COINSURANCE AMENDING AGREEMENT

(a)

Eligible Assets: Section 1.1(s) of the Coinsurance Agreement is hereby amended by deleting the definition of “Eligible Assets” and replacing it with the following:

(b)

Reinsurance Security Account: Section 1.1(zz) of the Coinsurance Agreement is hereby amended by deleting the definition of “Reinsurance Trust Account” and replacing it with the following:

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Coinsurance amending Agreement

(c)

Reinsurance Security Account Balance: Section 1.1(aaa) of the Coinsurance Agreement is hereby amended by deleting the definition of “Reinsurance Trust Account Balance” and replacing it with the following:

(d)

Reinsurance Security Agreement: Section 1.1(bbb) of the Coinsurance Agreement is hereby amended by deleting the definition of “Reinsurance Trust Agreement” and replacing it with the following:

(e)

Required Balance. Section 1.1(jjj) of the Coinsurance Agreement is hereby amended by deleting the definition of “Required Balance” and replacing it with the following:

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Coinsurance amending Agreement

i.

applies for or consents to the appointment of a receiver, rehabilitator, conservator, liquidator or statutory successor of its properties or assets, or any other similar Person for itself or for a substantial portion of its assets; or

ii.

passes a directors’ or shareholders’ corporate resolution authorizing any of the actions described in clause (i) above; or

iii.

is adjudicated as bankrupt or insolvent; or

iv.

files or consents to the filing of a petition in bankruptcy, seeks reorganization to avoid insolvency or makes formal application for any bankruptcy, dissolution, liquidation or similar law or statute; or

v.

becomes the subject of an order to rehabilitate or an order to liquidate as defined by the insurance code of the jurisdiction of the party’s domicile.

i.

In the event of the insolvency of the Ceding Company, all reinsurance payments due to the Ceding Company under this Agreement will be payable directly to the liquidator, rehabilitator, receiver, or statutory successor of the Ceding Company, without diminution because of the insolvency, for those claims allowed against the Ceding Company by any court of competent jurisdiction or by the liquidator, rehabilitator, receiver or statutory successor having authority to allow such claims.

ii.

In the event of insolvency of the Ceding Company, the liquidator, rehabilitator, receiver, or statutory successor will give written notice to the Reinsurer of all pending claims against the Ceding Company on any Reinsured Policy within a reasonable time after such Claim is filed in the insolvency proceedings. While a Claim is pending, the Reinsurer may investigate and interpose, at its own expense, in the proceedings where the Claim is adjudicated, any defense or defenses that it may deem available to the Ceding Company or its liquidator, rehabilitator, receiver, or statutory successor.

iii.

The expense incurred by the Reinsurer will be chargeable, subject to court approval, against the Ceding Company as part of the expense of liquidation to the extent of a proportionate share of the benefit that may accrue to the Ceding Company solely as a result of the defense undertaken by the Reinsurer. Where two or more reinsurers are participating in the same claim and a majority in interest elect to interpose a defense or defenses to any such Claim, the expense will be apportioned in accordance with the terms of this Agreement as though such expense had been incurred by the Ceding Company.

iv.

The Reinsurer will be liable only for the amounts reinsured and will not be or become liable for any amounts or reserves to be held by the Ceding Company on Reinsured Policies under this Agreement.

(c)

Insolvency of the Reinsurer. In the event of the Reinsurer’s insolvency, the Ceding Company may terminate this Agreement upon written notice to the Reinsurer and recapture all of the inforce business reinsured by the Reinsurer hereunder in accordance with Article XI. The effective date for termination of this Agreement will be no earlier than the effective date of the Reinsurer’s insolvency.

(d)

Subject to, and without limitation to the rights set out in, Section 8.4, in the event of the insolvency of the Ceding Company, the Reinsurer shall be entitled to set off any debts due or accruing due to the Ceding Company under this Agreement at the commencement of the winding-up of the Ceding Company against any debts due or accruing due to the Reinsurer by the Ceding Company under this Agreement at the commencement of the winding-up of the Ceding Company. For greater certainty, it is understood and agreed that the Reinsurer shall not be entitled for any reason whatsoever to exercise any set off rights (whether by operation of law, equity, agreement or otherwise) other than as set forth in the previous sentence or in Section 8.4.

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Coinsurance amending Agreement

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Coinsurance amending Agreement

(i)

any breach or falsity of any representation, warranty or covenant of the Reinsurer;

(ii)

the breach of or failure to perform any of the duties, obligations, covenants or agreements of the Reinsurer contained in this Agreement or the Reinsurance Security Agreement; or

(iii)

any amount owing to the Ceding Company pursuant to the Reinsurance Security Agreement, including any amount paid by the Ceding Company to the Custodian in order to indemnify or make payments to the Custodian in accordance with sections 25 and 26 of the Reinsurance Security Agreement.

12517773.6

Coinsurance amending Agreement

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Coinsurance amending Agreement

PRIMERICA LIFE INSURANCE COMPANY OF CANADA

By:

/s/ ▇▇▇▇ ▇. ▇▇▇▇▇

Name:

▇▇▇▇ ▇. ▇▇▇▇▇

Title:

CEO

FINANCIAL REASSURANCE COMPANY 2010, LTD.

By:

/s/ ▇▇▇▇ ▇▇▇▇

Name:

▇▇▇▇ ▇▇▇▇

Title:

PRESIDENT

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Coinsurance amending Agreement

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Coinsurance amending Agreement

SECTION 1

DEFINED TERMS AND INTERPRETATION.

1

SECTION 2

THE SECURITIES ACCOUNT.

4

SECTION 3

GRANT OF SECURITY.

5

SECTION 4

SECURED OBLIGATIONS.

5

SECTION 5

ATTACHMENT.

6

SECTION 6

DUTIES OF THE SECURED PARTY.

6

SECTION 7

RIGHTS OF THE PLEDGOR.

6

SECTION 8

EXPENSES.

6

SECTION 9

ENFORCEMENT.

7

SECTION 10

REMEDIES.

7

SECTION 11

EXERCISE OF REMEDIES.

8

SECTION 12

APPOINTMENT OF ATTORNEY.

8

SECTION 13

DEALING WITH THE COLLATERAL.

8

SECTION 14

STANDARDS OF SALE.

8

SECTION 15

DEALINGS BY THIRD PARTIES.

9

SECTION 16

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR.

9

SECTION 17

COLLATERAL MATTERS.

10

SECTION 18

APPOINTMENT AND DUTIES OF THE CUSTODIAN.

11

SECTION 19

DIRECTED POWERS.

12

SECTION 20

CONTRACTUAL SETTLEMENT.

13

SECTION 21

SERVICES TO BE PERFORMED WITHOUT DIRECTION.

13

SECTION 22

EXPRESS PROVISIONS.

14

SECTION 23

SECURITY INTEREST, SET-OFF AND DEDUCTION

14

SECTION 24

WAIVER BY CUSTODIAN.

15

SECTION 25

CHARGES OF THE CUSTODIAN.

15

SECTION 26

INDEMNIFICATION OF CUSTODIAN.

15

SECTION 27

LIMITATION OF CUSTODIAN LIABILITY.

15

SECTION 28

REMOVAL AND RESIGNATION OF THE CUSTODIAN.

17

SECTION 29

NO CONFLICT.

18

SECTION 30

COMMUNICATIONS AND DIRECTIONS.

18

SECTION 31

CONFIDENTIALITY.

21

SECTION 32

GENERAL.

21

(i)

The Secured Party is authorized to carry on insurance business in Canada under the Insurance Companies Act (Canada) (the “ICA”);

(ii)

The Pledgor and the Secured Party have entered into the 2010 Coinsurance Agreement, pursuant to which the Pledgor has agreed to reinsure certain risks for the benefit of the Secured Party;

(iii)

The Pledgor is not authorized under the ICA to reinsure risks in Canada;

(iv)

The Secured Party will only receive credit for capital purposes under the ICA for reinsurance ceded under the 2010 Coinsurance Agreement if security is maintained in Canada in respect of the reinsurance liabilities of the Pledgor in accordance with the Superintendent’s guidance on reinsurance arrangements;

(v)

The Pledgor has agreed to provide security to the Secured Party for its obligations pursuant to the 2010 Coinsurance Agreement and has agreed to enter into this Agreement and to perform the obligations of the Pledgor described hereunder;

(vi)

The Pledgor and the Secured Party desire to retain the Custodian to act as custodian of the Collateral in accordance with the terms of this Agreement and to provide safekeeping and custodial services in respect of the Collateral; and

(vii)

The Custodian has agreed to act as custodian of the Collateral and to provide safekeeping and custodial services in respect of the Collateral, all on the terms and conditions of this Agreement.

Section 1

Defined Terms and Interpretation.

(1)

As used in this Agreement, the following terms have the following meanings:

(i)

with respect to the purchase or sale of any security, the date the parties have contracted to settle the trade;

(ii)

with respect to the purchase or sale of any short term money market investments, the date specified by the Pledgor at the time at which it gave instructions to the Custodian;

(iii)

with respect to the maturity of a security, the maturity date; and

(iv)

with respect to interest and dividend payments, the due date established by the payor.

(2)

Terms defined in the PPSA or the STA and used but not otherwise defined in this Agreement have the same meanings as in the PPSA or STA, as the case may be. For greater certainty, the terms “investment property”, “money” and “proceeds” have the meanings given to them in the PPSA; and the terms “certificated security”, “control”, “deliver”, “entitlement holder”, “entitlement order”, “financial asset”, “security”, “securities account”, “securities intermediary”, “security entitlement” and “uncertificated security” have the meanings given to them in the STA.

(3)

In this Agreement the words “including”, “includes” and “include” mean “including (or includes or include) without limitation”. The expressions “Section” and other subdivision followed by a number mean and refer to the specified Section or other subdivision of this Agreement.

(4)

Any reference in this Agreement to gender includes all genders. Words importing the singular number only include the plural and vice versa.

(5)

The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenient reference only and do not affect its interpretation.

(6)

Any reference in this Agreement to this Agreement, any other agreement or any instrument, means this Agreement, such other agreement, or such instrument, in each case, as the same may have been or may from time to time be amended, modified, extended, renewed, restated, replaced or supplemented and includes all schedules attached thereto. Except as otherwise provided in this Agreement, any reference in this Agreement to a statute refers to such statute and all rules and regulations made under it as the same may have been or may from time to time be amended or re-enacted.

Section 2

The Securities Account.

(1)

The Custodian shall open and maintain the Securities Account as an account of, and in the name of, the Pledgor, or shall designate an existing account as a Securities Account for purposes of this Agreement. The parties hereby agree that the account described in Schedule “C” is and shall be a “Securities Account” for purposes of this Agreement.

(2)

The Securities Account shall be opened and maintained at the offices of the Custodian in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇. The Custodian will not change the location, name or account number of any Securities Account without the prior written consent of the Pledgor and the Secured Party. The Securities Account shall be administered upon the terms and conditions set forth herein. The Custodian agrees to hold the Collateral as client property separate and apart from its general property. Notwithstanding Section 17.1(l)(c) of the PPSA, or equivalent legislation in any other jurisdiction, the Custodian shall not lend, re-pledge or re-hypothecate the Collateral.

(3)

The Pledgor shall, from time to time, deposit, contribute or deliver property to the Securities Account as required by the terms of the 2010 Coinsurance Agreement.

(4)

The Pledgor shall ensure that all property deposited, contributed or delivered by it to the Securities Account, or in which it Directs that amounts in the Securities Account be invested, consists of Permitted Investments and cash deposited in the Securities Account in the normal course of operating an investment securities account. While it is the Pledgor’s obligation to ensure that all property delivered by it to the Securities Account consists of Permitted Investments and the Secured Party has access to statements of the Securities Account to permit it to confirm that the assets in the Securities Account are Permitted Investments, as a supplemental control, the Custodian may, at its sole discretion, block the settlement of property that is non-CDS eligible into the Securities Account (the “Blocking Service”). On each occasion that the Custodian provides the Blocking Service, it shall promptly notify the Secured Party and the Pledgor of any property that has not settled into the Securities Account due to the Blocking Service. The Pledgor and the Secured Party shall not Direct the Custodian to use any part of the Collateral in a securities lending program.

(5)

The Custodian shall determine the Market Value of the Collateral at such times as required for purposes of this Agreement. In determining such Market Values, the Custodian shall use nationally recognized pricing services for property for which such prices are available, and for property for which such prices are not available, the Market Value shall be the market value or estimated market value agreed by the Secured Party and the Pledgor (or the Investment Manager on its behalf). The Custodian shall not be liable for any loss, damage or expense, arising as a result of (i) an error in such data sources, or (ii) market values or estimated market values provided by the Pledgor or the Secured Party or for any delay or failure of either party providing such market values or estimated market values.

(6)

The Pledgor shall ensure that the Market Value of the Permitted Investments forming part of the Collateral shall at all times be at least equal to the Minimum Market Value. If the Market Value of the Permitted Investments forming part of the Collateral shall at any time fall below the Minimum Market Value, the Pledgor shall promptly deposit in the Securities Account additional Collateral with a Market Value sufficient to bring the Market Value of the Permitted Investments forming part of the Collateral to at least the Minimum Market Value.

(7)

The Pledgor may not withdraw, and the Custodian shall not comply with any Entitlement Order issued by the Pledgor to withdraw, any of the Collateral from the Securities Account without the joint written Direction of the Pledgor and the Secured Party. Upon any withdrawal made in accordance with this Section 2(7), the Collateral withdrawn shall cease to be subject to the Security Interest and shall cease to be Collateral. The Security Interest shall not otherwise terminate except by means of the earlier of (i) the Release Date or (ii) a discharge in writing executed by the Secured Party in accordance with Section 30. The Custodian shall be entitled to set off against any Collateral withdrawn by the Pledgor pursuant to this Section 2(7) any fees and expenses due and payable to it by the Pledgor pursuant to this Agreement.

(8)

No withdrawal of Collateral pursuant to Section 2(7) shall prejudice the right of the Secured Party to subsequently require, or the obligation of the Pledgor to make, delivery of new Collateral in accordance with the terms of the 2010 Coinsurance Agreement and this Agreement.

(9)

Notwithstanding anything in this Agreement to the contrary, the Custodian agrees that it will comply with any Entitlement Orders originated by the Secured Party, without the further consent of the Pledgor. Upon receipt by the Custodian of a written notice from the Secured Party of a Notice of Exclusive Control, the Custodian shall promptly cease to comply with Entitlement Orders of the Pledgor or the Investment Manager with respect to the Collateral or the Securities Account (including without limitation Directions pursuant to Section 7(1) and Section 7(2)). In complying with any such Notice of Exclusive Control, the Custodian shall be entitled to a reasonable period of time to implement the Notice of Exclusive Control and shall not be required to cease processing a pending transaction not involving the withdrawal of property from the Securities Account pursuant to a Direction that was received by the Custodian prior to receiving the Notice of Exclusive Control. Other than the delivery of an Entitlement Order, no other statement or document need be presented by the Secured Party to withdraw any of the Collateral from the Securities Account, except that the Secured Party shall acknowledge to the Custodian receipt of such withdrawn Collateral.

(10)

As between the Secured Party and the Pledgor, the Secured Party agrees that it may only deliver a Notice of Exclusive Control to the Custodian if an Event of Default has occurred and is continuing.

Section 3

Grant of Security.

(a)

the Securities Account

(b)

all of the credit balances, security entitlements, securities, cash, and other financial assets and other property (or their value) from time to time held in the Securities Account;

(c)

all securities and other property derived from any dealing with or distribution of any property referred to in this Section 3;

(d)

all substitutions and replacements of, increases and additions to the property described in Section 3(a), Section 3(b) and Section 3(c), including as a result of any merger, amalgamation, arrangement, consolidation, subdivision, reclassification, stock dividend or other adjustment; and

(e)

all proceeds in any form derived directly or indirectly from any dealing with all or any part of the property described in Section 3(a), Section 3(b), Section 3(c) and Section 3(d), including the proceeds of such proceeds.

Section 4

Secured Obligations.

(a)

all of the Pledgor’s present and future obligations to the Secured Party to pay the Pledgor’s share of any loss or liability or both (including where required by the 2010 Coinsurance Agreement, any loss or liability on account of claims incurred but not reported) sustained by the Secured Party for which the Pledgor is liable under the 2010 Coinsurance Agreement and all of the Pledgor’s other present and future debts, liabilities and obligations to the Secured Party, direct or indirect, absolute or contingent, whether alone or with others, pursuant to or in connection with the 2010 Coinsurance Agreement or this Agreement (collectively, and together with the Expenses, the “Secured Obligations”); and

(b)

all reasonable legal fees, court costs, receiver’s or agent’s remuneration and other expenses of taking possession of, realizing, collecting, selling, transferring, delivering or obtaining payment for the Collateral upon the Security Interest becoming enforceable, and of taking, defending or participating in any action or proceeding in connection with any of the foregoing matters (collectively, the “Expenses”).

▇▇▇▇▇▇▇ ▇

▇▇▇▇▇▇▇▇▇▇.

(1)

The Pledgor acknowledges that (i) value has been given, (ii) it has rights in the Collateral or the power to transfer rights in the Collateral to the Secured Party (other than after- acquired Collateral), (iii) it has not agreed to postpone the time of attachment of the Security Interest, and (iv) it has received a copy of this Agreement.

(2)

At the request of the Secured Party, the Pledgor will take all action that the Secured Party deems advisable to cause the Secured Party to have control over any securities or other investment property delivered by the Pledgor pursuant to the 2010 Coinsurance Agreement or this Agreement or that is now or at any time becomes Collateral, including (i) causing the Collateral to be transferred to or registered in the name of the Custodian or its nominee, (ii) endorsing any certificated securities to the Custodian or its nominee by an effective endorsement, (iii) directing CDS Clearing and Depository Services Inc. that the Collateral is to be credited to an account in the name of the Custodian or its nominee, (iv) delivering the Collateral to the Custodian, and (v) delivering to the Custodian any and all consents or other documents or agreements which may be necessary to effect the transfer of any Collateral to the Custodian.

Section 6

Duties of the Secured Party.

(1)

The Secured Party has no obligation to exercise any option or right in connection with any Collateral. The Secured Party has no obligation to protect or preserve any Collateral from depreciating in value or becoming worthless and is released from all responsibility for any loss of value whether such Collateral is in the possession of, is a security entitlement of, or is subject to the control of, the Secured Party, the Custodian, the Pledgor or any other Person. The Custodian shall comply with its Standard of Care in the physical keeping of any Collateral.

Section 7

Rights of the Pledgor.

(1)

Until the Secured Party has delivered a Notice of Exclusive Control, the Pledgor shall be entitled, subject to Section 2(4), Section 2(6) and Section 2(7), to Direct the Custodian as to the manner of investment of the Collateral and to otherwise deal with the Collateral in the ordinary course of business. The Custodian may establish reasonable requirements relative to the time or times by which Direction must be given and shall advise the Pledgor of those requirements. The Pledgor may, by Direction to the Custodian and the Secured Party, designate an Investment Manager to manage the investment of some or all of the Collateral as identified by the Pledgor, and to provide Directions to the Custodian with regard to the investment of the Collateral. The Custodian may assume that the designation of an Investment Manager continues in force until it receives a written Direction from the Pledgor to the contrary. Whenever a Notice of Exclusive Control has been delivered to the Custodian, all rights of the Pledgor, or any Investment Manager, to Direct the Custodian as to the manner of investment of the Collateral shall terminate and all such rights shall become vested solely and absolutely in the Secured Party.

(2)

Until the Secured Party has delivered a Notice of Exclusive Control, the Pledgor shall be entitled to Direct the Custodian with respect to the exercise of the voting rights attached to the securities and other financial assets that are part of the Collateral. The Custodian may establish reasonable requirements relative to the time or times by which any such Directions must be given and shall advise the Pledgor of those requirements. Following delivery to the Custodian of a Notice of Exclusive Control, all rights of the Pledgor to vote or to Direct the voting (including under any proxy given by the Custodian or the Secured Party (or a nominee) or otherwise) shall cease and all such rights become vested solely and absolutely in the Secured Party.

(3)

All dividends, interests, distributions and other amounts related to the Collateral shall be collected by the Custodian, credited to the Securities Account and shall constitute Collateral, unless and until released in accordance with Section 2(7). Any dividend, interest, cash or other amounts received by the Pledgor contrary to this Section 7(3) will be held by the Pledgor as trustee for the Secured Party and shall be immediately paid over to the Custodian, or after the giving of a Notice of Exclusive Control, to or to the order of the Secured Party.

Section 8

Expenses.

Section 9

Enforcement.

(1)

The Security Interest shall become and be enforceable against the Pledgor upon the occurrence of any one or more of the following events (each, an “Event of Default”):

(a)

the Pledgor is no longer authorized in its home jurisdiction to carry on the business of reinsurance;

(b)

the Pledgor fails to make any payment when due (following the expiry of any cure period provided for in the 2010 Coinsurance Agreement) under the 2010 Coinsurance Agreement (whether on a scheduled payment date or upon default or termination);

(c)

the Pledgor defaults in any of its other duties and obligations under the 2010 Coinsurance Agreement (following the expiry of any cure period provided for in the 2010 Coinsurance Agreement);

(d)

any representation or warranty made by the Pledgor in this Agreement is breached or is incorrect in any respect and the Pledgor fails to remedy such breach and cause such representation or warranty to become correct in all respects within three Business Days of receipt of notice from the Secured Party requiring it to do so;

(e)

the Pledgor fails to perform any of its undertakings, covenants or agreements in this Agreement and such failure is not remedied on or before the third Business Day following the day in which notice of such failure has been given by the Secured Party to the Pledgor;

(f)

the Pledgor becomes insolvent or unable to pay its debts as they fall due or fails or admits in writing its inability to pay its debts as they fall due;

(g)

the Pledgor institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (i) results in a judgment of insolvency or liquidation, or (ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof provided the Pledgor is diligently pursuing the dismissal, discharge, stay or restrain during such time;

(h)

one or more supervisory or regulatory authorities takes control of all or substantially all of the assets of the Pledgor, with the intention that such authority or authorities act as administrator, liquidator or provisional liquidator, receiver or interim receiver, trustee, custodian or other similar officer; or

(i)

a liquidator or receiver of the Pledgor or of any part of the insurance business of the Pledgor is appointed under the provisions of any statute or pursuant to any agreement between the Pledgor and a third party.

(2)

The Pledgor and the Secured Party hereby acknowledge and agree that the Custodian shall in no way be required to confirm or verify that an Event of Default has occurred or is continuing prior to acting upon a Notice of Exclusive Control or an Entitlement Order given to the Custodian in accordance with the terms of this Agreement.

Section 10

Remedies.

(a)

delivering a Notice of Exclusive Control to the Custodian;

(b)

realizing upon or otherwise disposing of or contracting to dispose of the Collateral by sale, transfer or delivery;

(c)

exercising and enforcing all rights and remedies of a holder of the Collateral as if the Secured Party were the absolute owner thereof (including, if necessary, causing the Collateral to be registered in the name of the Secured Party or its nominee if not already done);

(d)

collecting any proceeds arising in respect of the Collateral;

(e)

directing the Custodian to transfer all Collateral held by the Custodian in the Securities Account to another account maintained with, by or on behalf of the Secured Party or otherwise as the Secured Party may Direct, and the Custodian shall comply with any such Direction;

(f)

applying any proceeds arising in respect of the Collateral in accordance with Section 32(11); and

(g)

exercising any other remedy or proceeding authorized or permitted under the PPSA or otherwise by Applicable Law or equity.

▇▇▇▇▇▇▇ ▇▇

Exercise of Remedies.

Section 12

Appointment of Attorney.

Section 13

Dealing with the Collateral.

(a)

the Secured Party is not obliged to exhaust its recourse against the Pledgor or any other Person or against any other security it may hold in respect of the Secured Obligations before realizing upon or otherwise dealing with the Collateral in such manner as the Secured Party may consider desirable;

(b)

the Secured Party may grant extensions or other indulgences, take and give up securities, accept compositions, grant releases and discharges and otherwise deal with the Pledgor and with other Persons, sureties or securities as it may see fit without prejudice to the Secured Obligations, the liability of the Pledgor or the rights of the Secured Party in respect of the Collateral; and

(c)

except as otherwise provided by Applicable Law or this Agreement, the Secured Party is not (i) liable or accountable for any failure to collect, realize or obtain payment in respect of the Collateral, (ii) bound to institute proceedings for the purpose of collecting, enforcing, realizing or obtaining payment of the Collateral or for the purpose of preserving any rights of any Persons in respect of the Collateral, (iii) responsible for any loss occasioned by any sale or other dealing with the Collateral or by the retention of or failure to sell or otherwise deal with the Collateral, or (iv) bound to protect the Collateral from depreciating in value or becoming worthless.

Section 14

Standards of Sale.

(a)

the Collateral may be disposed of in whole or in part;

(b)

the Collateral may be disposed of by public auction, public tender or private contract, with or without advertising and without any other formality;

(c)

any assignee of such Collateral may be the Secured Party or a customer of the Secured Party;

(d)

any sale conducted by the Secured Party will be at such time and place, on such notice and in accordance with such procedures as the Secured Party, in its sole discretion, may deem advantageous;

(e)

the Collateral may be disposed of in any manner and on any terms necessary to avoid violation of Applicable Law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that the prospective bidders and purchasers have certain qualifications, and restrict the prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of the Collateral) or in order to obtain any required approval of the disposition (or of the resulting purchase) by any governmental or regulatory authority or official;

(f)

a disposition of the Collateral may be on such terms and conditions as to credit or otherwise as the Secured Party, in its sole discretion, may deem advantageous; and

(g)

the Secured Party may establish an upset or reserve bid or price in respect of the Collateral.

Section 15

Dealings by Third Parties.

(1)

No Person dealing with the Secured Party or an agent or receiver appointed at the instance of the Secured Party is required to determine (i) whether the Security Interest has become enforceable, (ii) whether the powers which such Person is purporting to exercise have become exercisable, (iii) whether any money remains due to the Secured Party or the Custodian by the Pledgor, (iv) the necessity or expediency of the stipulations and conditions subject to which any sale or lease is made, (v) the propriety or regularity of any sale or other dealing by the Secured Party with the Collateral, or (vi) how any money paid to the Secured Party has been applied.

(2)

Any bona fide purchaser of all or any part of the Collateral from the Secured Party or any receiver or agent will hold the Collateral absolutely, free from any claim or right of whatever kind, including any equity of redemption, of the Pledgor, which it specifically waives (to the fullest extent permitted by Applicable Law) as against any such purchaser together with all rights of redemption, stay or appraisal which the Pledgor has or may have under any rule of law or statute now existing or hereafter adopted.

Section 16

Representations, Warranties and Covenants of the Pledgor.

(a)

the Pledgor is an insurance company duly incorporated and validly existing under the laws of its jurisdiction of incorporation and is not in liquidation, is authorized in its jurisdiction of incorporation to carry on the business of reinsurance and has the corporate power and authority to enter into this Agreement and to exercise its rights and perform its obligations hereunder and has taken all corporate and other action required to authorise its execution and performance of this Agreement;

(b)

the Pledgor owns, or will at the time of it being credited to the Securities Account own, the Collateral free and clear of all Liens (other than the Security Interest and the Custodian Security Interest) and other adverse claims and the Pledgor is entitled to grant the Security Interest and the Custodian Security Interest created pursuant to this Agreement;

(c)

this Agreement does not conflict in any material respect with any contractual or other obligation binding upon the Pledgor or with the constitutional documents of the Pledgor;

(d)

the Security Interest created pursuant to this Agreement constitutes and will constitute a first priority security interest over the Collateral, not subject to any prior or pari passu security interest (other than the Custodian Security Interest);

(e)

this Agreement has been duly executed and delivered by the Pledgor and constitutes the legal, valid and binding obligations of the Pledgor, enforceable in accordance with its terms;

(f)

other than with the prior written consent of the Secured Party, the Pledgor shall not dispose of the Collateral, shall not create any Liens, other than the Security Interest and the Custodian Security Interest created by this Agreement, in respect of the Collateral (irrespective of whether ranking behind the Security Interest created hereby), shall not permit the existence of any such Lien, and shall not grant control over any of the Collateral to any Person other than the Secured Party;

(g)

to the Pledgor’s knowledge, no transfer restrictions apply to any of the Collateral, except as have been complied with;

(h)

the Pledgor does not know of any claim to or interest in any Collateral, including any adverse claims. If any Person asserts any Lien, encumbrance or adverse claim against any of the Collateral, the Pledgor will promptly notify the Secured Party;

(i)

the Pledgor has not consented to, will not consent to, and has no knowledge of any control by any Person with respect to any Collateral, other than the Secured Party;

(j)

the Pledgor will notify the Secured Party immediately upon becoming aware of any change in an “issuer’s jurisdiction” within the meaning of the STA and the equivalent legislation in any other jurisdiction in respect of any Collateral that are uncertificated securities;

(k)

the Pledgor will not change its name in any manner or its jurisdiction of incorporation without providing at least 30 days’ prior written notice to the Secured Party and the Custodian;

(1)

the head office and chief executive office of the Pledgor is located at the location specified in the 2010 Coinsurance Agreement or otherwise provided to the Secured Party, and the Pledgor will not change the jurisdiction of its head office or chief executive office without providing at least 30 days’ prior written notice to the Secured Party; and

(m)

the Pledgor will grant to the Secured Party such further security interests, assignments, mortgages, charges, hypothecations and pledges in such of the Collateral that is not effectively subject to a valid and perfected first ranking security interest pursuant to this Agreement, and in each relevant jurisdiction as reasonably determined by the Secured Party. The Pledgor will perform all acts, execute and deliver all agreements, documents and instruments and take such other steps as are reasonably requested by the Secured Party at any time to register, file, signify, publish, perfect, maintain, protect, and enforce the Security Interest including: (i) executing, recording and filing of financing or other statements, and paying all taxes, fees and other charges payable, (ii) placing notations on its books of account to disclose the Security Interest, (iii) delivering acknowledgements, confirmations and subordinations that may be necessary to ensure that the Security Interest constitutes a valid and perfected first ranking security interest, (iv) executing and delivering any certificates, endorsements, instructions, agreements, documents and instruments, required to register, file, signify, publish, perfect, maintain, protect and enforce the Security Interest. The documents contemplated by this paragraph must be in form and substance reasonably satisfactory to the Secured Party.

Section 17

Collateral Matters.

(1)

The Custodian acknowledges and agrees that:

(a)

the Collateral is and will at all times be held by the Custodian in Canada;

(b)

the Custodian represents and warrants to the Secured Party that it is a Canadian financial institution and is not an Affiliate of the Pledgor, and covenants to remain a Canadian financial institution and not an Affiliate of the Pledgor so long as this Agreement remains in force;

(c)

subject to the provisions set out herein, it has not acquired and will not acquire any right, title or interest in the Collateral on its own behalf other than such rights as it may have as securities intermediary with respect thereto (including the Custodian Security Interest) and to hold and administer the same in accordance with the terms of this Agreement;

(d)

it has not entered into, and will not enter into, any agreement, other than this Agreement, in which it agrees to comply with any Entitlement Order or other instruction or direction in respect of the Collateral or any portion thereof and it will not accept or act upon an Entitlement Order, instruction or direction in respect of the Collateral or the Securities Account, except as provided in this Agreement;

(e)

all property (whether a credit balance, a security, an instrument or other property whatsoever) credited to or held in the Securities Account is to be treated as a financial asset under the STA and the equivalent legislation in other jurisdictions;

(f)

the Securities Account is a “securities account” for purposes of the STA, and the equivalent legislation in other jurisdictions;

(g)

it is acting as a “securities intermediary”, for purposes of the STA and the equivalent legislation in other jurisdictions, in respect of the Collateral and any security entitlements credited to the Securities Account; and

(h)

its “securities intermediary’s jurisdiction” for purposes of the STA, and the equivalent legislation in other jurisdictions, is the Province of Ontario, Canada.

(2)

Each of the Pledgor and the Secured Party acknowledges and agrees that

(a)

the Custodian shall have no obligation to register any financing statement or other personal property security filings in respect of any of the Collateral, or to perfect or maintain the perfection of any Lien, other than its obligation to open and maintain the Securities Account in accordance with the terms of this Agreement; and

(b)

the Custodian shall not be responsible for determining the amount of Collateral required to be delivered by the Pledgor at any time pursuant to the 2010 Coinsurance Agreement or to determine whether the Collateral held in the Securities Account are either Permitted Investments or cash.

Section 18

Appointment and Duties of the Custodian.

(1)

The Custodian agrees to act as Custodian and, in that connection, agrees to maintain the Securities Account in accordance with the terms of this Agreement. In particular, the Custodian agrees that:

(a)

except as otherwise provided herein, all securities and all other property delivered to the Custodian pursuant to this Agreement or the 2010 Coinsurance Agreement for credit to the Securities Account, or otherwise as Collateral, shall promptly be credited to, and shall be held in, the Securities Account. The Custodian shall hold the Collateral in accordance with the terms and conditions of this Agreement. The Custodian shall hold the Collateral as client property separate and apart from its general property. All Collateral shall at all times and in all circumstances be clearly recorded in the books and records of the Custodian as being separate and apart from the assets of the Custodian and in a manner which reflects the Pledgor as the beneficial owner of the securities and other property in the Securities Account. The Custodian shall make notations in its records that the Securities Account is subject to a security interest in favour of the Secured Party;

(b)

the Custodian shall promptly credit and deposit all cash or other amounts received as dividends, interest, distributions or other payment related to the Collateral, including all cash or other amounts received pursuant to Section 7(3), to the Securities Account;

(c)

the Custodian shall, with respect to Corporate Actions, use reasonable efforts to promptly forward to the Pledgor, or, on Direction from the Pledgor, to the Investment Manager, or, following the delivery of a Notice of Exclusive Control to the Custodian, the Secured Party, a corporate action notice that contains a summary of information which has actually been received by the Custodian from third party sources believed by the Custodian to be reliable, and request Directions with respect to such Corporate Action where required. The Custodian shall, with respect to Voting Materials, use reasonable efforts to promptly forward, or arrange to have promptly forwarded, to the Pledgor (or to the Investment Manager which the Pledgor has designated as having responsibility for the relevant security) or, following the delivery of a Notice of Exclusive Control to the Custodian, the Secured Party, all Voting Materials which the Custodian receives in respect of securities forming part of the Collateral. The Custodian shall be under no duty to investigate, participate in or take affirmative action concerning any Corporate Actions or Voting Materials, except in accordance with a Direction given in accordance with this Agreement, and upon such indemnity and provision for fees and expenses as the Custodian may require. For greater certainty, other than as described in this paragraph and in (l)(e) below, the Custodian shall not be obligated to forward or summarize any other shareholder communications, including shareholder mailings, notices or reports, and the Custodian shall have no responsibility or liability for ensuring the accuracy or adequacy of such third party information contained in any such Voting Materials or Corporate Action notice;

(d)

the Custodian shall register the Collateral in the Custodian’s own name in the name of a Depository or in the name of a nominee, or in bearer form, if the security is not capable of being registered or registration of it would not be in the best interests of the Pledgor and the Secured Party;

(e)

the Custodian shall account for all Collateral in the Securities Account and shall provide monthly statements of account. Additional statements as required to satisfy the requirements of the Superintendent and any other regulatory or administrative agencies will also be provided as requested by the Secured Party, the Pledgor, the Superintendent or such other regulatory or administrative agency, all at the expense of the Pledgor. Upon the expiration of one hundred and twenty (120) days from the date of mailing of any statement, the Custodian shall be fully released and discharged from any liability or accountability to any party with respect to the acts or transactions disclosed in such statement, except when the Custodian has breached its Standard of Care and in respect of those certain acts and transactions which the Pledgor or the Secured Party has identified by giving written notice to the Custodian;

(f)

the Custodian shall respond to any direct inquiries of the Pledgor, the Secured Party, the Superintendent, or any of their representatives, concerning the Securities Account or the Collateral, and shall upon reasonable prior notice provide to the Pledgor, the Secured Party and the Superintendent detailed inventories of all securities and other property held in the Securities Account, and the Custodian shall, upon reasonable prior notice, and subject to such commercially reasonable requirements as the Custodian may impose, permit the Pledgor, the Secured Party, the Superintendent, or any of their representatives, to examine and audit all securities and other property held in the Securities Account. The Custodian shall promptly provide notice to the Secured Party and the Pledgor concerning audits of the Superintendent. The parties acknowledge that copies of statements and confirmations relating to the Securities Account are available through the Custodian’s client access web portal, and the Pledgor hereby consents to the Custodian granting access to the Secured Party to information regarding the Securities Account by such web portal and such consent to access may not be withdraw without the consent of the Secured Party. The Pledgor and the Secured Party hereby consent to the Custodian granting access to the Superintendent to the information regarding the Securities Account by the Custodian’s client access web portal;

(g)

the Custodian shall keep records of the administration of the Securities Account. The Pledgor, the Superintendent, the Secured Party and/or any other persons to whom the Custodian is legally obligated to provide access, may examine such records upon reasonable prior notice during business hours through any person or persons duly authorized in writing by the Pledgor, the Superintendent, the Secured Party and/or such other person, as the case may be;

(h)

the Custodian shall notify the Pledgor and the Secured Party of any claim of which the Custodian has actual notice against the Collateral or any part thereof exerted by any Person, or of any loss, destruction of or damage to the Collateral or any part thereof;

(i)

the Custodian shall, on the receipt from the Secured Party of an Entitlement Order, or notice from the Secured Party that such surrender or transfer is required in connection with a realization effected in accordance with Section 10, surrender possession of all or part of the Collateral or transfer all or part of the Collateral from the Securities Account to the Secured Party, another Person or to an account designated by the Secured Party, all as Directed by the Secured Party;

(j)

the Custodian will, on or before the fifteenth day of each calendar month, or, if the fifteenth day is not a business day of the Custodian, on or before the first business day of the Custodian following the fifteenth day, prepare and file with the Superintendent, in a form acceptable to the Superintendent, a Declaration with respect to the Collateral, in such form as the Superintendent may require from time to time, together with paper and electronic copies of information all as may be required from time to time by the Superintendent with respect to the Collateral. The Secured Party hereby appoints the Custodian as its agent for the purpose of filing such Declaration and authorizes the Custodian to file each such Declaration on its behalf. The Secured Party acknowledges that such Declaration may as an administrative matter be filed by the Custodian as part of a larger filing made in respect of other similar arrangements with other clients;

(k)

notwithstanding Section 17.1(l)(c) of the PPSA, the equivalent legislation in any other jurisdictions or any other provision of Applicable Law, the Custodian shall not lend, re-pledge or re-hypothecate the Collateral; and

(1)

the Custodian shall not permit any of the Collateral to be used as part of the Custodian’s securities lending program.

Section 19

Directed Powers.

(1)

The Custodian shall exercise the following powers and authority in the administration of the Securities Account only upon Direction of the Pledgor or its Investment Manager and, to the extent required by Section 2, the consent of the Secured Party and, after receipt of a Notice of Exclusive Control from the Secured Party, only upon the Direction of the Secured Party:

(a)

settle the purchase and sale of Collateral; and

(b)

complete and process such Voting Materials and process Corporate Actions as the Custodian may be Directed, provided that the Custodian has received Directions within the time frames specified by the Custodian in any such Voting Materials or Corporate Action notice applicable thereto. Where Directions have not been provided within such time frames, the Custodian will take no action except only in the case of Corporate Actions and where a default option exists, such default option as outlined in the notice will apply. In the event that Directions are provided after such time frames, the Custodian shall use reasonable efforts to process such Corporate Actions or Voting Materials.

▇▇▇▇▇▇▇ ▇▇

Contractual Settlement.

Section 21

Services to be Performed without Direction.

(1)

The Custodian may, without Direction, perform the following duties with respect to the Collateral in accordance with accepted industry practice in the relevant market:

(a)

hold securities forming part of the Collateral through a Depository on the terms of business of the operators of such Depository, and may effect settlement in accordance with the customary or established trading and processing practices and procedures in the jurisdiction or market in which any transaction in respect of the Collateral occurs. The Custodian shall be fully protected and absolved from any liability howsoever arising from effecting transactions in the foregoing manner except to the extent that such liability arises out of the Custodian’s breach of its Standard of Care in carrying out Directions in relation to such transactions.

(b)

enter into and settle foreign exchange transactions, on behalf of the Pledgor, for purposes of facilitating settlement of trades of Collateral or otherwise, and any such transactions may be entered into with such counterparties (including but not limited to the Custodian acting as principal) as the Custodian may choose in its sole discretion, including Affiliates of the Custodian, unless the Pledgor otherwise Directs;

(c)

to the extent it may do so in the ordinary course of its business, (i) collect income payable to and distributions due to the Securities Account and sign on behalf of the Pledgor or the Secured Party any declarations, affidavits, certificates of ownership and other documents required to collect income and principal payments, including but not limited to, tax reclamations, rebates and other withheld amounts, and (ii) collect proceeds from securities or other property which may mature, provided that whenever a security or other property offers the Custodian the option of receiving dividends in shares or cash, the Custodian is authorized to select the cash option unless the Custodian receives a Direction to the contrary. The Custodian shall not be responsible for the failure to receive payment of (or late payment of) distributions with respect to securities or other property held in the Securities Account;

(d)

present for redemptions or exchange any securities or other property which may be recalled, redeemed, withdrawn or retired provided that timely receipt of written notice of the same is received by the Custodian from the issuer;

(e)

retain uninvested cash balances from time to time on hand in the Securities Account and may, in its sole discretion, hold such cash balances on deposit with a bank or another deposit taking institution, including the Custodian or its Affiliates, in such interest bearing account as the Custodian may, in its sole discretion, determine.

(f)

do all such acts, take all such proceedings and exercise all such rights and privileges, although not specifically mentioned in this Agreement, as the Custodian may deem necessary to carry out its rights and obligations under this Agreement.

(2)

The Custodian may appoint Agents and nominees (which may be Affiliates of or otherwise connected to the Custodian) to perform any of the services to be performed by the Custodian as required under the Agreement.

(3)

The Custodian shall act in accordance with its Standard of Care in the selection and monitoring of Agents and nominees.

(4)

The Custodian shall not be liable in any circumstances for the acts or omissions of any agent appointed by the Secured Party or Pledgor. For greater certainty, Depositories are not agents of the Custodian.

(5)

For greater certainty, any rights, powers, authorities, benefits, and limitations on liability or responsibility whatsoever granted to the Custodian under this Agreement or conferred upon the Custodian otherwise at law shall be deemed to have been granted to, or conferred upon, any and all Agents and nominees duly appointed by the Custodian, and in furtherance thereof, any references to “the Custodian” herein shall be construed as references to such Agents or nominees, as the context requires.

(6)

Settlements of transactions may be effected in accordance with trading and processing practices customary in the jurisdiction or market where the transaction occurs. The Pledgor acknowledges that this may, in certain circumstances, require the delivery of cash or securities (or other property) without the concurrent receipt of securities (or other property) or cash and, in such circumstances, the Pledgor shall have sole responsibility for non receipt of payment (or late payment) by the counterparty.

Section 22

Express Provisions.

Section 23

Security Interest, Set-Off and Deduction

(1)

If a Direction from the Pledgor, or the settlement of a transaction would create a debt owing, overdraft or short position in the Securities Account (an “Overdraft”), then the Custodian is authorized to, but shall not be obliged to, act on such Direction or complete such transaction.

(2)

Interest on any Overdraft shall be calculated on the daily balance of the amount owing (before and after demand, default and judgment) at an annual rate established and declared by the Custodian from time to time, subject to such minimum charges as declared from time to time, with interest on overdue interest at the same rate. Interest is payable monthly and shall form part of the Overdraft.

(3)

The Pledgor agrees to pay to the Custodian promptly upon notice, the amount of any Overdraft together with any interest that has accrued in accordance with Section 23(2).

(4)

Notwithstanding any other provision of this Agreement, the Custodian, in its reasonable discretion, shall be entitled to decline to act upon any Direction of the Pledgor unless and until all the amounts due and owing to the Custodian under this Agreement have been paid in full. The Custodian shall give the parties notice of its decision not to act on any such Direction as soon as practicable thereafter.

(5)

The Pledgor hereby assigns, conveys, mortgages, pledges, hypothecates, and charges in favour of, and grants a security interest (the “Custodian Security Interest”) to the Custodian in the Collateral and all proceeds thereof as continuing collateral security for, and in an amount not to exceed the amount of, any obligations, liabilities and indebtedness of the Pledgor to the Custodian from time to time, whether present or future, absolute or contingent, liquidated or unliquidated, of whatsoever nature or kind, in any currency or otherwise, arising pursuant to this Agreement, with respect to (i) any unpaid fees, disbursements and expenses, and (ii) Overdraft amounts (collectively, the “Pledgor Obligations”).

(6)

If and to the extent that at any time any Pledgor Obligations owing to the Custodian hereunder are outstanding and unpaid, in addition to any right or remedy that the Custodian may otherwise have hereunder or under any Applicable Law, the Custodian is hereby authorized, in its discretion (upon reasonable notice to the Pledgor and the Secured Party and in accordance with Applicable Law), both before and after demand or judgment, and whether or not default has occurred hereunder:

(a)

to sell, as agent for the Pledgor, such portion of the Collateral (which, for the purposes of this Section 23 shall include any account with any third party with whom cash has been deposited by the Custodian on behalf of the Pledgor) as may be required to satisfy any such unpaid Pledgor Obligations, on such commercially reasonable terms as it thinks fit in its discretion; and

(b)

set off against and deduct from the proceeds of any such sale amounts owing to the Pledgor in respect of unpaid Pledgor Obligations, and account for any surplus in excess of such amount to the Pledgor, or as provided in this Agreement,

Section 24

Waiver by Custodian.

Section 25

Charges of the Custodian.

Section 26

Indemnification of Custodian.

(1)

The Pledgor shall indemnify and hold the Custodian, its directors, officers, employees, representatives and agents harmless from and against any and all taxes, charges, costs, expenses, damages, claims, demands and liabilities to which they, or any of them, may become subject, including legal and accounting costs, for or in respect of anything done or omitted to be done in connection with this Agreement or in respect of the Collateral, except for the negligence, wilful misconduct, fraud or lack of good faith of the Custodian, such indemnification to survive the resignation or removal of the Custodian and the termination of this Agreement.

(2)

Following the delivery of a Notice of Exclusive Control, the Secured Party shall indemnify and hold the Custodian, its directors, officers, employees, representatives and agents harmless from and against any and all taxes, charges, costs, expenses, damages, claims, demands and liabilities to which they, or any of them, may become subject, including legal and accounting costs, for or in respect of anything done or omitted to be done in connection with this Agreement or in respect of the Collateral following the delivery of a Notice of Exclusive Control, except for the negligence, wilful misconduct, fraud or lack of good faith of the Custodian, such indemnification to survive the resignation or removal of the Custodian and the termination of this Agreement.

(3)

Whenever an action by the Custodian is authorized by Direction pursuant to the provisions of this Agreement and such action is taken in accordance with such Direction, the party or parties authorizing such action by way of Direction hereby agree to indemnify the Custodian against all losses, damages, costs and expenses, including reasonable attorneys’ fees, resulting from any action so taken by the Custodian.

Section 27

Limitation of Custodian Liability.

(1)

The Custodian, in carrying out its duties in respect of the safekeeping of, and dealing with, the Collateral, shall exercise the degree of care, diligence and skill that a prudent Canadian trust company would exercise incomparable circumstances (the “Standard of Care”).

(2)

Except to the extent that the Custodian has not complied with the Standard of Care, or to the extent of its own negligence, wilful misconduct, fraud or lack of good faith, the Custodian shall not be liable for any act or omission in the course of, or connected to, rendering services hereunder. Without limitation, the Custodian shall not be liable for any losses to, or diminution of, the Collateral, except to the extent that such loss or diminution is directly caused by the Custodian’s breach of the Standard of Care. In no event shall the Custodian be liable for any consequential or special damages, including but not limited to loss of reputation, goodwillor business. Notwithstanding the foregoing or any other provision of this Agreement, the Custodian’s liability arising from the Blocking Service shall in no event exceed the aggregate amount of fees received by the Custodian with respect to the specific Securities Account in the preceding six (6) months.

(3)

The Custodian shall not be responsible for:

(a)

any property until it has been received by the Custodian;

(b)

the title, validity or genuineness of any property or evidence of title to any Collateral or any defect in ownership or title;

(c)

any act or omission required or demanded by any governmental, taxing, regulatory or other competent authority in any country in which all or part of the Collateral is held or which has jurisdiction over the Custodian the Pledgor or the Secured Party;

(d)

any loss resulting from official action (including nationalisation and expropriation), currency restrictions or devaluations, acts or threat of war or terrorism, insurrection, revolution or civil disturbance, acts of God, strikes or work stoppages, inability of any Depository or other settlement system to settle transactions, interruptions in postal, telephone, telex and/or other communication systems or in power supply, the failure of any third party appointed by the Pledgor to fulfil its obligations hereunder, or any other event or factor beyond the reasonable control of the Custodian;

(e)

any failure to act on Directions, if the Custodian reasonably believed that to do so might result in breach of Applicable Law or the terms of this Agreement; or

(f)

any Collateral which it does not hold or which is not directly controlled by the Custodian or its appointed Agents.

(4)

The Custodian’s duties and responsibilities in connection with this Agreement will be limited to those expressly set forth in this Agreement. The Custodian is not a principal, participant, party or beneficiary in any transaction underlying this Agreement and will have no duty to inquire beyond the terms and provisions hereof. Save and except for carrying out Directions as provided herein, the Custodian shall have no responsibility for trading in securities which form part of the Collateral, or for any investment management or investment decision. The Custodian shall not be held responsible for the sufficiency of the Collateral or for any market decline in the value of the Collateral and shall have no obligation to notify either the Pledgor or the Secured Party of any such decline. The Custodian will not be liable for any error in judgement, any act or omission, any mistake of law or fact, or for anything it may do or refrain from doing in connection herewith, except for its own negligence, wilful misconduct, fraud or lack of good faith.

(5)

Should any dispute arise in respect of the Collateral or this Agreement, or should the Custodian in good faith be uncertain as to what action to take under this Agreement, it will be entitled to withhold delivery of all or any part of the Collateral until the dispute is resolved, any conflicting demands are withdrawn or any uncertainty is resolved. Should the Custodian be threatened with litigation or become involved in litigation or arbitration in any manner whatsoever in connection with this Agreement or the Collateral, the Pledgor hereby agrees to reimburse the Custodian for its lawyers’ fees and any and all other expenses, losses, costs and damages incurred by the Custodian in connection with such threatened or actual litigation or arbitration. Notwithstanding any other term of this Agreement, the Custodian shall have no responsibility or liability to the Pledgor for complying with a Notice of Exclusive Control or an Entitlement Order concerning the Securities Account issued by the Secured Party, and shall have no responsibility to investigate the appropriateness of any such Entitlement Order, even if the Pledgor notifies the Custodian that the Secured Party is not legally entitled to originate any such Entitlement Order, unless the Custodian has been served with an injunction, restraining order or other legal process issued by a court of competent jurisdiction (“Court Order”) enjoining it from complying and has had a reasonable opportunity to act on such Court Order.

(6)

The Custodian may employ and retain and consult with legal counsel or professional advisors satisfactory to it concerning any questions relating to its duties or responsibilities hereunder or otherwise in connection herewith and the Pledgor shall reimburse the Custodian for all reasonable costs and expenses associated therewith. Provided that no conflict exists as in relation to the issue between the Pledgor and the Secured Party, the Custodian may consult with counsel to the Secured Party or the Pledgor, as the Custodian may determine. The Custodian shall be entitled to rely on and may act upon advice of such legal counsel or professional advisors and shall not be liable for any action taken, suffered or omitted by it in good faith in relying thereon, provided the advice so acted or relied upon by the Custodian was within the area of professional competence of the person from whom it was received.

(7)

The Pledgor shall notify the Custodian in writing of any taxes payable in respect of the Collateral. The Custodian shall use reasonable efforts, based upon the information available to it, to assist the Pledgor with respect to any taxes. If the Custodian is responsible under any Applicable Law for any taxes in respect of the Securities Account, the Pledgor shall inform the Custodian in writing of such taxes, shall Direct the Custodian with respect to the payment of such taxes and shall provide the Custodian with the necessary funds and all information required to fund, pay or meet such taxes. The Custodian shall have no responsibility or liability for and shall be indemnified and held harmless by the Pledgor for any assistance provided to the Pledgor and for any taxes now or hereafter imposed on the Securities Account or the Pledgor or the Custodian in respect of the Securities Account by any taxing authorities, domestic, foreign or international.

(8)

Each of the Pledgor and the Secured Party shall provide the Custodian with an incumbency certificate substantially in the form set out in Schedule “D” setting out the names and sample signatures of persons authorized to give Directions to the Custodian hereunder. The Custodian shall be entitled to rely on such certificate until a revised certificate is provided to it hereunder. Unless otherwise expressly provided, each Direction shall continue in full force and effect until superseded or cancelled by another written instruction. Any Directions shall, as against the Pledgor and the Secured Party, if applicable, and in favour of the Custodian, be conclusively deemed to be Directions for the purposes of this Agreement notwithstanding any error in the transmission thereof or that such written instruction may not be genuine, if believed by the Custodian acting in good faith, to be genuine. Provided however that the Custodian, subject to Section 27(9), may in its discretion decline to act upon any Direction: (a) that is insufficient or incomplete; or (b) that is not received by the Custodian in sufficient time to give effect to such written instructions; or (c) where the Custodian has reasonable grounds for concluding that the same has not been accurately transmitted or is not genuine. If the Custodian declines to give effect to any Directions for any reason set out in the preceding sentence, it shall notify the person giving such instruction forthwith after it so declines.

(9)

Except as otherwise expressly provided in this Agreement, any statement, certificate, notice, request, consent, approval, or other instrument to be delivered or furnished by the Pledgor or the Secured Party shall be sufficiently executed if executed in the name of the Pledgor or the Secured Party by persons named in the incumbency certificate delivered pursuant to Section 27(8). The Custodian shall be protected in acting upon any written statement or other instrument made by such officers or agents of the Pledgor or the Secured Party with respect to the authority conferred on it.

Section 28

Removal and Resignation of the Custodian.

(1)

The Custodian may at any time resign from, and terminate its capacity hereunder by delivery of written notice of resignation, effective not less than ninety (90) days after receipt by both the Secured Party and the Pledgor. The Custodian may be removed by the Pledgor and the Secured Party delivering to the Custodian of a joint written notice of removal, effective not less than ninety (90) days after receipt by the Custodian. Notwithstanding the foregoing, no such resignation by the Custodian or removal by the Pledgor and the Secured Party shall be effective until a successor to the Custodian shall have been duly appointed by the Pledgor and approved by the Secured Party and all Collateral in the Securities Account have been duly transferred to such successor. The Pledgor and the Secured Party, upon receipt of the written notice of resignation of the Custodian or issuance of a notice of removal of the Custodian, shall undertake to obtain the agreement of a qualified, successor depository, agreeable to each of the Secured Party and the Pledgor, to act as a successor Custodian in accordance with all agreements of the Custodian herein. Neither the Secured Party nor the Pledgor shall unreasonably withhold approval of such Custodian.

(2)

Any successor Custodian appointed hereunder shall execute an instrument accepting such appointment hereunder and shall deliver the same to the Pledgor and the Secured Party and to the then acting Custodian. Thereupon such successor Custodian shall, without any further act, assume the obligations and duties of the Custodian under this Agreement with like effect as if originally named herein; but the predecessor Custodian shall nevertheless, when requested in writing by the successor Custodian, execute an instrument or instruments assigning such of its rights and powers, and shall duly assign, transfer and deliver to the Custodian all property and money held by such predecessor hereunder. The predecessor Custodian shall be entitled to reimbursement in accordance with Section 26 for all reasonable expenses it incurs in connection with the settlement of its account and the transfer and delivery of the Collateral to its successor. The predecessor Custodian shall continue to be indemnified by reason of such entity being or having been a Custodian in accordance with the terms hereof.

▇▇▇▇▇▇▇ ▇▇

No Conflict.

(1)

The Custodian represents and warrants to the Secured Party and the Pledgor that, at the time of the execution and delivery of this Agreement, no material conflict of interest exists with respect to the Custodian’s role hereunder. The Custodian shall resign by giving notice in accordance with Section 28 if a material conflict of interest arises with respect to its role as custodian hereunder that is not eliminated within ninety (90) days after the Custodian becomes aware of such conflict of interest. Immediately after the Custodian becomes aware that it has a material conflict of interest, it shall provide the Secured Party and the Pledgor with written notice of the nature of that conflict.

(2)

The Pledgor and the Secured Party agree that the Custodian, and any of its divisions, branches or Affiliates, may take any one or more of the following actions without creating a conflict of interest; and without being liable to account therefor or being in breach of this Agreement:

(a)

purchase, hold, sell, invest in or otherwise deal with securities or other property of the same class and nature as may be part of the Collateral, whether on its own account or for the account of another (in a fiduciary capacity or otherwise);

(b)

act as a market maker in any securities that form part of the Collateral;

(c)

provide brokerage services to other clients;

(d)

act as financial adviser to the issuer of such securities;

(e)

act in the same transaction as agent for more than one client;

(f)

act as a deposit taking institution holding the cash balances in the Securities Account;

(g)

have a material interest in any issue of securities that form part of the Collateral;

(h)

subject to Section 31(1), use in other capacities knowledge gained in its capacity as Custodian hereunder; and

(i)

earn profits from any of the activities listed herein.

Section 30

Communications and Directions.

(1)

All communications hereunder (including, for greater certainty, Directions) must be given by one of the following methods of communication:

•

personal or courier delivery;

•

prepaid ordinary mail;

•

authenticated telex;

•

facsimile;

•

S.W.I.F.T.;

•

one of the Custodian’s secured client access channels, including RBC Dexia OnLine;

•

directly between electromechanical or electronic terminals (including, subject to Section 30(5), the internet or unsecured lines of communication); or

•

telephone (subject to Section 30(3)).

(2)

Communications should be addressed, as applicable, as follows:

(i)

to the Pledgor at:

▇▇▇▇▇▇▇▇▇:

▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Facsimile:

▇▇ (▇▇▇) ▇▇▇-▇▇▇▇

Attention:

▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇

Facsimile:

▇▇ (▇▇▇)▇▇▇ ▇▇▇▇

Attention:

▇▇▇▇ ▇▇▇▇

Facsimile:

(▇▇▇)▇▇▇ ▇▇▇▇

(ii)

to the Secured Party at:

Attention:

General Counsel

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

(iii)

to the Custodian at:

(3)

With respect to telephone Directions, the party giving such Directions shall endeavour to forward written Directions confirming such telephone Directions on the same day that such telephone Directions are given to the Custodian. The fact that such confirming written Directions are not received or that contrary Directions are received by the Custodian shall in no way affect the validity of any transactions effected by the Custodian on the basis of the telephone Directions.

(4)

Without limiting the foregoing, in the case of Directions sent through one of the Custodian’s secured access channels, including RBC Dexia Online, or sent directly between electromechanical or electronic terminals (including, subject to Sections 30(5) and 30(6), the internet or unsecured lines of communication), the parties acknowledge that it may not be possible for such Directions to be executed, however the Custodian shall nevertheless be protected in relying on such Directions as if they were written Directions from the party issuing same. The Custodian shall be entitled, without further inquiry or investigation, to assume that such Directions have been duly and properly issued by the Pledgor, the Investment Manager, or the Secured Party, as the case may be, and that the sender(s) is/are duly authorized to act, and to provide Directions, on behalf of the Pledgor, the Investment Manager, or the Secured Party, as case may be.

(5)

The parties acknowledge and agree that the Custodian, in providing the services hereunder, may forward reports and information to the parties or an Investment Manager, and may receive and act upon communications and instructions (including without limitation, Directions) received from the parties or an Investment Manager, through use of the internet or any other electronic means of communication which is not secure.

(6)

Nothing in this Agreement shall create an obligation for the Custodian to constantly monitor its electronic communication equipment, provided that reasonable monitoring is performed within business hours of the Custodian where communications are sent and the Custodian will not be held liable for an omission to act from not receiving electronically transmitted communications (including, without limitation, Directions). The party giving an electronic communication is responsible to ensure that it has been transmitted and received by the correct recipient. In the event of any disagreement as to whether electronic communications (including, without limitation, Directions) have been received by the Custodian, the sender will have the onus of proving that such electronic communication have been so received by the correct recipient.

(7)

The Custodian shall:

(a)

be fully protected in acting upon any Direction believed by it to be genuine and presented by the proper person(s); and

(b)

be under no duty to make any investigation or inquiry as to any statement contained in any such Direction but may accept such statement as conclusive evidence of the truth and accuracy of such statement.

Section 31

Confidentiality.

(1)

Each party shall hold in confidence all information relating to the Collateral and this Agreement (“Confidential Information”) and may only release such information to others where required by Applicable Law, where such information was within such party’s possession on a non-confidential basis prior to it being provided to such party, such information is or becomes generally available to the public or as otherwise agreed between the parties. The parties hereby consent to the delivery and availability of a copy of this Agreement, and any amendment thereto, to the Superintendent.

(2)

Without limitation of Section 31(1) above, the parties agree that the Custodian may share Confidential Information, on a need-to-know basis, with its Agents, service providers, Affiliates, related companies, subsidiaries, parent companies and their respective parent companies, Affiliates, related companies and subsidiaries, for the purposes of marketing, administration, to prevent fraud, to verify the identity of the parties and to prevent money laundering. For greater certainty, information disclosed for marketing purposes shall be on a no-names basis and shall be aggregated with similar information of other clients of the Custodian and shall form part of the collective internal client database used by the Custodian on an ongoing basis to assess and change how it promotes and performs its services to its clients. The Custodian will also provide the information relative to the Pledgor and the Secured Party’s information, including Confidential Information, to any federal or provincial legal or regulatory body if required by Applicable Law to do so.

(3)

Unless otherwise prohibited by Applicable Law, in the event that the Custodian becomes legally obligated to disclose any of the Confidential Information, the Custodian shall provide the parties with notice, as soon as reasonably practicable given the circumstances, of such requirements so that one or both of the parties may seek a protective order or other appropriate remedy or waive compliance with the terms of this section, which waiver may not be unreasonably withheld. The Custodian will reasonably cooperate with a party’s effort to obtain such protective order or other remedy at the applicable party’s sole expense. In the event that such protective order or other remedy is not obtained within a reasonable period of time or that the parties waive compliance with the provisions of this section or that the Custodian is compelled to forthwith provide the Confidential Information, the Custodian agrees to provide only that portion of the Confidential Information which is legally required and the Custodian will use commercially reasonable efforts to obtain confidential treatment for any Confidential Information that is so disclosed.

(4)

The Pledgor and Secured Party acknowledge that the Custodian may from time-to-time be required to transfer, store and process Confidential Information outside of Canada. The parties further acknowledge and agree that the contractual or other measures that the Custodian may use to protect such information are subject to the legal requirements of the jurisdiction where such information may be transferred, stored or processed, and that the Custodian may be required by Applicable Law to disclose Confidential Information to the lawful authorities operating within that jurisdiction. The parties further agree and acknowledge that the Custodian shall in no way be liable or responsible in any way for any damages, costs or expenses whatsoever that the parties may face as a result of the Custodian being legally obligated to disclose any such Confidential Information.

Section 32

General.

(1)

The Agreement shall not be terminated until the earlier of (i) the Release Date and (ii) the delivery to the Pledgor of a written release or discharge signed by the Secured Party. Upon termination of the Agreement and at the request and expense of the Pledgor, the Secured Party will execute and deliver to the Pledgor such financing statements and other releases, discharges, documents or instruments as the Pledgor may reasonably require and the Custodian will redeliver to the Pledgor, or as the Pledgor may otherwise Direct the Custodian, any Collateral in its possession.

(2)

This Agreement does not operate by way of merger of any of the Secured Obligations and no judgment recovered by the Secured Party will operate by way of merger of, or in any way affect, the Security Interest, which is in addition to, and not in substitution for, any other security now or hereafter held by the Secured Party in respect of the Secured Obligations. The representations, warranties and covenants of the Pledgor in this Agreement survive the execution and delivery of this Agreement. Notwithstanding any investigation made by or on behalf of the Custodian or the Secured Party, the covenants, representations and warranties continue in full force and effect.

(3)

The Pledgor will do all acts and things and execute and deliver, or cause to be executed and delivered, all agreements, documents and instruments that the Secured Party may require and take all further actions as the Secured Party may require for (i) protecting the Collateral, (ii) perfecting, preserving and protecting the Security Interest, and (iii) exercising all powers, authorities and discretions conferred upon the Secured Party and the Custodian. After the Security Interest becomes enforceable, the Pledgor will do all acts and things and execute and deliver all documents and instruments that the Secured Party may require for facilitating the sale or other disposition of the Collateral in connection with its realization, or for enforcing any of its other rights and remedies hereunder or under Applicable Law.

(4)

This Agreement is in addition to, without prejudice to and supplemental to all other security now held or which may hereafter be held by the Secured Party.

(5)

This Agreement is binding on the Pledgor, its successors and assigns, and enures to the benefit of the Secured Party, the Custodian, and their respective successors and assigns. This Agreement may not be assigned by any party hereto without the prior written consent of the other parties hereto.

(6)

The Pledgor acknowledges and agrees that in the event it amalgamates or merges with any other Person, it is the intention of the parties that the Security Interest (i) extends to: (A) all of the Collateral that any of the amalgamating corporations then own, (B) all of the Collateral that the amalgamated corporation thereafter acquires, (C) all of the Collateral in which any of the amalgamating corporations then has any interest and (D) all of the Collateral in which the amalgamated corporation thereafter acquires any interest; and (ii) secures the payment and performance of the Secured Obligations of each of the amalgamating corporations and the amalgamated corporation to the Secured Party in any currency, however or wherever incurred, and whether incurred alone or jointly with another or others and whether as principal, guarantor or surety and whether incurred prior to, at the time of or subsequent to the amalgamation. The Security Interest attaches to the additional Collateral at the time of amalgamation and to any Collateral thereafter owned or acquired by the amalgamated corporation when such becomes owned or is acquired. Upon any such amalgamation, the defined term “Pledgor” will extend to and include the amalgamated corporation and the defined term “Secured Obligations” will extend to and include the Secured Liabilities of the amalgamated corporation.

(7)

If any court of competent jurisdiction from which no appeal exists or is taken, determines any provision of this Agreement to be illegal, invalid or unenforceable, that provision will be severed from this Agreement and the remaining provisions will remain in full force and effect.

(8)

This Agreement may only be amended, supplemented or otherwise modified by written agreement executed by the Secured Party, the Custodian and the Pledgor.

(9)

No consent or waiver by the Secured Party in respect of this Agreement is binding unless made in writing and signed by an authorized officer of the Secured Party. Any consent or waiver given by the Secured Party under this Agreement is effective only in the specific instance and for the specific purpose for which given. No waiver of any of the provisions of this Agreement constitutes a waiver of any other provision.

(10)

A failure or delay on the part of the Secured Party in exercising a right under this Agreement does not operate as a waiver of, or impair, any other right of the Secured Party however arising. A single or partial exercise of a right on the part of the Secured Party does not preclude any other or further exercise of that right or the exercise of any other right by the Secured Party.

(11)

All monies collected by the Secured Party upon the enforcement of its rights and remedies under this Agreement, including any sale or other disposition of the Collateral, will be applied on account of the Secured Obligations at such times, in such manner and in such order as the 2010 Coinsurance Agreement may require or as the Secured Party may determine.

(12)

This Agreement will be governed by, interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

(13)

The Pledgor irrevocably attorns and submits to the non-exclusive jurisdiction of any court of competent jurisdiction of the Province of Ontario sitting in Toronto, Ontario in any action or proceeding arising out of or relating to this Agreement. The Pledgor irrevocably waives objection to the venue of any action or proceeding in such court or that such court provides an inconvenient forum. Nothing in this Section 32(13) limits the right of the Secured Party to bring proceedings against the Pledgor in the courts of any other jurisdiction.

(14)

Any action or proceeding against the Custodian arising out of or relating to this Agreement may only be brought in a court of competent jurisdiction in the Province of Ontario.

(15)

The Pledgor hereby irrevocably consents to the service of any and all process in any such action or proceeding by the delivery of copies of such process to the Pledgor at the address set out in relation to the Pledgor in Section 30(2). Nothing in this Section 32(15) limits the right of the Secured Party to serve process in any other manner permitted by Applicable Law.

FINANCIAL REASSURANCE COMPANY

2010, LTD.

Per:

[Illegible]

Authorized Signing Officer

Per:

Authorized Signing Officer

PRIMERICA LIFE INSURANCE COMPANY OF CANADA

Per:

[Illegible]

Authorized Signing Officer

Per:

[Illegible]

Authorized Signing Officer

RBC DEXIA INVESTOR SERVICES

TRUST, as Custodian

Per:

▇▇▇▇▇ ▇▇▇▇▇▇▇

Authorized Signing Officer

Per:

▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇

Authorized Signing Officer

Page

ARTICLE I

1

DEFINITIONS

Section 1.1

Definitions

1

ARTICLE II

5

REINSURANCE

Section 2.1

Reinsurance

5

Section 2.2

Exclusions

5

Section 2.3

Territory

5

ARTICLE III

5

COMMENCEMENT OF THE REINSURER'S LIABILITY

Section 3.1

Commencement of the Reinsurer's Liability

5

ARTICLE IV

6

REINSURANCE PREMIUMS, ALLOWANCES AND OTHER OBLIGATIONS

Section 4.1

Reinsurance Premiums

6

Section 4.2

Allowances

6

Section 4.3

Other Obligations

6

Section 4.4

Third Party Reinsurance

6

ARTICLE V

6

TAXES

Section 5.1

Guaranty Fund Assessments

6

Section 5.2

Tax Elections

6

ARTICLE VI

7

CLAIMS

Section 6.1

Notice of Claims

7

Section 6.2

Settlement Authority

7

Section 6.3

Claim Payments

7

Section 6.4

Misstatement of Age or Sex

7

ARTICLE VII

7

REINSTATEMENTS

Section 7.1

Reinstatements

7

ARTICLE VIII

7

ACCOUNTING AND RESERVES

Section 8.1

Monthly Reports

7

Section 8.2

Monthly Account Balance Reports

7

Section 8.3

Settlements

7

Section 8.4

Offset and Recoupment

8

Section 8.5

Currency

8

ARTICLE IX

8

EXPENSES IN CONNECTION WITH THE REINSURED POLICIES

Section 9.1

Expenses in Connection with the Reinsured Policies

8

Page

ARTICLE X

8

ERRORS AND OMISSIONS

Section 10.1

Errors and Omissions

8

ARTICLE XI

8

RECAPTURE

Section 11.1

Recapture

8

Section 11.2

Notice of Recapture

9

Section 11.3

Recapture Fee

9

Section 11.4

Renewal Recapture

9

Section 11.5

Commutation Accounting and Settlement

9

Section 11.6

Limitation on Partial Recaptures

9

ARTICLE XII

10

ACCESS TO BOOKS AND RECORDS

Section 12.1

Access to Books and Records

10

ARTICLE XIII

10

INSOLVENCY

Section 13.1

Insolvency

10

ARTICLE XIV

11

DISPUTE RESOLUTION

Section 14.1

Consent to Jurisdiction

11

Section 14.2

Waiver of Jury Trial

11

Section 14.3

Specific Performance

11

ARTICLE XV

11

REINSURANCE TRUST ACCOUNT

Section 15.1

Reinsurance Trust Agreement

11

Section 15.2

Investment of Trust Assets

11

Section 15.3

Adjustment of Trust Assets and Withdrawals

11

Section 15.4

Negotiability of Trust Assets

12

Section 15.5

Ceding Company's Withdrawals

12

Section 15.6

Return of Excess Withdrawals

12

Section 15.7

Costs of Trust

12

ARTICLE XVI

12

THIRD PARTY BENEFICIARY

Section 16.1

Third Party Beneficiary

12

ARTICLE XVII

13

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 17.1

Representations and Warranties of the Ceding Company

13

Section 17.2

Covenants of the Ceding Company

14

Section 17.3

Representations and Warranties of the Reinsurer

15

ARTICLE XVIII

16

INDEMNIFICATION

Section 18.1

Indemnification

16

Page

ARTICLE XIX

16

LICENSES, REGULATORY MATTERS

Section 19.1

Licenses

16

Section 19.2

Regulatory Matters

16

ARTICLE XX

DURATION OF AGREEMENT; TERMINATION

Section 20.1

Duration

16

Section 20.2

Termination by Mutual Consent

16

Section 20.3

Termination by the Reinsurer

17

Section 20.4

No Termination Upon Change of Control

17

Section 20.5

Survival

17

ARTICLE XXI

17

MISCELLANEOUS

Section 21.1

Entire Agreement

17

Section 21.2

Amendments

17

Section 21.3

Severability

17

Section 21.4

Governing Law

17

Section 21.5

Notices

18

Section 21.6

Consent to Jurisdiction

18

Section 21.7

Service of Process

18

Section 21.8

Assignment

18

Section 21.9

Captions

19

Section 21.10

Treatment of Confidential Information

19

Section 21.11

No Waiver; Preservation of Remedies

19

Section 21.12

Calendar Days

19

Section 21.13

Counterparts

19

Section 21.14

Incontestability

19

Section 21.15

Interpretation

20

Section 21.16

Reasonableness

20

SCHEDULES

Schedule A

Identification of Reserves

1

Schedule B

No Conflict or Violation Exceptions

2

Schedule C

Required Balance

3

EXHIBITS

Exhibit I

Identification of Reinsured Policies

Exhibit II

Third Party Reinsurance

Exhibit III

Form of Monthly Report

Exhibit IV

Form of Monthly Account Balance Report

Exhibit V

Form of Reinsurance Trust Agreement

Exhibit VI

Factual Information

Exhibit VII

Milliman Report

Exhibit VIII

Investment Guidelines

(a)

“Administrative Practices” shall have the meaning specified in Section 17.2(a).

(b)

“Affiliate” means, with respect to a Party, any entity that controls, is controlled by or is under common control with such Party.

(c)

“Agreement” shall have the meaning specified in the Preamble.

(d)

“Applicable Law” means any domestic or foreign, federal, provincial, state or local statute, law, ordinance or code, or any written rules, regulations or administrative interpretations or guidelines issued by any Governmental Authority pursuant to any of the foregoing, in each case applicable to any Party, and any order, writ, injunction, directive, judgment or decree of a court of competent jurisdiction applicable to the Parties.

(e)

“Bermuda Monetary Authority” means the regulatory authority in Bermuda that is responsible for the registration and on-going supervision of the Reinsurer.

(f)

“Business Day” means any day other than a day on which banks in the Province of Ontario or Bermuda are permitted or required to be closed.

(g)

“Ceding Company” shall have the meaning specified in the Preamble.

(h)

“CGAAP” means applicable Canadian generally accepted accounting principles as modified by the requirements, if any, of OSFI.

(i)

“Change of Control” shall have the meaning specified in Section 21.10.

(j)

“Claims” means any and all claims, requests, demands or notices made under a Reinsured Policy for payment of benefits or other obligations, including death benefits, waived premiums, returned premium or any other payments alleged to be due in accordance with the terms and conditions of such Reinsured Policy.

(k)

“Commissions” means the contractual amounts earned by and the bonuses paid to the Ceding Company's sales representatives in connection with the Reinsured Policies on and after the Effective Date.

(l)

“Commutation Payment” shall have the meaning specified in Section 11.5.

(m)

“Confidential Information” shall have the meaning specified in Section 21.10.

(n)

“Conversion” means the issuance by the Ceding Company of a new Coverage in replacement of a Coverage under a Reinsured Policy pursuant to an option granted under the terms of such Reinsured Policy; provided, however, in no event shall Conversions include any Renewal.

(o)

“Coverage” means, with respect to any Policy, one or more life insurance coverages issued by the Ceding Company. A single Policy may have multiple Coverages issued to multiple individuals and such multiple Coverages, in turn, may have different Original Initial Level Premium Periods, all within a single Policy.

(p)

“Covered Liabilities” means all liabilities incurred by the Ceding Company under the express terms of the Reinsured Policies (including End of Term Renewals) and all Reinsured ECOs; provided, however, in no event shall Covered Liabilities include any Excluded Liabilities.

(q)

“Direct Premiums” means all premiums actually received from the Policyholders attributable to the Reinsured Policies from and after the Effective Date and waived premiums on such Policies.

(r)

“Effective Date” means January 1, 2010.

(s)

“Eligible Assets” means assets permitted to be vested in trust pursuant to the Reinsurance Trust Agreement and the Investment Guidelines (“Eligible Assets”); provided, however, investments in or issued by an entity controlling, controlled by or under common control with either the Ceding Company or the Reinsurer shall not exceed 5% of total investments. The Eligible Assets are further subject to and limited by, the Investment Guidelines.

(t)

“End of Term Conversion” means, with respect to a Coverage under a Reinsured Policy, a Conversion that occurs (i) at any time during the two year period ending on the last day of the Original Initial Level Premium Period of a Coverage or (ii) after the last day of such period.

(u)

“End of Term Renewal” means a Renewal that occurs at the end of the Original Initial Level Premium Period.

(v)

“Excluded Liabilities” shall have the meaning specified in Section 2.2.

(w)

“Existing Practice” shall have the meaning specified in Section 17.2(a).

(x)

“Expense Allowance” means an annualized per base policy expense allowance equal to the Reinsurer's Quota Share multiplied by C$42.50 for each Reinsured Policy payable on a monthly basis, which amount shall be increased (i) by 3% on the first anniversary date of the Effective Date and (ii) thereafter, by a compounded rate equal to the percentage increase, if any, in the labour cost index published by Statistics Canada on each subsequent anniversary date of the Effective Date.

(y)

“Extra-Contractual Obligations” means all liabilities, obligations and expenses not arising under the express terms and conditions of any Reinsured Policy, whether such liabilities, obligations or expenses are owing to an insured, a Governmental Authority or any other Person in connection with such Reinsured Policy, including (a) any liability for punitive, exemplary, consequential, special, treble, tort, bad faith or any other form of extra-contractual damages, (b) damages or claims in excess of the applicable policy limits of the Reinsured Policies, (c) statutory or regulatory damages, fines, penalties, administrative monetary amounts, forfeitures and similar charges of a penal or disciplinary nature, and (d) liabilities and obligations arising out of any act, error or omission, whether or not intentional, in bad faith or otherwise, including any act, error or omission relating to (i) the form, marketing, production, issuance, sale, cancellation or administration of Reinsured Policies or (ii) the failure to pay or the delay in payment of claims, benefits, disbursements or any other amounts due or alleged to be due under or in connection with Reinsured Policies (exclusive of interest on payments to Policyholders, as determined in accordance with the laws of the jurisdiction applicable to such Reinsured Policy). For avoidance of doubt, any liabilities, obligations and expenses relating to any change in the Reinsured Policies arising out of or resulting from litigation, arbitration or settlements will be deemed Extra-Contractual Obligations.

(z)

“Financial Statement Credit” means credit for reinsurance permitted by OSFI on the Ceding Company's financial statements and MCCSR calculations filed with OSFI with respect to the Reinsured Policies as though licensed reinsurance was provided.

(aa)

“Governmental Authority” means any federal, provincial, state, county, local, foreign or other governmental or public agency, instrumentality, commission, authority or self-regulatory organization, board or body, including OSFI and other insurance regulatory authorities.

(bb)

“Indemnification Claims” shall have the meaning specified in Section 18.1.

(cc)

“Investment Guidelines” means the investment guidelines attached as Exhibit VIII.

(dd)

“Initial Ceding Commission” means the sum of C$74,000,000 as determined in accordance with the actuarial report originally dated October 21,2009 and revised as of November 25,2009.

(ee)

“Market Value” shall have the meaning specified in the Reinsurance Trust Agreement.

(ff)

“MCCSR” means minimum continuing capital and surplus requirements determined in accordance with the MCCSR Guideline.

(gg)

“MCCSR Guideline” means Guideline A - entitled “Minimum Continuing Capital and Surplus Requirements for Life Insurance Companies dated December 2009.

(hh)

“Milliman” shall have the meaning specified in Section 17.1(e).

(ii)

“Milliman Information” shall have the meaning specified in Section 17.1(e).

(jj)

“Milliman Report” shall mean the report attached hereto as Exhibit VII.

(kk)

“Monthly Account Balance Report” shall have the meaning specified in Section 8.2.

(ll)

“Monthly Report” shall have the meaning specified in Section 8.1.

(mm)

“Net Premium” shall have the meaning specified in Section 4.1(b).

(nn)

“Original Initial Level Premium Period” means, with respect to each Reinsured Policy, the period beginning with the original issue date of a Coverage and ending with the first premium increase date identified within such Reinsured Policy on which premiums for such Coverage will increase without a corresponding increase in the terms or limits of such Coverage.

(oo)

“OSFI” means the Office of the Superintendent of Financial Institutions, Canada.

(pp)

“Parties” shall have the meaning specified in the Preamble.

(qq)

“Person” means any natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

(rr)

“Policies” means term life insurance base policies and riders thereto issued by the Ceding Company.

(ss)

“Policyholders” means the owners or holders of one or more of the Reinsured Policies.

(tt)

“Premium Taxes” means any Taxes imposed on premiums relating to the Reinsured Policies.

(uu)

“Prime Rate” means, as of any day, a fluctuating interest rate per annum equal to the “prime” rate of interest announced publicly by The Royal Bank of Canada. If the Royal Bank of Canada does not publicly announce a prime rate, the Ceding Company and the Reinsurer (or its designee) shall jointly select another bank that publicly announces a prime rate and the prime rate publicly announced by that bank shall be used.

(vv)

“Primerica” means Primerica, Inc., a Delaware corporation.

(ww)

“Recapture Fee” shall have the meaning specified in Section 11.3.

(xx)

“Recapture Notice” shall have the meaning specified in Section 11.2.

(yy)

“Reinstatement” shall have the meaning specified in Section 7.1.

(zz)

“Reinsurance Trust Account” shall have the meaning specified in Section 15.1.

(aaa)

“Reinsurance Trust Account Balance” means, as of the last day of each calendar quarter following the date hereof, the aggregate Market Value as of such date of the Eligible Assets maintained in the Reinsurance Trust Account

(bbb)

“Reinsurance Trust Agreement” shall have the meaning specified in Section 15.1.

(ccc)

“Reinsured ECOs” means (i) Extra-Contractual Obligations paid by the Ceding Company to a single (or joint) policyholder or beneficiary in the ordinary course of business, consistent with prudent business practices and (ii) Extra-Contractual Obligations arising in circumstances where the Reinsurer is an active party and directs or consents to the act, omission or course of conduct occurring after the date hereof that resulted in such Extra- Contractual Obligation; provided, however, that Reinsured ECOs shall not include any liabilities: (x) relating to class actions of any kind; (y) relating to sales, marketing or distribution practices of the Ceding Company or its sales representatives directed or applied to any specific class of policyholders, as indicated on the underwriting records of the Ceding Company; or (z) relating to or based on violations of, or noncompliance with, Applicable Law by the Ceding Company.

(ddd)

“Reinsured Policies” means Policies issued (i) on the policy forms identified in Exhibit I and riders thereto in force as of 11:59 p.m. (EST) on December 18, 2009; and (ii) as a result of any Conversions thereto, but not including any End of Term Conversions arising from Coverages with an Original Initial Level Premium Period ending on or after January 1, 2017. For greater certainty, the Reinsured Policies do not include any segregated fund business.

(eee)

“Reinsurer” shall have the meaning specified in the Preamble.

(fff)

“Reinsurer's Quota Share” means eighty percent (80%) or such other percentage as modified to reflect a partial recapture of the Reinsurer's Quota Share of the Reinsured Policies pursuant to the terms and conditions specified in Article XI.

(ggg)

“Renewal” means the continuation of coverage under a Reinsured Policy after the end of the Original Initial Level Premium Period of such coverage in accordance with the terms of the Reinsured Policy.

(hhh)

“Renewal Recapture Right” shall have the meaning specified in Section 11.4.

(iii)

“Representatives” shall have the meaning specified in Section 12.1.

(jjj)

“Required Balance” means, as of any date, the amount equal to the greater of (i) the Reinsurer's Quota Share of the Subject Reserves with respect to the Reinsured Policies, and (ii) the amount of assets held in trust necessary at any particular point in time under the MCCSR Guideline in order for the Ceding Company to take full Financial Statement Credit for the unlicensed reinsurance in the same manner as if licensed reinsurance was being provided that enables the Ceding Company to maintain its OSFI target capital ratio as well as to be able to meet all Dynamic Capital Adequacy Testing adverse scenarios that may be required by OSFI with respect to the Reinsurer's Quota Share of the Subject Reserves. For greater certainty, the amount of Trust Assets held in trust shall at no time be less than a minimum of an amount equal to 100% of the aggregate liability ceded (if greater than zero) plus 70% of the offsetting reserves ceded (MCCSR Guideline section 1.2.3.2) plus 150% of the Regulatory Required Capital for the Ceded Business as defined by the MCCSR Guideline, as calculated in Schedule C hereto as of December 31, 2009.

(kkk)

“Required Regulatory Capital” means the amount of capital necessary to be maintained by the Ceding Company under the MCCSR Guideline with respect to the Subject Reserves.

(lll)

“Subject Reserves” means, as of any date, all reserves set forth on Schedule A as of such date corresponding to liabilities of a type or kind identified as Covered Liabilities, related to the Reinsured Policies, such amount as determined by the Ceding Company in accordance with the methodologies used by the Ceding Company to calculate such amounts for purposes of its financial statements prepared in accordance with CGAAP, or such other accounting standards as may be applicable during the term of this agreement, and generally consistent with past practices as of all dates without giving effect to this Agreement or as may otherwise be required to be maintained pursuant to the Insurance Companies Act (Canada) and its applicable regulations as well as any instructions, advisories or guidelines issued by OSFI, including the MCCSR Guideline.

(mmm)

“Superintendent” means the Superintendent of Financial Institutions (Canada).

(nnn)

“Tax Authority” means the Canada Revenue Agency and any other domestic or foreign Governmental Entity responsible for the administration of any Taxes.

(ooo)

“Taxes” means all forms of taxation, whether of Canada or elsewhere and whether imposed by a local, municipal, provincial, state, federal, foreign or other body or instrumentality, and shall include, without limitation, income, excise, sales, use, gross receipts, value added and premium taxes, together with any related interest, penalties and additional amounts imposed by any taxing authority.

(ppp)

“Then Current Practice” shall have the meaning specified in Section 17.2(a).

(qqq)

“Third Party Reinsurance” means reinsurance of the Reinsured Policies placed with third party reinsurers, as identified and summarized in Exhibit II (as such Exhibit II may be amended from time to time).

(rrr)

“Third Party Reinsurance Premiums” means all premiums paid by the Ceding Company on or after the Effective Date for coverage under Third Party Reinsurance, net of refunds of unearned premiums on lapse (except that the refund of unearned premiums shall only apply for premiums payable under Third Party Reinsurance on or after the Effective Date).

(sss)

“Top-Up Notice” shall have the meaning specified in Section 8.3.

(ttt)

“Trust Assets” shall have the meaning specified in Section 15.2(a).

(uuu)

“Trustee” shall have the meaning specified in Section 15.1.

(a)

liabilities relating to benefits, including, but not limited to, terminal illness benefits, other than life insurance death benefits, any related waiver of premium coverages and write-offs of terminal illness policy loan balances;

(b)

any liabilities resulting from any coverage added after the Effective Date to a Reinsured Policy that is not a Conversion or Renewal or otherwise required or permitted by the terms of such Reinsured Policy in effect on the Effective Date, unless such additional coverage is required by applicable law or has been approved in writing in advance by the Reinsurer;

(c)

any liabilities relating to deaths occurring prior to the Effective Date;

(d)

Extra-Contractual Obligations, other than Reinsured ECOs;

(e)

any loss or liabilities relating to or arising from the Ceding Company's Retained Asset Account for the Reinsured Policies;

(f)

any losses or liabilities arising under any End of Term Conversion occurring on or after January 1,2017;

(g)

any loss or liabilities relating to or arising from actions taken by the Ceding Company without the consent of the Reinsurer as required by Section 17.2(b) hereof;

(h)

any loss or liabilities relating to or arising from claims made, or lawsuits brought, by agents of the Ceding Company; and

(i)

all liabilities or obligations of any kind or nature whatsoever that do not relate to the Reinsured Policies (collectively, (a)-(i) constitute the “Excluded Liabilities”).

(a)

On the date hereof, as consideration for the reinsurance provided hereunder, the Ceding Company shall transfer to the Reinsurance Trust Account on behalf of the Reinsurer an amount equal to the Reinsurer's Quota Share of the Subject Reserves, if positive, and advance premiums attributable to the Reinsured Policies as of the Effective Date and the Reinsurer shall pay to the Ceding Company an amount equal to the Initial Ceding Commission and the value of the Reinsurer’s Quota Share of the Subject Reserves, to the extent such reserves are negative. For greater certainty, the Ceding Company shall retain all reserves, if any, established with respect to Excluded Liabilities. Any Eligible Assets shall be free of all liens, charges or encumbrances, and assigned or endorsed in blank by the Ceding Company to the Trustee in order to transfer absolutely and unequivocally all right, title and interest in such assets.

(b)

As additional consideration for the reinsurance provided herein, on a monthly basis during the term of this Agreement, the Ceding Company shall pay to the Reinsurer the Reinsurer's Quota Share of Direct Premiums net of the Reinsurer's Quota Share of Third Party Reinsurance Premiums (the “Net Premium”). The Net Premium shall be paid in accordance with Article VIII.

(a)

All monthly settlements shall be effected as follows: (i) if the Monthly Report shows that the Ceding Company owes the Reinsurer a positive amount, the Ceding Company will pay the amount owed simultaneously with the delivery to the Reinsurer of the Monthly Report and (ii) if the Monthly Report shows that the Reinsurer owes the Ceding Company a positive amount, the Reinsurer shall pay the amount owed within twenty (20). Business Days after receiving the Monthly Report, it being understood that, for purposes of this Section 8.3(a), appropriate adjustments shall be made for withdrawals and reimbursements made during the month by the Ceding Company pursuant to Sections 15.5 and 15.6.

(b)

If the Reserve Report provided to the Reinsurer for the last month of a calendar quarter, which report shall be prepared in accordance with CGAAP, shows that the Reinsurance Trust Account Balance is less than the Required Balance or if at any time specified by OSFI the Reinsurance Trust Account Balance is less than the Required Balance, the Ceding Company shall provide notice to the Reinsurer of the failure by the Reinsurer to ensure the Reinsurance Trust Account Balance equals or exceeds the Required Balance as of the end of the immediately preceding calendar quarter or such other time as OSFI has specified, the Ceding Company shall notify the Reinsurer of the amount of the deficiency along with a copy of the applicable Monthly Report (the “Top-Up Notice”). The Top-Up Notice shall be delivered to the Reinsurer at the same time as the copy of the Monthly Report for the same calendar quarter.

(c)

All settlements of account between the Ceding Company and the Reinsurer shall be made in cash or its equivalent.

(a)

If the Reinsurer becomes insolvent;

(b)

If the Bermuda Monetary Authority takes control of the assets of the Reinsurer and/or cancels or significantly restricts the conditions of the Reinsurer’s license;

(c)

If either the Bermuda Monetary Authority, Petitioning Creditor(s) or the Reinsurer institutes a proceeding or petition for, the appointment of a liquidator of the Reinsurer;

(d)

If the Reinsurer fails to take steps reasonably satisfactory to the Ceding Company to assure the Ceding Company of full Financial Statement Credit for the Reinsured Policies within forty-five (45) calendar days of Reinsurer’s receipt of written notice from the Ceding Company that the Ceding Company has been advised by any Governmental Authority that the Governmental Authority will deny or has denied Financial Statement Credit on any financial statement filed by the Ceding Company with such Governmental Authority;

(e)

If the Reinsurer is in material breach of any other representation, warranty or covenant under this Agreement and the Reinsurer fails to cure any such material breach of any representation, warranty or covenant hereunder within sixty (60) calendar days of receipt of written notice of such breach by the Reinsurer; or

(f)

If the Reinsurer fails in any material respects to fund the Reinsurance Trust Account to the amount required after receipt of the Top-Up Notice under Section 15.3(c) within the time period specified therein, and the Reinsurer fails to cure any such funding deficiency within twenty (20) Business Days of receipt of written notice of such funding deficiency by the Reinsurer.

(a)

The Ceding Company shall, upon reasonable notice and subject to Applicable Law, provide to the Reinsurer and the counsel, financial advisors, accountants, actuaries and other representatives of the Reinsurer (the “Representatives”) access, at the Reinsurer's sole cost and expense, to review, inspect, examine and reproduce the Ceding Company's books, records, accounts, policies, practices and procedures, including underwriting, policy, claims administration guidelines and sales and Conversion practices, relating to the Reinsured Policies, including any audits and self assessments conducted by the Ceding Company as well as any unaudited information provided to Primerica in connection with Primerica's public company reporting requirements, at the place such records are located, and to discuss such matters with the employees, external auditors and external actuaries of the Ceding Company that are knowledgeable about such records, without undue disruption of the normal operations of the Ceding Company.

(b)

The Reinsurer and its Representatives shall have the right, at its sole cost and expense, to conduct audits from time to time, upon reasonable notice to the Ceding Company, of the relevant books, records, accounts, policies, practices and procedures, including underwriting, policy, claims administration guidelines and sales and Conversion practices of the Ceding Company relating to the Reinsured Policies. Reinsurer shall also have the right, at any time it deems necessary, to request that the Ceding Company provide a copy of specific Claim files for the Reinsurer review. The Reinsurer's requests will be limited to paid or settled Claims with a Claim amount greater than C$250,000.

(c)

The Reinsurer shall reimburse the Ceding Company for any reasonable out-of-pocket costs that the Ceding Company incurs in providing assistance to the Reinsurer and its Representatives in connection with this Section 12.1.

(d)

The Ceding Company shall use its reasonable best efforts to assist and cooperate with the Reinsurer and its Representatives in providing access to the relevant in force files, experience data, books, records and accounts of the Ceding Company relating to the Reinsured Policies.

(a)

The assets held in the Reinsurance Trust Account (the “Trust Assets”) shall consist of Eligible Assets.

(b)

The Reinsurer shall appoint either a third-party investment manager or a Citigroup Inc. affiliate to manage the assets held in the Reinsurance Trust Account, pursuant to an investment management agreement in a form acceptable to the Ceding Company. The Reinsurer shall be responsible for all fees arising from the services provided by such third-party investment manager or Citigroup Inc. affiliate.

(a)

Any adjustments of Trust Assets or withdrawals of Trust Assets from the Reinsurance Trust Account shall be in compliance with the terms of the Reinsurance Trust Agreement.

(b)

The amount of Trust Assets to be maintained in the Reinsurance Trust Account shall be adjusted following the end of each calendar quarter or at such other time as OSFI may specify in accordance with the Reserve Report for the last calendar month of each calendar quarter provided to the Reinsurer pursuant to the terms of Section 8.1 or the instructions of OSFI. Such report shall set forth the amount by which the Reinsurance Trust Account Balance equals or exceeds the Required Balance, in each case as of the end of the immediately preceding calendar quarter or at such other time as OSFI may specify.

(c)

If the Reinsurance Trust Account Balance exceeds 105% of the Required Balance, in each case as of the end of the immediately preceding calendar quarter or at such other time as OSFI may specify, then the Reinsurer shall have the right to seek approval from the Ceding Company (which shall not be unreasonably or arbitrarily withheld, conditioned or delayed) and from OSFI to withdraw the excess.

(d)