PARTITION AND NOVATION AGREEMENT

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1 PARTITION AND NOVATION AGREEMENT THIS PARTITION AND NOVATION AGREEMENT effective xxxxxxx, among OPTIMUM RE INSURANCE COMPANY ( Reinsurer ), xxxxxxxxx ( Ceding Company ) and xxxxxxxxx ( Purchaser ). WHEREAS the Reinsurer and the Ceding Company are parties to the reinsurance contracts specified in Exhibit A attached hereto, which may have been amended or supplemented from time to time, and forming part hereof (such reinsurance contract or reinsurance contracts being hereinafter referred to as the Reinsurance Contract ); and WHEREAS the Ceding Company and the Purchaser are parties to a purchase agreement (the Purchase Agreement ), pursuant to which the Purchaser purchased the individual insurance policies identified in Exhibit B (the Reinsured Policy ) issued by the Ceding Company or its predecessor and reinsured under the Reinsurance Contract; and WHEREAS the Ceding Company as of xxxxxxx, (the Effective Date ), wishes to partition and novate the Reinsured Policy under the Reinsurance Contract and all of the Ceding Company s rights, duties, obligations and liabilities, in respect to the Reinsured Policy under the Reinsurance Contract to the Purchaser, in order that the Ceding Company will be relieved of all of its rights, duties, obligations and liabilities in respect to the Reinsured Policy under the Reinsurance Contract; and WHEREAS the Purchaser wishes to consent and agree to such transfer and assignment. NOW THEREFORE IN CONSIDERATION OF the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. The parties hereby agree to a partitioning and novation of the Reinsurance Contract as set out herein. 2. Purchaser hereby assumes, as of the Effective Date, all of the Ceding Company s rights, duties, obligations and liabilities under the Reinsurance Contract in respect to the Reinsured Policy. 3. Reinsurer agrees with each the Purchaser and the Ceding Company, that on and after the Effective Date, the Purchaser shall be bound by all of the terms and conditions of the Reinsurance Contract. The Purchaser shall enjoy all of the Ceding Company s rights under the Reinsurance Contract and shall perform all of the Ceding Company s duties, obligations and liabilities in respect to the Reinsured Policy under the Reinsurance Contract to the same extent as if the Purchaser had been an original party to the Reinsurance Contract instead of the Ceding Company. It is understood that profit sharing, if applicable, on the Reinsurance Contract described in Exhibit A attached hereto, will be excluded from this Agreement. 4. Notwithstanding any other provisions in this Agreement or the Reinsurance Contracts, all parties acknowledge that the Reinsurer has, as permitted under the Reinsurance Contracts, offset amounts owed pertaining to the Reinsurance Policy from the Reinsurer to the Ceding Company against amounts owed to the Reinsurer from the Ceding Company.

2 The parties hereby acknowledge that any such amounts offset by the Reinsurer as of the Effective Date will not be due or payable by the Reinsurer to the Purchaser. The Reinsurer hereby agrees that no amounts pertaining to the Reinsurer arising after the Effective Date will be eligible to offset any amounts owed to the Reinsurer from the Ceding Company. 5. The Ceding Company consents to the partition and novation of the Reinsured Policy under the Reinsurance Contract on and after the Effective Date and the assumption of all of its rights, duties, obligations and liabilities, in respect to the Reinsured Policy thereunder from the Ceding Company to Purchaser. The Ceding Company agrees that the Purchaser shall enjoy and shall be entitled to enforce all the Ceding Company s rights in respect to the Reinsured Policy under the Reinsurance Contract. The Purchaser agrees that all of the Ceding Company s duties, obligations and liabilities in respect to the Reinsured Policy under the Reinsurance Contract shall be performed by the Purchaser as if the Purchaser had been an original party to the Reinsurance Contract instead of the Ceding Company. 6. If following the Effective Date of this Partition and Novation Agreement, it is determined a policy should have been included as a Reinsured Policy and assumed by the Purchaser, the Purchaser shall submit such policy to the Reinsurer for its written approval to be reinsured. Only after such written approval is obtained, such policy shall become a Reinsured Policy for all purposes of this Partition and Novation Amendment. Such written approval to include a policy as a Reinsured Policy shall serve as official documentation to the Reinsurance Contract, thus eliminating the need of a formal Amendment to the Reinsurance Contract. 7. The Purchaser releases and forever discharges the Ceding Company of the Ceding Company s duties, obligations and liabilities under the Reinsurance Contract in respect to the Reinsured Policy and all claims, demands, actions and causes of action which the Reinsurer ever had, now has or may hereafter have against the Ceding Company in any way arising out of, resulting from or related to the Reinsured Policy under the Reinsurance Contract. 8. The Reinsurer and the Purchaser hereby ratify and confirm the Reinsurance Contract, in respect to the Reinsured Policy, as an agreement solely between them in full force and effect in accordance with its terms and conditions of this Agreement which shall form part of the partitioned Reinsurance Contract. 9. The Reinsurer and the Ceding Company hereby ratify and confirm the Reinsurance Contract is an agreement solely between them in respect to the business described thereunder, which excludes the Reinsured Policy purchased by the Purchaser, and the Ceding Company s duties, obligations and liabilities in respect to such business shall continue in full force and effect in accordance with the terms and conditions of the Reinsurance Contract. 10. Each party agrees to do all things as may be necessary to give full effect to this Partition and Novation Agreement.

3 11. This Partition and Novation Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. 12. This Partition and Novation Agreement shall be governed by and construed in accordance with the laws of xxxxxxxx. 13. Except for the Purchase Agreement as between the Ceding Company and Purchaser, this Agreement represents the entire agreement among the parties with respect to the subject matter hereof, and supersedes any prior or contemporaneous oral or written agreements relating thereto.

4 IN WITNESS WHEREOF the parties have executed this Partition and Novation Agreement in triplicate on the dates indicated. FOR: XXXXXXXXX NAME: TITLE: NAME: TITLE: FOR: XXXXXXXXXX NAME: TITLE: NAME: TITLE: FOR: OPTIMUM RE INSURANCE COMPANY NAME: Serge Goulet TITLE: President & COO NAME: Jean-Claude Pagé TITLE: Vice-Chairman of the Board

5

6 EXHIBIT A TO THE PARTITION AND NOVATION AMENDMENT EFFECTIVE xxxxxxxxxxx The following are the Reinsurance Contracts referred to in the above referenced Partition and Novation Agreement: Agreement Description Effective Date Cancelled for New Business

7 EXHIBIT B TO THE PARTITION AND NOVATION AMENDMENT EFFECTIVE xxxxxxxxxx The attached are the policies assumed by the Purchaser and reinsured with the Reinsurer referred to in the above referenced Partition and Novation Agreement:

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