Commutation and Release Agreement Between Farmers New World Life Insurance Company, an insurance company organized under the laws of the State of Washington Suite 300 Bellevue, WA 98005 (hereinafter referred to as the ‘‘Reinsured’’) and Zurich...

Whereas, the Parties entered into reinsurance contracts described in Schedule 1 (the “Reinsurance Agreements”), pursuant to which the Reinsurer agreed to reinsure certain liabilities subject to the terms and conditions of the Reinsurance Agreements;

Whereas, with effect from the Effective Time, the Parties wish to fully commute their liabilities and obligations under the Reinsurance Agreements in accordance with the provisions of this Agreement and to effect a full and final settlement, discharge and release of the Reinsured’s and the Reinsurer’s liabilities, duties and obligations with respect to the Reinsurance Agreements; and

Whereas, the Reinsured and the Reinsurer agree that the Reinsurance Agreements mentioned in Schedule 1 constitute all existing reinsurance agreements in force between the Parties as at the Effective Time.

PAYMENT

Notwithstanding any provisions of the Reinsurance Agreements to the contrary, as consideration for the recapture transaction contemplated hereby, the Parties agree that the Reinsurer shall pay to the Reinsured an amount equal to the sum of the following amounts (the “Terminal Settlement”):

                          the “Final Net Settlement”).

1.2

Notwithstanding any provisions of the Reinsurance Agreements to the contrary, as consideration for the recapture transaction contemplated hereby, the Parties agree that the Reinsured shall pay to the Reinsurer a fee (the “Recapture Fee”)                                     

          “Estimated Recapture Fee”) and finally determined in accordance with Section 1.6.

1.3

Payments of the Terminal Settlement and Recapture Fee shall be made and adjusted in accordance with Sections 1.4 through 1.9.                                  

1.4

Prior to the date hereof, the Reinsured shall prepare and deliver to the Reinsurer a report (the “Estimated Statement”)                                      

Within ten (10) days following the Closing Date, the Reinsured shall                     

On or before the date that is ninety (90) days after the Closing Date, the Reinsured shall prepare and deliver to Reinsurer a statement (the “Closing Statement”)                                   

Any late payment by either Party, i.e. payment after the due date, shall accrue interest of               

Interest shall be calculated from the first day after the respective due date of the payment until the payment date.

Any payment due to the Reinsurer should be paid via bank transfer to the account detailed below:

Currency

ISO -

Code

Bank

Account

number

IBAN Code

Any payment due to the Reinsured should be paid via bank transfer to the account detailed below:

Currency

ISO -

Code

Bank

Account

number

IBAN Code

Following the Closing Date, the Reinsurer and the Reinsured shall take all action necessary to terminate       .

RELEASE AND DISCHARGE BY THE REINSURED AND BY THE REINSURER

In consideration for the receipt of the Terminal Settlement pursuant to Section 1.1 above and the release in Section 2.2 below, the Reinsured on behalf of itself and its successors, predecessors and assigns hereby fully, knowingly, voluntarily, intentionally, unconditionally and irrevocably:

waives, releases and forever discharges the Reinsurer and its predecessors, affiliates, subsidiaries, associates, officers, directors, employees, shareholders and agents and their heirs and successors and assigns from any and all past, present, and future liabilities, obligations and adjustments for payment of interest, offsets, actions, causes of action, suits, debts, sums of money, accounts, premium payments, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, damages, judgments, liens, rights, costs and expenses (including attorneys’ fees and costs actually incurred), claims and demands, liabilities and losses of any nature whatsoever and howsoever arising under or in any way related to the Reinsurance Agreements, whether grounded in law or in equity, in contract, tort, or otherwise, all whether such liabilities and obligations are admitted, known or unknown, reported or unreported and whether arisen in the past or currently existing or arising in the future, vested or contingent, that the Reinsured now has, owns, or holds or claims to have, own, or hold, or at any time had, owned, or held, or claimed to have had, owned, or held, or may after the execution of this Agreement have, own, or hold or claim to have, own, or hold, against the Reinsurer, arising from, based upon, or in any way related to the Reinsurance Agreements, it being the intention of the Parties that this release operate as a full and final settlement of the Reinsurer’s current and future liabilities to the Reinsured under and in connection with the Reinsurance Agreements.

In consideration for the receipt of the Recapture Fee pursuant to Section 1.2. above and the release pursuant to Section 2.1 above, the Reinsurer on behalf of itself, and its successors, predecessors and assigns hereby fully, knowingly, voluntarily, intentionally, unconditionally and irrevocably:

waives, releases and forever discharges the Reinsured and its predecessors, affiliates, subsidiaries, associates, officers, directors, employees, shareholders and agents and their heirs and successors and assigns from any and all past, present, and future liabilities, obligations and adjustments for payment of interest, offsets, actions, causes of action, suits, debts, sums of money, accounts, premium payments, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, damages, judgments, liens, rights, costs and expenses (including attorneys’ fees and costs actually incurred), claims and demands, liabilities and losses of any nature whatsoever and howsoever arising under or in any way related to the Reinsurance Agreements, whether grounded in law or in equity, in contract, tort, or otherwise, all whether such liabilities and obligations are admitted, known or unknown, reported or unreported and whether arisen in the past or currently existing or arising in the future, vested or contingent, that the Reinsurer now has, owns, or holds or claims to have, own, or hold, or at any time had, owned, or held, or may after the execution of this Agreement have, own, or hold or claim to have, own, or hold, against the Reinsured, arising from, based upon, or in any way related to the Reinsurance Agreements, it being the intention of the Parties that this release operate as a full and final settlement of the Reinsured’s current and future liabilities to the Reinsurer under and in connection with the Reinsurance Agreements.

Except with respect to enforcement of this Agreement, the Parties absolutely and unconditionally covenant and agree with each other, their respective successors and assigns, that upon full payment by the applicable Party of the amounts set forth in Clause 1 of this Agreement, neither of the Parties will hereafter for any reason whatsoever, demand, claim or file suit or initiate arbitration proceedings against the other in respect of any matter relating to or arising out of the Reinsurance Agreements.

The Parties hereby acknowledge and agree to the Effective Time for the commutation and termination of the Reinsurance Agreements described herein, notwithstanding anything to the contrary set forth in the Reinsurance Agreements requiring prior notice to recapture or terminate the Reinsurance Agreements. The Parties hereby further waive any and all notice and consent requirements contained in the Reinsurance Agreements for the commutation and termination of the Reinsurance Agreements described herein.

It is understood by each of the Reinsured and the Reinsurer that there is a risk that, subsequent to the execution of this Agreement, each such Party may incur or suffer loss, damage or injuries which are in some way caused by or related to matters which are the subject of this Agreement, but which are unknown or unanticipated at the time of the execution of this Agreement. Further, there is a risk that the loss or damage presently known may be or become greater than each such Party now expects or anticipates. Each of the Reinsured and the Reinsurer, respectively, assumes this risk and the releases set forth in this Agreement shall apply to all unknown or unanticipated results, as well as those known and anticipated.

REPRESENTATIONS AND WARRANTIES

The Reinsured represents and warrants that it is the true and only beneficiary of the Reinsurance Agreements in which it has an interest and that there are no other parties of interest in respect of the Reinsurance Agreements other than the Reinsurer.

Each of the Parties represents and warrants to the other that:

it is a company duly organized and validly existing under the laws of the jurisdiction in which it is incorporated and is in good standing and;

it is fully authorised with the requisite corporate power to execute and deliver this Agreement and;

the person executing this Agreement on its behalf has the right power, legal capacity and is fully authorised to do so and;

it has duly executed and delivered this Agreement and, assuming this Agreement constitutes a valid and binding agreement of the other Parties hereto, constitutes a valid and binding obligations of such Party, enforceable against such Party in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and;

neither the execution nor delivery of this Agreement nor compliance with or fulfillment of the terms, conditions, and provisions hereof, conflicts with, results in a material breach or violation of the terms, conditions, or provisions of, or constitutes a material default, an event of default, or an event creating rights of acceleration, termination, or cancellation, or a loss of rights under (i) its organizational documents, (ii) any judgment, decree, order, contract, agreement, indenture, instrument, note, mortgage, lease, governmental permit, or other authorization, right, restriction or obligation to which it is a party or any of its property subject or by which it is bound, in any material respects, or (iii) any foreign, federal, state, or local law, statute, ordinance, rule, or regulation applicable to it in any material respects and;

any authorization, consent, approval, order, license, certificate, or permit or act of or from, or declaration of filing with, any governmental entity or other party, required to be obtained in connection with this Agreement or to make this Agreement valid and binding has been obtained and is in full force and effect.

Each of the Parties warrants and guarantees that it has not made any assignment of any claim, cause of action or right of any kind embodied in any of the claims or obligations that are released in this Agreement.

GENERAL

The rights and obligations set out in this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and shall be binding upon any and all predecessors, successors, liquidators, receivers and assigns of the Parties hereto.

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter herein and may be amended, supplemented or otherwise modified, or a provision hereof waived, only by a written instrument signed by each of Parties hereto. This Agreement supersedes any and all prior agreements, arrangements, understandings, representations and warranties, both written and oral, between the Parties relating to the subject matter herein. This Agreement is intended to finally resolve the rights and liabilities of the Parties under the Reinsurance Agreements and none of the Parties shall seek to reopen or set aside this Agreement on the grounds that it in the future becomes aware of any mistake of law (including any such mistake arising as a result of a subsequent change of law) or a mistake of fact relating to this Agreement (or the Reinsurance Agreements) or upon which this Agreement was entered into.

Save to the extent expressly set out in Clause 2 of this Agreement it is not intended to nor shall it create any rights, entitlements, claims or benefits enforceable by any person that is not a party to it.

It is understood and agreed that each Party shall bear its own costs and legal fees in connection with this Agreement except as otherwise expressly set forth in this Agreement.

This Agreement may be executed by hand or via pdf or any secure electronic means in any number of counterparts which, taken together, constitute one agreement, although each of which when so executed and delivered shall be deemed an original.

The Parties hereto undertake to do all such acts and execute all such deeds and

other documents which may be necessary on their part to give effect to the terms of the Agreement.

Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

NOTICES

CONFIDENTIALITY

NON-WAIVER OF RIGHTS

GOVERNING LAW CLAUSE

ARBITRATION CLAUSE