Exhibit 10.1

UNION SECURITY INSURANCE COMPANY

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ASSURANT LIFE OF CANADA

 

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ASSET PURCHASE AND ASSUMPTION REINSURANCE AGREEMENT

 

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Dated as of April 1, 2006

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TABLE OF CONTENTS

 

          Page ARTICLE 1    INTERPRETATION    2

1.1

   Definitions    2

1.2

   Headings and Table of Contents    8

1.3

   Number and Gender    8

1.4

   Business Days    8

1.5

   Currency    8

1.6

   Statute References    8

1.7

   Section and Schedule References    8 ARTICLE 2    PURCHASE OF ASSETS;
ASSUMPTION OF LIABILITIES    8

2.1

   Transfer of Assets    8

2.2

   Assumption of Liabilities    8

2.3

   Purchase Price    9

2.5

   Preparation of Closing Statement.    9

2.6

   Payment on Adjustment Date.    10

2.7

   Fair Market Value.    11

2.8

   Stated Capital    11

2.9

   Allocation of Purchase Price    11

2.10

   Tax Elections    11

2.11

   Notification and Administration.    12

2.12

   Non-Transferable and Non-Assignable Assets    12

2.13

   Bulk Sales Compliance    13

2.14

   Section 116    13 ARTICLE 3    CLOSING DELIVERIES    14

3.1

   Vendor’s Closing Deliveries    14

3.2

   Purchaser’s Closing Deliveries    14

3.3

   Notices and Acknowledgements    14 ARTICLE 4    REPRESENTATIONS AND
WARRANTIES    14

4.1

   Representations and Warranties of the Vendor    14

4.2

   Representations and Warranties of the Purchaser    16

 

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TABLE OF CONTENTS

(continued)

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4.3

   Survival of Representations and Warranties.    16 ARTICLE 5   
INDEMNIFICATION    17

5.1

   Indemnity by the Vendor    17

5.2

   Indemnity by the Purchaser    17

5.3

   Notice of Claim    17

5.4

   Direct Claims    18

5.5

   Third Party Claims    18

5.6

   Settlement of Third Party Claims    19

5.7

   Interest on Claims    19 ARTICLE 6    GENERAL    20

6.1

   Co-operation in Filing of Returns    20

6.2

   Non-Merger    20

6.3

   Further Assurances    20

6.4

   Expenses    20

6.5

   Payment of Taxes    20

6.6

   Notices    20

6.7

   Time of Essence    21

6.8

   Entire Agreement    21

6.9

   Waiver    21

6.10

   Severability    21

6.11

   Attornment    22

6.12

   Language    22

6.13

   Governing Law    22

6.14

   Successors and Assigns    22

6.15

   Counterparts    22

 

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ASSET PURCHASE AND ASSUMPTION REINSURANCE AGREEMENT

THIS AGREEMENT is made as of the 1st day of April, 2006

BETWEEN:

UNION SECURITY INSURANCE COMPANY, an insurance company domesticated under the
laws of the state of Iowa, carrying on business in Canada as Fortis Benefits
Insurance Company,

(the “Vendor”)

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ASSURANT LIFE OF CANADA, an insurance company formed under the laws of Canada

(the “Purchaser”)

RECITALS

WHEREAS:

 

A. The Vendor desires to sell, transfer, assign and convey the Assets to the
Purchaser and to transfer and assign to the Purchaser the Assumed Liabilities of
the Vendor, all of which relate to the insurance business in Canada carried on
by the Vendor; and

 

B. The Purchaser desires to purchase the Assets and to assume the Assumed
Liabilities of the Vendor.

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

INTERPRETATION

1.1 Definitions. In this Agreement, the following terms shall have the meanings
set out below unless the context requires otherwise:

“Adjustment Date” has the meaning given in Section 2.6.

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“Affiliate” means, with respect to any Person, any other Person who directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with, such Person, and includes any Person in like relation to an
Affiliate. A Person shall be deemed to control a Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; and the term “controlled” shall
have a similar meaning.

“Agreement” means this Agreement, including the Schedules to this Agreement, as
it or they may be amended or supplemented from time to time, and the expressions
“hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar expressions
refer to this Agreement and not to any particular Section or other portion of
this Agreement.

“Applicable Law” means, with respect to any Person, property, transaction, event
or other matter, any Law relating or applicable to such Person, property,
transaction, event or other matter. Applicable Law also includes, where
appropriate, any interpretation of the Law (or any part) by any Person having
jurisdiction over it, or charged with its administration or interpretation.

“Assets” means all of the Canadian property, assets, interests and rights of the
Vendor that are Related to the Business including the following:

 

  (a) the Operating Assets;

 

  (b) the Investment Assets; and

 

  (c) the Other Intangibles.

“Assumed Contractual Liabilities” has the meaning given in Section 2.2.

“Assumed Liabilities” means, collectively, the Insurance Liabilities in Canada,
the Assumed Contractual Liabilities in Canada and the Assumed Payables in
Canada.

“Assumed Payables” means, collectively all trade accounts payable of the Vendor
Related to the Business to the extent not settled or otherwise paid pursuant to
Section 6.2.

“Books and Records” means originals or copies of all books, records, policies,
files (including, without limitation, claims files), correspondence, documents
and papers Related to the Business including sales and advertising materials,
sales and purchases correspondence, trade association files, research and
development records, lists of present and former customers and suppliers,
personnel, employment and other records.

“Business” means the business of the Canadian branch operations of the Vendor,
including offering and selling life insurance on or in respect of funeral
arrangements.

“Business Day” means any day except Saturday, Sunday or any day on which banks
are generally not open for business in the City of Toronto.

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“Claim” has the meaning given in Section 5.1.

“Closing Date” means April 1, 2006, or any other date agreed to by the Vendor
and the Purchaser.

“Closing Statement” means a statement prepared by the Vendor setting out the
current value of the Insurance Liabilities, the current value of the Assumed
Payables and the fair market value of the Assets as of the Closing Time.

“Closing Time” means the moment in time immediately following • a.m. on the
Closing Date.

“Closing Time Assets Value” means the Fair Market Value of the Assets, as
determined in the manner set forth in Section 2.5.

“Closing Time Assumed Payables Value” means the value of the Assumed Payables as
of the Closing Time, as determined in the manner set forth in Section 2.5.

“Closing Time Insurance Liabilities Value” means the value of the Insurance
Liabilities as of the Closing Time, as determined in the manner set forth in
Section 2.5.

“Contracts” means all the rights and interests of the Vendor to and in all of
the contracts and agreements Related to the Business that are described in
Schedule 1.1(b).

“Direct Claim” has the meaning given in Section 5.4.

“Excluded Assets” means all assets, properties, interests and rights of the
Vendor other than the Assets, but including the rights of the Vendor relating to
this Agreement or any agreements or documents made pursuant to this Agreement;
and the registered business name “Assurant Life”.

“Fair Market Value” means fair market value as at the Closing Time.

“Governmental Entity” means (i) any multinational, federal, provincial,
municipal, local or other governmental or public department, central bank,
court, commission, board, bureau, minister, body, agency or instrumentality,
domestic or foreign; (ii) any subdivision, agent, commission, board or authority
of any of the forgoing; or (iii) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority as provided for or
permitted under legislation enacted by any of the foregoing.

“including” means “including without limitation”, and “includes” means “includes
without limitation”.

“Indemnified Party” means a Person whom the Vendor or the Purchaser, as the case
may be, has agreed to indemnify under Article 5.

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“Indemnifying Party” means, in relation to an Indemnified Party, the Party to
this Agreement that has agreed to indemnify that Indemnified Party under Article
5.

“Insurance Liabilities” means all liabilities and obligations arising out of or
relating to the Insurance Policies. The Insurance Liabilities shall include,
without limitation (a) all liabilities for unpaid claims, incurred but not
reported claims, benefits or other payments arising under or relating to the
Insurance Policies, whether or not incurred before, on or after the Closing
Time; (b) all loss adjustment expenses and expense reimbursement amounts arising
out of or relating to the Insurance Policies; (c) all liabilities arising out of
any changes to the terms and conditions of the Insurance Policies mandated by
Applicable Law whether incurred before, on or after the Closing Time;
(d) premium taxes due in respect of premiums written after the Closing Time with
respect to the Insurance Policies; (e) assessments and similar charges with
respect to the Insurance Policies in connection with the participation by the
Vendor or the Purchaser, whether voluntary or involuntary, in any guaranty
association or risk pool established or governed by any province or other
jurisdiction, arising on account of premiums earned after the Closing Time;
(f) all liabilities for amounts payable after the Closing Time for returns or
refunds of premiums with respect to the Insurance Policies; (g) all liabilities
arising out of Vendor’s Extra Contractual Obligations; and (h) all unclaimed
property liabilities arising under or relating to the Insurance Policies with
respect to amounts paid or received after the Closing Time.

“Insurance Policies” means group and individual life insurance and annuity
policies written by the Vendor in connection with the Business and certificates
under such group policies.

“Investment Assets” means the term or time deposits used as investment assets,
bonds and other investment assets described on Schedule 1.1(a).

“Law” means any law, rule, statute, regulation, order, judgment, decree, treaty
or other requirement having the force of law, including the common law and civil
law.

“Lien” means any lien, mortgage, charge, hypothec, pledge, security interest,
prior assignment, option, warrant, lease, sublease, right to possession,
encumbrance, claim, right or restriction which affects, by way of a conflicting
ownership interest or otherwise, the right, title or interest in or to any
particular property.

“Net Adjustment Amount” has the meaning given in Section 2.6.

“Objecting Party” has the meaning given in Section 2.5.

“Objection Notice” has the meaning given in Section 2.5.

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“Operating Assets” means the following:

 

  (a) all right, title and interest of the Vendor in and to the Insurance
Policies, including, without limitation, the right to contest Insurance Policies
and make all discretionary decisions with respect to the Insurance Policies on
and after the Closing Time;

 

  (b) all cash on hand or held in accounts at banks or other depositaries, term
or time deposits used as operating assets and similar cash–equivalent items;

 

  (c) all accounts receivable of the Vendor relating to all premiums due and all
premiums payable under the Insurance Policies;

 

  (d) all agent balances;

 

  (e) all receivables owing to the Vendor from one or more of its Affiliates;
and

 

  (f) the Personal Property.

“Other Intangibles” means the following:

 

  (a) the Contracts;

 

  (b) the Books and Records; and

 

  (c) all rights and interest under or pursuant to all warranties,
representations and guarantees, express, implied or otherwise, of or made by
suppliers or others that are Related to the Business.

“Party” means a party to this Agreement and any reference to a Party includes
its successors and permitted assigns; and “Parties” means every Party.

“Permitted Liens” means:

 

  (a) Liens for Taxes if such Taxes are not due and payable;

 

  (b) mechanics’, construction, carriers’, workers’, repairers’, storers’ or
other similar liens (inchoate or otherwise) which individually or in the
aggregate are not material, arising or incurred in the ordinary course of
business which have not been filed, recorded or registered in accordance with
Applicable Law or of which notice has not been given to the Vendor; and

 

  (c) Liens by lessors on leased Personal Property.

“Person” is to be broadly interpreted and includes an individual, a corporation,
a partnership, a trust, an unincorporated organization, the government of a
country or any political subdivision thereof, or any agency or department of any
such government, and the executors, administrators or other legal
representatives of an individual in such capacity.

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“Personal Property” means all equipment, computer hardware, furniture,
furnishings, motor vehicles and other chattels of the Vendor Related to the
Business.

“Prime Rate” means the prime rate of interest per annum quoted by the Royal Bank
of Canada from time to time as its reference rate of interest for Canadian
dollar demand loans made to its commercial customers in Canada and which the
Royal Bank of Canada refers to as its “prime rate”, as such rate may be changed
from time to time.

“Projected Assets Value” means the Vendor’s good faith estimate of the Fair
Market Value of the Assets.

“Projected Assumed Payables Value” means the Vendor’s good faith estimate of the
value of the Assumed Payables as at the Closing Time.

“Projected Insurance Liabilities Value” means the Vendor’s good faith estimate
of the value of the Insurance Liabilities as at the Closing Time.

“Purchase Price” has the meaning given in Section 2.3.

“Related to the Business” means, used primarily in, arising primarily from, or
relating primarily to the Business.

“Reviewing Accountants” has the meaning given in Section 2.5.

“Rights” has the meaning given in Section 2.12.

“Shares” has the meaning set out in Section 2.4.

“Taxes” means all taxes, charges, fees, levies, imposts and other assessments,
including all income, sales, use, goods and services, value added, capital,
capital gains, alternative, net worth, transfer, profits, withholding, payroll,
employer health, excise, franchise, real property and personal property taxes,
and any other taxes, customs duties, fees, assessments or similar charges in the
nature of a tax including Canada Pension Plan and provincial pension plan
contributions, employment insurance payments and workers compensation premiums,
together with any instalments with respect thereto, and any interest, fines and
penalties, imposed by any governmental authority (including federal, state,
provincial, municipal and foreign governmental authorities), and whether
disputed or not.

“Third Party” has the meaning given in Section 5.6.

“Third Party Claim” has the meaning given in Section 5.4.

“Vendor’s Extra Contractual Obligations” means all liabilities for compensatory,
consequential, exemplary, punitive or other special or similar damages which
relate to or arise in connection with, and any settlement, defense or
investigation costs incurred in connection with, any alleged or actual act,
error, omission or other event in connection

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with the handling of any claims by the Vendor under any of the Insurance
Policies prior to the Closing Time or in connection with the marketing,
issuance, delivery, cancellation or administration of any of the Insurance
Policies prior to the Closing Time.

1.2 Headings and Table of Contents. The division of this Agreement into Articles
and Sections, the insertion of headings, and the provision of any table of
contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.

1.3 Number and Gender. Unless the context requires otherwise, words importing
the singular include the plural and vice versa and words importing gender
include all genders.

1.4 Business Days. If any payment is required to be made or other action is
required to be taken pursuant to this Agreement on a day which is not a Business
Day, then such payment or action shall be made or taken on the next Business
Day.

1.5 Currency. All dollar amounts referred to in this Agreement are stated in
lawful currency of Canada.

1.6 Statute References. Any reference in this Agreement to any statute or any
section thereof shall, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted from
time to time.

1.7 Section and Schedule References. Unless the context requires otherwise,
references in this Agreement to Sections or Schedules are to Sections or
Schedules of this Agreement. The Exhibits and Schedules to this Agreement are as
follows:

SCHEDULES

 

  1.1(a) Investment Assets

 

  1.1(b) Contracts

 

  2.11(1) Notifications

ARTICLE 2

PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES

2.1 Transfer of Assets. Effective as of the Closing Time, the Vendor agrees to
sell, transfer, assign and convey to the Purchaser the Assets and the Purchaser
agrees to purchase the Assets, subject to the terms and conditions of this
Agreement.

2.2 Assumption of Liabilities.

 

  (1)

Upon and subject to the terms and conditions of this Agreement, effective as of
the Closing Time (a) the Vendor agrees to transfer and assign to the Purchaser
the

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Insurance Policies and the Insurance Liabilities, and (b) the Purchaser agrees
to accept, assume and to substitute itself in the Vendor’s place with respect to
the Insurance Policies and the Insurance Liabilities as if had originally issued
such Insurance Policies. The Purchaser shall perform all promises made by the
Vendor and shall be entitled to all rights owed to the Vendor pursuant to the
terms and conditions of the Insurance Policies.

 

  (2) Effective as of the Closing Time, the Purchaser agrees to assume and to
pay, perform and discharge, or cause to be paid, performed or discharged, all of
the liabilities, commitments and obligations under the Contracts (the “Assumed
Contractual Liabilities”) and the Assumed Payables.

 

  (3) Except as provided in this Section 2.2 or otherwise in this Agreement, the
Purchaser shall not assume and shall not be liable or responsible for any
liabilities, commitments or obligations of the Vendor whatsoever.

2.3 Purchase Price.

The purchase price (the “Purchase Price”) payable by the Purchaser to the Vendor
for the Assets, as adjusted in accordance with Section 2.6, shall be an amount
equal to the Fair Market Value of the Assets.

2.4 Payment of Purchase Price.

The Purchase Price shall be paid and satisfied as follows:

 

  (1) As of the Closing Time:

 

  (a) as to an amount equal to the Projected Insurance Liabilities Value, by the
assumption of the Insurance Liabilities in accordance with Section 2.2 (1);

 

  (b) as to an amount equal to the value of the Projected Assumed Payables
Value, by the assumption of the Assumed Payables as contemplated by
Section 2.2(2); and

 

  (c) as to the amount by which the Projected Assets Value exceeds the aggregate
of the Projected Insurance Liabilities Value and Projected Assumed Payables
Value by the issuance to the Vendor of the applicable number of common shares in
the capital of the Purchaser (the “Shares”) at the issuance price of $1,000 per
share.

 

  (2) On the Adjustment Date, the Net Adjustment Amount shall be paid, if
applicable, in the manner provided for in Section 2.6.

2.5 Preparation of Closing Statement. The Vendor shall prepare and deliver to
the Purchaser, as soon as reasonably practical after the Closing Time, and in
any event not later than 75 days thereafter the Closing Statement. The Closing
Statement shall be conclusive for the

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purposes of calculating the value of each of the Insurance Liabilities and the
Assumed Payables and the fair market value of the Assets, each as of the Closing
Time and shall be final and binding upon the Parties unless before the 10th
Business Day after the date on which the Closing Statement was delivered to the
Purchaser, either of the Parties (the “Objecting Party”) gives to the other a
written notice of objection (the “Objection Notice”) to any matter stated in the
Closing Statement. The Objection Notice shall set out the reasons for the
Objecting Party’s objection as well as the amount under dispute and reasonable
details of the calculation of such amount. In the event that the Parties agree
on the resolution of the dispute set out in the Objection Notice, the Parties
shall confirm the resolution in writing and shall thereafter be bound by the
resolution and any further monetary adjustment required thereby shall be made
within 10 Business Days of the date of receiving the Objection Notice. In the
event that the Parties are unable to settle any dispute with respect to the
Closing Statement within 10 Business Days after the delivery by the Objecting
Party to the other Party of the Objection Notice, the dispute shall forthwith,
and in any event within 30 Business Days after the delivery by the Objecting
Party of the Objection Notice, be referred to a nationally recognized accounting
firm (the “Reviewing Accountants”). The Reviewing Accountants shall finally
settle the dispute between the Parties and no recourse may thereafter be had
with regard to the referred dispute to any court or tribunal. In making a
determination, the Reviewing Accountants shall act as experts and not as
arbitrators. All costs of the Reviewing Accountants shall be borne equally by
the Purchaser and the Vendor.

2.6 Payment on Adjustment Date.

 

 

(1)

If an Objection Notice has not been delivered by either Party within the time
limit prescribed by Section 2.5, then on the 10th Business Day after delivery of
the Closing Statement to the Purchaser pursuant to Section 2.5 (the “Adjustment
Date”), an amount (the “Net Adjustment Amount”) which shall be equal to:

 

  (i) the Projected Assets Value minus the sum of the Projected Insurance
Liabilities Value and the Projected Assumed Payables Value; minus

 

  (ii) the Closing Time Assets Value minus the sum of the Closing Time Insurance
Liabilities Value and the Closing Time Assumed Payables Value;

and shall be paid in the following manner:

 

  (a) if the Net Adjustment Amount balance is negative, then the Purchaser will
pay to the Vendor (as a Purchase Price adjustment) an amount equal to the Net
Adjustment Amount by wire transfer, certified cheque or banker’s draft payable
to or at the direction of the Vendor; or

 

  (b) if the Net Adjustment Amount balance is positive, then the Vendor will pay
to the Purchaser (as a Purchase Price adjustment) an amount equal to the Net
Adjustment Amount by wire transfer, certified cheque or banker’s draft payable
to or at the direction of the Purchaser.

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  (2) If either Party gives an Objection Notice within the time limit prescribed
by Section 2.5, then the Purchaser or the Vendor, as the case may be, shall pay
the portion, if any, of the Net Adjustment Amount in respect of which there is
no objection in accordance with Section 2.6 on the Adjustment Date. Upon the
resolution of the dispute with respect to the Closing Statement, the Purchaser
or the Vendor, as the case may be, shall pay any additional amounts or
overpayments, as the case may be, as are determined to be payable in accordance
with the provisions of Section 2.6.

2.7 Fair Market Value. The Parties acknowledge that it is their intention that
the Purchase Price received by the Vendor for the transfer of the Assets (after
adjustment pursuant to Section 2.6) be an amount equal to the Fair Market Value
of the Assets, with the intention that no benefit be conferred on any Party or
any Person, and that such amount is based on the Parties’ best estimate of the
Fair Market Value of the Assets. If any taxing authority having jurisdiction
determines or proposes to assess or reassess either or both Parties on the basis
that the Purchase Price is not equal to the Fair Market Value of the Assets, as
adjusted pursuant to Section 2.4, or proposes to make an assessment of tax on
the basis that any benefit or advantage is or has been conferred on any Party or
other Person by reason of the sale and purchase provided for herein, then
subject to each of the Parties exhausting or waiving its rights of objection to
and appeal from any actual or proposed assessment or reassessment by such taxing
authority, the Parties agree to adjust the Purchase Price by adjusting the price
for which the Shares were issued or taking or causing to be taken such actions
as are necessary to adjust the Purchase Price to ensure that the Purchase Price
is equal to the Fair Market Value of the Assets purchased pursuant to this
Agreement. Thereafter, the Purchase Price will be deemed to be and always to
have been the Fair Market Value of the Assets, as determined by the board of
directors of the Purchaser after consultation with such taxing authority and the
Parties shall make any such further elections or use their best efforts to amend
any such previously filed elections as may be necessary or desirable in the
opinion of the Vendor.

2.8 Stated Capital. The Vendor and the Purchaser agree that there shall be added
to the stated capital account maintained by the Purchaser in respect of its
common shares an amount equal to the maximum amount that the Purchaser may add
to such stated capital as a result of the issuance of the Shares pursuant to the
provisions of the Insurance Companies Act (Canada). Such amount shall be
calculated and recorded in the records of the Purchaser no later than 90 days
after the Closing Time.

2.9 Allocation of Purchase Price. The Purchase Price shall be allocated among
the Assets in the manner agreed to by the Vendor and the Purchaser in writing
within 60 days following the date hereof. The Purchaser and the Vendor shall
follow such allocations in determining and reporting their liabilities for any
Taxes and, without limitation, shall file their respective income tax returns
prepared in accordance with such allocations.

2.10 Tax Elections.

 

  (1)

The Parties shall make and file a joint election pursuant to
subsection 138(11.5) of the Income Tax Act (Canada) and the analogous provisions
of any relevant

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provincial taxing legislation, in the form and manner, and within the time,
prescribed by the relevant legislation. Further, the Parties shall make and file
a joint election pursuant to subsection 85(1) of the Income Tax Act (Canada) and
the analogous provisions of any relevant provincial taxing legislation, in the
form and manner, and within the time, prescribed by the relevant legislation.

 

  (2) If applicable, the Parties shall make and file an election under
subsection 219(5.2) of the Income Tax Act (Canada) and the analogous provisions
of any relevant provincial legislation, in the form and manner and within the
time prescribed by the relevant legislation.

 

  (3) If applicable, the Parties shall make and file a joint election in the
prescribed form under Section 22 of the Income Tax Act (Canada) and the
analogous provisions of any relevant provincial income tax legislation in
respect of any account receivable transferred pursuant to Section 2.1 and shall
each file such elections within the time prescribed by the relevant legislation.

 

  (4) If applicable, the Parties shall make and file an election under
subsection 20(24) of the Income Tax Act (Canada) and the analogous provisions of
any relevant provincial legislation, in the form and manner and within the time
prescribed by the relevant legislation.

 

  (5) The Parties shall make and file any other elections under the Income Tax
Act (Canada) or any relevant provincial income tax legislation if appropriate or
desirable, as mutually agreed by the Parties.

2.11 Notification and Administration.

 

  (1) The Purchaser shall undertake to complete the notifications set out in
Schedule 2.11(1).

 

  (2) The Purchaser shall administer and service the Insurance Policies on and
after the Closing Time and shall incur all expenses as a result of such
administration and service. As soon as practicable following the Closing Time,
the Purchaser agrees that all administrative forms used after the Closing Time
relating to the Business will display the Purchaser’s name and logo rather than
that of the Vendor. The Insurance Policies may remain those as previously issued
by the Vendor and need not be replaced with a policy issued by the Purchaser.

2.12 Non-Transferable and Non-Assignable Assets. To the extent that any of the
Assets, or any claim, right, benefit or obligation arising under or resulting
from such Assets (collectively, the “Rights”) is not capable of being
transferred without the approval, consent or waiver of any third Person, or if
the transfer of a Right would constitute a breach of any obligation under, or a
violation of, any Applicable Law unless the approval, consent or waiver of such
third Person is obtained, then, except as expressly otherwise provided in this
Agreement and without limiting the rights and remedies of the Purchaser
contained elsewhere in this

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Agreement, this Agreement shall not constitute an agreement to transfer such
Rights unless and until such approval, consent or waiver has been obtained.
After the Closing Time and until all such Rights are transferred to the
Purchaser, the Vendor shall:

 

  (1) maintain its existence and hold the Rights in trust for the Purchaser;

 

  (2) comply with the terms and provisions of the Rights as agent for the
Purchaser at the Purchaser’s cost and for the Purchaser’s benefit;

 

  (3) cooperate with the Purchaser in any reasonable and lawful arrangements
designed to provide the benefits and burdens of such Rights to the Purchaser;
and

 

  (4) enforce, at the request of the Purchaser and at the expense and for the
account of the Purchaser, any rights of the Vendor arising from such Rights
against any third Person, including the right to elect to terminate any such
rights in accordance with the terms of such rights upon the written direction of
the Purchaser.

In order that the full value of the Rights may be realized for the benefit of
the Purchaser after the Closing Time, the Vendor shall, at the request and
expense and under the direction of the Purchaser, in the name of the Vendor or
otherwise as the Purchaser may specify, take all such action and do or cause to
be done all such things as are, in the reasonable opinion of the Purchaser,
necessary or proper in order that the obligations of the Vendor under such
Rights may be performed in such manner that the value of such Rights is
preserved and ensures to the benefit of the Purchaser, and that any moneys due
and payable and to become due and payable to the Purchaser in and under the
Rights are received by the Purchaser. The Vendor shall promptly pay to the
Purchaser all moneys collected by or paid to the Vendor in respect of every such
Right. The Purchaser shall indemnify and hold the Vendor harmless from and
against any claim or liability under or in respect of such Rights arising
because of any action of the Vendor taken pursuant to this Section.

2.13 Bulk Sales Compliance. The Vendor has specifically requested the Purchaser
waive the requirements of the provisions of the Bulk Sales Act (Ontario),
Section 6 of the Retail Sales Tax Act (Ontario) and any similar bulk sales Laws.
The Purchaser hereby waives such requirements on the understanding that the
Vendor agrees to indemnify and hold the Purchaser harmless from and against any
and all losses, costs or expenses which may be suffered or incurred by the
Purchaser in connection with the transactions contemplated in this Agreement as
a result of the non-compliance with such Laws.

2.14 Section 116. To the extent, if any, that the Assets include property that
is not “excluded property” for purposes of Section 116 of the Income Tax Act
(Canada), the Vendor shall make reasonable efforts to obtain prior to the
Closing Time (or as soon as practicable thereafter) a certificate issued by the
Minister of National Revenue of Canada pursuant to Section 116 of the Income Tax
Act (Canada) in respect of the transfer of the Assets to the Purchaser (and, if
applicable, a corresponding certificate under any applicable provincial tax
legislation), and a copy of such certificate shall be delivered to the Purchaser
forthwith upon receipt thereof by the Vendor.

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ARTICLE 3

CLOSING DELIVERIES

3.1 Vendor’s Closing Deliveries. On the Closing Date, the Vendor shall deliver
or cause to be delivered to the Purchaser the following:

 

  (1) all deeds, conveyances, bills of sale, assurances, transfers, assignments
and other documents and instruments as may be necessary or reasonably required
to complete the transactions provided for in this Agreement, if any; and

 

  (2) physical possession of the Assets, taking into account the nature of the
Asset to be delivered.

3.2 Purchaser’s Closing Deliveries. On the Closing Date, the Purchaser shall
deliver or cause to be delivered to the Vendor a copy of the resolution of the
board of directors and/or sole shareholder of the Purchaser authorizing the
transactions contemplated hereunder and issuing the Shares to the Vendor.

3.3 Notices and Acknowledgements. Each of the Purchaser and Vendor acknowledge
and agree that (a) notices of the transactions contemplated hereby and the
assignment of the Contracts between the Vendor and participants in the Vendor’s
residential title insurance services lender program have been provided, or shall
be provided, to the parties to such Contracts at such time and in such form as
may be agreed to by the Purchaser and the Vendor, and (b) notices of the
transactions to certain of the lawyers (as agreed by the Vendor and the
Purchaser) who recommend the Vendor’s real property title insurance products to
their clients have been provided to such lawyers or will be provided to such
lawyers promptly following the date hereof, which notices shall be in the form
agreed to by the Purchaser and the Vendor.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of the Vendor. The Vendor represents and
warrants to the Purchaser as follows:

 

  (1) Incorporation and Power. The Vendor is a corporation duly incorporated and
organized, and validly subsisting under the laws of Iowa. The Vendor has the
corporate power and authority and is qualified to own and transfer the Assets.
No act or proceeding has been taken by or against the Vendor in connection with
the dissolution, liquidation, winding up, bankruptcy or reorganization of the
Vendor.

 

  (2) Due Authorization. The Vendor has the corporate power, authority and
capacity to enter into and deliver this Agreement and to carry out its
obligations under this Agreement. The execution and delivery of this Agreement
and the completion of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of the Vendor.

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  (3) Enforceability of Obligations. This Agreement constitutes a valid and
binding obligation of the Vendor enforceable against the Vendor in accordance
with its terms subject, however, to limitations on enforcement imposed by
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of the rights of creditors or others and to the extent that equitable remedies
such as specific performance and injunctions are only available in the
discretion of the court from which they are sought.

 

  (4) Non-Contravention. The execution and delivery of this Agreement by the
Vendor and the performance of its obligations hereunder do not (or would not
with the giving of notice, the lapse of time or the happening of any other event
or condition) (i) conflict with the charter documents or by-laws of the Vendor,
(ii) result in a breach of, a violation of, or conflict with any of the terms or
provisions of any contracts or instruments to which it is a party, or
(iii) result in the creation of any Lien on any of the Assets.

 

  (5) Title to Assets. The Vendor has good and marketable title to all the
Assets that are owned by the Vendor, free and clear of any and all Liens, except
for Permitted Liens. Other than this Agreement, there is no agreement, option or
other right or privilege outstanding in favour of any Person for the purchase
from the Vendor of the Business or of any of the Assets out of the ordinary
course of business.

 

  (6) Contracts. Each material Contract is in full force and effect and the
Vendor is entitled to the full benefit and advantage of each such material
Contract in accordance with the terms of each such material Contract.

 

  (7) Litigation. Except as disclosed by the Vendor to the Purchaser prior to
the Closing Time, there are no material actions, suits or proceedings, pending
against the Vendor relating to, or affecting, the Business or the transactions
contemplated by this Agreement.

 

  (8) Extra-Contractual Obligations . As of the date hereof, there are no Vendor
Extra-Contractual Obligations and, to the knowledge of the Vendor, there are no
circumstances which could reasonably be expected to give rise to any Vendor
Extra-Contractual Obligations.

 

  (9) Deductions at Source. Except as disclosed by the Vendor to the Purchaser,
the Vendor has fulfilled all requirements under the Income Tax Act (Canada) and
the regulations thereto, the Canada Pension Plan, the Employment Insurance Act
(Canada) and any applicable provincial legislation, for withholding of amounts
from its employees employed in connection with the Business and has remitted all
amounts withheld to the appropriate authorities within the prescribed times.

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4.2 Representations and Warranties of the Purchaser. The Purchaser represents
and warrants to the Vendor as follows:

 

  (1) Incorporation and Power. The Purchaser is a corporation duly incorporated
and organized and validly subsisting under the laws of Canada.

 

  (2) Due Authorization. The Purchaser has the corporate power, authority and
capacity to enter into this Agreement and to carry out its obligations under
this Agreement. The execution and delivery of this Agreement and the completion
of the transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action on the part of the Purchaser.

 

  (3) Enforceability of Obligations. This Agreement constitutes a valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms subject, however, to limitations on enforcement
imposed by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of the rights of creditors or others and to the extent that
equitable remedies such as specific performance and injunctions are only
available in the discretion of the court from which they are sought.

 

  (4) Non-Contravention. The execution and delivery of this Agreement by the
Purchaser and the performance of its obligations hereunder do not (or would not
with the giving of notice, the lapse of time or the happening of any other event
or condition) (i) conflict with the charter documents or by-laws of the
Purchaser, or (ii) result in a breach of, a violation of, or conflict with any
of the terms or provisions of any contracts or instruments to which it is a
party.

 

  (5) Litigation. There are no material actions, suits or proceedings pending
against the Purchaser which would affect the Purchaser’s right or ability to
consummate the transactions contemplated hereunder.

4.3 Survival of Representations and Warranties.

 

  (1) The representations and warranties of the Vendor contained in Section 4.1
shall survive the completion of the transfer of Assets contemplated hereunder
for a period of 18 months from the date of this Agreement and shall continue in
full force and effect for the benefit of the Purchaser, after which time the
Vendor shall be released from all obligations in respect of such representations
and warranties except with respect to any Claims asserted by the Purchaser in
writing (setting out in reasonable detail the nature of the Claim and the
approximate amount of such Claim) before the expiration of such period, but
there shall be no time limit on the representations and warranties of the Vendor
set out in Section 4.1 which relate to the incorporation of the Vendor, the due
authorization of this Agreement by the Vendor, the enforceability of the
Vendor’s obligations under this Agreement, or to the title of the Vendor to the
Assets.

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- 17 -

 

  (2) The representations and warranties of the Purchaser contained in
Section 4.2 shall survive the completion of the transfer of Assets contemplated
hereunder Closing for a period of 18 months from the date of this Agreement, and
shall continue in full force and effect for the benefit of the Vendor, after
which time the Purchaser shall be released from all obligations in respect of
such representations and warranties except with respect to any Claims asserted
by the Vendor in writing (setting out in reasonable detail the nature of the
Claim and the appropriate amount thereof) before the expiration of such period,
but there shall be no time limit on the representations and warranties of the
Purchaser set out in Section 4.2 which relate to the incorporation of the
Purchaser, the due authorization of this Agreement by the Purchaser and the
enforceability of the Purchaser’s obligations under this Agreement.

ARTICLE 5

INDEMNIFICATION

5.1 Indemnity by the Vendor. The Vendor shall indemnify and hold the Purchaser,
its directors, officers, employees, agents, representatives and the Purchaser’s
Affiliates (other than the Vendor) and their respective directors, officers and
employees harmless in respect of any claim, demand, action, cause of action,
damage, loss, cost, liability or expense (hereinafter referred to as “Claim”)
which may be made or brought against an Indemnified Party or which it may suffer
or incur directly or indirectly as a result of, in respect of or arising out of:

 

  (1) any incorrectness in or breach of any representation or warranty of the
Vendor contained in this Agreement; or

 

  (2) any breach of or any non-fulfilment of any covenant or agreement on the
part of the Vendor under this Agreement.

5.2 Indemnity by the Purchaser. The Purchaser shall indemnify and hold the
Vendor, its directors, officers, employees, agents, representatives and the
Vendor’s Affiliates (other than the Purchaser) and their respective directors,
officers and employees harmless in respect of any Claim which may be made or
brought against an Indemnified Party or which it may suffer or incur directly or
indirectly as a result of in respect of or arising out of:

 

  (1) any incorrectness in or breach of any representation or warranty of the
Purchaser contained in this Agreement; or

 

  (2) any breach of or any non-fulfilment of any covenant or agreement on the
part of the Purchaser under this Agreement.

5.3 Notice of Claim. If an Indemnified Party becomes aware of a Claim in respect
of which indemnification is provided for pursuant to either of Section 5.1 or
5.2, as the case may be, the Indemnified Party shall promptly give written
notice of the Claim to the Indemnifying Party. Such notice shall specify whether
the Claim arises as a result of a claim by a Person

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- 18 -

 

against the Indemnified Party (a “Third Party Claim”) or whether the Claim does
not so arise (a “Direct Claim”), and shall also specify with reasonable
particularity (to the extent that the information is available):

 

  (1) the factual basis for the Claim; and

 

  (2) the amount of the Claim, if known.

If, through the fault of the Indemnified Party, the Indemnifying Party does not
receive notice of any Claim in time effectively to contest the determination of
any liability susceptible of being contested, then the liability of the
Indemnifying Party to the Indemnified Party under this Article shall be reduced
by the amount of any losses incurred by the Indemnifying Party resulting from
the Indemnified Party’s failure to give such notice on a timely basis.

5.4 Direct Claims. In the case of a Direct Claim, the Indemnifying Party shall
have 60 days from receipt of notice of the Claim within which to make such
investigation of the Claim as the Indemnifying Party considers necessary or
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both Parties
agree at or before the expiration of such 60 day period (or any mutually agreed
upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.

5.5 Third Party Claims. In the case of a Third Party Claim, the Indemnifying
Party shall have the right, at its expense, to participate in or assume control
of the negotiation, settlement or defence of the Claim. If the Indemnifying
Party elects to assume such control, the Indemnifying Party shall reimburse the
Indemnified Party for all of the Indemnified Party’s out-of-pocket expenses
incurred as a result of such participation or assumption. The Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel at
its expense or unless the named parties to any action or proceeding include both
the Indemnifying Party and the Indemnified Party and a representation of both
the Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defences). The Indemnified Party shall
cooperate with the Indemnifying Party so as to permit the Indemnifying Party to
conduct such negotiation, settlement and defence and for this purpose shall
preserve all relevant documents in relation to the Third Party Claim, allow the
Indemnifying Party access on reasonable notice to inspect and take copies of all
such documents and require its personnel to provide such statements as the
Indemnifying Party may reasonably require and to attend and give evidence at any
trial or hearing in respect of the Third Party Claim. If, having elected to
assume control of the negotiation, settlement or defence of the Third Party
Claim, the Indemnifying Party thereafter fails to conduct such negotiation,
settlement

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or defence with reasonable diligence, then the Indemnified Party shall be
entitled to assume such control and the Indemnifying Party shall be bound by the
results obtained by the Indemnified Party with respect to such Third Party
Claim. If any Third Party Claim is of a nature such that (i) the Indemnified
Party is required by Applicable Law or the order of any court, tribunal or
regulatory body having jurisdiction, or (ii) it is necessary in the reasonable
view of the Indemnified Party acting in good faith and in a manner consistent
with commercially reasonable practices, in respect of (A) a Third Party Claim by
a customer relating to products or services supplied by the Business or (B) a
Third Party Claim relating to any Contract which is necessary to the ongoing
operations of the Business or any material part thereof in order to avoid
material damage to the relationship between the Indemnified Party and any of its
major customers or to preserve the rights of the Indemnified Party under such an
essential Contract, to make a payment to any person (a “Third Party”) with
respect to the Third Party Claim before the completion of settlement
negotiations or related legal proceedings, as the case may be, then the
Indemnified Party may make such payment and the Indemnifying Party shall,
promptly after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment. If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of which such a payment was made, as finally
determined, is less than the amount which was paid by the Indemnifying Party to
the Indemnified Party, the Indemnified Party shall, promptly after receipt of
the difference from the Third Party, pay the amount of such difference to the
Indemnifying Party. If such a payment, by resulting in settlement of the Third
Party Claim, precludes a final determination of the merits of the Third Party
Claim and the Indemnified Party and the Indemnifying Party are unable to agree
whether such payment was unreasonable in the circumstances having regard to the
amount and merits of the Third Party Claim, then such dispute shall be referred
to and finally settled by binding arbitration from which there shall be no
appeal.

5.6 Settlement of Third Party Claims. If the Indemnifying Party fails to assume
control of the defence of any Third Party Claim, the Indemnified Party shall
have the exclusive right to contest, settle or pay the amount claimed. Whether
or not the Indemnifying Party assumes control of the negotiation, settlement or
defence of any Third Party Claim, the Indemnifying Party shall not settle any
Third Party Claim without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed; provided, however, that
the liability of the Indemnifying Party shall be limited to the proposed
settlement amount if any such consent is not obtained for any reason within a
reasonable time after the request therefor.

5.7 Interest on Claims. The amount of any Claim submitted under Section 5.1 or
Section 5.2 as damages or by way of indemnification shall bear interest from and
including the date any Indemnified Party is required to make payment in respect
thereof at the Prime Rate calculated from and including such date to but
excluding the date reimbursement of such Claim by the Indemnifying Party is
made, and the amount of such interest shall be deemed to be part of such Claim.

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ARTICLE 6

GENERAL

6.1 Co-operation in Filing of Returns. The Purchaser agrees to provide to the
Vendor all reasonable co-operation following the date of this Agreement in
connection with the filing of income tax returns of the Vendor in respect of
which the Books and Records delivered to the Purchaser pursuant to this
Agreement are relevant.

6.2 Non-Merger. Each Party hereby agrees that all provisions of this Agreement,
other than the representations and warranties contained in Article 4 and the
related indemnities in Sections 5.1 and 5.2 hereof (which shall be subject to
the special arrangements provided in such Articles or Sections) shall forever
survive the execution, delivery and performance of this Agreement, and the
completion of the transfer of Assets contemplated hereby.

6.3 Further Assurances. Each Party shall promptly do, execute, deliver or cause
to be done, executed and delivered all further acts, documents and things in
connection with this Agreement that the other Party may reasonably require, for
the purposes of giving effect to this Agreement.

6.4 Expenses. Each Party shall be responsible for its own legal and other
expenses (including any Taxes imposed on such expenses) incurred in connection
with the negotiation, preparation, execution, delivery and performance of this
Agreement and the transactions contemplated by this Agreement and for the
payment of any broker’s commission, finder’s fee or like payment payable by it
in respect of the purchase and sale of the Assets pursuant to this Agreement.

6.5 Payment of Taxes. The Purchaser shall be responsible for and shall pay all
sales, transfer and similar Taxes properly payable by a purchaser upon and in
connection with the transfer of the Assets to the Purchaser.

6.6 Notices.

 

  (1) Any notice, certificate, consent, determination or other communication
required or permitted to be given or made under this Agreement shall be in
writing and shall be effectively given and made if (i) delivered personally,
(ii) sent by prepaid courier service, or (iii) sent prepaid by fax or other
similar means of electronic communication, in each case to the applicable
address set out below:

 

  (i) if to the Vendor, to:

Matthew McGuire

PO Box 2730, Rapid City, SD 57709-2730

440 Mt. Rushmore Road, Rapid City, SD 57701

Phone: 605-719-0100

Fax: 605-719-0853

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  (ii) if to the Purchaser, to:

Frank Genest

5160 Yonge Street, Suite 500

Toronto, Ontario

M2N 7C7

Phone: 416-733-3360 / 800-561-3232

Fax: 416-733-7826

 

  (2) Any such communication so given or made shall be deemed to have been given
or made and to have been received on the day of delivery if delivered, or on the
day of faxing or sending by other means of recorded electronic communication,
provided that such day in either event is a Business Day and the communication
is so delivered, faxed or sent before 4:30 p.m. on such day. Otherwise, such
communication shall be deemed to have been given and made and to have been
received on the next following Business Day. Any such communication given or
made in any other manner shall be deemed to have been given or made and to have
been received only upon actual receipt.

 

  (3) Any Party may from time to time change its address under this Section 6.6
by notice to the other Party given in the manner provided by this Section.

6.7 Time of Essence. Time shall be of the essence of this Agreement in all
respects.

6.8 Entire Agreement. This Agreement constitutes the entire agreement between
the Parties pertaining to the subject matter of this Agreement and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral
or written. There are no conditions, warranties, representations or other
agreements between the Parties in connection with the subject matter of this
Agreement (whether oral or written, express or implied, statutory or otherwise)
except as specifically set out in this Agreement.

6.9 Waiver. A waiver of any default, breach or non-compliance under this
Agreement is not effective unless in writing and signed by the Party to be bound
by the waiver. No waiver shall be inferred from or implied by any failure to act
or delay in acting by a Party in respect of any default, breach or
non-observance or by anything done or omitted to be done by the other Party. The
waiver by a Party of any default, breach or non-compliance under this Agreement
shall not operate as a waiver of that Party’s rights under this Agreement in
respect of any continuing or subsequent default, breach or non-observance
(whether of the same or any other nature).

6.10 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such prohibition or unenforceability and shall be severed from
the balance of this Agreement, all without affecting the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.

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6.11 Attornment. Each Party agrees (i) that any action or proceeding relating to
this Agreement may (but need not) be brought in any court of competent
jurisdiction in the Province of Ontario, and for that purpose now irrevocably
and unconditionally attorns and submits to the jurisdiction of such Ontario
court; (ii) not to oppose any such Ontario action or proceeding on the basis of
forum non conveniens or for any other reason; and (iii) not to oppose the
enforcement against it in any other jurisdiction of any judgment or order duly
obtained from an Ontario court as contemplated by this Section 6.11.

6.12 Language. The Parties have required that this Agreement and all deeds,
documents and notices relating to this Agreement be drawn up in the English
language. Les parties aux présentes ont exigé que le présent contrat et tous
autres contrats, documents ou avis afférents aux présentes soient rédigés en
langue anglaise.

6.13 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable in that Province and shall be treated, in all respects, as an Ontario
contract.

6.14 Successors and Assigns. This Agreement shall enure to the benefit of, and
be binding on, the Parties and their respective successors and permitted
assigns. Neither Party may assign or transfer, whether absolutely, by way of
security or otherwise, all or any part of its respective rights or obligations
under this Agreement without the prior written consent of the other Party.

6.15 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which taken together
shall be deemed to constitute one and the same instrument. Counterparts may be
executed either in original or faxed form and the Parties adopt any signatures
received by a receiving fax machine as original signatures of the Parties;
provided, however, that any Party providing its signature in such manner shall
promptly forward to the other Party an original of the signed copy of this
Agreement which was so faxed.

IN WITNESS WHEREOF the Parties have executed this Agreement.

 

UNION SECURITY INSURANCE COMPANY Per:  

/s/ Matthew F. McGuire

Name:   Matthew F. McGuire Title:   Assoc. General Counsel & Asst. Secretary
Per:  

/s/ Alan W. Feagin

Name:   Alan W. Feagin Title:   Executive Vice President

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ASSURANT LIFE OF CANADA Per:  

/s/ Francois G. Genest

Name:   Francois G. Genest Title:   President Per:  

/s/ Richard C. Myers

Name:   Richard C. Myers Title:   Treasurer

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Schedule 1.1(a)

INVESTMENT ASSETS

 

Description

 

Maturity

 

Cost (Can $)

   Yield                                        Total   

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- 2 -

 

Schedule 1.1(b)

CONTRACTS

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

Schedule 2.11(1)

Canadian policyholder communications

The Purchaser (“ALC”) will produce and mail with a cover letter the following
documents at the last address of record to all Canadian holders of Fortis
Benefits Insurance Company (“FBIC”) group or individual policies as set out
below. For those individual policies that have been assigned, the letters will
be sent to the assignee of record.

1) Before assumption (November 2005)

1.1 Letter 1: FBIC notice of intent to FBIC policyholders with fairness opinion

2) After assumption (April 2006)

2.1 Letter 2: ALC Certificate of FBIC assumption

3) On-going (during 2006)

3.1 Premium notice insert

3.2 Premium notice message

Pierce National Life (PNL) was the former name of FBIC before July 2002. Since
these holders have policies identified to PNL on hand, some might not recognize
the FBIC notice or certificate to apply to them. The notice and certificate will
mention PNL.

The notice (item 1.1), certificate (item 2.1) and premium notice insert (item
3.1) will be translated for French-speaking FBIC policyholders.

The certificate (Letter 2) will be added to reprinted policies sent to holders
requesting a duplicate of their FBIC or PNL policies which may have been lost or
misplaced.

The premium notice mailed to premium-payers who pay premiums via direct bill
will be updated to reflect ALC and contain a brief message (item 3.2) concerning
ALC. The ALC premium notice will be accompanied with a separate insert (item
3.1) for the first two billing cycles explaining the change from the FBIC to
ALC. The message will remain on the invoice until June 30, 2007. The last
premium notice insert should be mailed in November 2006.

EFT bank statements will begin reflecting ALC’s name for all consumers paying
their premiums through electronic (EFT) debits of their bank accounts. The name
on the bank statement will be a combined format (“Fortis Benefits - Assurant”).
At the conclusion of the transition period, bank statements would begin
reflecting the Assurant name exclusively.

Credit card issuers (HBC, Visa, Mastercard) will be informed to switch to ALC on
their credit card statements for policies issued on ALC paper. “Fortis Benefits
– Assurant” will be used here for a defined transition period as well.

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- 2 -

 

Mailing of assumption certificates is scheduled to begin in late April 2006 as
an insert to T-4 slips that are issued for policy gains that are reportable for
policyholders’ 2005 income tax filing. Policyholders or assignees not reached in
that fashion will be mailed their assumption certificate (letter 2) such that
all holders will have received an assumption certificate by the end of May 2006.

Returned notices of ALC will be stored together, in the original mailing
envelopes, off-site as long as legally required. The documents will not be
sorted (e.g. in policy number order, etc.). Additional attempts to find a good
address and re-mail the new company notices will not be required.

A special unique envelope will be used so that returned documents can be easily
separated from the mail that requires immediate attention. ALC will ensure the
new envelopes used by ALC to notify policyholders of the change are not
misunderstood as junk mail and discarded without opening.

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- 3 -

 

Letter 1: FBIC Notice of intent to FBIC policyholders with fairness opinion

FORTIS BENEFITS INSURANCE COMPANY

ASSURANT LIFE OF CANADA

TRANSFER OF BUSINESS

Notice is hereby given that, pursuant to Section 587.1 and 254 of the Insurance
Companies Act, Fortis Benefits Insurance Company (“Fortis”) and Assurant Life of
Canada (“Assurant”) intend to make an application to the Minister of Finance on
or after December 26, 2005, for approval of the transfer on April 1st, 2006 of
all of Fortis’ Canadian business to Assurant under a Transfer and Assumption
Agreement (the “Agreement”). Fortis’ Canadian business includes policies issued
by Pierce National Life Insurance Company. An Independent Actuary has reviewed
this Agreement.

The Agreement and the Report of the Independent Actuary are available for
inspection by policyholders and claimants thereunder at the Canadian office of
Fortis located at 1145 Nicholson Road, Unit #2, Newmarket, Ontario, L3Y 9C3 and
at the home office of Assurant at 5160 Yonge Street, Suite 500, Toronto,
Ontario, M2N 7C7, during regular business hours, for a 30-day period after the
date of publication of this notice.

Any shareholder or policyholder who wishes to obtain a copy of the Agreement and
the Report of the Independent Actuary may do so by writing at either of these
addresses.

Toronto, November 15, 2005

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FORTIS BENEFITS INSURANCE COMPANY

ASSURANT LIFE OF CANADA

SUMMARY OF THE REPORT OF THE INDEPENDENT ACTUARY

On the proposed transfer of substantially all of the assets and liabilities of
the Canadian branch of Fortis Benefits Life Insurance Company (“FBIC”) to
Assurant Life of Canada (“Assurant”)

Summary and Opinion

Having studied the documents related to the proposed transactions, having relied
on the information requested from and provided by FBIC and Assurant, having
reviewed the valuation basis expected to be used by the appointed actuary for
Assurant for the assumed policy liabilities and having reviewed pro-forma
financial projections prepared by Assurant, I am of the opinion that:

 

•  

the assets being transferred from FBIC are appropriate in relation to the
liabilities being assumed by Assurant;

 

•  

the interests, rights and benefit expectations of FBIC policyholders are
protected by the proposed transactions;

 

•  

the security of benefits for policies assumed will remain satisfactory after
implementation of the proposed transaction; and

 

•  

the interests of Canadian employees of the Branch have been considered and dealt
with in a reasonable manner.

DATED at Montreal, Quebec

November XX, 2005

Richard Bisson FSA, FCIA

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Letter 2: ALC Certificate of FBIC assumption

ASSURANT LIFE OF CANADA

CERTIFICATE OF ASSUMPTION

Dear Policyholder:

We are pleased to confirm that the Transfer and Assumption Agreement (the
“Agreement”) between Assurant Life of Canada and Fortis Benefits Insurance
Company was successfully completed and approved by the Minister of Finance of
Canada. The Agreement took effect April 1st, 2006.

Pursuant to the Agreement, life insurance and annuity policies that have been
issued by Fortis Benefits Insurance Company or Pierce National Life Insurance
Company have now been assumed by Assurant Life of Canada. Given that all duties,
rights, liabilities and obligations included in your policy are now directly
those of Assurant Life of Canada, all premium payments, notices, claims or
transactions in respect of your policy should be made and sent directly to
Assurant Life of Canada, as though Assurant Life of Canada had issued your
policy.

The Administrative Office of Assurant Life of Canada will be at the same
location as previously and can be reached at the same toll-free phone or fax
number.

All terms, conditions and benefits under your policy remain the same, except
that all references in your policy to Fortis Benefits Insurance Company or
Pierce National Life Insurance Company are hereby changed to refer to Assurant
Life of Canada. This Certificate of Assumption issued by Assurant Life of Canada
is to be attached to and forms part of your policy.

We look forward to serving you.

François Genest, President

Assurant Life of Canada

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- 6 -

 

Premium notice insert

Notice from Assurant Life of Canada

As you may notice, we are sending you today an Assurant Life of Canada premium
notice. Your final expense or funeral plan was originally underwritten by Fortis
Benefits Insurance Company or perhaps by Pierce National Life Insurance Company.
Both of these Companies are part of Assurant.

Assurant has since then organized a new Canadian Company named Assurant Life of
Canada. This in no way modifies the terms of your policy or your premium. Your
policy number and coverage remain the same.

Our Administrative Office remains at the same location as previously and can be
reached at the same address, toll-free phone or fax number. Going forward, you
will notice this new Assurant name on all of our forms and correspondence.
Please make your cheque payable to “Assurant Life of Canada”.

Premium notice message

Please make your cheque payable to “Assurant Life of Canada”

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- 7 -

 

Letter 1: FBIC notice of intent to FBIC policyholders with fairness opinion
(French)

FORTIS BENEFITS COMPAGNIE D’ASSURANCE

ASSURANT VIE DU CANADA

PRISE EN CHARGE

Tel que prévu aux articles 587.1 et 254 de la Loi sur les Compagnies
d’Assurance, Fortis Benefits Compagnie d’Assurance (“Fortis”) et Assurant Vie du
Canada (“Assurant”) vous avisent par la présente qu’elles ont l’intention de
proposer le ou avant le XX décembre, 2005 au Ministre des Finances du Canada,
qu’il approuve le transfert en date du 1er janvier 2006 de toutes les affaires
canadiennnes de Fortis à Assurant, en vertu d’une entente de transfert et de
prise en charge (« l’entente »). Les affaires canadiennnes de Fortis incluent
les policies émises par Pierce Nationale Compagnie d’Assurance-Vie. Un actuaire
indépendant a examiné cette entente.

L’entente et le rapport de l’actuaire indépendant sont disponibles pour examen
aux titulaires et requérants en titre au bureau canadien de Fortis situé au 1145
Nicholson Road, Unité #2, Newmarket, Ontario, L3Y 9C3 et au siège social
d’Assurant situé au 5160 Yonge St., Suite 500, Toronto, Ontario, M2N 7C7, durant
les heures régulières de bureau et pour une période de 30 jours suivant la date
de publication de cet avis.

Tout actionnaire ou titulaire qui désire obtenir copie de l’entente ou du
rapport de l’actuaire indépendant peut ce faire en écrivant à l’une ou l’autre
de ces deux adresses. Toute personne qui voudrait formuler une objection à cette
proposition de transfert d’affaires peut soumettre par écrit son objection le ou
avant le YY décembre 2005 à l’Office du Surintendant des Institutions
Financières, 255 Albert Street, Ottawa, Ontario, K1A 0H2.

Toronto, le XX novembre 2005

FORTIS BENEFITS COMPAGNIE D’ASSURANCE

ASSURANT VIE DU CANADA

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- 8 -

 

SOMMAIRE DU RAPPORT DE L’ACTUAIRE INDÉPENDANT

Concernant le transfert proposé d’un part substantielle de l’actif et du passif
de la branche canadienne de Fortis Benefits Compagnie d’Assurance (“Fortis”) à
Assurant Vie du Canada (“Assurant”),

Sommaire et 0pinion

Ayant étudié des documents relatifs à la transaction proposée, m’étant appuyé
sur l’information demandée et reçue de Fortis et d’Assurant, ayant examiné les
bases d’évaluation que l’actuaire désigné d’Assurant anticipe utiliser pour les
engagements des polices prises en charge et ayant examiné les projections
financières préparées par Assurant selon les règles, je suis d’opinion que:

 

•  

les actifs de Fortis qui sont transférés sont adéquats relativement au passif
qu’Assurant prend en charge;

 

•  

les droits et interêts des titulaires de Fortis sont protégés dans la
transaction proposée de même que leurs attentes quant aux garanties;

 

•  

la sécurité des garanties pour les polices prises en charge demeurera
satisfaisante suite à l’exécution de la transaction proposée; et

 

•  

les interêts des employés Canadiens de la Branche ont été considérés et traités
de manière raisonnable.

EN DATE du XX novembre 2005

à Montréal, Québec

Richard Bisson FSA, FICA

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- 9 -

 

Letter 2: Certificate of FBIC assumption (French)

ASSURANT VIE DU CANADA

CERTIFICAT DE PRISE EN CHARGE

Cher Propriétaire,

Il nous fait plaisir de vous informer que l’entente de transfert et de prise en
charge entre Fortis Benefits Compagnie d’Assurance et Assurant Vie du Canada
(“Assurant”) s’est finalisée avec succès et a été approuvée par le Ministre des
Finances du Canada. L’entente a pris effet le 1er janvier 2006.

Suite à cette entente, les contrats d’assurance et d’épargne émis par Fortis
Benefits Compagnie d’Assurance ou Pierce Nationale Compagnie d’Assurance-Vie
sont maintenant pris en charge par Assurant Vie du Canada. Puisque toutes les
obligations, droits, exigibilités et responsabilités contenus dans votre contrat
sont maintenant directement celles d’Assurant Vie du Canada, les paiements de
prime, avis, réclamations et transactions en regard de votre contrat doivent
être faits et envoyés directement à Assurant Vie du Canada, comme si Assurant
Vie du Canada avait établi votre contrat.

Le centre administratif d’Assurant demeure à la même adresse que précédemment et
pourra être rejoint au même numéro de téléphone sans frais ou de télécopieur.

Toutes les dispositions, conditions et garanties de votre contrat demeurent
identiques, sauf que chaque référence dans votre contrat à Fortis Benefits
Compagnie d’Assurance ou Pierce Nationale Compagnie d’Assurance-Vie est par la
présente modifiée pour référer à Assurant Vie du Canada. Ce certificat de prise
en charge établi par Assurant Vie du Canada se rattache et fait partie de votre
contrat.

Au plaisir de vous servir,

François Genest, Président

Assurant Vie du Canada

Premium notice insert (French)