written
     or in electronic  form,  that disparage  you,  except as may be required by
     law.  Nothing herein shall preclude  Central from complying with a subpoena
     or other lawful process.

10.  PRESS RELEASE.

     You hereby agree that Central may issue the press release  attached  hereto
announcing your resignation.

11.  CONFIDENTIALITY.  During  the  course  of your  employment,  you  may  have
received,  developed  or learned of  confidential  and  proprietary  information
regarding Central

                                       3

<PAGE> 4

and its  operations.  You agree  that,  without  the prior  written  consent  of
Central,  you will not at any time  following  your  termination  of employment,
disclose to any person,  firm,  corporation or other entity,  any proprietary or
confidential  information regarding Central or its operations,  or in any manner
use such  proprietary or confidential  information,  unless such information has
been otherwise made known to the public.

12.  CONSEQUENCE OF BREACH.   If  you  breach  any  of  the  provisions  of this
Agreement  and  Release,  you will  forfeit  the right to  receive  any  amounts
remaining unpaid under this Agreement and Release and, further,  Central will be
entitled to such legal  remedies as may be available as a result of your breach.
If Central  breaches any of the  provisions of this  Agreement and Release,  you
will be entitled to such legal  remedies as may be  available as a result of its
breach.

13.  GOVERNING LAW/ARBITRATION.  This Agreement and Release shall be governed in
all  respects  by the laws of the  Commonwealth  of  Massachusetts.  The parties
agree, however, that any controversy or claim arising out of or relating to this
Agreement  and  Release,  or the  breach  thereof,  shall be settled by means of
arbitration administered by the American Arbitration Association under its rules
with respect to  employment  disputes,  and further,  that  arbitration  in this
manner  shall  be the  exclusive  remedy  for any  dispute  arising  under  this
Agreement and Release.

14.  ENTIRE AGREEMENT; MODIFICATION. This Agreement and Release and the attached
Appendix A constitute the entire agreement between the parties pertaining to the
subject matter of this Agreement and Release. This Agreement and Release may not
be modified or  cancelled  in any manner  except by means of a written  document
signed by the parties. The paragraph headings used in this Agreement and Release
are  included  solely  for  purposes  of  convenience  and not for  purposes  of
interpreting this Agreement and Release.

15.  ENFORCEABILITY.  If any  provision of this  Agreement  and Release is found
unenforceable,  all other provisions will remain fully  enforceable and continue
in effect.  Moreover,  if any one or more of the  provisions  contained  in this
Agreement  and Release is held to be  excessively  broad as to duration,  scope,
activity or subject, the parties agree that such provision(s) will be limited or
reduced so as to be enforceable to the full extent permissible by law.

THIS  AGREEMENT  AND  RELEASE  INCLUDES A RELEASE OF KNOWN AND  UNKNOWN  CLAIMS.
PLEASE  READ THIS  AGREEMENT  AND  RELEASE  CAREFULLY  AND  CONSIDER  ALL OF ITS
PROVISIONS BEFORE YOU SIGN IT.

                                       4
<PAGE> 5

IN WITNESS WHEREOF,  the parties have executed this Agreement and Release on the
19th day of October, 2004.

ATTEST:                             CENTRAL CO-OPERATIVE BANK

/s/ Rhoda K. Astone                 /s/ John D. Doherty
------------------------            ------------------------------------
                                    By:    John D. Doherty
                                    Title: President and CEO

ATTEST:                             CENTRAL BANCORP, INC.

/s/ Rhoda K. Astone                 /s/ John D. Doherty
------------------------            ------------------------------------
                                    By:    John D. Doherty
                                    Title: Chairman, President and CEO

WITNESS:

/s/ Paul S. Feeley                  /s/ Michael K. Devlin
------------------------            ------------------------------------
                                    Michael K. Devlin

                                       5

<PAGE> 6

                                   APPENDIX A
                                   ----------

This Appendix A to the Agreement  and Release sets forth the  understandings  of
Central and  Michael K. Devlin (the  "Executive")  regarding  the  payments  and
benefits due in connection with his termination of employment:

A.   PAYMENTS UPON RESIGNATION

Regardless  of whether  or not he revokes  the  release  of claims  pursuant  to
paragraph 7 of the Agreement and Release,  Executive shall be paid the following
in connection with his resignation effective October 18th, 2004:

     1.    Executive  will receive his base salary through his termination  date
     of October 18th,  2004, on the next  regularly  scheduled pay date (October
     22nd, 2004).

     2.    Executive  will  receive  an  additional  cash  payment  of $6,099.44
     representing  two weeks of accrued  and unused  vacation  leave on the next
     regularly scheduled pay date (October 22nd, 2004).

B.   PAYMENTS UPON EXPIRATION OF REVOCATION PERIOD

Provided Executive does not revoke the release of claims pursuant to paragraph 7
of the Agreement and Release within the applicable  seven day period,  Executive
shall become entitled to receive the following payments, effective as of October
27th, 2004:

     1.    Executive  will  receive  three  months  of base  salary,  or a total
     severance  payment  of  $39,646.38  (exclusive  of  applicable  withholding
     taxes), payable as follows:

                    $3,049.72                        October 29, 2004
                    $3,049.72                        November 5, 2004
                    $3,049.72                        November 12, 2004
                    $3,049.72                        November 19, 2004
                    $3,049.72                        November 26, 2004
                    $3,049.72                        December 3, 2004
                    $3,049.72                        December 10, 2004
                    $3,049.72                        December 17, 2004
                    $3,049.72                        December 24, 2004
                    $3,049.72                        December 31, 2004
                    $3,049.72                        January 7, 2005
                    $3,049.72                        January 14, 2005
                    $3,049.72                        January 21, 2005

     Total:        $39,646.36

<PAGE> 7

     2.    Executive's  will  receive  an  additional  cash payment equal to the
     value of three  months  of the life  insurance  premiums  that  would  have
     otherwise been paid by Central had Executive not terminated employment.

C.   ADDITIONAL PROVISIONS

     1.    Executive  shall not be entitled to receive an annual bonus  pursuant
     to any bonus or incentive plans sponsored by Central.

     2.    The payments and benefits  listed in Section B  shall become  payable
     only if Executive  signs the  Agreement and Release and does not revoke the
     release of claims contained therein within seven (7) days after signing it.

     3.    All  payments  and  benefits  listed  above  shall be reduced by  any
     applicable federal, state, and/or local income or payroll tax withholdings.

     4.    Any  other vested and accrued benefits to which Executive is entitled
     upon  termination  of  employment  under any other  employee  benefit  plan
     sponsored by Central  (i.e.,  pension  plan,  401(k) plan,  employee  stock
     ownership plan) will be paid or distributed as provided for under the terms
     of those plans.

     5.    The treatment of any stock options or other stock-based  compensation
     following  Executive's  termination of employment  shall be governed by the
     terms of the plans  under  which such  awards  were  granted  and any award
     agreements or similar  notices  issued by Central in  connection  with such
     awards.

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