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                                 CLIFFORD CHANCE

                                 EXECUTION COPY

                          LONDON PACIFIC GROUP LIMITED

                                   AS BORROWER

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

                                    AS LENDER

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                                 U.S.$50,000,000
                      MULTICURRENCY TERM FACILITY AGREEMENT
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<TABLE>

                                                         CONTENTS
<S>                                                                                                   <C>
Clause                                                                                                 Page
1.     Definitions And Interpretation..................................................................1
2.     The Facility...................................................................................10
3.     Utilisation of the Facility....................................................................11
4.     Multicurrency Option...........................................................................12
5.     Interest Periods...............................................................................14
6.     Payment and Calculation of Interest............................................................15
7.     Letter of Credit Commission....................................................................15
8.     Market Disruption and Alternative Interest Rates...............................................16
9.     Borrower's Liabilities in relation to Letters of Credit........................................17
10.    Repayment......................................................................................17
11.    Cancellation and Prepayment....................................................................18
12.    Taxes..........................................................................................18
13.    Tax Receipts...................................................................................19
14.    Increased Costs................................................................................20
15.    Illegality.....................................................................................21
16.    Mitigation of Adverse Circumstances............................................................21
17.    Representations................................................................................21
18.    Financial Information..........................................................................24
19.    Financial Condition............................................................................25
20.    Covenants......................................................................................28
21.    Events Of Default..............................................................................29
22.    Commitment Commission and Fees.................................................................32
23.    Costs and Expenses.............................................................................33
24.    Additional Borrowers and Guarantors............................................................34
25.    Guarantee And Indemnity of the Parent..........................................................35
26.    Default Interest and Break Costs...............................................................39
27.    Borrower's Indemnities.........................................................................40
28.    Currency of Account and Payment................................................................41
29.    Payments.......................................................................................42
30.    Set-Off........................................................................................43
31.    Assignments....................................................................................43

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32.    Calculations and Evidence of Debt..............................................................44
33.    Remedies and Waivers, Partial Invalidity.......................................................45
34.    Notices........................................................................................46
35.    Governing Law..................................................................................47
36.    Jurisdiction...................................................................................47

Schedule 1           THE GUARANTORS...................................................................49

Schedule 2           CONDITIONS PRECEDENT.............................................................50

Schedule 3           UTILISATION REQUEST..............................................................51

Schedule 4           EXISTING ENCUMBRANCES............................................................52

Schedule 5           FORM OF COMPLIANCE CERTIFICATE...................................................54

Schedule 6           ACCESSION AGREEMENT..............................................................57

Schedule 7           MANDATORY COSTS..................................................................62

Schedule 8           FORM OF GUARANTEE................................................................64

Schedule 9           FORM OF LETTER OF CREDIT.........................................................69

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THIS AGREEMENT is made on 2 May 2000

BETWEEN

(1)      LONDON PACIFIC GROUP LIMITED registered no. 30810 (the "Parent"); and

(2)      THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND (the "Bank").

IT IS AGREED as follows.

1.       DEFINITIONS AND INTERPRETATION

1.1      Definitions
        In this Agreement:

        "Accession Agreement" means an accession agreement  substantially in the
         form set out in Schedule 6 (Accession Agreement).

        "Additional  Borrower"  means any company which has become an Additional
        Borrower  in  accordance  with  Clause  24  (Additional   Borrowers  and
        Guarantors).

        "Additional  Borrower  Conditions   Precedent"  means  those  conditions
        precedent specified in the Accession Agreement and referred to in Clause
        24.1 (Accession of Borrowers).

        "Advance" means an advance (as from time to time  consolidated,  divided
        or reduced by repayment, in accordance with the terms hereof) made or to
        be made by the Bank hereunder.

        "Authorised  Signatory" means, in relation to an Obligor, any person who
        is duly  authorised  (in such manner as may be reasonably  acceptable to
        the Bank) and in  respect of whom the Bank has  received  a  certificate
        signed by a director or another  Authorised  Signatory  of such  Obligor
        setting out the name and  signature of such person and  confirming  such
        person's authority to act.

        "Available  Facility"  means,  at any time,  save as otherwise  provided
         herein, $50,000,000 less:

     (a)  the Original  Dollar  Amount of each Advance  which has then been made
          and not repaid or prepaid prior to the Termination Date;

     (b)  the  Original  Dollar  Amount of each Letter of Credit  which has been
          issued  by the Bank  and for  which  the Bank has not been  reimbursed
          prior to the Termination Date.

         "Available  Group Net Assets" means the value of the net assets of each
         member of the Group (excluding  investments in subsidiaries)  excluding
         (a) the assets of London  Pacific  Life  Annuity  Company and any other
         member of the Group which is not  permitted  by law or any  requirement
         (whether or not having the force of law) of any
<PAGE>

         competent  authority in any jurisdiction in which it is incorporated or
         carries on business  to  guarantee  the  liabilities  of the  Borrowers
         hereunder  or where the giving of such a  guarantee  would  cause it to
         breach any  applicable  solvency or other like ratio required by law or
         any such  competent  authority and (b) any assets to which  recourse in
         respect of a  guarantee  of the  liabilities  of the  Borrowers  is not
         permitted by law or any requirement (whether or not having the force of
         law) of any  competent  authority  in any  jurisdiction  in  which  the
         relevant  member of the Group is incorporated or carries on business as
         shown in the latest audited  consolidated  financial  statements of the
         Parent and the latest relevant  financial  statements of each member of
         the Group.

        "Available  Letter of Credit  Facility"  means,  at any time and save as
        otherwise  provided herein,  $10,000,000 less the Original Dollar Amount
        of each  Letter of Credit  which has been  issued and for which the Bank
        has not been reimbursed prior to the Termination Date.

        "Borrowers" means the Parent and any Additional Borrower hereunder.

        "Business  Day" means a day (other than a Saturday  or Sunday)  which is
        not a public holiday and on which banks  generally are open for business
        in London and New York City and in  relation to any date for the payment
        or purchase of any sum denominated in:

     (c)  an Optional  Currency (other than the euro),  banks generally are open
          for business in the principal  financial centre of the country of such
          Optional Currency; or

     (d)  the  euro,  banks  generally  are  open  for  business  in one or more
          Participating member states specified by the Bank from time to time.

        "Cash Collateral" means, in relation to a Letter of Credit, a deposit in
        such interest-bearing  account or accounts as the Bank may specify, such
        deposit  and  account  to be  secured  in  favour  of,  and on terms and
        conditions acceptable to, the Bank.

         "Compliance Certificate" means a certificate  substantially in the form
         set out in Schedule 5 (Form of Compliance Certificate).

        "Dispute" means any dispute referred to in Clause 36 (Jurisdiction).

        "Dollar Amount" means:

     (a)  in relation to an Advance,  its Original  Dollar  Amount as reduced by
          the proportion (if any) of such Advance which has been repaid;

     (b)  in relation to a Letter of Credit at any time

         (i)      if such  Letter of  Credit  is  denominated  in  dollars,  the
                  maximum  actual and  contingent  liability of the Bank at such
                  time; and
<PAGE>

         (ii)     if  such  Letter  of  Credit  is  denominated  in an  Optional
                  Currency,  the equivalent in dollars of the maximum actual and
                  contingent  liability of the Bank at such time,  calculated as
                  at the later of the  dates  which  falls (a) two (2)  Business
                  Days before its issue date or any renewal date or (b) the most
                  recent L/C Valuation Date; and

     (c)  in relation to the  Outstandings,  the aggregate of the Dollar Amounts
          of each outstanding Advance and Letter of Credit.

         "EMU" means Economic and Monetary Union as  contemplated  in the Treaty
         on European Union.

         "EMU Legislation" means legislative  measures of the European Union for
         the  introduction  of  changeover to or operation of the euro in one or
         more member states being in part legislative measures to implement EMU.

         "Encumbrance"  means  (a) a  mortgage,  charge,  pledge,  lien or other
         encumbrance  securing any obligation of any person, (b) any arrangement
         under  which  money or claims  to, or the  benefit  of, a bank or other
         account may be applied,  set off or made  subject to a  combination  of
         accounts  so as to effect  discharge  of any sum owed or payable to any
         person or (c) any other type of preferential arrangement (including any
         title transfer and retention arrangement) having a similar effect.

         "Event of Default" means any  circumstance  described as such in Clause
         21 (Events of Default).

         "Existing  Additional  Borrower"  has the  meaning as set out in Clause
         24.6 (Authorisation).

         "Existing  Amount"  means,  in  relation  to any  Advance  and  any two
         successive  Interest  Periods  relating  thereto,  the  amount  of such
         Advance at the beginning of the last day of the first of those Interest
         Periods less any part thereof falling to be repaid on such day.

         "Expiry Date" means,  in relation to any Letter of Credit,  the date on
         which the maximum aggregate liability thereunder is reduced to zero.

         "Facility"  means the  multicurrency  term loan  facility and letter of
         credit facility granted to the Borrowers in this Agreement.

         "Facility Office" means the office identified with the Bank's signature
         below or such other office as it may from time to time select by notice
         to the Parent.

         "Group" means the Parent and its subsidiaries for the time being.

         "Guarantors"  means the Parent and any  subsidiary  of the Parent which
         has then guaranteed amounts owing by the Borrowers  hereunder and will,
         initially,  be the  subsidiaries  whose names are set out in Schedule 1
         (Guarantors)  and, in the event that a subsidiary  of the Parent should
         itself become an Additional Borrower, that subsidiary.
<PAGE>

         "Guarantor  Conditions  Precedent"  means  those  conditions  precedent
         referred to in Clause 24 (Additional Borrowers and Guarantors).

         "Guaranteeing  Group"  means,  at any time,  the Parent and each of the
         Guarantors (other than the Parent) at that time.

         "Guaranteeing  Group Net  Assets"  means the value of the net assets of
         each member of the  Guaranteeing  Group  excluding (a)  investments  in
         subsidiaries  and (b) any  assets to which  recourse  in  respect  of a
         guarantee  of amounts  due  hereunder  is not  permitted  by law or any
         requirement  (whether or not having the force of law) of any  competent
         authority  in any  jurisdiction  in which  the  relevant  member of the
         Guaranteeing Group is incorporated or carries on business less loans to
         members of the Group which are not members of the Guaranteeing Group as
         shown in the latest audited  consolidated  financial  statements of the
         Parent and the latest relevant  financial  statements of each member of
         the Guaranteeing Group.

         "Initial  Repayment  Date"  means the date  falling  twenty four months
         after the date of this Agreement.

         "Interest Period" means, save as otherwise provided herein any of those
         periods mentioned in Clause 5.1 (Interest Periods).

         "L/C Amount" means:

     (a)  each sum paid or due and payable by the Bank to the  beneficiary  of a
          Letter of Credit pursuant to the terms of such Letter of Credit; and

     (b)  all  liabilities,  costs  (including,  without  limitation,  any costs
          incurred in funding any amount which falls due from the Bank under the
          Letter of Credit),  claims,  losses and expenses which the Bank incurs
          or sustains in connection with a Letter of Credit.

         in each  case  which  has not  been  reimbursed  pursuant  to  Clause 9
         (Borrowers' Liabilities in relation to Letters of Credit).

         "L/C  Commission  Rate" means a letter of credit  commission rate of 35
         pence per (pound)100 for the first 3 months of the letter of credit and
         12 pence per (pound)100 thereafter.

         "L/C  Valuation  Date" means the first Business Day which falls six (6)
         months  after the date  hereof and each day  falling at six (6) monthly
         intervals hereafter.

         "Letter of Credit" means,  save as otherwise  provided herein, a letter
         of  credit  issued or to be  issued  by the Bank  pursuant  to Clause 3
         (Utilisation of the Facility)  substantially  in the form as set out in
         Schedule 9 (Form of Letter of  Credit) or in such other form  requested
         by the Borrower which is acceptable to the Bank.

         "LIBOR" means, in relation to any amount to be advanced to, or owing by
         an Obligor hereunder on which interest for a given period is to accrue,
         the rate per annum at which the Bank was offering to prime banks in the
         London  interbank  market  deposits

<PAGE>

         in the  currency  of such amount for such period at or about 11.00 a.m.
         (London time) on the Quotation Date for such period.

         "Loan"  means  the  aggregate  principal  amount  for  the  time  being
         outstanding hereunder.

         "Mandatory  Cost Rate" means the rate  determined  in  accordance  with
         Schedule 7 (Mandatory Costs).

         "Margin" means 1.0 per cent. per annum.

         "Material  Adverse  Effect" means a material  adverse effect on (a) the
         business,  operations,  property, condition (financial or otherwise) or
         prospects of the Group taken as a whole;  (b) the ability of an Obligor
         to perform its obligations under this Agreement or any guarantee of the
         Agreement; or (c) the validity or enforceability of the Agreement, such
         guarantee or the rights or remedies of any party thereunder.

         "New Amount"  means,  in relation to any Advance and any two successive
         Interest  Periods relating  thereto,  the amount of such Advance at the
         beginning of the second of those  Interest  Periods,  as  determined in
         accordance with Clause 4.3 (Amounts of Advances).

         "Obligors" means the Borrowers and the Guarantors.

         "Optional Currency" means any currency (except dollars) which:

     (a)  is freely transferable and freely convertible into dollars;

     (b)  is available to banks in the relevant interbank market; and

     (c)  has been  previously  approved  in writing by the Bank as an  optional
          currency for the purpose of any  utilisation,  or  denomination of any
          Advance during an Interest Period relating thereto, at least three (3)
          Business  Days prior to delivery of the  Utilisation  Request for such
          Advance or the request under Clause 4.1 (Parent's Request for Optional
          Currency),

         but, in the case of the currency of any Participating Member State, the
         euro shall be an Optional Currency only in the form of the euro unit.

         "Original Dollar Amount" means, in relation to an Advance:

     (a)  where such Advance came into  existence as a result of a drawing under
          the Facility,  the amount specified as such in the Utilisation Request
          relating thereto;

     (b)  where such Advance came into existence upon the  consolidation  of two
          or more Advances,  the aggregate of the Dollar Amounts of the Advances
          so consolidated; and
<PAGE>

     (c)  where  such  Advance  came  into  existence  upon the  division  of an
          Advance, the amount specified as such by the Parent pursuant to Clause
          5.4 (Division of Advances).

         "Outstanding  Amounts"  has  the  meaning  as set out in  Clause  25.10
         (Suspense Accounts).

         "Outstandings"  means at any time,  the aggregate of the Dollar Amounts
         of each  outstanding  Advance  and the Dollar  Amounts  of the  maximum
         actual  and  contingent  liabilities  of the Banks in  respect  of each
         outstanding Letter of Credit.

         "Participating  Member  State" means any member state which has adopted
         the euro as its lawful currency at the relevant time.

         "Permitted Encumbrance" means:

     (a)  any Encumbrance existing on the date hereof as specified in Schedule 4
          (Existing Encumbrances) and provided that the principal amount secured
          thereby is not hereafter increased; or

     (b)  any  Encumbrance on any property or assets which is outstanding at the
          time such property or assets are acquired by a member of the Group and
          provided that the principal  amount  secured  thereby is not increased
          after its acquisition; or

     (c)  any  Encumbrance  created  by a member of the  Group  prior to and not
          created  or agreed to be created in  contemplation  of its  becoming a
          member of the Group and provided  that the  principal  amount  secured
          thereby is not subsequently increased.

         "Potential Event of Default" means any event which may become (with the
         passage of time, the giving of notice,  the making of any determination
         hereunder or any combination thereof) an Event of Default.

         "Proceedings"   means  any   proceedings   referred  to  in  Clause  36
         (Jurisdiction).

         "Quotation Date" means, in relation to any period for which an interest
         rate is to be determined  hereunder,  the day on which quotations would
         ordinarily be given by prime banks in the relevant interbank market for
         deposits  in the  currency  in  relation  to which  such  rate is to be
         determined for delivery on the first day of that period, provided that,
         if, for any such period,  quotations  would ordinarily be given on more
         than one date,  the Quotation Date for that period shall be the last of
         those dates.

         "Relevant  Entity"  means any  subsidiary  of the Parent  (including  a
         Guarantor) and any holding company of any such subsidiary.

         "Repayment  Date" means the Initial  Repayment Date or, if the Bank has
         agreed to an extension of the date for  repayment of the Loan  pursuant
         to Clause 10.2 (Consent to Request for Extension), the then latest date
         for repayment of the Loan.
<PAGE>

         "Repeated Representations" means each of the representations set out in
         Clauses 17.1 (Status),  17.3 (Binding Obligations),  17.4 (Execution of
         this Agreement),  17.7 (No Material  Proceedings),  17.10 (Validity and
         Admissibility  in  Evidence),  17.11  (Claims Pari Passu) and 17.17 (No
         Event of Default).

         "Subsequent  Participant"  means a Member State that adopts the euro as
         its lawful currency after 1 January 1999.

         "Term"  means,  in relation to a Letter of Credit,  the period from its
         Utilisation Date until its Expiry Date.

         "Termination  Date"  means  the day  which  is one  month  prior to the
         Repayment Date.

         "Treaty on European  Union"  means the Treaty of Rome of 25 March 1957,
         as amended by the Single  European  Act 1986 and the  Maastrict  Treaty
         (which was signed at Maastrict  on 7 February  1992 and came into force
         on 1 November 1993).

         "Unpaid Sum" means the unpaid balance of any of the sums referred to in
         Clause 26.1 (Default Interest Periods).

         "Utilisation Date" means, in relation to an Advance,  the date on which
         it is to be made and, in  relation  to a Letter of Credit,  the date on
         which it is to be issued.

         "Utilisation Request" means a request substantially in the form set out
         in Schedule 3 (Utilisation Request).

1.2      Interpretation
         Any reference in this Agreement to:

         the "Bank" shall be  construed so as to include its and any  subsequent
         successors in accordance with their respective interests;

         "borrowings"  means any  obligation  for the  payment or  repayment  of
         money, whether present or future in respect of:

     (a)  amounts raised by borrowing and  outstanding  under any loan agreement
          or acceptance under any acceptance credit facility;

     (b)  amounts  raised and  outstanding  under any bill  discounting  or note
          purchase facility;

     (c)  amounts  raised  and  outstanding  under  any  debenture,  loan  stock
          instrument or commercial paper programme;

     (d)  the amount of any  liability  in  respect  of leases or hire  purchase
          contracts  which  would,  in  accordance  with US GAAP (as used in the
          Parent's most recent audited annual consolidated  financial statements
          from time to time) be  treated  as  finance  or  capital  leases  (but
          excluding  any such  finance or capital  leases  which have a value of
          less than (pound)200,000);
<PAGE>

     (e)  the  amount of any  liability  in respect  of the  purchase  price for
          property of any description (real or personal) or works or services or
          any combination  thereof the payment of which is deferred for a period
          in excess of six months after delivery or performance; and

     (f)  amounts  raised  under  any  other  transaction  (including,   without
          limitation,  any  forward  sale  or  purchase  agreement)  having  the
          commercial  effect of a borrowing entered into by a person in order to
          enable such person to finance its operations or capital requirements,

         but shall not include  guarantees or other indebtedness of a contingent
         nature.

         "connected person" has the meaning given to that term in Section 839 of
         the Income and Corporation Taxes Act 1988;

         "continuing" shall be construed, in relation to an Event of Default, as
         a  reference  to an Event of  Default  which  has not  been  waived  in
         accordance with the terms hereof;

         "control"  has the  meaning  given to that term in  Section  416 of the
         Income and Corporation Taxes Act 1988;

         the "equivalent" on any date in one currency (the "first  currency") of
         an amount  denominated in another currency (the "second currency") is a
         reference to the amount of the first  currency which could be purchased
         with the amount of the  second  currency  at the spot rate of  exchange
         quoted by the Bank at or about 11.00 a.m. on such date for the purchase
         of the first currency with the second currency;

         a "holding company" of a company or corporation shall be construed as a
         reference to any company or  corporation  of which the  first-mentioned
         company or corporation is a subsidiary;

         "indebtedness"  shall be  construed  so as to  include  any  obligation
         (whether  incurred  as  principal  or as  surety)  for the  payment  or
         repayment of money, whether present or future, actual or contingent;

         a "law" shall be  construed as any law  (including  common or customary
         law), statute,  constitution,  decree,  judgment,  treaty,  regulation,
         directive,  bye-law,  order or any  other  legislative  measure  of any
         government,  supranational,  local government,  statutory or regulatory
         body or court;

         a "member state" shall be construed as a reference to a member state of
         the European Union;

         a "month" is a reference to a period  starting on one day in a calendar
         month  and  ending  on the  numerically  corresponding  day in the next
         succeeding  calendar  month  save  that,  where any such  period  would
         otherwise end on a day which is not a business day, it shall end on the
         next  succeeding  business  day,  unless that day falls in the calendar
         month  succeeding that in which it would otherwise have ended, in which
         case it shall end on the  immediately  preceding  business day Provided
         that, if a period  starts on the
<PAGE>

         last  business  day in a calendar  month or if there is no  numerically
         corresponding  day in the month in which that period ends,  that period
         shall end on the last business day in that later month;

         a "person"  shall be  construed  as a reference  to any  person,  firm,
         company,  corporation,  government,  state or  agency of a state or any
         association  or  partnership  (whether  or not  having  separate  legal
         personality)  of two or more of the foregoing and shall be construed so
         as to include  their  respective  successors  and assigns in accordance
         with their respective interests;

         "repay" (or any derivative form thereof) shall, subject to any contrary
         indication,  be construed to include  "prepay" (or, as the case may be,
         the corresponding derivative form thereof);

         a "subsidiary"  of a company or corporation  means any other company or
         corporation  which is a  "subsidiary  undertaking"  of such  company or
         corporation  as defined  pursuant to Section 258 of the  Companies  Act
         1985;

         a  "successor"  shall be  construed  so as to  include an  assignee  or
         successor  in title of such  party and any person who under the laws of
         its  jurisdiction of  incorporation  or domicile has assumed the rights
         and  obligations of such party under this Agreement or to which,  under
         such laws, such rights and obligations have been transferred;

         "tax" shall be construed so as to include any tax, levy,  impost,  duty
         or other charge of a similar nature  (including any penalty or interest
         payable in  connection  with any  failure to pay or any delay in paying
         any of the same);

         "VAT" shall be construed  as a reference  to value added tax  including
         any  similar  tax which may be  imposed in place  thereof  from time to
         time;

         a  "wholly-owned  subsidiary"  of a  company  or  corporation  shall be
         construed  as a reference  to any company or  corporation  which has no
         other members except that other company or  corporation  and that other
         company's or corporation's  wholly-owned subsidiaries or persons acting
         on behalf of that other  company  or  corporation  or its  wholly-owned
         subsidiaries; and

         the "winding-up",  "dissolution" or  "administration"  of, or any other
         insolvency  event  relating  to,  a  company  or  corporation  shall be
         construed  so as to include any  equivalent  or  analogous  proceedings
         under the law of the  jurisdiction in which such company or corporation
         is  incorporated   or  any   jurisdiction  in  which  such  company  or
         corporation  carries on business  including the seeking of liquidation,
         winding-up, reorganisation,  dissolution, administration,  arrangement,
         adjustment, protection or relief of debtors.

1.3      Currency Symbols

         1.3.1    "$" and "dollars"  denote lawful currency of the United States
                  of America  and  "sterling"  denotes  lawful  currency  of the
                  United Kingdom.
<PAGE>

         1.3.2    "euro"  means the single  currency  of the  European  Union as
                  constituted by the Treaty on the European Union as referred to
                  in EMU  Legislation and "euro unit" means the currency unit of
                  the euro as defined in EMU Legislation.

1.4      Agreements and Statutes

         Any reference in this Agreement to:

         1.4.1    this  Agreement or any other  agreement  or document  shall be
                  construed as a reference to this Agreement or, as the case may
                  be,  such other  agreement  or  document  as the same may have
                  been, or may from time to time be, amended, varied, novated or
                  supplemented; and

         1.4.2    a statute or treaty  shall be construed as a reference to such
                  statute or treaty as the same may have been,  or may from time
                  to time be, amended or, in the case of a statute, re-enacted.

1.5      Headings

         Clause and Schedule headings are for ease of reference only.

1.6      Time

         Any  reference  in this  Agreement  to a time of day  shall,  unless  a
         contrary indication appears, be a reference to London time.

1.7      Third Party Rights

        A person  who is not a party to this  Agreement  has no right  under the
        Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
        Agreement.

2.       THE FACILITY

2.1      Grant of the Facility

         The Bank grants to the Parent  through the  Facility  Office,  upon the
         terms and subject to the conditions  hereof, a multicurrency  term loan
         facility in an aggregate amount of $50,000,000  (fifty million dollars)
         or its equivalent from time to time in Optional Currencies.

2.2      Purpose and Application

         The  Facility  is  intended  for  general   corporate   purposes   and,
         accordingly,  the Parent shall apply all amounts raised by it hereunder
         in  or  towards   satisfaction  of  its  general  corporate   financing
         requirements  and the Bank shall not be obliged to concern  itself with
         such application.

2.3      Conditions Precedent

         Save as the Bank may otherwise agree, none of the Borrowers may deliver
         any  Utilisation  Request  unless the Bank has  confirmed to the Parent
         that it has received all
<PAGE>

         of the  documents and other  evidence  listed in Schedule 2 (Conditions
         Precedent) and that each is, in form and substance, satisfactory to the
         Bank.

3.       UTILISATION OF THE FACILITY

3.1      Utilisation Conditions

         Save as otherwise  provided herein, an Advance will be made by the Bank
         to any  Borrower  or a Letter of Credit will be issued by the Bank on a
         request by the Parent  if:

         3.1.1    not less than  three  (3) (or,  if such  Advance  or Letter of
                  Credit is to be  denominated  in sterling,  two (2))  Business
                  Days before the  proposed  date for the making of such Advance
                  or the  issuing  of the  Letter  of  Credit,  the  Parent  has
                  delivered  to  the  Bank  a  completed   Utilisation   Request
                  therefor;

         3.1.2    the  Utilisation  Date is a Business  Day which is or precedes
                  the Termination Date;

         3.1.3    the  Utilisation  Date is not less than five (5) Business Days
                  after  the  date  upon  which  the  Facility  was   previously
                  utilised;

         3.1.4    (in respect of an Advance) the proposed Original Dollar Amount
                  of such  Advance  is a  minimum  amount of  $1,000,000  and in
                  multiples  of $500,000  (or, if less,  equal to the  Available
                  Facility);

         3.1.5    (in respect of a Letter of Credit) the Bank has  approved  the
                  terms  of  the  Letter  of  Credit  (which,  unless  the  Bank
                  otherwise  agrees in writing,  shall be  substantially  in the
                  form set out in  Schedule 9 (Form of Letter of  Credit)),  the
                  purpose of its issue and the identity of the beneficiary;

         3.1.6    (in  respect  of a Letter of  Credit)  the  proposed  Original
                  Dollar  Amount of such  Letter of Credit  does not  exceed the
                  Available  Letter of Credit Facility on the Utilisation  Date,
                  and when  aggregated  with each other Letter of Credit then in
                  issue and Advance  outstanding  does not exceed the  Available
                  Facility on the Utilisation Date;

         3.1.7    the proposed  Original  Dollar Amount of such Advance does not
                  exceed the Available Facility on the Utilisation Date;

         3.1.8    (in  respect of a Letter of  Credit)  the  proposed  Term is a
                  period not exceeding  twelve (12) months,  ending on or before
                  the Repayment Date;

         3.1.9    (in respect of an Advance) the  interest  rate  applicable  to
                  such Advance during its first  Interest  Period would not fall
                  to be  determined  pursuant to Clause 8.1 (Market  Disruption,
                  Substitute Interest Period and Interest Rate); and

         3.1.10   on and as of the proposed  Utilisation  Date, (a) no Potential
                  Event of  Default or Event of Default  has  occurred  which is
                  continuing  and has not been  waived or would  result from the
                  making of such Advance or issue of such Letter of Credit;  (b)
                  no petition has been presented (which remains outstanding) for
                  the winding up of the Borrower wishing to borrow an Advance or
                  have the Letter
<PAGE>

                  of Credit  issued; and (c)  the  Repeated  Representations are
                  true in  all  material  respects on and as of the  Utilisation
                  Date.

3.2      Completion of Letters of Credit

         The Bank is authorised to issue any Letter of Credit pursuant to Clause
         3.1 (Utilisation Conditions for the Facility) by:

         3.1      completing the issue date and the proposed Expiry Date of such
                  Letter of Credit; and

         3.2      executing and delivering such Letter of Credit to the relevant
                  recipient on the Utilisation Date.

3.3      Renewal of a Letter of Credit

         3.3.1    Not less than three (3)  Business  Days before the Expiry Date
                  of a Letter of Credit the Borrower which requested such Letter
                  of Credit may, by written  notice to the Agent,  request  that
                  the Term of such Letter of Credit be extended.

         3.3.2    The  Bank  shall  treat  such  request  in the  same  way as a
                  Utilisation Request for a Letter of Credit.

         3.3.3    The terms of each  renewed  Letter of Credit shall be the same
                  as those of the relevant Letter of Credit immediately prior to
                  its  renewal,  save that its Term shall  commence  on the date
                  which was the Expiry Date of such Letter of Credit immediately
                  prior to its renewal and shall end on the proposed Expiry Date
                  specified in such request.

         4.4      The Bank is  authorised  to amend  any such  Letter  of Credit
                  pursuant  to such  request if the  conditions  set out in this
                  Agreement have been complied with.

4.       MULTICURRENCY OPTION

4.1      Parent's Request for Optional Currency

         The Parent may, not less than five (5) Business  Days' before the first
         day of an Interest  Period,  request (by notice to the Bank),  that any
         Advance be  denominated  in any Optional  Currency  during any Interest
         Period relating thereto, in which event such Advance shall,  subject to
         Clause 4.2 (Conditions for  Denomination in an Optional  Currency),  be
         denominated in such Optional Currency. If the Parent does not make such
         a request,  each Advance shall be  denominated in the currency in which
         it was denominated during the preceding Interest Period.

4.2      Conditions for Denomination in an Optional Currency

         If an Advance is to be denominated in an Optional  Currency  during any
         Interest Period relating thereto, but:
<PAGE>

         4.2.1    no  later  than  11.00  a.m.  on the  Quotation  Date for such
                  Interest Period, the Bank notifies the Parent that the Bank is
                  of the opinion  that it is not feasible for such Advance to be
                  made  in  such  Optional  Currency  or,  as the  case  may be,
                  denominated in such Optional Currency; or

         4.2.2    to give effect to such request would cause the Outstandings to
                  be denominated in more than 5 Optional Currencies,

         the Bank shall notify the Parent and such Advance shall be  denominated
         in dollars.

4.3      Amounts of Advances

         The amount of an Advance during an Interest Period relating thereto (in
         determining  which it shall be  assumed  that any part of such  Advance
         falling  to be  repaid  on or  before  the  last  day of the  preceding
         Interest Period, if any, relating thereto is duly repaid) shall be:

         4.3.1    the Dollar  Amount of such  Advance  if such  Advance is to be
                  denominated in dollars during such Interest Period; or

         4.3.2    if such Advance is to be denominated in an Optional  Currency,
                  the amount of such Optional  Currency which could be purchased
                  with the  Dollar  Amount of such  Advance  at the spot rate of
                  exchange  quoted  by the Bank at or about  11.00  a.m.  on the
                  third  Business Day  preceding  the first day of such Interest
                  Period  for  the  purchase  of  such  Optional  Currency  with
                  dollars.

4.4      Currency Change

         If an Advance is to be denominated in different  currencies  during two
         successive  Interest  Periods,  then,  on the last day of the  first of
         those Interest Periods:

         4.4.1    the Bank shall:

         (a)      apply an amount  equal to the New Amount of such Advance in or
                  towards the purchase of the Existing  Amount of such  Advance;
                  and

         (b)      pay  any  portion  of  the  amount  which  is not  applied  in
                  accordance  with  sub-clause  4.4.1(a) to the Parent or, if an
                  Event of Default  shall have  occurred and the Bank so elects,
                  retain any such  portion  for its own  account,  any amount so
                  retained by the Bank being  treated as if it were a prepayment
                  made by the Parent under Clause 11.2 (Prepayment); and

         4.4.2    the Parent shall pay to the Bank a sum equal to the amount (if
                  any) by which the Existing  Amount of such Advance exceeds the
                  portion  thereof  purchased by the Bank pursuant to sub-clause
                  4.4.1(a).

4.5      Same Currency

         If an Advance is to be denominated in the same Optional Currency during
         two successive Interest Periods and there is any difference between the
         Existing  Amount of
<PAGE>

         such Advance and its New Amount,  then, on the last day of the first of
         those Interest Periods:

         4.5.1    if the Existing Amount of such Advance exceeds its New Amount,
                  the Parent shall pay to the Bank an amount equal to the amount
                  of such excess; or

         4.5.2    if the New Amount of such Advance exceeds its Existing Amount:

                  (a)      the Bank shall pay to the  Parent an amount  equal to
                           the amount of such excess; or

                  (b)      if an Event of Default  shall have  occurred  and the
                           Bank so elects,  no such payments shall be made and a
                           sum equal to the  aggregate  amount  which would have
                           been so  payable  shall be  treated  as  having  been
                           prepaid by the Parent under Clause 11.2 (Prepayment).

5.       INTEREST PERIODS

5.1      Interest Periods

         The period for which an Advance is  outstanding  shall be divided  into
         successive  periods  each of which  (other than the first,  which shall
         begin on the day such  Advance is made)  shall start on the last day of
         the preceding such period.

5.2      Duration

         The duration of each Interest Period shall, save as otherwise  provided
         herein, be one, three or six months, or such other period as the Parent
         requests  and the Bank  agree,  in each case as the Parent  may, by not
         less than three (or,  if the  Advance  to which  such  Interest  Period
         relates is denominated in sterling, two) Business Days' prior notice to
         the Bank select provided that:

         5.2.1    if the Parent  fails to give such notice of its  selection  in
                  relation to an Interest Period,  the duration of that Interest
                  Period shall, subject to sub-clauses 5.2.2 and 5.2.3, be three
                  months;

         5.2.2    the  Parent  may  select an  Interest  Period of less than one
                  months' duration so long as a Repayment Date occurs within one
                  month of the date on which such Interest Period commences; and

         5.2.3    any Interest Period which would otherwise end during the month
                  preceding, or extend beyond, a Repayment Date shall be of such
                  duration that it shall end on that Repayment Date.

5.3      Consolidation of Advances

         If two or more Interest Periods relating to Advances denominated in the
         same  currency  end at the same  time,  then,  on the last day of those
         Interest Periods, those Advances shall be consolidated into and treated
         as a single Advance.
<PAGE>

5.4      Division of Advances

         The Parent may, by not less than five  Business  Days' prior  notice to
         the Bank,  direct  that any  Advance  shall,  at the  beginning  of any
         Interest Period relating thereto, be divided into (and thereafter, save
         as otherwise  provided herein,  treated in all respects as) two or more
         Advances having such Original  Dollar Amounts (in aggregate,  equalling
         the  Dollar  Amount  of the  Advance  being  so  divided)  as  shall be
         specified by the Parent in such notice,  provided that the Parent shall
         not be entitled to make such a direction if any Advance  thereby coming
         into  existence  would  have an  Original  Dollar  Amount  of less than
         $5,000,000.

5.5      Consolidated and Divided Advances

         For the purpose of Clause 4  (Multicurrency  Option),  an Advance which
         comes into  existence  upon the  consolidation  of two or more existing
         Advances or the  division of an  existing  Advance  shall be treated as
         having existed prior to the date on which it comes into existence and:

         5.5.1    in the case of a consolidated Advance,  having an amount equal
                  to  the   aggregate   of  the  amounts  of  the   Advances  so
                  consolidated; and

         5.5.2    in the case of a divided  Advance,  having an amount  equal to
                  the  portion of the  Advance so divided  which  bears the same
                  proportion  to the  amount of the  Advance  so  divided as the
                  Dollar Amount of the Advance  coming into  existence  bears to
                  the Dollar Amount of the Advance so divided.

6.       PAYMENT AND CALCULATION OF INTEREST

6.1      Payment of Interest

         On the last day of each  Interest  Period the Parent  shall pay accrued
         interest on the Advance to which such Interest Period relates.

6.2      Calculation of Interest

         The rate of interest  applicable to an Advance from time to time during
         an Interest Period relating  thereto shall in relation to an Advance be
         the rate per annum  which is the sum of the  Mandatory  Cost Rate,  the
         Margin and LIBOR on the Quotation Date therefor.

7.       letter of credit commission

         The Parent shall, in respect of each Letter of Credit,  pay to the Bank
         a letter of credit  commission  in the  currency in which the  relevant
         Letter of  Credit  is  denominated  at the L/C  Commission  Rate on the
         maximum  actual  and  contingent  liabilities  of the  Bank  under  the
         relevant Letter of Credit.  Such letter of credit  commission  shall be
         paid in advance in respect of each  successive  period of three  months
         (or such shorter period as shall end on the relevant Expiry Date) which
         begins during the Term of the relevant
<PAGE>

         Letter of Credit,  the first such payment to be made on the Utilisation
         Date for such Letter of Credit and  thereafter on the first day of each
         such period.

8.       MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES

8.1      Market Disruption, Substitute Interest Period and Interest Rate

         If, as a result of circumstances  affecting the London Interbank Market
         generally,  at 11:00 a.m. on the Quotation Date for any Interest Period
         relating to an Advance, the Bank was not offering to prime banks in the
         London  Interbank  Market  deposits in the currency of such Advance for
         the proposed duration of such Interest Period then, notwithstanding the
         provisions  of  Clauses  5  (Interest   Periods)  and  6  (Payment  and
         Calculation  of Interest),

         8.1.1    the duration of that Interest Period shall be one month or, if
                  less, such that it shall end on the next Repayment Date; and

         8.1.2    the rate of interest  applicable  to such Advance from time to
                  time during such  Interest  Period shall be the rate per annum
                  which is the sum of the Mandatory Cost Rate (in the case of an
                  Advance denominated in sterling),  the Margin and the rate per
                  annum  determined by the Bank to be that which  expresses as a
                  percentage  rate  per  annum  the cost to it of  funding  such
                  Advance during such Interest  Period from whatever  sources it
                  may select.

8.2      Alternative Interest Rate

         If the interest rate applicable to an Advance during an Interest Period
         falls to be  determined  pursuant  to Clause  8.1  (Market  Disruption,
         Substitute Interest Period and Interest Rate):

         8.2.1    the Bank shall notify the Parent of such event;

         8.2.2    if the Bank or the  Parent so  requires,  within  five days of
                  such  notification  the Bank and the Parent  shall  enter into
                  negotiations  with a view to agreeing a  substitute  basis for
                  determining the rates of interest from time to time applicable
                  to  the  Advances  and/or  upon  which  the  Advances  may  be
                  maintained  (whether  in  dollars,   sterling  or  some  other
                  currency) thereafter; and

         8.2.3    if the  Bank has  required  the  Parent  to  enter  into  such
                  negotiations, the Bank may declare (any such declaration to be
                  binding on the  Borrowers)  that each Advance shall become due
                  and  payable  on the  last day of its  then  current  Interest
                  Period  unless by then a  substitute  basis has been agreed in
                  relation thereto.
<PAGE>

9.       BORROWER'S LIABILITIES IN RELATION TO LETTERS OF CREDIT

9.1      Right to make Payments under Letters of Credit

         Each Bank shall be entitled to make any payment in accordance  with the
         terms of the  relevant  Letter of Credit  without any  reference  to or
         further  authority  from the  Borrower  or any other  investigation  or
         enquiry.  Each Borrower irrevocably  authorises the Bank to comply with
         any demand under a Letter of Credit which is valid on its face.

9.2      Revaluation of Outstandings

         On each L/C Valuation Date, the Bank shall  calculate the  Outstandings
         (having  regard to  changes in the  Dollar  Amounts  of the  Letters of
         Credit  which may arise as a result of currency  fluctuations)  and the
         Bank  shall  notify  the  Parent  of the  amount,  if any (the  "Excess
         Amount") by which the  Outstandings  exceed the Available  Facility and
         the Parent shall:

         9.2.1    procure  that the  Bank's  obligations  under any  Letters  of
                  Credit  are  reduced  by an  amount  no less  than the  Excess
                  Amount; or

         9.2.2    secure such Excess Amount by providing  Cash  Collateral in an
                  amount no less than the Excess Amount.

10.      REPAYMENT

10.1     Repayment and Extension Option

         Each Borrower shall repay its respective  proportion of the Loan on the
         Initial  Repayment  Date provided  that, one year after the date hereof
         and annually  thereafter  until the  Termination  Date,  the Parent may
         within 90 days after  delivery to the Bank of its audited  consolidated
         financial  statements  for any  financial  year  (commencing  with  the
         financial  year ended 2000) request the Bank for an extension by twelve
         months of the date on which the Loan  shall be  repaid,  whereupon  the
         Bank shall  respond  within 90 days of such  request.

10.2     Consent to Request for Extension

         If the  Bank  consents  to a  proposed  extension,  then  the  date for
         repayment  of the Loan shall be extended  by twelve  months to the date
         falling twelve months after the Initial Repayment Date (or, if the date
         for repayment of the Loan has previously been extended, the then latest
         date for repayment of the Loan).  On the first Business Day after which
         the Loan falls  finally due to be repaid the Available  Facility  shall
         reduce to zero.
<PAGE>

11.      CANCELLATION AND PREPAYMENT

11.1     Cancellation

         The Parent  may,  by giving to the Bank not less than thirty (30) days'
         prior  written  notice  to that  effect,  cancel  the whole or any part
         (being a minimum amount of $500,000) of the Available Facility.

11.2     Prepayment

         The Parent or any  Additional  Borrower may, if the Parent has given to
         the Bank not less  than  five (5) days'  prior  written  notice to that
         effect, prepay the whole or any part of any Advance borrowed by it such
         that the Dollar  Amount of such  Advance will be reduced by the minimum
         amount of $1,000,000 and integral multiples of $500,000 on the last day
         of any Interest  Period  relating to such Advance;  any payment so made
         shall satisfy pro tanto the relevant Borrowers' obligation under Clause
         10.1 (Repayment and Extension Option) in inverse chronological order.

11.3     Reborrowing

         The Borrowers shall, subject to the other provisions of this Agreement,
         be  entitled  to reborrow  any amount  prepaid  pursuant to Clause 11.2
         (Prepayment).

11.4     Cancellation of Letters of Credit

         Any Borrower  which has  requested a Letter of Credit may give the Bank
         not less than ten (10) Business  Days' prior notice of its intention to
         procure  that the  Bank's  liability  under  such  Letter  of Credit is
         reduced to zero (whereupon it shall do so).

11.5     Notice of Cancellation or Prepayment

         Any notice of cancellation  or prepayment  given by the Parent pursuant
         to this Clause 11 (Cancellation  and Prepayment)  shall be irrevocable,
         shall specify the date upon which such cancellation or prepayment is to
         be made and the amount of such  cancellation  or  prepayment  and shall
         oblige the Parent to make such prepayment or procure such  cancellation
         on such date.

12.      TAXES

12.1     Tax Gross-up

         All  payments to be made by an Obligor to the Bank  hereunder  shall be
         made free and clear of and without  deduction  for or on account of tax
         unless such  Obligor is required to make such a payment  subject to the
         deduction or  withholding of tax, in which case the sum payable by such
         Obligor (in respect of which such  deduction or withholding is required
         to be made) shall be increased  to the extent  necessary to ensure that
         the Bank  receives a sum net of any deduction or  withholding  equal to
         the  sum  which  it  would  have  received  had no  such  deduction  or
         withholding  been made or  required to be made.
<PAGE>

12.2     Section 349 Bank Exception

         Notwithstanding  the  provisions  of  Clause  12.1 (Tax  Gross-up),  no
         Obligor  shall  be  obliged  to  increase  the  amount  of any  payment
         hereunder  to the Bank  pursuant to Clause 12.1 (Tax  Gross-up)  if the
         requirement to make a deduction or withholding  arises as a consequence
         of the Bank not being  recognised as a bank for the purposes of Section
         349 of the  Income  and  Corporation  Taxes  Act 1988 (a  "Section  349
         Bank").

12.3     Section 349 Bank Representation

         The Bank  represents  that it is a Section 349 Bank and undertakes that
         it will notify the Parent as soon as  reasonably  practicable  after it
         becomes  aware  thereof if at any time it ceases to be  recognised as a
         Section 349 Bank.

12.4     Reimbursement of Obligor

         If an  Obligor  is  required  to  increase  the  amount of any  payment
         hereunder to the Bank  pursuant to Clause 12.1 (Tax  Gross-up)  and the
         Bank  is able to  apply  for or  otherwise  take  advantage  of any tax
         credit,  tax deduction or similar  benefit by reason of the withholding
         or deduction  which such  Obligor was required to make,  the Bank shall
         reimburse to such Obligor,  upon receipt by the Bank,  such part of any
         such credit,  deduction or benefit as is properly  attributable to such
         withholding  or deduction and will leave the Bank in no worse  position
         than it would  have been in had  there  been no tax  imposed  upon that
         payment by such Obligor as aforesaid.

13.      TAX RECEIPTS

13.1     Notification of Requirement to Deduct Tax

         If, at any time, an Obligor is required by law to make any deduction or
         withholding  from any sum  payable by it  hereunder  (or if  thereafter
         there is any  change in the rates at which or the  manner in which such
         deductions or withholdings are  calculated),  such Obligor shall notify
         the Bank  thereof as soon as  reasonably  practicable  after it becomes
         aware of the same.

13.2     Evidence of Payment of Tax

         If an Obligor  makes any  payment  hereunder  in respect of which it is
         required to make any  deduction or  withholding,  it shall pay the full
         amount required to be deducted or withheld to the relevant  taxation or
         other  authority  within  the  time  allowed  for  such  payment  under
         applicable law and shall as soon as reasonably  practicable  deliver to
         the Bank an original  receipt (or a certified  copy thereof)  issued by
         such authority  evidencing the payment to such authority of all amounts
         so required to be deducted or withheld in respect of such payment.

13.3     Tax and Other Affairs

         No provision of this  Agreement  shall  interfere with the right of the
         Bank to  arrange  its tax or any other  affairs in  whatever  manner it
         thinks fit, oblige the Bank to claim any
<PAGE>

         credit, relief,  remission or repayment in respect of any payment under
         Clause 12 (Taxes) in priority to any other credit, relief, remission or
         repayment  available  to  it  nor  oblige  the  Bank  to  disclose  any
         information relating to its tax or other affairs or any computations in
         respect thereof.

14.      INCREASED COSTS

14.1     Increased Costs

         If,  by reason of (a) any  change  in law or in its  interpretation  or
         administration  and/or (b)  compliance  with any request or requirement
         relating to the  maintenance  of capital or any other  request  from or
         requirement  of any  central  bank or other  fiscal,  monetary or other
         authority:

         14.1.1   the  Bank or any  holding  company  of the Bank is  unable  to
                  obtain the rate of return on its  capital  which it would have
                  been  able  to  obtain  but for the  Bank's  entering  into or
                  assuming or  maintaining a  commitment,  issuing or performing
                  its obligations  under this Agreement or any Letter of Credit;
                  or

         14.1.2   the Bank or any holding company of the Bank incurs a cost as a
                  result of the Bank's  entering into or assuming or maintaining
                  a  commitment  or  performing  its   obligations   under  this
                  Agreement or any Letter of Credit; or

         14.1.3   there is an  increase  in the cost to the Bank or any  holding
                  company of the Bank of funding or  maintaining  the  Advances,
                  any Unpaid Sum or any Letter of Credit,

         then the  Obligor  shall,  from  time to time on  demand  of the  Bank,
         promptly pay to the Bank amounts sufficient to indemnify the Bank or to
         enable the Bank to indemnify its holding  company from and against,  as
         the case may be, (a) such  reduction  in the rate of return of capital,
         (b) such cost or (c) such increased cost.

14.2     Increased Costs Claims

         If the Bank intends to make a claim pursuant to Clause 14.1  (Increased
         Costs),  it shall  notify the Parent of the event  giving  rise to such
         claim.

14.3     Exclusions

         Notwithstanding  the foregoing  provisions of this Clause 14 (Increased
         Costs), the Bank shall not be entitled to make any claim in respect of:

         14.3.1   any cost, increased cost or liability as referred to in Clause
                  14.1  (Increased  Costs) to the extent the same is compensated
                  by the Mandatory Cost Rate; or

         14.3.2   any cost, increased cost or liability compensated by Clause 12
                  (Taxes).
<PAGE>

15.      ILLEGALITY

         If, at any time,  it is or will become  unlawful  for the Bank to make,
         fund, issue or allow to remain outstanding all or part of the Advances,
         then the Bank shall, promptly after becoming aware of the same, deliver
         to the Parent a notice to that  effect  and:  15.1.1 the Bank shall not
         thereafter  be  obliged  to make any  Advances  and the  amount  of the
         Available Facility shall be immediately  reduced to zero; 15.1.2 if the
         Bank so requires,  the Parent shall on such date as the Bank shall have
         specified repay any outstanding Advances together with accrued interest
         thereon and all other amounts owing hereunder; and

         15.1.3   ensure that the liabilities of the Bank under or in respect of
                  each Letter of Credit is reduced to zero or otherwise  secured
                  by providing Cash  Collateral in an amount equal to the Bank's
                  maximum actual and contingent liabilities under such Letter of
                  Credit in the currency or currencies of such Letter of Credit.

16.      MITIGATION OF ADVERSE CIRCUMSTANCES

         If circumstances arise which would, or would upon the giving of notice,
         result in:

         16.1.1   an  increase in the amount of any payment to be made to it for
                  its account pursuant to Clause 12.1 (Tax Gross-up);

         16.1.2   a claim for indemnification pursuant to Clause 14.1 (Increased
                  Costs); or

         16.1.3   the reduction of the Available  Facility to zero in accordance
                  with Clause 15 (Illegality),

         then the Bank shall promptly upon becoming aware of the same notify the
         Parent thereof and, in consultation with the Parent, take such steps as
         may  reasonably  be  open  to  it  to  mitigate  the  effects  of  such
         circumstances, including the transfer of its Facility Office to another
         jurisdiction or the transfer of its rights and obligations hereunder to
         a person acceptable to the Parent,  provided that the Bank shall not be
         obliged  to take any steps if, in its bona  fide  opinion,  such  steps
         would have an adverse  effect on its  business,  operation or financial
         condition.

17.      REPRESENTATIONS

        Each Obligor makes the  representations and warranties set out in Clause
        17.1 (Status) to Clause 17.17 (Event of Default). The Borrowers make the
        representations  in  respect  of  themselves  and the  Parent  makes the
        representations  in  respect  of each of the  Guarantors.  Each  Obligor
        acknowledges  that the Bank has entered into this  Agreement in reliance
        on those representations and warranties.

17.1     Status

         It is a corporation  duly organised under the laws of its  jurisdiction
         of incorporation.
<PAGE>

17.2     Governing Law and Judgements

         In any  proceedings  taken  in its  jurisdiction  of  incorporation  in
         relation to this Agreement and any guarantee of the  obligations of the
         Borrowers,  the  choice of  English  law as the  governing  law of this
         Agreement and such guarantee and any judgment  obtained in England will
         be recognised and enforced.

17.3     Binding Obligations

         The obligations expressed to be assumed by it in this Agreement and any
         guarantee  of the  obligations  of the  Borrowers  are  legal and valid
         obligations binding on it and enforceable against it in accordance with
         the terms hereof or thereof.

17.4     Execution of this Agreement

         Its execution of this Agreement and any guarantee of the obligations of
         the  Borrowers  and its exercise of its rights and  performance  of its
         obligations  hereunder  and  thereunder  do not and  will  not:

         17.4.1   conflict  with  any   agreement,   mortgage,   bond  or  other
                  instrument  or  treaty  to  which  it is a party  or  which is
                  binding upon it or any of its assets;

         17.4.2   conflict with its constitutive documents; or

         17.4.3   conflict with any applicable law.

         It has the power to enter into this  Agreement and any guarantee of the
         obligations  of the Borrowers  hereunder to which it is a party and all
         corporate and other action  required to authorise the execution of this
         Agreement and any such guarantee and the performance of its obligations
         hereunder and thereunder has been duly taken.

17.5     No Winding-up

         No member of the Group  has  taken any  corporate  action  nor have any
         other  steps been taken or legal  proceedings  been  started or (to the
         best of its knowledge and belief)  threatened against any member of the
         Group   for   its   winding-up,    dissolution,    administration    or
         re-organisation   (whether   by   voluntary   arrangement,   scheme  of
         arrangement  or  otherwise)  or  for  the  appointment  of a  receiver,
         administrator, administrative receiver, conservator, custodian, trustee
         or similar  officer  of it or of any or all of its assets or  revenues.

17.6     No Material Defaults

         No  member  of the  Group  is in  breach  of or in  default  under  any
         agreement  to which it is a party or which is  binding  on it or any of
         its  assets to an extent or in a manner  which  might  have a  Material
         Adverse Effect.
<PAGE>

17.7     No Material Proceedings

         No action or administrative proceeding of or before any court or agency
         which is  reasonably  likely to have a Material  Adverse  Effect on the
         business or financial  condition of the  Guaranteeing  Group as a whole
         has been started.

17.8     No Material Adverse Change

         Since the date as at which the most recent audited financial statements
         of the  Parent  and the  most  recent  audited  consolidated  financial
         statements of the Guarantor were stated to be prepared,  there has been
         no Material  Adverse  Effect on the business or financial  condition of
         the  Parent  or, as the case may be,  any  member  of the  Guaranteeing
         Group.

17.9     Written Information

         All  written  information  supplied by any member of the Group is true,
         complete and  accurate in all  material  respects as at the date it was
         given and is not misleading in any respect.

17.10    Validity and Admissibility in Evidence

         All acts,  conditions  and things  required to be done,  fulfilled  and
         performed  in order (a) to enable it lawfully  to enter into,  exercise
         its rights under and perform and comply with the obligations  expressed
         to be  assumed  by it in  this  Agreement  and  any  guarantee  of  the
         obligations of the Borrowers  hereunder to which it is a party,  (b) to
         ensure  that the  obligations  expressed  to be  assumed  by it in this
         Agreement  and  any  such  guarantee  are  legal,  valid,  binding  and
         enforceable  and (c) to make  this  Agreement  and any  such  guarantee
         admissible in evidence in its jurisdiction of  incorporation  have been
         done, fulfilled and performed.

17.11    Claims Pari Passu

         Under the laws of its  jurisdiction  of  incorporation  in force at the
         date hereof, the claims of the Bank against it under this Agreement and
         any guarantee of the  obligations  of the Borrowers  will rank at least
         pari   passu  with  the   claims  of  all  its  other   unsecured   and
         unsubordinated  creditors save those whose claims are preferred  solely
         by any  bankruptcy,  insolvency,  liquidation  or other similar laws of
         general application

17.12    No Filing or Stamp Taxes

         Under the laws of its  jurisdiction  of  incorporation  in force at the
         date hereof, it is not necessary that this Agreement be filed, recorded
         or enrolled with any court or other  authority in such  jurisdiction or
         that any stamp,  registration  or similar tax be paid on or in relation
         to this Agreement.

17.13    Encumbrances

         Save for Permitted Encumbrances,  no Encumbrance exists over all or any
         of the present or future revenues or assets of any member of the Group.
<PAGE>

17.14    No Deduction or Withholding

         Under the laws of its  jurisdiction  of  incorporation  in force at the
         date  hereof,  it  will  not be  required  to  make  any  deduction  or
         withholding from any payment it may make hereunder.

17.15    Ownership of an Additional Borrower

         Each Additional Borrower is a wholly owned subsidiary of the Parent.

17.16    Ownership of the Relevant Entity

         Each Relevant Entity is under the control of the Parent.

17.17    No Event of Default

         No Event of Default has occurred  which is continuing  and has not been
         waived.

17.18    Repetition of Representations

         The  Repeated  Representations  shall be deemed to be  repeated  by the
         relevant  Obligor  by  reference  to the facts and  circumstances  then
         existing upon the delivery of each  Utilisation  Request,  on the first
         day of each Interest  Period,  each date on which an Advance is made or
         is to be made, each date on which a Letter of Credit is issued or is to
         be issued or its Term extended and each date on which a company becomes
         (or it is proposed that a company becomes) an Additional  Borrower or a
         Guarantor.

18.      FINANCIAL INFORMATION

18.1     Financial Statements

         The Parent shall:

         18.1.1   as soon as the same become available,  but in any event within
                  120 days after the end of each of its financial years, deliver
                  to the Bank the consolidated financial statements of the Group
                  and each Additional  Borrower for such financial year together
                  with  financial  statements of each of the Guarantors for such
                  financial year;

         18.1.2   as soon as the same become available,  but in any event within
                  120 days  after the end of each half of each of its  financial
                  years,   deliver  to  the  Bank  the  consolidated   financial
                  statements of the Group for such period;

         18.1.3   from time to time on the request of the Bank, furnish the Bank
                  with  such  information   about  the  business  and  financial
                  condition  of the  Group  or any  Guarantor  as the  Bank  may
                  reasonably  require  including  their most  recent  management
                  accounts; and

         18.1.4   from time to time,  promptly after filing of the same, provide
                  the Bank with a copy of the form 20-F filed by the Parent with
                  the Securities and Exchange Commission of the United States.
<PAGE>

18.2     Requirements as to Financial Statements

         The Parent shall ensure that:

         18.2.1   each set of financial  statements  delivered by it pursuant to
                  Clause 18.1  (Financial  Statements) is prepared in accordance
                  with US GAAP  (or,  in the case of a  Guarantor  or any  other
                  Additional Borrower,  in accordance with accounting principles
                  generally accepted in its jurisdiction of incorporation);

         18.2.2   each set of financial  statements  delivered by it pursuant to
                  Clause  18.1.1  of  has  been  audited  by an  internationally
                  recognised firm of independent  auditors  licensed to practise
                  in Jersey (or, in the case of the  financial  statements  of a
                  Guarantor or any other Additional  Borrower,  audited (if such
                  audited financial  statements have in any event been produced)
                  by an internationally  recognised firm of independent auditors
                  licensed to practise in the  jurisdiction of  incorporation of
                  such Guarantor or such other  Additional  Borrower,  or, if no
                  such  audited   financial   statements   have  been  produced,
                  confirmed  by the auditors of the Parent as being the balances
                  included in the audited  consolidated  financial  statements);
                  and

         18.2.3   within  30 days of  publication  of the  financial  statements
                  referred  to in Clauses  18.1.1 and 18.1.2 it  delivers to the
                  Bank a  duly  completed  Compliance  Certificate  signed  by a
                  director or Authorised  Signatory of the Parent evidencing the
                  compliance  by the  Parent  with the  provisions  of Clause 19
                  (Financial Condition).

19.      FINANCIAL CONDITION

19.1     Financial Condition

         The Parent  shall  ensure  that  except  subject to Clause  19.4 (Grace
         Periods),  at all times,  the consolidated  financial  condition of the
         Group, as evidenced by the then most recent audited annual or unaudited
         semi-annual  consolidated  financial  statements of the Group, shall be
         such that:

         19.1.1   Liabilities do not exceed Equity;

         19.1.2   Equity is not less than $325,000,000;

         19.1.3   Operating  Profit is no less than 300 per  cent.  of  Interest
                  Charge;

         19.1.4   Operating Cash Flow is no less than 25 per cent. of Net Debt;

         19.1.5   the  ratio of  consolidated  current  assets  of the  Group to
                  consolidated  current liabilities of the Group (but so that in
                  computing  consolidated  current  liabilities  there  shall be
                  excluded,  if it would  otherwise  be  included  therein,  all
                  amounts  owed to the Bank  hereunder  or under  any  guarantee
                  hereof) is at least 2:1;

<PAGE>

         19.1.6   the  value of the  aggregate  intangible  assets  of the Group
                  (including goodwill arising on acquisition which has then been
                  set against  shareholder's equity and the loan to The Berkeley
                  Govett 1990  Employee  Share Option  Trust) does not exceed 40
                  per cent. of the value of the Group's  aggregate  gross assets
                  including  fixed and  current  assets of the Group  intangible
                  assets  (as  aforesaid)  and the net  assets of the  long-term
                  insurance business (but excluding the embedded after tax value
                  of  policies  in force in respect  of the long term  insurance
                  business); and

         19.1.7   Guaranteeing Group Net Assets are no less than 90 per cent. of
                  Available Group Net Assets.

19.2     Financial Definitions

         The expressions  used in this Clause 19 (Financial  Condition) shall be
         construed in  accordance  with US GAAP (as used in the then most recent
         audited annual consolidated  financial  statements of the Group) but so
         that: "Equity" means the sum of:

     (a)  the amount paid up or credited as paid up on the issued share  capital
          of the Parent;

     (b)  the  amounts  standing  to the  credit of the  Group's  share  premium
          account (which includes any premium arising on shares issued under the
          share option plan); and

     (c)  the amounts  standing to the credit of the Group's capital  redemption
          reserve account,

         plus or minus the amount  standing to the credit or debit,  as the case
         may be, of the  consolidated  profit  and loss  account  reserve of the
         Group, but after deducting therefrom:

     (a)  the  value of  goodwill  arising  on  acquisition  which  has been set
          against  shareholder's  equity  excluding any such goodwill arising on
          acquisitions on or after 1 January 2000;

     (b)  amounts attributable to minority interests in subsidiaries; and

     (c)  any  distribution  declared,  recommended  or made to the  extent  not
          provided  for in such  accounts  (other  than (a)  distributions  to a
          member  of the  Group or (b) in the case of a  distribution  declared,
          recommended  or made in  respect  of a  period  after  the date of the
          relevant accounts,  to the extent that such distribution is covered by
          profits which have accrued since that date);

         "Interest Charge" means the aggregate,  on a consolidated basis, of all
         interest  or similar  charges,  incurred  by any member of the Group in
         respect of borrowings (other than borrowings from another member of the
         Group);
<PAGE>

         "Liabilities"  means the consolidated  liabilities of the Group as they
         appear in the consolidated balance sheet of the consolidated  financial
         statements of the Group other than long-term insurance reserves;

         "Net Debt" means the principal  amount  outstanding,  on a consolidated
         basis,  in respect of borrowings by any member of the Group (other than
         borrowings  from another  member of the Group) less cash and short term
         investments  of  any  member  of the  Group  provided  that  short-term
         investments  shall  only be  taken  into  account  if  such  short-term
         investments  are themselves of investment  grade (i.e.  debt securities
         rated at least BBB or  equivalent  or equity  securities  in respect of
         such  companies  traded on a recognised  international  stock  exchange
         whose debt securities are rated at least BBB or equivalent or represent
         an underlying investment the majority of which is of investment grade);

         "Operating  Cash Flow" shall have the meaning  ascribed  thereto in the
         notes to the  consolidated  cash  flow  statement  of the  consolidated
         financial statements of the Group; and

         "Operating  Profit" means the consolidated  profit or loss, as the case
         may be, on ordinary activities of the Group including any net profit or
         loss on  investments,  but before  deduction of the Interest Charge and
         before taking account of:

     (a)  any tax paid or payable; and

     (b)  any exceptional or extraordinary profits, or losses,

         during the relevant financial year or financial half-year,  as the case
         may be;

19.3     Grace Periods

         The Parent shall not be in breach of any of its obligations pursuant to
         any  of  the  provisions  of  this  Clause  19  (Financial   Condition)
         concerning  the  financial  condition of the Group unless the financial
         condition  of the Group fails to satisfy  the  relevant  provisions  of
         Clause Clauses  19.1.1 to 19.1.6 for more than 14 consecutive  days or,
         in the case of Clause  19.1.7,  the  Parent  fails to remedy the breach
         within 28 days of notice from the Bank of the same.

19.4     Expert Consultation

         In the event that the Parent shall prepare its  consolidated  financial
         statements  for any financial  year on a basis which is not  consistent
         with  the  accounting  principles  used in the  consolidated  financial
         statements  for the  financial  year ended 31st  December 1999 then the
         Parent  and the  Bank  shall  negotiate  in good  faith  with a view to
         agreeing  such  changes to the  provisions  of Clause  19.1  (Financial
         Condition)  (if any) as shall  be  necessary  fairly  to  reflect  such
         change. If, within sixty (60) days of such negotiation being commenced,
         no agreement is reached between the Parent (acting  reasonably) and the
         Bank as to the necessary  changes (if any) to be made to the provisions
         of Clause
<PAGE>

         19.1  (Financial  Condition),  then  either  the Parent or the Bank may
         request the senior  partner in the auditors of the Parent in the United
         Kingdom to appoint a partner in the auditors of the Parent  (other than
         a partner  involved in the auditing of the financial  statements of the
         Parent or any member of the  Group) to act as an expert in  determining
         any such changes as may be  required,  and the decision of the auditors
         in this regard shall,  in the absence of manifest  error,  be final and
         binding upon all the parties.

20.      COVENANTS

20.1     Covenants in respect of the Borrowers

         Each of the Borrowers shall:

         20.1.1   obtain, comply with the terms of and do all that is reasonably
                  necessary   to   maintain   in  full   force  and  effect  all
                  authorisations,  approvals,  licences and consents required to
                  be  obtained  by it in or by the laws and  regulations  of its
                  jurisdiction of  incorporation  to enable it lawfully to enter
                  into and perform its  obligations  under this  Agreement or to
                  ensure the legality, validity, enforceability or admissibility
                  in  evidence  in its  jurisdiction  of  incorporation  of this
                  Agreement  and pay all taxes  within  any period  allowed  for
                  payment  of the same  (other  than any  taxes  which are being
                  contested in good faith);

         20.1.2   promptly after it becomes aware of the same inform the Bank of
                  the occurrence of any event which is or would become (with the
                  passage  of time,  the  giving of  notice,  the  making of any
                  determination  hereunder or any combination  thereof) an Event
                  of Default  and,  upon  receipt  of a written  request to that
                  effect  from  the  Bank,  confirm  to the Bank  that,  save as
                  previously  notified  to  the  Bank  or as  notified  in  such
                  confirmation, no such event has occurred;

         20.1.3   (disregarding   purchases  made  in  the  ordinary  course  of
                  business  and without  prejudice  to Clause  20.2.5)  promptly
                  notify the Bank of any material acquisition made by any member
                  of the Group and the consideration  payable in respect of such
                  acquisition; and

         20.1.4   ensure  that at all times the  claims of the Bank  against  it
                  under this  Agreement rank at least pari passu with the claims
                  of all its other unsecured and  unsubordinated  creditors save
                  those  whose   claims  are   preferred   by  any   bankruptcy,
                  insolvency,  liquidation  or  other  similar  laws of  general
                  application.

20.2     Covenants in respect of the Borrowers, Guarantors and the Group

         Each of the Borrowers shall ensure that neither it nor, (in the case of
         Clause 20.2.1) any of the Guarantors  shall or, (in the case of Clauses
         20.2.2,  20.2.3,  20.2.4 and  20.2.5)  any  member of the Group  shall,
         without the prior  written  consent of the Bank (such consent not to be
         unreasonably  withheld in the case of Clauses 20.2.2, 20.2.3 or
<PAGE>

         20.2.4) but so that the Bank shall be entitled to withhold  its consent
         to any  indebtedness  which would rank in priority to the claims of the
         Bank hereunder:

         20.2.1   incur  any  further  additional  indebtedness  in  respect  of
                  borrowings other than (a) borrowings the repayment of which is
                  expressed to be subordinated to the repayment of amounts owing
                  hereunder on terms  approved by the Bank (such approval not to
                  be unreasonably withheld or delayed), (b) indebtedness owed to
                  a Guarantor or any Borrower,  (c)  indebtedness in a principal
                  amount  not  exceeding  10 per cent.  of  Available  Group Net
                  Assets owed to a member of the Group which is not a Guarantor,
                  (d) any other  borrowings  incurred for the primary purpose of
                  funding the creation or a  redemption  of units in unit trusts
                  or of shares in open ended investment  schemes,  provided that
                  the aggregate  principal  amount of such  borrowings  does not
                  exceed(pound)12,500,000    (or   its   equivalent   in   other
                  currencies)  at any time and  provided  that  each  individual
                  borrowing is not  outstanding  for a period of more than seven
                  days and (e) lease, hire purchase or conditional sale or other
                  like agreements not exceeding(pound)500,000 (or its equivalent
                  in  other  currencies)  at any one  time  entered  into in the
                  ordinary course of business;

         20.2.2   create or permit to subsist any Encumbrance over all or any of
                  its  present  or  future  revenues  or  assets  other  than  a
                  Permitted Encumbrance;

         20.2.3   (disregarding  sales of stock in trade in the ordinary  course
                  of business) sell,  transfer or otherwise dispose of the whole
                  or a material part of its property or assets the book value of
                  which  is more  than 20 per  cent.  of the  book  value of the
                  whole;

         20.2.4   make any material  change to the nature of the business of the
                  Group (taken as a whole); or

         20.2.5   acquire any assets or business or make any  investment  during
                  the term of this Agreement for an aggregate  consideration  in
                  moneys or moneys worth exceeding $100,000,000.

21.      EVENTS OF DEFAULT

         Each of Clause 21.1 (Failure to Pay) to Clause 21.16 (Material  Adverse
         Change)  describes  circumstances  which constitute an Event of Default
         for the purposes of this Agreement.

21.1     Failure to Pay

         Any Borrower fails to pay any sum due from it hereunder at the time, in
         the  currency  and in the  manner  specified  herein  and such  failure
         continues for three  Business Days after notice from the Bank notifying
         it that such sums has not been received.
<PAGE>

21.2     Misrepresentation

         Any representation or statement made or deemed to be made by an Obligor
         in this  Agreement  or in any  guarantee of this  Agreement,  notice or
         other  document,  certificate  or  statement  delivered  by it pursuant
         hereto or in connection herewith is or proves to have been incorrect or
         misleading in any material respect when made or deemed to be made.

21.3     Specific Covenants

         Subject to this Agreement,  any Obligor fails duly to perform or comply
         with any of the obligations  expressed to be assumed by it in Clause 18
         (Financial Information) or Clause 20 (Covenants).

21.4     Financial Condition

         Subject  to this  Agreement,  at any  time any of the  requirements  of
         Clause 19.1 (Financial Condition) is not satisfied.

21.5     Other Obligations

         Any Obligor  fails duly to perform or comply with any other  obligation
         expressed to be assumed by it in this  Agreement or in any guarantee of
         this Agreement and such failure,  if capable of remedy, is not remedied
         within  ten (10) days after the Bank has given  notice  thereof to such
         Obligor.

21.6     Cross Default

         Any  indebtedness  of any member of the Group is not paid when due, any
         indebtedness  of any member of the Group is declared to be or otherwise
         becomes due and payable prior to its specified maturity, any commitment
         for any  indebtedness  of any  member  of any  member  of the  Group is
         cancelled  or suspended by a creditor of any member of the Group or any
         creditor  of any member of the Group  becomes  entitled  to declare any
         indebtedness  of any member of the Group due and  payable  prior to its
         specified  maturity,  provided that it shall not constitute an Event of
         Default if the aggregate amount (or its equivalent in other currencies)
         of all such indebtedness is less than (pound)1,000,000.

21.7     Insolvency and Rescheduling

         Any  Obligor  is unable  to pay its  debts as they fall due,  commences
         negotiations  with any one or more of its creditors  with a view to the
         general  readjustment or  rescheduling  of its  indebtedness or makes a
         general  assignment  for  the  benefit  of or a  composition  with  its
         creditors.

21.8     Winding-up

         A petition is presented  (and is not  withdrawn  within 21 days) unless
         the Parent demonstrates to the reasonable satisfaction of the Bank that
         such  petition is not a bona fide  petition or an order for a competent
         court is made or an effective  resolution is
<PAGE>

         passed for the winding-up or  dissolution of or for the  appointment of
         an administrator in respect of any Obligor (other than for the purposes
         of a solvent  amalgamation or  reconstruction,  the terms of which have
         been previously approved in writing by the Bank such approval not to be
         unreasonably withheld or delayed).

21.9     Execution or Distress of Assets

         An administrator, receiver, administrative receiver, trustee or similar
         officer is appointed  of any Obligor or of all or any material  part of
         its undertakings and assets.

21.10    Event or Proceeding

         There occurs in respect of any Obligor in any  jurisdiction in which it
         operates  or carries on a material  part of its  business  any event or
         proceeding  which is  equivalent or analogous to the matters set out in
         Clauses 21.8  (Winding-up)  or 21.9  (Execution  or Distress of Assets)
         above.

21.11    Control of the Parent and Ownership of the Additional Borrowers

         Any person or group of connected  persons  (which does not have control
         at the date hereof)  acquires  control of the Parent or any  Additional
         Borrower ceases to be a wholly owned subsidiary of the Parent.

21.12    Failure to Comply with Final Judgment

         Any member of the Group fails to comply with or pay any sum due from it
         under any final  judgment or any final order made or given by any court
         of competent jurisdiction.

21.13    The Group's Business

         Any member of the Group  ceases to carry on the  business it carries on
         at the date hereof or enters into any unrelated business.

21.14    Repudiation

         An Obligor  repudiates  this Agreement or does or causes to be done any
         act or thing evidencing an intention to repudiate this Agreement.

21.15    Illegality

         At any time it is or  becomes  unlawful  for an  Obligor  to perform or
         comply  with  any or all of  its  obligations  hereunder  or any of the
         obligations  of an  Obligor  hereunder  are not or cease  to be  legal,
         valid, binding and enforceable.

21.16    Material Adverse Change

         There  is a  Material  Adverse  Effect  on the  business  or  financial
         condition  of the Group  (taken as a whole)  since the date of the then
         latest  audited  consolidated  financial  statements of the Group which
         give reasonable  grounds in the opinion of the Bank to believe that any
         Borrower  may not (or may be unable  to)  perform  or  comply  with its
         obligations hereunder.
<PAGE>

21.17    Acceleration and Cancellation

         Upon the occurrence of an Event of Default and at any time  thereafter,
         whilst it is continuing, the Bank may by written notice to the Parent:

         21.17.1  declare all or any part of the Advances to be immediately  due
                  and  payable  (whereupon  the same  shall  become  so  payable
                  together with accrued interest thereon and any other sums then
                  owed by the Parent  hereunder)  or declare  all or any part of
                  the  Advances  to be due and  payable  on  demand of the Bank;
                  and/or

         21.17.2  require the Parent to procure that the liabilities of the Bank
                  under each Letter of Credit is promptly reduced to zero and/or
                  provide Cash Collateral for each Letter of Credit in an amount
                  specified  by the Bank and in the  currency  of such Letter of
                  Credit (whereupon the Parent shall do so); and/or

         21.17.3  declare that any  unutilised  portion of the Facility shall be
                  cancelled,  whereupon  the  same  shall be  cancelled  and the
                  Available Facility shall be reduced to zero.

21.18    Advances Due on Demand

         If, pursuant to Clause 21.17 (Acceleration and Cancellation),  the Bank
         declares  all or any  part of the  Advances  to be due and  payable  on
         demand of the Bank, then, and at any time  thereafter,  the Bank may by
         written notice to the Parent:

         21.18.1  require  repayment of all or such part of the Advances on such
                  date as it may  specify  in such  notice  (whereupon  the same
                  shall  become due and payable on the date  specified  together
                  with accrued  interest thereon and any other sums then owed by
                  the Parent  hereunder) or withdraw its declaration with effect
                  from such date as it may specify in such notice; and/or

         21.18.2  select as the  duration of any  Interest  Period  which begins
                  whilst such declaration  remains in effect a period of six (6)
                  months or less; and or

         21.18.3  call for cash cover in  respect  of any  Letters of Credit for
                  which the Bank has not received  reimbursement on such date as
                  it may specify in such notice (whereupon the same shall become
                  due and payable on such date).

22.      COMMITMENT COMMISSION AND FEES

22.1     Commitment Commission

         The Parent shall pay to the Bank a commitment  commission on the amount
         of the Available  Facility from day to day during the period  beginning
         on the date  hereof and ending on the  relevant  Repayment  Date,  such
         commitment  commission  to be calculated at the rate of 0.375 per cent.
         per annum on the undrawn  portion and payable in arrear on the last day
         of each successive period of three months which ends during such period
         and on such Repayment Date.
<PAGE>

22.2     Arrangement Fee

         The Parent shall pay the following arrangement fees to the Bank:

         22.2.1   $75,000 to be paid within  thirty (30) days of the date hereof
                  (or,  if  earlier,  on the date on which the first  Advance is
                  made hereunder); and

         22.2.2   if the option to extend is exercised in Clause 10.1 (Repayment
                  and Extension  Option) , $37,500 to be paid within thirty (30)
                  days of the date on which the extension is granted pursuant to
                  Clause 10.2 (Consent to Request for Extension).

23.      COSTS AND EXPENSES

23.1     Transaction Expenses

         The Parent  shall,  from time to time on demand of the Bank,  reimburse
         the Bank for all reasonable  costs and expenses  (including legal fees)
         together  with any VAT thereon  properly  incurred by it in  connection
         with the negotiation,  preparation and execution of this Agreement, any
         guarantee of this Agreement or any other  document  referred to in this
         Agreement and the completion of the transactions herein contemplated.

23.2     Preservation and Enforcement of Rights

         The Parent  shall,  from time to time on demand of the Bank,  reimburse
         the Bank for all reasonable  costs and expenses  (including legal fees)
         together  with any VAT thereon  incurred in or in  connection  with the
         preservation  and/or enforcement of any of the rights of the Bank under
         this  Agreement and any other  document  referred to in this  Agreement
         (including,  without limitation, any costs and expenses relating to any
         investigation  as to  whether  or not an Event of  Default  might  have
         occurred or is likely to occur or any steps  necessary  or desirable in
         connection  with any proposal for  remedying or otherwise  resolving an
         Event of Default).

23.3     Stamp Taxes

         The Parent shall pay all United  Kingdom or Jersey stamp,  registration
         and  other  taxes  to  which  this  Agreement,  any  guarantee  of this
         Agreement,  any other  document  referred to in this  Agreement  or any
         judgment given in connection therewith is or at any time may be subject
         and shall, from time to time on demand of the Bank,  indemnify the Bank
         against any liabilities,  costs, claims and expenses resulting from any
         failure to pay or any delay by the Parent in paying any such tax.

23.4     Amendment Costs

         If an Obligor requests any amendment, waiver or consent then the Parent
         shall,  within five Business Days of demand by the Bank,  reimburse the
         Bank for all costs and expenses  (including  legal fees)  together with
         any VAT thereon  incurred by such person in  responding to or complying
         with such request.
<PAGE>

24.      ADDITIONAL BORROWERS AND GUARANTORS

24.1     Accession of Borrowers

         The  Parent  may from time to time with the prior  consent  of the Bank
         (such consent not to be unreasonably withheld or delayed) designate any
         wholly-owned subsidiary of the Parent as an Additional Borrower for the
         purposes of the  Facility in which  event the Parent  shall  deliver or
         cause to be delivered to the Bank an Accession  Agreement duly executed
         by the  parties  thereto  together  with  all the  Additional  Borrower
         Conditions Precedent specified therein. This Agreement shall thereafter
         be read  and  construed  as if each  person  which  is a party  to such
         Accession  Agreement  as a proposed  Additional  Borrower  were a party
         hereto having all the same rights and obligations of a Borrower and all
         references to the "Borrowers" hereunder shall be construed accordingly.

24.2     Agreement to Accession of Borrowers

         On granting  consent  under Clause 24.1  (Accession of Borrowers) to an
         Additional  Borrower,  the Bank shall execute any  Accession  Agreement
         relating to the introduction of such an Additional Borrower.

24.3     Guarantors

         The Parent may from time to time designate any subsidiary of the Parent
         as a Guarantor  and,  upon the  delivery  to the Bank of the  Guarantor
         Conditions  Precedent in a form and substance  satisfactory to it, such
         subsidiary  shall be a Guarantor and all references to the "Guarantors"
         shall be construed accordingly.

24.4     Guarantor Conditions Precedent

         The following shall include the Guarantor Conditions Precedent:

         24.4.1   a guarantee in substantially the form provided by the existing
                  Guarantors  (with  such  changes  in  form  as  the  Bank  may
                  reasonably  require in the light of legal  advice  received by
                  it)   guaranteeing   amounts  owing  by  the  Parent  and  any
                  Additional Borrower hereunder;

         24.4.2   a copy,  certified  as a true copy on behalf of such person of
                  the Memorandum and Articles of Association  (or equivalent) of
                  such subsidiary;

         24.4.3   a copy,  certified as a true copy on behalf of such person, of
                  a Board  Resolution of such person  approving  the  execution,
                  delivery and  performance  of the  guarantee and the terms and
                  conditions  thereof and  authorising a named person or persons
                  to sign the same and any  documents  to be  delivered  by such
                  person  pursuant  thereto;

         24.4.4   a  certificate  of a duly  authorised  officer of such  person
                  setting out the names and signatures of the persons authorised
                  on behalf of such person by its Board  Resolution  referred to
                  in Clause 24.4.3 above; and
<PAGE>

         24.4.5   an  opinion  in such form as the Bank may  reasonably  require
                  relating to the due  execution of the  guarantee  addressed to
                  the Bank by in-house counsel to the Parent

         such  subsidiary  shall  be a  Guarantor  and  all  references  to  the
         "Guarantors" shall be construed accordingly.

24.5     Release of Guarantors

         The Parent may from time to time by not less than 30 days prior written
         notice to the Bank  request  that any  Guarantor  be released  from its
         guarantee of amounts due hereunder and provided that:

         24.5.1   following such release the Guaranteeing  Group Net Assets will
                  not be less than 90 per cent.  of Available  Group Net Assets;
                  and

         24.5.2   if such  Guarantor  is also a Borrower,  there are no Advances
                  made  to  that  Borrower  which  are  outstanding  other  than
                  Advances repaid prior to such release

         the Bank will upon expiry of such notice  release such  Guarantor  from
         its  guarantee  of amounts  due  hereunder  and all  references  to the
         "Guarantors" shall be construed accordingly.

24.6     Authorisation

         Each of the then existing  Additional  Borrowers from time to time (the
         "Existing  Additional  Borrowers")  authorises  the Parent to designate
         proposed further Additional Borrowers and Guarantors and to request the
         release of  Guarantors  and to  execute on behalf of any such  Existing
         Additional Borrower an Accession Agreement relating to the introduction
         of the proposed Additional Borrower.

25.      guarantee and indemnity of the parent

25.1     Guarantee and Indemnity

         The Parent hereby:

         25.1.1   irrevocably  and  unconditionally  guarantees  to the Bank the
                  proper and punctual performance by each Additional Borrower of
                  its obligations  under this Agreement and undertakes to pay to
                  the Bank on demand all sums from time to time due and  payable
                  (but unpaid) by each Additional  Borrower to the Bank under or
                  pursuant to this Agreement; and

         25.1.2   irrevocably   and   unconditionally   agrees  as  a  separate,
                  continuing  and primary  obligation  to indemnify  the Bank on
                  demand  by the Bank from and  against  all  losses,  claims or
                  costs  incurred  or  suffered  by the Bank as a result of this
                  Agreement or any of the obligations of any Additional Borrower
                  hereunder  being or becoming void,  voidable or  unenforceable
                  for any reason whatsoever, whether or not known to the Bank.
<PAGE>
25.2     Obligations not Discharged

         The  liability  of the  Parent  under  this  Clause 25  (Guarantee  and
         Indemnity of the Parent) shall not be discharged, impaired or otherwise
         affected by:

         25.2.1   the winding-up, dissolution, administration or re-organisation
                  of any  Additional  Borrower or any other person or any change
                  in its status, function, control or ownership; or

         25.2.2   any of the obligations of any Additional Borrower or any other
                  person hereunder or under any security taken in respect of any
                  of  its  obligations  hereunder  being  or  becoming  illegal,
                  invalid, unenforceable or ineffective in any respect; or

         25.2.3   any failure on the part of the Bank  (whether  intentional  or
                  not) to take,  perfect or realise  any  guarantee  or security
                  agreed to be taken in relation to this Agreement; or

         25.2.4   any time or other  indulgence  given or agreed to be given to,
                  or any composition or other  arrangement made with or accepted
                  from (a) any Additional Borrower in respect of its obligations
                  hereunder  or (b) any person in respect of  obligations  under
                  any guarantee or security relating to this Agreement; or

         25.2.5   any  amendment  to this  Agreement  or any such  guarantee  or
                  security; or

         25.2.6   any release,  discharge  or exchange of any such  guarantee or
                  security; or

         25.2.7   any other act,  event or omission which but for this provision
                  would or might  operate to impair or discharge  its  liability
                  hereunder.

25.3     Continuing Obligations

         The  obligations  of the Parent  under this  Clause 25  (Guarantee  and
         Indemnity of the Parent) shall constitute and be continuing obligations
         notwithstanding  any  settlement  of account  or other  matter or thing
         whatsoever  and shall not be considered  satisfied by any  intermediate
         payment  or  satisfaction  of all or  any  of  the  obligations  of any
         Additional  Borrower  under this  Agreement and shall  continue in full
         force and effect  until  payment in full of all  amounts  owing by each
         Additional Borrower hereunder.

25.4     Additional Security

         The  obligations  of the Parent  under this  Clause 25  (Guarantee  and
         Indemnity of the Parent) are in addition to and not in substitution for
         any other  guarantee  or security  which the Bank may now or  hereafter
         hold for the obligations of any Additional  Borrower  hereunder and may
         be  enforced  without  the  Bank  first  having  recourse  to any
<PAGE>

         such  guarantee or security and without the Bank first taking any steps
         or proceedings against any Additional Borrower.

25.5     Deferral of Guarantor's Rights

         So long as the Parent remains under any actual or contingent  liability
         under this 25 (Guarantee and Indemnity of the Parent), the Parent shall
         not exercise any rights it might have by reason of  performance  by the
         Parent of its obligations hereunder:

         25.5.1   to be indemnified by any Additional Borrower; and/or

         25.5.2   to take the benefit (in whole or in part and whether by way of
                  subrogation or otherwise) of any rights of the Bank under this
                  Agreement or of any other guarantee or security taken pursuant
                  to, or in  connection  with this  Agreement;  and/or

         25.5.3   to prove in a  liquidation  or  winding-up  of any  Additional
                  Borrower  in   competition   with  the  Bank  for  any  amount
                  whatsoever  owing  to the  Bank  under  this  Agreement.
<PAGE>

25.6     Discharge by Bank

         Any  discharge  given  by the  Bank to the  Parent  in  respect  of its
         obligations  under  this  Clause 25  (Guarantee  and  Indemnity  of the
         Parent) or any other agreement reached in relation hereto shall be, and
         be deemed  always to have  been,  void if any act on the faith of which
         that  discharge  was  given  or  that  agreement  was  entered  into is
         subsequently avoided by or in pursuance of any provision of law.

25.7     Payments

         All amounts payable by the Parent pursuant to this Clause 25 (Guarantee
         and  Indemnity  of the  Parent)  shall  be  made in  full  without  any
         deduction or withholding  whatsoever by the Parent  (whether in respect
         of set-off,  counterclaim,  duties, taxes, charges or otherwise) unless
         such  deduction or  withholding  is required by law, in which event the
         Parent shall ensure that the deduction or  withholding  does not exceed
         the  minimum  amount  legally  required  and shall pay to the Bank such
         additional  amounts  so that the net amount  received  by the Bank will
         equal the full amount which would have been received by the Bank had no
         such deduction or withholding been made provided that,  notwithstanding
         this Clause 25.7 and Clauses 10.2  (Section 349 Bank  Exception),  12.3
         (Section 349 Bank  Representation)  and 12.4 (Reimbursement of Obligor)
         shall  apply  mutatis  mutandis  in respect  of amounts  payable by the
         Parent under this Clause 25  (Guarantee  and  Indemnity of the Parent),
         but so that all references  thereunder to a Borrower shall be deemed to
         be a  reference  to the  Parent  for the  purposes  of this  Clause  25
         (Guarantee and Indemnity of the Parent).

25.8     Bank Certificate

         A certificate signed by an official of the Bank as to any amount due to
         the Bank  pursuant to this Clause 25  (Guarantee  and  Indemnity of the
         Parent) shall be conclusive evidence save in the case of manifest error
         or on any question of law.

25.9     Remedies and Waiver

         The Bank's rights under this Clause 25 (Guarantee  and Indemnity of the
         Parent)  are  cumulative,  may be  exercised  as  often  as  considered
         appropriate  and are in addition to rights under the general law.  Such
         rights (whether  arising  hereunder or under the general law) shall not
         be  capable  of being  waived or varied  otherwise  than by an  express
         waiver or  variation  in  writing  and in  particular  any  failure  to
         exercise  or any  delay in  exercising  any of such  rights  shall  not
         operate as a waiver or variation  of that or any other such right;  any
         defective or partial  exercise of any of such rights shall not preclude
         any other or  further  exercise  of that or any other such right and no
         act or course of conduct or  negotiation  on the part of the Bank shall
         preclude them from exercising any such right or constitute a suspension
         or variation of any such right.

25.10    Suspense Accounts

         All moneys  received,  recovered  or  realised by the Bank by virtue of
         Clause 25.1 (Guarantee and Indemnity) may, in the Bank's discretion, be
         credited  to a suspense or  impersonal  account and may be held in such
         account for so long as the Bank thinks fit
<PAGE>

         pending the  application  from time to time (as the Bank may think fit)
         of such moneys in or towards the payment and  discharge  of any amounts
         owing (the "Outstanding Amounts") by any of the Additional Borrowers to
         the Bank  hereunder.  The rate of  interest  applicable  to any  amount
         standing to the credit of such suspense or impersonal  account shall be
         the rate per  annum  which is equal to the rate per  annum for the time
         being in respect of the Outstanding Amounts. The Bank shall on the last
         day of each Interest Period in respect of the Outstanding Amounts apply
         the amount of interest for the time being  accrued on such  suspense or
         impersonal account in or towards payment of interest due to the Bank on
         each such day under this Agreement.

26.      DEFAULT INTEREST AND BREAK COSTS

26.1     Default Interest Periods

         If any sum due and payable by an Obligor  hereunder  is not paid on the
         due date therefor in accordance with Clause 29 (Payments) or if any sum
         due and  payable  by an  Obligor  under  any  judgment  of any court in
         connection  herewith  is not  paid on the  date of such  judgment,  the
         period  beginning  on such due date or, as the case may be, the date of
         such judgment and ending on the date upon which the  obligation of such
         Obligor to pay such sum is discharged  shall be divided into successive
         periods,  each of which  (other than the first) shall start on the last
         day of the  preceding  such  period and the  duration  of each of which
         shall be selected by the Bank.

26.2     Default Interest

         During each  period  relating to an Unpaid Sum as referred to in Clause
         26.1 (Default Interest  Periods),  an Unpaid Sum shall bear interest at
         the rate per annum  which is the sum from time to time of one per cent.
         per annum , in the case of an Advance denominated in dollars the Margin
         at such time and LIBOR on the Quotation Date therefor,  and in the case
         of an Advance  denominated  in sterling,  the Mandatory  Cost Rate, the
         Margin at such time and LIBOR on the Quotation  Date therefor  provided
         that:

         26.2.1   if, for any such Interest Period,  LIBOR cannot be determined,
                  the rate of  interest  applicable  to such Unpaid Sum shall be
                  the rate per  annum  which  is the sum of one per  cent.,  the
                  Mandatory Cost Rate (in the case of an Advance  denominated in
                  sterling),  the  Margin  at such  time and the rate per  annum
                  equal to the cost to the Bank of funding  such  Unpaid Sum for
                  such period from whatever sources as it may select;

         26.2.2   if such Unpaid Sum relates to all or part of an Advance  which
                  became due and  payable on a day other than the last day of an
                  Interest  Period  relating  thereto,  the  first  such  period
                  applicable to such Unpaid Sum shall be of a duration  equal to
                  the unexpired portion of that Interest Period relating to that
                  Advance;  and
<PAGE>

         26.2.3   the rate of interest applicable to such Unpaid Sum during such
                  period shall be that which  exceeds by one per cent.  the rate
                  which  would have been  applicable  to it had it not so fallen
                  due.

26.3     Payment of Default Interest

         Any  interest  which shall have  accrued  under  Clause  26.2  (Default
         Interest)  in  respect of an Unpaid  Sum shall be due and  payable  and
         shall be paid by the  Obligor  owing such Unpaid Sum on the last day of
         the period by  reference to which it is  calculated  as notified by the
         Parent to the Bank.

26.4     Break Costs

         If  the  Bank  receives  or  recovers  all or any  part  of an  Advance
         otherwise than on the last day of an Interest  Period  relating to that
         Advance  or  such  part   thereof   (except   pursuant   to  Clause  15
         (Illegality),  the relevant Borrower shall pay to the Bank on demand an
         amount  equal  to the  amount  (if  any) by  which  (a) the  additional
         interest  which  would have been  payable on the amount so  received or
         recovered  had it been  received or  recovered  on the last day of that
         Interest  Period  exceeds (b) the amount of  interest  which would have
         been payable to the Bank on the last day of Interest  Period in respect
         of a deposit in the  currency in which such  Advance or part thereof is
         denominated  equal to the amount so received or recovered  placed by it
         with a prime bank in London for a period  starting  on the date of such
         receipt or recovery and ending on the last day of that Interest Period.

27.      BORROWER'S INDEMNITIES

27.1     Parent's Indemnity

         The Parent undertakes to indemnify the Bank against:

         27.1.1   any reasonable cost,  claim,  loss,  expense  (including legal
                  fees) or liability together with any VAT thereon, which it may
                  sustain or incur as a  consequence  of the  occurrence  of any
                  Event  of  Default  or  any  default  by  the  Parent  in  the
                  performance of any of the obligations  expressed to be assumed
                  by it in this Agreement;

         27.1.2   any cost or loss it may  suffer  or  incur as a result  of its
                  entering into, or performing,  any foreign  exchange  contract
                  for the purposes of Clause 4 (Multicurrency Option);

         27.1.3   any cost or loss it may  suffer  or  incur as a result  of its
                  funding  or  making  arrangements  to fund an  Advance  or its
                  issuing  or  making  arrangements  to issue a Letter of Credit
                  requested  by the  Parent  but not made or issued by reason of
                  the operation of any one or more of the provisions hereof; and

         27.1.4   any loss it may  suffer or incur as a result of any  change to
                  the Interest Period or the currency of any Advance as a result
                  of the operation of this Agreement;
<PAGE>

         27.1.5   any sum paid or due and payable by the Bank in connection with
                  such Letter of Credit; and

         27.1.6   all liabilities,  costs (including,  without  limitation,  any
                  costs incurred in funding any amount which falls due from such
                  Bank in connection with such Letter of Credit), claims, losses
                  and expenses  which such Bank may at any time incur or sustain
                  in connection with any Letter of Credit.

27.2     Currency Indemnity

         If any sum (a "Sum") due from an Obligor  under this  Agreement  or any
         order,  judgment award or decision given or made in relation hereto has
         to be converted from the currency (the "First  Currency") in which such
         Sum is payable into another  currency (the "Second  Currency")  for the
         purpose of:

         27.2.1   making or filing a claim or proof against such Obligor; or

         27.2.2   obtaining  or  enforcing  an order,  judgment  in any court or
                  other tribunal,

         the relevant  Obligor  shall  indemnify  and hold  harmless each of the
         persons to whom such Sum is due from and against  any loss  suffered or
         incurred  as a  result  of any  discrepancy  between  (a)  the  rate of
         exchange  used for such  purpose  to  convert  such Sum from the  First
         Currency into the Second Currency and (b) the rate or rates of exchange
         at which such person may in the  ordinary  course of business  purchase
         the First Currency with the Second  Currency upon receipt of a Sum paid
         to it in  satisfaction,  in  whole  or in  part,  of  any  such  order,
         judgment, claim or proof.

28.      CURRENCY OF ACCOUNT AND PAYMENT

28.1     The dollar is the  currency  of account  and payment for each and every
         sum at any time due from an Obligor hereunder, provided that:

         28.1.1   each  repayment  of an Advance or Unpaid Sum or a part thereof
                  shall be made in the  currency in which such Advance or Unpaid
                  Sum is denominated at the time of that repayment;

         28.1.2   each payment in respect of a Letter of Credit  (including  any
                  Cash  Collateral  in respect  of a Letter of Credit)  shall be
                  made in the  currency  in  which  such  Letter  of  Credit  is
                  denominated;

         28.1.3   each  payment of  interest  shall be made in the  currency  in
                  which the sum in respect of which such  interest is payable is
                  denominated;

         28.1.4   each payment in respect of costs and expenses shall be made in
                  the currency in which the same were incurred;

         28.1.5   each  payment  pursuant  to Clause 14.1  (Increased  Costs) or
                  Clause 25.1  (Guarantee  and Indemnity of the Parent) shall be
                  made in the currency specified by the Bank; and
<PAGE>

         28.1.6   any amount  expressed  to be payable in a currency  other than
                  dollars shall be paid in that other currency.

28.2     The Bank may (acting  reasonably)  amend this  Agreement  to the extent
         that it considers to be required in order to reflect the  circumstances
         set out below if any of the following events occur:

         28.2.1   any  currency  in  which  any of  the  obligations  under  the
                  Facility and this Agreement are denominated  from time to time
                  is  changed  or  replaced  at any time  after the date of this
                  Agreement  (whether  as  a  result  of  the  introduction  of,
                  changeover  to or  operation  of a single or unified  European
                  currency or otherwise); and/or

         28.2.2   any price source for the euro or the national  currency of any
                  member state is eliminated or replaced; and/or

         28.2.3   any  market   conventions   relating  to  the  fixing   and/or
                  calculation of interest are changed or replaced.

28.3     If after the date of this Agreement a member state becomes a Subsequent
         Participant,  all  obligations  under  this  Agreement  (including  any
         obligation  in  respect  of any Bank's  Available  Facility)  to make a
         payment in its national  currency unit shall be redenominated  into the
         euro unit on the date on which it becomes a Subsequent Participant (but
         otherwise in accordance with EMU Legislation).

29.      PAYMENTS

29.1     Payments to the Bank

        On each date on which this  Agreement  requires  an amount to be paid by
        any Borrower,  such Borrower  shall make the same  available to the Bank
        for account of the Facility Office by payment in immediately  available,
        freely transferable,  cleared funds (or if such amount is denominated in
        dollars  in same  day  dollar  funds,  or  such  other  funds  as may be
        customary  in New York  City  for the  settlement  in New  York  City of
        international  banking  transactions  in dollars) to such account of the
        Bank as the  Bank  shall  from  time to time  have  specified  for  this
        purpose.

29.2     Payments by the Bank

         29.2.1   On each date on which this Agreement  requires an amount to be
                  paid by the Bank to any  Borrower  hereunder,  the Bank  shall
                  make  the  same  available  to  the  Borrower  by  payment  in
                  immediately available, freely transferable,  cleared funds (or
                  if such  amount is  denominated  in dollars in same day dollar
                  funds,  or such other  funds as may be  customary  in New York
                  City  for the  settlement  in New York  City of  international
                  banking  transactions  in  dollars)  to such  account  of such
                  Borrower  as such  Borrower  shall  from  time  to  time  have
                  specified for this purpose.
<PAGE>

         29.2.2   A payment  will be deemed to have been made by the Bank on the
                  date on which it is required  to be made under this  Agreement
                  if the Bank has, on or before  that date,  taken steps to make
                  that payment in accordance  with the  regulations or operating
                  procedures of the clearing system used by the Bank in order to
                  make the payment.

29.3     Alternative Payment Arrangements

         If, at any time, it shall become impracticable (by reason of any action
         of any  governmental  authority  or any  change  in law or any  similar
         event) for the Parent to make any  payments in the manner  specified in
         Clause 29.1 (Payments to the Bank),  then the Parent may agree with the
         Bank alternative  arrangements  for such payments to be made,  provided
         that, in the absence of any such agreement, the Parent shall be obliged
         to make all payments due to the Bank in the manner specified herein.

29.4     No Set-off

         All  payments  required  to be made by an  Obligor  hereunder  shall be
         calculated  without  reference to any set-off or counterclaim and shall
         be made free and clear of and without any  deduction  for or on account
         of any set-off or counterclaim.

30.      SET-OFF

30.1     Contractual Set-off

         Each Obligor  authorises  the Bank to apply any credit balance to which
         such  Obligor is entitled on any account of such  Obligor with the Bank
         in  satisfaction  of any sum due and payable  from such  Obligor to the
         Bank hereunder but unpaid. For this purpose,  the Bank is authorised to
         purchase  with the moneys  standing  to the credit of any such  account
         such other currencies as may be necessary to effect such application.

30.2     Set-off not Mandatory

         The Bank  shall not be  obliged to  exercise  any right  given to it by
         Clause 30.1 (Contractual Set-off).

31.      ASSIGNMENTS

31.1     Binding Agreement

         This  Agreement  shall be binding upon and enure to the benefit of each
         party hereto and its or any subsequent successors.

31.2     No Assignments and Transfers by the Obligors

         Save as  otherwise  provided  herein,  no Obligor  shall be entitled to
         assign or transfer all or any of its rights,  benefits and  obligations
         hereunder.
<PAGE>

31.3     Assignments by the Bank

         31.3.1   The Bank may, at any time, assign or grant  sub-participations
                  in respect of all or any of its rights and benefits hereunder.

         31.3.2   The consent of the Parent is required for an assignment by the
                  Bank unless the  assignment  is to any  subsidiary  or holding
                  company (or to any  subsidiary of any holding  company) of the
                  Bank.

         31.3.3   The Parent's consent must not be (a)  unreasonably  delayed or
                  withheld or (b)  withheld  solely  because the  assignment  or
                  transfer may result in an increase to the Mandatory Cost Rate.

31.4     Disclosure of Information

         31.4.1   The Bank may not disclose to any actual or potential assignee,
                  sub-participant  or to any person who may otherwise enter into
                  contractual  relations  with  the  Bank  in  relation  to this
                  Agreement  any  information  about  the  Group  which has been
                  supplied pursuant hereto except with the prior written consent
                  of the Parent (such approval not to be  unreasonably  withheld
                  or delayed),  unless such  information is in the public domain
                  (otherwise  than as a  result  of a  default  by the  Bank) or
                  unless such disclosure is required by law or by any government
                  or any  governmental,  quasi-governmental,  supra  national or
                  trade agency, statutory or regulatory body or any Court.

         31.4.2   The  Bank  undertakes  that it will not  disclose  information
                  about the Group to any person except as is expressly permitted
                  hereunder  and that prior to  disclosing  any  information  it
                  will,  in any  event,  obtain  from  the  person  to whom  the
                  information is to be disclosed an  undertaking  not to further
                  disclose  that  information  except as  permitted  under  this
                  Clause 31  (Assignments)  (including  the  obtaining of a like
                  undertaking   from  any  person  to  whom  it  might  disclose
                  information).

32.      CALCULATIONS AND EVIDENCE OF DEBT

32.1     Basis of Accrual

         Any interest, letter of credit commission, commitment commission or fee
         accruing hereunder will accrue from day to day and is calculated on the
         basis of a year of 360 days (or,  in the case of any  Advance or Letter
         of Credit  denominated  in sterling,  365 days and the actual number of
         days  elapsed)  or,  in any case  where  market  practice  differs,  in
         accordance with market practice.

32.2     Proportionate Reductions

         Any repayment of an Advance  denominated in an Optional  Currency shall
         reduce  the  amount of such  Advance  by the  amount  of such  Optional
         Currency  repaid and shall  reduce the  Dollar  Amount of such  Advance
         proportionately.
<PAGE>

32.3     Evidence of Debt

         The Bank shall maintain in accordance with its usual practice  accounts
         evidencing  the  amounts  from  time to time  lent by and  owing  to it
         hereunder.  In any legal  action  or  proceeding  arising  out of or in
         connection with this Agreement, the entries made in such accounts shall
         be prima facie  evidence of the  existence and amounts of the specified
         obligations of the Obligors.

32.4     Rounding and Other Consequential Changes

         32.4.1   Without  prejudice and in addition to any method of conversion
                  or  rounding  prescribed  by any EMU  Legislation  and without
                  prejudice  to (a)  the  liabilities  for  indebtedness  of the
                  Parent to the Bank under or pursuant to this  Agreement or (b)
                  the Available  Facility,  any reference in this Agreement to a
                  minimum amount (or an integral multiple thereof) in a national
                  currency of a Subsequent  Participant  to be paid to or by the
                  Bank  shall,   immediately   upon  it  becoming  a  Subsequent
                  Participant,  be  placed  by a  reference  to such  reasonably
                  comparable  and  convenient  amount (or an  integral  multiple
                  thereof) in the euro unit as the Bank may specify.

         32.4.2   Save as expressly  provided in this Clause 32.4  (Rounding and
                  Other Consequential  Changes), this Agreement shall be subject
                  to such reasonable  changes of construction as the Bank may at
                  the  relevant  time specify to be  appropriate  to reflect the
                  adoption of the euro in any Participating Member State and any
                  relevant  market  conventions  and  practices  relating to the
                  euro.

32.5     Certificates of the Bank

         A  certificate  of the Bank as to (a) the amount by which a sum payable
         to it hereunder is to be increased  under Clause 12.1 (Tax Gross-up) or
         (b) the amount for the time being  required to indemnify it against any
         such  cost,  payment  or  liability  as is  mentioned  in  Clause  25.1
         (Guarantee and Indemnity) or (c) Clause 14.1  (Increased  Costs) or (d)
         the amount paid by the Bank in respect of any Letter of Credit,  shall,
         in the  absence of  manifest  error,  be prima  facie  evidence  of the
         existence and amounts of the specified obligations of the Obligors.

33.      REMEDIES AND WAIVERS, PARTIAL INVALIDITY

33.1     Remedies and Waivers

         No failure to exercise, nor any delay in exercising, on the part of the
         Bank, any right or remedy  hereunder shall operate as a waiver thereof,
         nor shall any single or partial exercise of any right or remedy prevent
         any  further or other  exercise  thereof or the  exercise  of any other
         right or remedy. The rights and remedies herein provided are cumulative
         and not exclusive of any rights or remedies provided by law.
<PAGE>

33.2     Partial Invalidity

         If, at any time, any provision hereof is or becomes illegal, invalid or
         unenforceable in any respect under the law of any jurisdiction, neither
         the legality,  validity or enforceability  of the remaining  provisions
         hereof nor the legality,  validity or  enforceability of such provision
         under the law of any other jurisdiction shall in any way be affected or
         impaired thereby.

34.      NOTICES

34.1     Communications in Writing

         Each  communication  to be made hereunder shall be made in writing and,
         unless otherwise stated, shall be made by fax or letter.

34.2     Delivery

         Any  communication or document to be made or delivered by one person to
         another pursuant to this Agreement shall:

         34.2.1   if by way of fax (unless  that other  person has by five days'
                  notice specified  another number) be made to such other person
                  to the fax  number  identified  with its  signature  below and
                  shall be deemed to have been  received when  transmission  has
                  been completed; and

         34.2.2   if by way of letter  (unless  that  other  person  has by five
                  days' notice  specified  another address) be delivered to that
                  other  person at the  address  identified  with its  signature
                  below and shall be deemed to have been  delivered when left at
                  that  address  or, as the case may be,  two days  after  being
                  deposited in the post postage prepaid in an envelope addressed
                  to it at that address,

         provided that any  communication or document to be made or delivered to
         the Bank shall be effective only when received by its Corporate Banking
         division  and  then  only  if the  same  is  expressly  marked  for the
         attention  of the  department  or  officer  identified  with the Bank's
         signature below (or such other  department or officer as the Bank shall
         from time to time specify for this purpose).

34.3     Communication by Additional Borrowers

         Any  communication  or  document to be made or  delivered  to or by the
         Additional Borrowers or any of them shall be made or delivered to or by
         the Parent on behalf of all or any of them and each Additional Borrower
         irrevocably and unconditionally appoints the Parent as its agent:

         34.3.1   for it and on its behalf to issue and  receive  communications
                  or  documents  to be made or  delivered  to or by it hereunder
                  including,  without limitation,  in respect of any Utilisation
                  Request,  selection of any Interest Period, designation of any
                  proposed  Additional  Borrower,  designation or release of any
                  Guarantor or prepayment of any Advance; and
<PAGE>

         34.3.2   to  agree  any  amendment  to,  variation  or  waiver  of this
                  Agreement  including,  without  limitation,  entering into any
                  Accession   Agreement   and   negotiating   and  agreeing  any
                  substitute basis for the calculation of interest hereunder,

         and each  Additional  Borrower  acknowledges  that any action  taken or
         agreement  made by the Parent  whatsoever on behalf of such  Additional
         Borrower  in  relation  to this  Agreement  shall  be  binding  on that
         Additional Borrower.

34.4     English Language

         Each  communication  and  document  made or  delivered  by one party to
         another  pursuant to this Agreement shall be in the English language or
         accompanied  by a  translation  thereof into English  certified  (by an
         officer of the person  making or  delivering  the same) as being a true
         and accurate translation thereof.

35.      GOVERNING LAW

         This Agreement shall be governed by, and construed in accordance  with,
         English law.

36.      JURISDICTION

36.1     English Courts

         Each of the parties  hereto  irrevocably  agrees for the benefit of the
         Bank that the courts of England  shall  have  jurisdiction  to hear and
         determine any suit,  action or proceeding,  and to settle any disputes,
         which  may  arise  out  of  or  in  connection   with  this   Agreement
         (respectively  "Proceedings"  and  "Disputes")  and, for such purposes,
         irrevocably submits to the jurisdiction of such courts.

36.2     New York Courts

         Each of the Borrowers  irrevocably  agrees that the courts of the State
         of New York and the courts of the  United  States of  America,  in each
         case sitting in the County of New York, shall have jurisdiction to hear
         and determine any  Proceedings and to settle any Disputes and, for such
         purposes, irrevocably submits to the jurisdiction of such courts.

36.3     Convenient Forum

         Each of the Borrowers  irrevocably  waives any objection which it might
         now or hereafter have to the courts referred to in Clause 36.1 (English
         Courts) and Clause 36.2 (New York Courts) being  nominated as the forum
         to hear and  determine any  Proceedings  and to settle any Disputes and
         agrees  not to  claim  that  any  such  court  is not a  convenient  or
         appropriate forum.

36.4     Service of Process

         The Parent and each  Additional  Borrower  agrees  that the  process by
         which any  Proceedings are begun may be served on it by being delivered
         (i) in connection with

<PAGE>

         any Proceedings in England,  to Clifford Chance Secretaries  Limited at
         200 Aldersgate  Street,  London EC1A 4JJ or its other registered office
         for the time being and (ii) in connection  with any  Proceedings in New
         York, to Nazareth Century Corporation at 350 Fifth Avenue,  Suite 4210,
         New  York,  NY 10118.  If the  appointment  of  either  of the  persons
         mentioned  in this Clause 36.4 ceases to be effective in respect of the
         Parent  or any  Additional  Borrower,  the  Parent  or such  Additional
         Borrower shall  immediately  appoint a further person in England or, as
         the case may be, New York to accept service of process on its behalf in
         England or, as the case may be, New York and,  failing such appointment
         within 15 days,  the Bank shall be entitled to appoint such a person by
         notice to the Parent or such  Additional  Borrower.  Nothing  contained
         herein  shall  affect the right to serve  process  in any other  manner
         permitted by law.

         No Limitation on Proceedings

         The submission to the  jurisdiction of the courts referred to in Clause
         36.1 (English  Courts) and Clause 36.2 (New York Courts) shall not (and
         shall  not be  construed  so as to) limit the right of the Bank to take
         Proceedings  against the Parent or any Additional Borrower in any other
         court of competent  jurisdiction nor shall the taking of Proceedings in
         any one or more jurisdictions preclude the taking of Proceedings in any
         other jurisdiction  (whether  concurrently or not) if and to the extent
         permitted by applicable law.

AS  WITNESS  the hands of the duly  authorised  representatives  of the  parties
hereto the day and year first before written.
<PAGE>

                                   SCHEDULE 1

                                 THE GUARANTORS

Name                                        Jurisdiction of Incorporation
----                                        -----------------------------
London Pacific Group Limited                Jersey, Channel Islands

Berkeley International Capital Corporation  California, United States of America

Berkeley International Capital Limited      Guernsey, Channel Islands

North American Fiduciary Dervices, Inc.     California, United States of America

Berkeley (USA) Holdings Limited             California, United States of America

<PAGE>

                                   SCHEDULE 2

                              CONDITIONS PRECEDENT

1.       In relation to the Parent and each Guarantor listed in Schedule 1:

         (a)      a copy,  certified a true copy by a duly Authorised  Signatory
                  of such person of the  Memorandum  and Articles of Association
                  (or equivalent) of such person ;

         (b)      a copy,  certified as a true copy on behalf of such person, of
                  a Board  Resolution of such person  approving  the  execution,
                  delivery  and  performance  of (in the case of the  Parent and
                  each  Additional  Borrower)  this  Agreement and the terms and
                  conditions  hereof (and,  in the case of each  Guarantor)  its
                  guarantee of the obligations of the Parent and each Additional
                  Borrower  under this  Agreement  and the terms and  conditions
                  thereof and  authorising a named person or persons to sign the
                  same and any documents to be delivered by such person pursuant
                  hereto or thereto; and

         (c)      a certificate  of a duly  Authorised  Signatory of such person
                  setting out the names and signatures of the persons authorised
                  on behalf of such person by its Board  Resolution  referred to
                  in (b) above.

2.       In relation to each Guarantor a guarantee in the form as set out in the
         Schedule 8 (Form of Guarantee) .

3.       An opinion  relating to the due execution by a non-UK  Guarantor of any
         guarantee  referred to in paragraph 2 above  addressed to the Bank in a
         form acceptable to the Bank (whose  acceptance will not be unreasonably
         withheld  or  delayed)  by  external  legal  counsel  appointed  by the
         relevant Guarantor.

4.       An opinion from Clifford  Chance  addressed to the Bank  concerning the
         validity of the Facility Agreement and the guarantees.

5.       A schedule of current  borrowings and  Encumbrances  of the Group as at
         the end of the month in which this Agreement is signed (which  schedule
         shall be used to identify  current  borrowings and Encumbrances for the
         purposes of Clauses 20.2.1 and 20.2.2)).

6.       A copy,  certified  a true  copy by a duly  authorised  officer  of the
         Parent of:

         (a)      the audited consolidated financial statements of the Group for
                  its financial year ended 31 December 1999; and

         (b)      the audited financial  statements of each Additional  Borrower
                  and Guarantor for its financial year ended 31 December 1999.

7.       Evidence that Clifford Chance Secretaries  Limited has agreed to act as
         agent of the Parent and each  Additional  Borrower  for the  service of
         process in England and that Nazareth Century  Corporation has agreed to
         act as agent of the Parent and each Additional Borrower for the service
         of process in New York.
<PAGE>

                                   SCHEDULE 3

                               UTILISATION REQUEST

From:    London Pacific Group Limited

To:      The Governor and Company of the Bank of Scotland

Dated:

Dear Sirs,

1.       We refer to the agreement (the "Facility  Agreement")  dated 2 May 2000
         and made between  ourselves as and yourselves as lender.  Terms defined
         in the Facility Agreement shall have the same meaning in this notice.

2.       This notice is irrevocable.

3.       We hereby give you notice that,  pursuant to the Facility Agreement and
         on [date of proposed  Advance],  [we/or [Name of  Additional  Borrower]
         wish[es] the Bank to make an Advance/issue a Letter of Credit having an
         Original  Dollar  Amount  of $][ ] upon the terms  and  subject  to the
         conditions contained therein.

4.       We confirm that following  utilisation of the Advance we will remain in
         compliance with the covenant contained in Clause 20.2.5.

5.       We would like this Advance to be  denominated in [currency] and to have
         a first Interest Period of [ ] months'  duration*./[We  would like this
         Advance to be  divided  upon the making  thereof  into [ ] Advances  as
         follows:

                                                             [Duration of First
        Original Dollar Amount              Currency          Interest Period]*

6.      We confirm  that,  at the date hereof,  no Event of Default or Potential
        Event of  Default  has  occurred  which is  continuing  and has not been
        waived nor would  result from the making of this  Advance/issue  of this
        Letter  of  Credit  and the  Repeated  Representations  are  true in all
        material respects.

7.       The proceeds of the  utilisation  should be credited to [insert account
         details].

                                Yours faithfully
                          .............................
                              Authorised Signatory
                              for and on behalf of
                          LONDON PACIFIC GROUP LIMITED
-----------------------------------------------------------------------------

         *        Insert only if there are no outstanding  Advances  denominated
                  in the currency of the utilisation

<PAGE>

                                   SCHEDULE 4

                              EXISTING ENCUMBRANCES

      Guarantees and Letters of Credit Related to U.S.$50,000,000 Facility
                   (Facility Agreement dated 26 October 1996)
<TABLE>
<CAPTION>
------------------------------------------- --------------------- -------------------- ---------------------
              Group Company                      Instrument        Issued in Favour           Amount ($)
<S>                                         <C>                   <C>                  <C>
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Letter of Credit      Selle Italia         150,000.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Bank Guarantee        Credito Italiano     64,438.64
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Bank Guarantee        Credito Italiano     30,710.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Letter of Credit      Acumin               103,479.50
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Letter of Credit      Acumin               179,655.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Letter of Credit      Acumin               125,099.75
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Letter of Credit      Acumin               262,162.20
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Letter of Credit      GE Capital Bank      1,900,000.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited      Bank Guarantee        Furniture  Builders  9,612,666.02
                                                                  Ltd
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
                                                                  Total                12,428,211.11
                                                                  ------
------------------------------------------- --------------------- -------------------- ---------------------
</TABLE>

Third Party Encumbered Assets
<TABLE>
<CAPTION>
<S>                                         <C>                   <C>                  <C>
------------------------------------------- --------------------- -------------------- ---------------------
              Group Company                      Instrument           Details of              Amount
                                                                       Equipment               ($)
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Corporation  Lease Purchase        Two Photocopiers     31,000.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
SAI Capital Holdings, Inc                   Lease Purchase        Computer Equipment   80,750.27
------------------------------------------- --------------------- -------------------- ---------------------

<PAGE>

------------------------------------------- --------------------- -------------------- ---------------------
SAI Capital Holdings, Inc                   Lease Purchase        Computer Software    124,937.04
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
SAI Capital Holdings, Inc                   Lease Purchase        Advent Software      408,979.29
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Select Advisors                             Lease Purchase        Computer Equipment   18,870.28
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- ------------------------------------------
                                                                  Total                664,536.88
                                                                  ------
------------------------------------------- --------------------- -------------------- ---------------------
</TABLE>
<PAGE>

                                   SCHEDULE 5

                         FORM OF COMPLIANCE CERTIFICATE

To:         Governor and Company of the Bank of Scotland
            Corporate Banking
            P.O. Box 30
            Broad Street House
            55 Old Broad Street
            London EC2P 2HL

Attention: Evelyn Clark

                                                       Dated [               ]

Dear Sirs,

$50,000,000 Facility Agreement dated 2 May 2000

We refer to  Clause  20.2.3  of the  above  Facility  Agreement  and  report  on
compliance  with the  provisions  of Clause 21 of the  Facility  Agreement  with
reference  to the  consolidated  financial  statements  of  the  Group  for  the
financial [half] year ending on [ ].

(A)  Compliance  with the  following  covenants  contained in Clause 21.1 of the
above Facility Agreement:

<TABLE>
<CAPTION>

                                                                                    Year             Year
                                                                                    $000             $000
<C>                                                                             <S>              <C>
1)       Liabilities not to exceed equity
         Liabilities
                       Creditors                                                [         ]      [         ]
                       Creditors - non current                                  [         ]      [         ]
                       Less: Long-term insurance reserves                       [(       )]      [(       )]
                                                                                -----------      -----------

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

-------------------------------------------------------------------------------
         Equity                                                                 [         ]      [         ]
-------------------------------------------------------------------------------
                       Called up share capital                                  [         ]      [         ]
-------------------------------------------------------------------------------
                       Share premium                                            [         ]      [         ]
-------------------------------------------------------------------------------
                       Capital redemption reserve                               [         ]      [         ]
-------------------------------------------------------------------------------
                       Profit and loss account
-------------------------------------------------------------------------------
                       Less: goodwill
-------------------------------------------------------------------------------
                       Profit and loss account excluding goodwill               [         ]      [         ]
-------------------------------------------------------------------------------
                       Other reserves as at [   ]                               [         ]      [         ]
-------------------------------------------------------------------------------
                                                                                -----------      -----------
                                                                                [(       )]      [(       )]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
         Ratio                                                                  [        ]%      [        ]%
------------------------------------------------------------------------------- ===========      ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                    Year             Year
                                                                                    $000             $000
<C>                                                                             <S>              <C>

2)       Net Worth not to be less than $325 million
-------------------------------------------------------------------------------
         Equity (as above)                                                      [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
3)       Operating Profit to be a minimum of 300% of
         Interest Charge
-------------------------------------------------------------------------------
         Operating Profit
-------------------------------------------------------------------------------
                       Profit before taxation                                   [         ]      [         ]
-------------------------------------------------------------------------------
                       Interest expense                                         [         ]      [         ]
------------------------------------------------------------------------------- -----------      -----------
                                                                                [         ]      [         ]
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
         Less:    Exceptional and extraordinary items                           [(       )]      [(       )]
------------------------------------------------------------------------------- -----------      -----------

-------------------------------------------------------------------------------
         Interest Cover                                                         [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
         Interest Charge                                                        [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
         Ratio                                                                  [        ]%      [        ]%
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
4)       Operating cash flow to be no less than 25% of Net Debt
-------------------------------------------------------------------------------
         Operating cash flow                                                    [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
         Net Debt
-------------------------------------------------------------------------------
                       Borrowings                                               [         ]      [         ]
-------------------------------------------------------------------------------
                       Cash held in escrow                                      [         ]      [         ]
-------------------------------------------------------------------------------
                       Liquid resources
-------------------------------------------------------------------------------
                       Less: securities below BBB rating
-------------------------------------------------------------------------------
                                                                                [(       )]      [(       )]
-------------------------------------------------------------------------------
                       Cash                                                     [(       )]      [(       )]
------------------------------------------------------------------------------- -----------      -----------
         Net Debt/(Cash)                                                        [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
(N.B.  Covenant may only be breached if net debt is positive)
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
5)       Ratio of Current Assets to Current Liabilitis to be at least   2.1
-------------------------------------------------------------------------------
         Current Assets                                                         [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
         Current liabilities (Creditors)                                        [         ]      [         ]
-------------------------------------------------------------------------------
                       Less: amounts due to Bank                                [(       )]      [(       )]
-------------------------------------------------------------------------------
                                                                                -----------      -----------
                                                                                [(       )]      [(       )]
-------------------------------------------------------------------------------
------------------------------------------------------------------------------- ===========      ===========
         Ratio                                                                  [        ]%      [        ]%
                                                                                ===========      ===========

-------------------------------------------------------------------------------
6)       Aggregate intangible assets not to exceed 40% of Group
         Gross Assets
-------------------------------------------------------------------------------
         Intangible assets:
-------------------------------------------------------------------------------
                       Goodwill                                                 [         ]      [         ]
-------------------------------------------------------------------------------
                       Deferred Policy Acquisition Costs                        [         ]      [         ]
-------------------------------------------------------------------------------
                       Intangible Assets                                        [         ]      [         ]
-------------------------------------------------------------------------------
                                                                                -----------      -----------
                                                                                [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                                                    Year             Year
                                                                                    $000             $000
<C>                                                                             <S>              <C>
         Aggregate gross assets:
-------------------------------------------------------------------------------
                       Fixed assets                                             [         ]      [         ]
-------------------------------------------------------------------------------
                       Current assets                                           [         ]      [         ]
-------------------------------------------------------------------------------
                       Goodwill                                                 [         ]      [         ]
-------------------------------------------------------------------------------
                                                                                -----------      -----------
                                                                                [         ]      [         ]
-------------------------------------------------------------------------------
------------------------------------------------------------------------------- ===========      ===========
         Ratio                                                                  [        ]%      [        ]%
                                                                                ===========      ===========

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
7)       Guaranteeing Group net assets to be no less than 90% of
         Available Net Assets
-------------------------------------------------------------------------------
         Guaranteeing Group net assets                                          [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

-------------------------------------------------------------------------------
         Available Group net assets                                             [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========
         Ratio                                                                  [         ]      [         ]
------------------------------------------------------------------------------- ===========      ===========

</TABLE>

(B)     The Repeated  Representations remain true in all material respects as at
        the date hereof by reference to the facts and  circumstances on the date
        hereof.

(C) No  Potential  Event of Default or Event of Default  has  occurred  which is
continuing and has not been waived.

Expressions  defined in the  Facility  Agreement  shall  have the same  meanings
herein.

                              For and on behalf of

                          LONDON PACIFIC GROUP LIMITED
<PAGE>

                                   SCHEDULE 6

                               ACCESSION AGREEMENT

THIS ACCESSION AGREEMENT is made on the [         ] day of [           ],

BETWEEN

(1)      London  Pacific Group Limited [on behalf of itself and as agent for and
         on  behalf  of  [list  any  other  parties  who  have  hitherto  become
         Additional Borrowers pursuant to the Agreement]] (the "Parent");

(2)      [Additional borrower] (the "Additional Borrower");

(3)      The Governor and Company of the Bank of Scotland (the "Bank").

WHEREAS

(1)      By a facility  agreement dated 2 May 2000 made between the Parent,  The
         Governor  and Company of the Bank of Scotland  (the  "Agreement"),  the
         Bank has granted a loan facility of up to $50,000,000 or its equivalent
         to the  Parent  and any other  person  which has  become an  additional
         borrower pursuant thereto;

(2)      [The  Agreement  has hitherto  been further  amended by the addition of
         other  additional   borrowers  pursuant  to  the  following   accession
         agreements:-

         [list accession agreements             dates of accession agreements]]

(3)      Pursuant  to  Clause  24.1  of the  Agreement,  the  Parent  wishes  to
         designate the Additional  Borrower as a Borrower under the Facility and
         the Bank, has consented to such designation.

NOW IT IS HEREBY AGREED as follows:-

1.       Interpretation

         Save as otherwise defined herein,  terms defined in the Agreement shall
         bear the same meaning herein.

<PAGE>

2.       Additional Borrower

         With effect from the date on which the Parent delivers to the Bank each
         of the  conditions  precedent  specified in Clause 3 of this  Accession
         Agreement,  the Agreement shall  henceforth be read and construed as if
         the  Additional  Borrower  were party to the  Agreement  having all the
         rights and  obligations of an Additional  Borrower and a Borrower under
         the Facility.  Accordingly,  all references in the Agreement to (a) any
         "Additional  Borrower"  or  "Borrower"  shall be treated as including a
         reference to such  Additional  Borrower and (b) any  references  to the
         Agreement  shall  be  treated  as  a  reference  to  the  Agreement  as
         supplemented  by this  Accession  Agreement  to the  intent  that  this
         Accession  Agreement  and the  Agreement  shall be read  and  construed
         together as one single agreement.

3.       Conditions Precedent

         The following are the Additional Borrower Conditions Precedent referred
         to in Clause 2 of this  Accession  Agreement  which are  required to be
         delivered to the Bank in relation to the Additional Borrower:-

3.1      a copy,  certified as a true copy by an Authorised  Signatory on behalf
         of such  person,  of the  Memorandum  and Articles of  Association  (or
         equivalent) of such person;

3.2      a copy,  certified as a true copy by an Authorised  Signatory on behalf
         of such person,  of a Board  Resolution  of such person  approving  the
         execution,  delivery and performance of this Accession  Agreement,  the
         Agreement,  any guarantee referred to in Clause 3.4 below and the terms
         and  conditions  hereof and thereof and  authorising  a named person or
         persons  to sign the same and any  documents  to be  delivered  by such
         person pursuant hereto or thereto;

3.3      a certificate of a duly  authorised  officer of such person setting out
         the names and  signatures  of the persons  authorised on behalf of such
         person by its Board Resolution referred to in 3.2 above;

3.4      if the Additional Borrower is not an existing Guarantor, a guarantee in
         substantially  the form provided by the existing  Guarantors (with such
         changes,  if any,  as the Bank may  reasonably  require in the light of
         legal advice received by it)  guaranteeing  amounts owing by the Parent
         and the Additional Borrowers under the Agreement; and

3.5      an opinion in such form as the Bank may reasonably  require relating to
         the  due  execution  of this  Accession  Agreement  and  any  guarantee
         referred  to in Clause  3.4  above  addressed  to the Bank by  in-house
         counsel to the Parent.

4.       Representations

         The Additional  Borrower  hereby  represents in respect of itself as if
         the  representations set out in Clause 17 of the Agreement were set out
         in full in this Accession Agreement.

<PAGE>

5.       Counterparts

         This Accession  Agreement may be signed in  counterparts,  all of which
         taken together shall constitute a single agreement.

6.       Law

         This  Accession  Agreement  shall be  governed  by,  and  construed  in
         accordance with, English law.

7.       Jurisdiction

7.1      Each of the parties  hereto  irrevocably  agrees for the benefit of the
         Bank that the courts of England  shall  have  jurisdiction  to hear and
         determine any suit,  action or proceeding,  and to settle any disputes,
         which may arise out of or in connection  with this Accession  Agreement
         (respectively  "Proceedings"  and  "Disputes")  and, for such purposes,
         irrevocably submits to the jurisdiction of such courts.

7.2      Each of the Borrowers  irrevocably  agrees that the courts of the State
         of New York and the courts of the  United  States of  America,  in each
         case sitting in the County of New York, shall have jurisdiction to hear
         and determine any  Proceedings and to settle any Disputes and, for such
         purposes, irrevocably submits to the jurisdiction of such courts.

7.3      Each of the Borrowers  irrevocably  waives any objection which it might
         now or  hereafter  have to the  courts  referred  to in Clause  7.1 and
         Clause  7.2  being  nominated  as the forum to hear and  determine  any
         Proceedings and to settle any Disputes and agrees not to claim that any
         such court is not a convenient or appropriate forum.

7.4      The Parent and each  Additional  Borrower  agrees  that the  process by
         which any  Proceedings are begun may be served on it by being delivered
         (i) in connection with any  Proceedings in England,  to Clifford Chance
         Secretaries Limited at 200 Aldersgate Street,  London EC1A 4JJ or other
         its  registered  office for the time being and (ii) in connection  with
         any  Proceedings  in New York, to Nazareth  Century  Corporation at 350
         Fifth  Avenue,  Suite 4210,  New York,  NY 10118 or other its principal
         place of business in New York for the time being. If the appointment of
         either  of the  persons  mentioned  in this  Clause  7.4  ceases  to be
         effective  in  respect of the Parent or any  Additional  Borrower,  the
         Parent or such Additional  Borrower shall immediately appoint a further
         person in England or, as the case may be, New York to accept service of
         process on its behalf in England  or, as the case may be, New York and,
         failing such appointment  within 15 days, the Bank shall be entitled to
         appoint  such a person  by  notice  to the  Parent  or such  Additional
         Borrower.  Nothing  contained  herein  shall  affect the right to serve
         process in any other manner permitted by law.

7.5      The submission to the  jurisdiction of the courts referred to in Clause
         7.1 and  Clause  7.2 shall not (and  shall not be  construed  so as to)
         limit the right of the Bank to take  Proceedings  against the Parent or
         any  Additional  Borrower in any other court of competent  jurisdiction
         nor shall the taking of  Proceedings  in any one or more
<PAGE>

         jurisdictions   preclude  the  taking  of   Proceedings  in  any  other
         jurisdiction  (whether  concurrently  or  not)  if and  to  the  extent
         permitted by applicable law.

7.6      The Parent and each Additional  Borrower  hereby consents  generally in
         respect if any  Proceedings to the giving of any relief or the issue of
         any process in connection with such  Proceedings  including the making,
         enforcement or execution against any property whatsoever  (irrespective
         of its use or intended use) of any order or judgment  which may be made
         or given in such Proceedings.

7.7      To the extent  that the Parent or any  Additional  Borrower  may in any
         jurisdiction  claim  for  itself  or its  assets  immunity  from  suit,
         execution,  attachment (whether in aid of execution, before judgment or
         otherwise)  or other  legal  process and to the extent that in any such
         jurisdiction  there may be  attributed  to itself  or its  assets  such
         immunity  (whether  or not  claimed),  the  Parent  or such  Additional
         Borrower hereby  irrevocably agrees not to claim and hereby irrevocably
         waives such  immunity to the full extent  permitted by the laws of such
         jurisdiction and, in particular,  to the intent that in any proceedings
         taken in New York the  foregoing  waiver of immunity  shall have effect
         under and be construed in  accordance  with the United  States  Foreign
         Sovereign Immunities Act of 1976.

AS  WITNESS  the hands of the duly  authorised  representatives  of the  parties
hereto the day and year first before written.
<PAGE>

The Parent

LONDON PACIFIC GROUP LIMITED

By:

Address:

Attention:

Telex:

The Additional Borrower

By:

Address:

Attention:

Telex:

The Bank

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

By:

Address:

Attention:

Telex:

<PAGE>

                                   SCHEDULE 7

                                 MANDATORY COSTS

1.      The  Mandatory  Cost  Rate  is an  addition  to  the  interest  rate  to
        compensate the Bank for the cost of compliance with the  requirements of
        the Bank of England  and/or the  Financial  Services  Authority  (or, in
        either  case,  any  other  authority  which  replaces  all or any of its
        functions).

2.      On the  first  day of each  Interest  Period  (or as  soon  as  possible
        thereafter) the Bank shall calculate, as a percentage rate per annum its
        Mandatory Cost Rate, in accordance with the formulae set out below.

3.       The Mandatory Cost Rate will be calculated by the Bank as follows:

         (a)      in relation to sterling Advances:

                                          [OBJECT OMITTED]per cent. per annum

         (b)      in relation to Advances in any currency other than sterling:

                                          [OBJECT OMITTED]per cent. per annum.

        Where:

         A        is the percentage of eligible  liabilities  (assuming these to
                  be in excess  of any  stated  minimum)  which the Bank is from
                  time to time  required to  maintain  as an interest  free cash
                  ratio  deposit  with the Bank of England  to comply  with cash
                  ratio requirements.

         B        is the percentage  rate of interest  (excluding the Margin and
                  the  Mandatory  Cost Rate)  payable for the relevant  Interest
                  Period on the Advance.

         C        is the percentage (if any) of eligible  liabilities  which the
                  Bank is  required  from time to time to  maintain  as interest
                  bearing special deposits with the Bank of England.

         D        is the  percentage  rate  per  annum  payable  by the  Bank of
                  England to the Bank on interest bearing special deposits.

         E        is the rate of  charge  payable  by the Bank to the  Financial
                  Services  Authority pursuant to the Fees Regulations (but, for
                  this  purpose,  ignoring any minimum fee required  pursuant to
                  the  Fees   Regulations)   and   expressed   in   pounds   per
                  (pound)1,000,000 of the Fee Base of the Bank.

4.       For the purposes of this Schedule:
<PAGE>

         (a)      "eligible   liabilities"  and  "special   deposits"  have  the
                  meanings  given to them from time to time under or pursuant to
                  the Bank of England Act 1998 or (as may be appropriate) by the
                  Bank of England;

         (b)      "Fee  Regulations"   means  the  Banking   Supervision  (Fees)
                  Regulations  1999 or such  other  law as may be in force  from
                  time to time in  respect of the  payment  of fees for  banking
                  supervision; and

         (c)      "Fee Base" has the meaning given to it, and will be calculated
                  in accordance with, the Fees Regulations.

5.       In application of the above formulae, A, B, C and D will be included in
         the formulae as percentages  (i.e. 5 per cent.  will be included in the
         formula  as  5  and  not  as  0.05).  A  negative  result  obtained  by
         subtracting  D from B shall be taken as  zero.  The  resulting  figures
         shall be rounded to four decimal places.

6.       The Bank may from time to time,  after  consultation  with the  Parent,
         determine and notify to the Parent any  amendments or variations  which
         are  required to be made to any of the  formulae set out above in order
         to comply with any change in law or any requirements  from time to time
         imposed by the Bank of England or the Financial Services Authority (or,
         in either case,  any other  authority  which replaces all or any of its
         functions) and any such determination shall, in the absence of manifest
         error, be conclusive and binding on all the parties hereto.

<PAGE>

                                   SCHEDULE 8

                                FORM OF GUARANTEE

To:      The Governor and Company of the Bank of Scotland
         Corporate Banking
         Old Broad Street
         55 Old Broad Street
         London EC2P 2HL

We refer to the facility  agreement dated 2 May 2000 (the "Facility  Agreement")
between  London  Pacific  Group  Limited (a company  incorporated  with  limited
liability  under the laws of  Jersey,  whose  registered  office is  situate  at
[address]) as borrower and as a guarantor of the  obligations  of any Additional
Borrower (the "Parent"), and The Governor and Company of the Bank of Scotland as
lender  (the  "Bank")  whereby  the Bank has  agreed  to make  available  a loan
facility of $50,000,000 (or its equivalent).

This guarantee is made by way of Deed:

1.       We irrevocably and unconditionally guarantee to the Bank the proper and
         punctual  performance  by the  Parent  and  each  Additional  Borrower,
         including any person who becomes an Additional  Borrower after the date
         hereof  (together the  "Principals"  and each a  "Principal")  of their
         obligations  under the Facility  Agreement  and undertake to pay to the
         Bank on demand all sums from time to time due and payable  (but unpaid)
         by the  Principals  or any of them to the Bank or any of them  under or
         pursuant to the Facility Agreement.

2.       We irrevocably and unconditionally agree as a separate,  continuing and
         primary obligation to indemnify the Bank on demand by the Bank from and
         against all losses, claims or costs incurred or suffered by the Bank or
         any of  them  as a  result  of  the  Facility  Agreement  or any of the
         obligations of any  Additional  Borrower  thereunder  being or becoming
         void,  voidable or unenforceable for any reason whatsoever,  whether or
         not known to the Bank.

3.       Our liability hereunder shall not be discharged,  impaired or otherwise
         affected  by  (i)  the  winding-up,   dissolution,   administration  or
         re-organisation  of any Additional  Borrower or any other person or any
         change in its status, function,  control or ownership,  (ii) any of the
         obligations of any Additional  Borrower or any other person  thereunder
         or under  any  security  taken  in  respect  of any of its  obligations
         thereunder  being  or  becoming  illegal,  invalid,   unenforceable  or
         ineffective  in any respect,  (iii) any failure on the part of the Bank
         (whether  intentional or not) to take, perfect or realise any guarantee
         or security  agreed to be taken in relation to the Facility  Agreement,
         (iv) any time or other  indulgence  given or  agreed to be given to, or
         any composition or other arrangement made with or accepted from (a) the
         Principals  or any of them in  respect of their  obligations  under the
         Facility  Agreement or (b) any person in respect of  obligations  under
         any guarantee or security relating to the Facility  Agreement,  (v) any
         amendment to the Facility  Agreement or any such guarantee or security,
         (vi) any
<PAGE>

         release,  discharge or exchange of any such  guarantee or security,  or
         (vii) any other act,  event or  omission  which but for this  provision
         would or might operate to impair or discharge our liability hereunder.

4.       Our  obligations  hereunder are in addition to and not in  substitution
         for any other guarantee or security which the Bank may now or hereafter
         hold for the  obligations  of the  Principals  or any of them under the
         Facility  Agreement  and may be enforced  without the Bank first having
         recourse to any such  guarantee  or security and without the Bank first
         taking any steps or proceedings against the Principals or any of them.

5.       So long as we are under any actual or contingent liability hereunder we
         will not exercise any rights we might have by reason of  performance by
         us of our obligations hereunder:

         (a)      to be indemnified by the Principals or any of them; and/or

         (b)      to  claim   contribution  from  any  other  guarantor  of  any
                  Principal's obligations under the Facility Agreement; and/or

         (c)      to take the benefit (in whole or in part and whether by way of
                  subrogation  or otherwise) of any rights of the Bank under the
                  Facility Agreement or of any other guarantee or security taken
                  pursuant to, or in  connection  with the  Facility  Agreement;
                  and/or

         (d)      to prove in a liquidation  or winding-up of the  Principals or
                  any of  them in  competition  with  the  Bank  for any  amount
                  whatsoever owing to the Bank under the Facility Agreement.

6.       Any discharge  given by the Bank or any of them to us in respect of our
         obligations  hereunder  or any  other  agreement  reached  in  relation
         thereto shall be, and be deemed always to have been, void if any act on
         the  faith of which  that  discharge  was given or that  agreement  was
         entered  into  is  subsequently  avoided  by or  in  pursuance  of  any
         provision of law.

7.       All amounts  payable  under this  Guarantee by us shall be made in full
         without  any  deduction  or  withholding  whatsoever  by us (whether in
         respect of set-off, counterclaim,  duties, taxes, charges or otherwise)
         unless such deduction or withholding is required by law, in which event
         we shall ensure that the deduction or  withholding  does not exceed the
         minimum  amount  legally  required and  forthwith  pay to the Bank such
         additional  amounts  so that the net amount  received  by the Bank will
         equal the full amount which would have been received by the Bank had no
         such deduction or withholding been made.

8.       We  acknowledge  that we  have  represented  to the  Bank,  and  hereby
         warrant,  that we have full  power  and  authority  to enter  into this
         Guarantee,  that we have taken all necessary corporate or other actions
         to authorise the same,  and that, as executed,  this guarantee (and the
         performance of all obligations  herein contained) does not and will not
         constitute  a breach of any law,  regulation  or official  directive to
         which we are
<PAGE>

         subject,  or any  agreement  by which we are bound,  and is and will be
         valid, binding and enforceable in accordance with its terms (subject to
         any limitations arising from  administration,  bankruptcy,  insolvency,
         liquidation,  reorganisation  and similar laws generally  affecting the
         rights of creditors).

9.       A certificate signed by an official of the Bank as to any amount due to
         the Bank pursuant to this Guarantee  shall be conclusive  evidence save
         in the case of manifest error or on any question of law.

10.      The Bank's rights under this Guarantee are cumulative, may be exercised
         as often as considered  appropriate and are in addition to rights under
         the general law. Such rights  (whether  arising  hereunder or under the
         general law) shall not be capable of being  waived or varied  otherwise
         than by an express waiver or variation in writing and in particular any
         failure to exercise or any delay in exercising any of such rights shall
         not operate as a waiver or  variation  of that or any other such right;
         any  defective  or partial  exercise  of any of such  rights  shall not
         preclude any other or further  exercise of that or any other such right
         and no act or course of conduct or  negotiation on the part of the Bank
         shall  preclude  them from  exercising  any such right or  constitute a
         suspension or variation of any such right.

11.      All moneys  received,  recovered  or  realised by the Bank by virtue of
         Clause 1 or Clause 2 may,  in the Bank's  discretion,  be credited to a
         suspense or  impersonal  account and may be held in such account for so
         long as the Bank thinks fit pending the  application  from time to time
         (as the Bank may think fit) of such  moneys in or towards  the  payment
         and discharge of any amounts owing (the  "Outstanding  Amounts") by the
         Parent  or any of the  Additional  Borrowers  to  the  Bank  under  the
         Facility  Agreement.  The rate of  interest  applicable  to any  amount
         standing to the credit of such suspense or impersonal  account shall be
         the rate per  annum  which is equal to the rate per  annum for the time
         being in respect of the Outstanding Amounts. The Bank shall on the last
         day of each Interest Period in respect of the Outstanding Amounts apply
         the amount of interest for the time being  accrued on such  suspense or
         impersonal account in or towards payment of interest due to the Bank on
         each such day under the Facility Agreement.

12.      Each of the  provisions  of  this  Guarantee  shall  be  severable  and
         distinct from one another and if one or more such provisions is invalid
         or  unenforceable  the  remaining  provisions  shall  not in any way be
         affected or impaired.

13.      We agree that our rights and  obligations  under this  Guarantee or any
         part thereof are not  assignable to any other party without the consent
         in writing of the Bank.

14.      Any  demand to be made  hereunder  may be made of us at our  registered
         office or our principal place of business for the time being.

15.      This  Guarantee  shall be governed by and construed in accordance  with
         English law.

16.      We hereby  irrevocably  agree  that the  courts of  England  shall have
         jurisdiction to hear and determine any suit, action or proceeding,  and
         to settle any disputes,  which may
<PAGE>

         arise  out of or in  connection  with  this  Guarantee  and,  for  such
         purposes,  we hereby  irrevocably  submit to the  jurisdiction  of such
         courts.

17.      We  hereby  agree  that  the  process  by which  any  suit,  action  or
         proceeding is begun may be served on us by being  delivered to Nazareth
         Century Corporation at 350 Fifth Avenue, Suite 4210, New York, NY 10118
         or its registered office for the time being. [Non-UK Guarantors only]

<PAGE>

IN WITNESS  WHEREOF this Deed has been executed hereto and is intended to be and
is hereby delivered on the date first above written

SIGNED as a Deed by [                                                  ]

Limited

                                    Director

                                    Director/Secretary

[OR appropriate alternative attestation for non-UK Guarantors]

EXECUTED as a Deed under Seal by
[Name of Company]
acting by [Name(s) of authorised signatory(ies)]
in the presence of:
Signature of Witness     .................................................

Name of Witness          .................................................

Address                  .................................................

                         .................................................

                         .................................................

Occupation               .................................................

Accepted and agreed by
The Governor and Company of the Bank of Scotland

<PAGE>

                                   SCHEDULE 9

                            FORM OF LETTER OF CREDIT

To:  [Beneficiary]

                                                  Date:

Dear Sirs

Irrevocable Standby Letter of Credit No. [         ]

This  Letter of Credit is issued  by The  Governor  and  Company  of the Bank of
Scotland,  (the "Issuer") at the request of London Pacific Group Limited in your
favour on the following terms:

1.       The Issuer shall not be obliged to make payments hereunder exceeding in
         aggregate  the maximum  amount of  $10,000,000.  Any payment  hereunder
         shall be made in [currency] and shall reduce the Issuer's  liability to
         make payment hereunder accordingly.

2.       This Letter of Credit shall expire at [ ] a.m./p.m., London time on [ ]
         (the  "Expiry  Date").  The Issuer will have no liability in respect of
         any demand  delivered  after such time and a demand not  accompanied by
         the information  mentioned in paragraph 3(b) below shall not be validly
         delivered.

3.       Subject  to  paragraph  2 above,  within  three  (3)  business  days of
         receiving (a) your demand on the Issuer  specifying  the amount claimed
         under this  Letter of Credit and  bearing an  endorsement  of the above
         Letter  of  Credit  number  and (b)  [details  of any  other  documents
         required from the  Beneficiary to be inserted  (including a certificate
         verified  as having  been  signed  by two  authorised  officers  of the
         Beneficiary authorising delivery of the demand)], at [details of Bank's
         office to be inserted]  the Issuer  hereby  agrees to pay to you in the
         currency specified in paragraph 1 above,  subject to the maximum amount
         referred to in paragraph 1 above.

4.       Your  rights and the rights of the Issuer  under this  Letter of Credit
         may not be assigned or transferred.

5.       This Letter of Credit is subject to Uniform  Customs and  Practice  for
         Documentary Credits (International Chamber of Commerce, Publication No.
         500 - 1993).

6.       This Letter of Credit is  governed by English law and,  for the benefit
         of the  Issuer  only,  the  courts  of  England  shall  have  exclusive
         jurisdiction.

Yours faithfully

 ........................................
for and on behalf of
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

<PAGE>

SIGNATURES

The Parent

LONDON PACIFIC GROUP LIMITED

By:               R.W. Green (Company Secretary)

Address:
Attention:
Telex:
Fax:

The Bank

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

By:               Evelyn Clark

Address:
Attention:
Telex:
Fax:

<PAGE>Dated this 31st May 2000

                                      Deed

                                     between

                              RICHARD JOHN PIROUET

                                       and

                          CLIVE AUBREY CHARLES CHAPLIN

                                       and

                              RONALD WILLIAM GREEN

                                       and

                             VICTOR ALOYSIUS HEBERT

<PAGE>

THIS DEED is made the 31st day of May 2000

BETWEEN

RICHARD JOHN PIROUET of La Colline, Le Mont Cambrai, St. Lawrence, Jersey, CLIVE
AUBREY CHARLES CHAPLIN of Whiteley Chambers,  Don Street, St Helier,  Jersey and
RONALD WILLIAM GREEN of Minden House,  6 Minden Place,  St Helier,  Jersey,  and
VICTOR ALOYSIUS HEBERT of 333 Bush Street, San Francisco, California 94104-2878,
USA (together the "Trustees")

SUPPLEMENTAL TO:-

1.       A settlement of trust dated 16 February 1990 and made between  Berkeley
         Govett & Company Limited and John Gerald Patrick Wheeler and Ian Walter
         Stanley Strang and known as the Berkeley  Govett & Company Limited 1990
         Employee Share Option Trust (the "Settlement").

2.       A Deed dated 14 April 1992 made by John Gerald Patrick  Wheeler and Ian
         Walter Stanley Strang resolving to change the name of the Settlement to
         THE GOVETT & COMPANY EMPLOYEE SHARE OPTION TRUST.

3.       An Instrument  dated 18 March 1994 between John Gerald Patrick Wheeler,
         Ian Walter Stanley Strang and Richard John Pirouet  whereby John Gerald
         Patrick  Wheeler  retired as  Trustee  and  Richard  John  Pirouet  was
         appointed as a new Trustee.

4.       An  Instrument  dated 27  September  1994  between  Ian Walter  Stanely
         Strang,  Richard John Pirouet and Clive Aubrey Charles  Chaplin whereby
         Clive Aubrey Charles Chaplin was appointed as a new Trustee.
<PAGE>

5.       An  Instrument  dated 3 March 1995 between Ian Walter  Stanley  Strang,
         Richard  John  Pirouet and Clive  Aubrey  Charles  Chaplin  whereby Ian
         Walter Stanley Strang retired as a trustee.

6.       A Deed dated 29 December  1995 made by Richard  John  Pirouet and Clive
         Aubrey Charles  Chaplin  resolving to change the name of the Settlement
         to THE LONDON PACIFIC GROUP 1990 EMPLOYEE SHARE OPTION TRUST.

7.       A Deed dated 22 August 1996 made by Richard John Pirouet,  Clive Aubrey
         Charles  Chaplin and Ronald  William Green whereby Ronald William Green
         was appointed an Additional Trustee.

8.       Amendment No.1 to the Rules of the  Settlement  approved and adopted by
         resolution of the Trustees of the Settlement on the 24th October 1995

9.       Amendment No.2 to the Rules of the  Settlement  approved and adopted by
         resolution of the Trustees of the Settlement on the 29th January 1996

10.      A Deed dated 29th August 1998 made by and between the Trustees  whereby
         Victor Aloysius Hebert was appointed as a new Trustee of the Settlement

11.      A Deed dated 20th  November 1998 between  London  Pacific Group Limited
         and the Trustees  amending the Rules of the Settlement with effect from
         30th November 1998

WHEREAS:-

A.       The Trustees are the present trustees of the Settlement.

B.       By Clause 22.2 of the Settlement,  the Trustees have power from time to
         time by instrument  in writing to revoke,  alter or amend all or any of
         the provisions of the Rules

C.       By Rule 10(b) of the Rules,  the Trustees have power to amend,  suspend
         or terminate the Rules at any time and for any reason

D.       The  Trustees are  desirous of  exercising  the powers set out above in
         such manner as herein appears.
<PAGE>

E.       Where the context  admits  words and phrases used herein shall bear the
         same meaning herein as in the Settlement.

NOW THIS DEED  WITNESSETH  that in exercise of the power  conferred upon them by
Clause 22.2 of the  Settlement  and Rule 10(b) of the Rules the Trustees  HEREBY
DECLARE that the Settlement  shall be, with effect from 2nd June 2000,  read and
construed as if the provision  specified in the Schedule  hereto were  expressly
incorporated in the Settlement.

IN WITNESS  whereof this Deed has been executed by the Trustees the day and year
first above written.

<PAGE>

                                  THE SCHEDULE

Schedule 2 of the  Settlement  (the Rules)  shall be deleted in its entirety and
shall be replaced by the following:

"
                                   SCHEDULE 2

                            THE LONDON PACIFIC GROUP

                        1990 EMPLOYEE SHARE OPTION TRUST

                                      RULES

These  Rules have been  established  pursuant to the London  Pacific  Group 1990
Employee  Share Option Trust  established  by a Settlement  dated 16th February,
1990.

1.       Definitions

         1.1      In these  Rules  wherever  the context  permits the  following
                  expressions shall have the meanings set against them:-

                  (a)      "Company" shall mean London Pacific Group Limited,  a
                           company   incorporated   with  limited  liability  in
                           Jersey, Channel Islands;

                  (b)      "Employee"  means any employee,  including an officer
                           or director, of a member of the Group;

                  (c)      "Expiration  Date"  means the last day of the term of
                           an Option established by an Option Agreement;
<PAGE>

                  (d)      "the Group" means the Company and its Subsidiaries;

                  (e)      "Option"  means a stock  option  granted  pursuant to
                           these Rules;

                  (f)      "Option   Agreement"  means  the  written   agreement
                           described  in Rule  5(b)  evidencing  the grant of an
                           Option to an Employee or  Consultant  and  containing
                           the terms,  conditions and restrictions pertaining to
                           such Option;

                  (g)      "Option  Shares"  means  the  Shares  subject  to  an
                           Option;

                  (h)      "Optionholder" means an Employee who holds an Option;

                  (i)      "Relevant   Optionholder"   means  any   Optionholder
                           employed  by  North  American  Trust  Company  of 225
                           Broadway,  Suite  500,  San Diego,  California  92101
                           ("NATC") as at the 10th November, 1998, designated as
                           a Relevant Optionholder by the Trustees in writing at
                           the Trustees' sole and unfettered discretion;

                  (j)      "Relevant  Option  Shares"  means  in  relation  to a
                           Relevant Optionholder such number of Option Shares as
                           are  notified to such  Relevant  Optionholder  by the
                           Trustees in writing;

                  (k)      "Relevant Vesting Date" means the 31st March, 1999;
<PAGE>

                  (l)      "Rules"   unless  the   context   clearly   indicates
                           otherwise, means a rule of the Trust;

                  (m)      "Settlement"   means  the   Settlement   dated   16th
                           February, 1990 known as The London Pacific Group 1990
                           Employee Share Option Trust;

                  (n)      "Share"  means  an  Ordinary  Share of 5c each in the
                           Company;

                  (o)      "Subsidiary"  means a Subsidiary  of the Company,  as
                           determined  by the  Trustees in  accordance  with the
                           terms of the Settlement;

                  (p)      "$" or "dollar" or "c" or "cent"  refers to the legal
                           tender of the United States of America;

                  (q)      "Trust" means The London  Pacific Group 1990 Employee
                           Share Option Trust as amended from time to time; and

                  (r)      "Trustees" means the Trustee or Trustees for the time
                           being of the Trust.

         1.2      The singular includes the plural and vice versa.

         1.3      The  masculine  includes  the feminine and vice versa and each
                  includes neuter.

2.       Administration
<PAGE>

         (a)      The Trustees shall have full power and discretion,  subject to
                  the express provisions of these Rules:

                  (i)      To determine from time to time which  Employees shall
                           be granted Options, the term of each Option, the time
                           or times at which all or portions of an Option may be
                           exercised  and the  number  of Shares  subject  to an
                           Option;

                  (ii)     To  construe  and  interpret  these Rules and Options
                           granted  under it,  and to amend and revoke the Rules
                           and regulations for  administration  of this Plan. In
                           the  exercise  of  this  power,  the  Trustees  shall
                           generally  determine  all  questions  of  policy  and
                           interpretation  that may arise,  and may  correct any
                           defect,  omission or  inconsistency in these Rules or
                           in any Option Agreement in a manner and to the extent
                           it shall deem  necessary  or  expedient to make these
                           Rules fully effective;

                  (iii)    To prescribe the terms and conditions of each Option,
                           including without  limitation the exercise price, and
                           to specify the provisions of each Option;

                  (iv)     Subject  to  applicable  legal  restrictions  and the
                           consent of the  Optionholder  affected,  to amend any
                           outstanding   Option  Agreement,   including  without
                           limitation  the  acceleration  in whole or in part of
                           the exercise schedule of any Option outstanding;

                  (v)      Generally,  to  exercise  such  powers and to perform
                           such acts as are deemed  necessary  or  expedient  to
                           promote the best interests of the Company.

         (b)      All  decisions,  interpretations  and  other  actions  of  the
                  Trustees shall be final and binding on all  Optionholders  and
                  all persons  deriving their rights from an  Optionholder.  The
                  Trustees  shall not be liable  for any  action  that they have
                  taken or failed to take in good  faith  with  respect to these
                  Rules or any Option.

<PAGE>

3.       Eligibility

         Options may be granted to any Employees.

4.       Shares Subject to Rules

         (a)      Restrictions.

         When the Trustees grant an Option they shall retain,  for themselves or
         others,  such rights to repurchase or cancel,  rights of first refusal,
         and other transfer  restrictions  applicable to Shares upon exercise of
         the Option,  or shall impose such other  restrictions on the Shares, as
         the Trustees may determine. The terms and conditions of any such rights
         or  other  restrictions  shall  be set  forth  in the  relevant  Option
         Agreement.

         (b)      No Rights as a Shareholder.

         An Optionholder  shall have no rights as a shareholder  with respect to
         any of his Option  Shares  until the issue to him (as  evidenced by the
         appropriate entry in the register of members of the Company) of a share
         certificate  evidencing  his holding of such Shares.  Subject to Rule 7
         hereof  no  adjustment  shall  be  made  for  dividends   (ordinary  or
         extraordinary,   whether  in  cash,   securities  or  other  property),
         distributions, or other rights with respect to which the record date is
         prior to the date the said share certificate is issued.

<PAGE>

5.       Grant of Options

         (a)      General.

         The Trustees may grant Options at any time and from time to time during
         the Trust Period of the Settlement. The Trustees shall specify the date
         of grant or, if the Trustees  fail to do so, the date of grant shall be
         the date of the action taken by the Trustees to grant the Option.

         (b)      Option Agreement.

         As soon as practicable  after the grant of an Option,  the Optionholder
         and  the  Company   shall  enter  into  a  written   Option   Agreement
         substantially  in the form of the Appendix  hereto which  specifies the
         date of grant,  the number of Option Shares,  the exercise  price,  the
         other terms and  conditions of the Option and any special  restrictions
         on the Option Shares.

         (c)      Exercise Price.

         The exercise  price of Shares under each Option shall be  determined by
         the Trustees,  having regard to the price at which the Shares have been
         purchased.

         (d)      Limits on Exercise.

         Subject to the other  provisions  of these  Rules,  an Option  shall be
         exercisable  in its  entirety  at  grant or at such  times  and in such
         amounts as are specified in the Option Agreement.  Notwithstanding  the
         terms of the Rules and any

         Option  Agreement,  as  amended,  in the event  that the  shares of the
         Company are de-listed  from the London Stock  Exchange and the New York
         Stock Exchange,  all unvested Options shall vest  immediately  prior to
         such de-listing.  For the purposes of this Rule an Option is "unvested"
         if  it  is  not  exercisable  and  an  Option  vests  when  it  becomes
         exercisable for the first time.
<PAGE>

         (e)      Exercise Procedures.

         To the extent the right to acquire  Shares has accrued,  Options may be
         exercised,  in whole or in part,  from time to time, by written  notice
         from the  Optionholder  to the  Trustees  stating  the number of Shares
         being acquired and the date of the Option  Agreement  representing  the
         Option  which  is  being   exercised.   The  written  notice  shall  be
         accompanied by payment of the exercise price for the Shares,  and other
         applicable amounts, as provided in Rule 6.

         (f)      Termination of Employment; Death; Disability.

         Subject as provided below,  and in particular to Rule 5(j), if, for any
         reason  other  than  death  or  permanent  and  total  disability,   an
         Optionholder's  employment  by the Company or a Subsidiary  terminates,
         Options  held  at  the  date  of   termination   (to  the  extent  then
         exercisable)  may be  exercised  in the  whole  or in part at any  time
         within one month after the date of such termination, or such greater or
         lesser period as is specified in the Option Agreement,  as amended (but
         in no event after the Expiration  Date),  but not  thereafter.  For the
         purposes  of  this  Clause  5(g)  an  Optionholder's  employment  by  a
         Subsidiary  shall be deemed to terminate if the company  employing  the
         Optionholder  ceases to be a  Subsidiary.  If an  Optionholder  dies or
         becomes   permanently  and  totally  disabled  (as  determined  by  the
         Trustees)  while  employed  by the  Group  (or,  in the event of death,
         within the period that the Option remains exercisable after termination
         of employment), Options

         then held (to the extent then exercisable) may be exercised in whole or
         in  part  by  the   Optionholder,   by  the   Optionholder's   personal
         representative,  or by the person to whom the Option is  transferred by
         will or the laws of inheritance,  at any time within one year after the
         date of death or permanent and total  disability of the Optionholder or
         if less, the period specified in the Option Agreement,  but in no event
         after  the  Expiration  Date.  In  the  event  of  the  termination  of
         employment,  death or disability of the Optionholder  before the
<PAGE>

         Option shall have become fully  exercisable,  the Option, to the extent
         not then exercisable  shall lapse and the Company or the Trustees shall
         be under no liability whatsoever with regard thereto.

         (g)      Leaves of Absence.

         For purposes of Rule 5(g) above, an Optionholder's employment shall not
         be deemed to  terminate  by reason of sick leave,  military  leave,  or
         other leave of absence approved by the Trustees.

         (h)      Modification, Extension and Renewal of Options.

         Within the limitations of these Rules, the Trustees may modify,  extend
         or renew outstanding Options or may accept the cancellation thereof (to
         the extent not previously exercised) for the granting of new Options in
         substitution therefor.  Notwithstanding the foregoing,  no modification
         shall,  without  the consent of the  Optionholder,  alter or impair his
         rights or obligations under an Option.

         (i)      Overriding Provisions

         The  following  provisions  shall only have  effect in the event of the
         closing of the sale of NATC pursuant to the terms of an agreement dated
         24th September, 1998, between NATC and City National Bank.

                  (i)      Notwithstanding  any  provision  in these Rules or in
                           any Option Agreement to the contrary,  an Option held
                           by a Relevant  Optionholder  shall be  exercisable in
                           whole or in part,  at the  discretion of the Relevant
                           Optionholder,  over  Relevant  Option Shares from the
                           Relevant  Vesting  Date  PROVIDED  THAT the  Relevant
                           Optionholder  continues  to be an  employee of either
                           (1)  NATC;  or  (2)  City  National  Bank  as at  the
                           Relevant Vesting Date.
<PAGE>

                  (ii)     Notwithstanding  any  provision  in these Rules or in
                           any Option Agreement to the contrary, in the event of
                           a Relevant  Optionholder  either being made redundant
                           or being  asked to leave  the  employment  of NATC or
                           City National Bank without due cause,  in either case
                           before the Relevant  Vesting  Date, an Option held by
                           such Relevant  Optionholder  shall be  exercisable in
                           whole or in part at the  discretion  of the  Relevant
                           Optionholder  over  Relevant  Option  Shares from the
                           date  of  such  termination  of  employment.  For the
                           purposes of  clarification of this Rule, in the event
                           of  the  Relevant   Optionholder:   (1)  leaving  his
                           employment  of his own  volition,  or (2)  having his
                           employment  terminated for Cause, before the Relevant
                           Vesting  Date,  any  Option  held  by  such  Relevant
                           Optionholder  shall  lapse  and  the  Company  or the
                           Trustees shall be under no liability  whatsoever with
                           regard thereto.

                           As used  herein,  "Cause"  includes,  as  exclusively
                           determined    by   the    Trustees,    the   Relevant
                           Optionholder's:

                           (1) wilful misconduct against the Group or any of its
                               directors, officers, employees or agents;

                           (2) breach  of  confidentiality  against  any  Group
                               company;

                           (3) gross   negligence   in  the  course  of  or  in
                               connection  with  the   Relevant  Optionholder's
                               services for the Group;

                           (4) illegal or unethical business practices; or

                           (5) a  conviction  by a competent  court of law for a
                               criminal offence.

                  (iii)    In the event of an Option becoming  exercisable under
                           the provisions of Rule 5(j)(i), such Option shall, if
                           at all, be  exercised  before 31st March,  2001,  and
                           whether or not the  Relevant  Optionholder  is at the
                           time of  exercise  of such Option an employee of NATC
                           or City National  Bank. In the event that such Option
                           is not exercised  before
<PAGE>

                           31st March,  2001,  the said  Option  shall lapse and
                           the  Company  or  the  Trustees  shall  be  under  no
                           liability  whatsoever  with regard thereto.

         (k)      Transferability

                  Options may not be transferred  unless otherwise  specifically
                  provided  in the Option  Agreement,  other than by will or the
                  laws of descent and distribution.

6.       Payment upon Exercise of Options

                  (a)      Exercise Price.

         The  exercise  price of Shares  acquired  under this Plan shall be paid
         either in full at the time an Option is  exercised  or  pursuant to any
         deferred payment  arrangement that the Trustees in their discretion may
         approve;  provided,  however,  that  unless  otherwise  approved by the
         Trustees, any deferred payments shall bear interest at such rate as the
         Trustees may determine in their absolute discretion.

                  (b)      Form of Consideration.

         If, and to the extent,  permitted or  authorised  by the  Trustees,  in
         their absolute discretion,  an Optionholder may make all or any portion
         of any  payment  due to the  Company  upon  exercise  of an  Option  by
         delivery of any property  (excluding  shares of the Company) other than
         cash,  so  long  as  such  property   constitutes   good  and  valuable
         consideration for the Shares under applicable law and is surrendered in
         good form for transfer.

7.       Adjustment of Shares

         If the number of Shares in issue is hereafter  increased or  decreased,
         or Shares are changed into or exchanged  for a different  number and/or
         kind of  shares  or  other  securities  of the  Company  or of  another
         corporation,  by reason of a reorganisation,  merger,  consolidation or
         other  acquisition,  capitalisation,  reclassification,
<PAGE>

         consolidation,   division  or   subdivision  or  declaration  of  stock
         dividends,  or a special dividend is declared,  the total number and/or
         kind of Shares  for the  acquisition  of which  Options  may be granted
         under  these  Rules,  and the number  and/or kind of Shares as to which
         Options (or portions thereof) are outstanding, may be adjusted pro rata
         by the Trustees.  Any adjustment in an outstanding Option shall be made
         without  change  in the  aggregate  exercise  price  applicable  to the
         unexercised portion of such Option but with a corresponding  adjustment
         in the exercise price per Share. Any adjustment under this Rule 7 shall
         be subject to the  provisions of the Company's  Memorandum and Articles
         of Association, as amended, and applicable law.

8.       No Right to Employment

         Neither these Rules nor any Option granted  hereunder shall confer upon
         any  Optionholder  any right with respect to continuation of employment
         by, or the provision of  consulting  services to, the Company or any of
         its  Subsidiaries,  or shall interfere in any way with the Company's or
         any of its Subsidiaries'  right to terminate the employment or services
         of any Optionholder at any time with or without cause.

9.       Legal Requirements

         The Company  shall not be obliged to issue any Shares upon  exercise of
         any  Option  unless  the  Shares  are at that  time  listed  on a Stock
         Exchange or effectively  registered or exempt from  registration  under
         any relevant securities laws of the United States or the United Kingdom
         and the issue of the Shares is otherwise in compliance with all

         such  applicable  securities  laws  and the  regulations  of any  Stock
         Exchange  on which the  Company's  securities  may then be listed.  The
         Company  shall have no  obligation  to  register  the Shares  under any
         securities  laws of the United States or the United  Kingdom or to take
         any other  steps  which may be  necessary  to enable  the  Shares to be
         issued under any securities laws. Upon exercising all or any portion of
         any Option, an Optionholder may be required to furnish  representations
         or undertakings  deemed  appropriate by the Company to enable the issue
         of the Shares or subsequent  transfers of any interest in the Shares to
         comply with applicable  securities  laws.  Certificates
<PAGE>

         evidencing  the holding of Shares  issued upon  exercise of Options may
         bear any legend required by, or useful for purposes of compliance with,
         applicable  securities  or  other  laws,  these  Rules  or  the  Option
         Agreements.

10.      Duration and Amendments

                  (a)      Duration.

                           These Rules  shall  become  effective  on the date of
                  execution of the  Settlement  and terminate  automatically  on
                  expiration  of the Trust  Period under the  Settlement.  These
                  Rules,  any amendments to these Rules and any Options  granted
                  hereunder whose validity  depends upon  amendments  subject to
                  approval  of holders of Shares  shall be null and void if such
                  approval is not obtained.

                  (b)      Amendment; Termination.

                           The  Trustees may amend,  suspend or terminate  these
                  Rules at any time and for any reason; provided,  however, that
                  any amendment which  increases the number of Shares  available
                  for issue by the Company under these Rules (except as provided
                  in Rule 7) shall be subject to the  approval of the holders of
                  Shares. Such shareholders'  approval shall not be required for
                  any other amendments of these Rules.

                  (c)      Effect of Amendment or Termination.

                           No Shares shall be issued under these Rules after the
                  termination  hereof,  except  pursuant  to an  Option  granted
                  before  termination.  Termination  or amendment of these Rules
                  shall not affect any Shares previously  acquired or any Option
                  previously granted under these Rules.

11.      Proper Law
<PAGE>

         These Rules and all Option  Agreements  entered  into  pursuant to them
         shall be governed by and construed in  accordance  with the laws of the
         Island of Jersey.

         These Rules have been amended by an Amendment No. 1 effective from 29th
         December,  1995, an Amendment No. 2 effective from 29th January,  1996,
         an Amendment No. 3 effective from 30th November, 1998, and an Amendment
         No. 4 effective from 2nd June 2000"

<PAGE>

SIGNED by the said
RICHARD JOHN PIROUET
in the presence of:-

SIGNED by the said
CLIVE AUBREY CHARLES CHAPLIN
in the presence of:-

SIGNED by the said
RONALD WILLIAM GREEN
in the presence of:-

SIGNED by the said
VICTOR ALOYSIUS HEBERT
in the presence of:-

<PAGE>

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