Canadian Quota Share Retrocession Agreement dated December 21, 2006



 Exhibit 10.27.4 
 Execution Copy 
 CANADIAN QUOTA SHARE RETROCESSION AGREEMENT

 between 
 AXA RE 
 (in respect of its non life Canada branch) 
 and 
 PARIS RE 
 (in respect of its non life Canada branch) 
 Dated December 21, 2006 and effective as of January 1, 2006 







 TABLE OF CONTENTS 
 CANADIAN QUOTA SHARE RETROCESSION AGREEMENT 
  

					
		  	ARTICLE 1	  	
			
		  	DEFINITIONS	  	
			
		  	ARTICLE 2	  	
			
		  	SUBJECT BUSINESS	  	
			
	 2.01
	  	Subject Business	  	8
	 2.02
	  	Changes to Schedule 2.01A	  	9
	 2.03
	  	Rationale	  	9
			
		  	ARTICLE 3	  	
			
		  	CESSION OF THE SUBJECT BUSINESS, SCOPE OF LIABILITY AND	  	
			
		  	TERM OF AGREEMENT	  	
			
	 3.01
	  	Cover	  	10
	 3.02
	  	Extended Expiration	  	10
	 3.03
	  	Original Terms and Conditions and Follow the Settlements	  	10
	 3.04
	  	Net Basis	  	10
	 3.05
	  	Commencement and Period	  	11
			
		  	ARTICLE 4	  	
			
		  	INURING AXA RE RETROCESSION AGREEMENTS	  	
			
	 4.01
	  	Obligations of the Parties	  	11
	 4.02
	  	Receipt of Recoverables	  	11
	 4.03
	  	Default Amounts	  	11
	 4.04
	  	Commutations	  	12
			
		  	ARTICLE 5	  	
			
		  	CONSIDERATION AND PREMIUM	  	
			
	 5.01
	  	Initial Premium	  	12
	 5.02
	  	Funds Withheld; Future Premiums	  	12

  

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		  	ARTICLE 6	  	
			
		  	 FW CANADIAN ACCOUNT BALANCE, EXPERIENCE ADJUSTMENTS,
 INTEREST, DEPOSITS AND CREDITS
	  	
			
	 6.01
	  	Establishment of Funds Withheld Account	  	13
	 6.02
	  	[Intentionally omitted]	  	13
	 6.03
	  	Periodic Calculation of FW Canadian Account Balance	  	13
	 6.04
	  	Calculation of the Amount of the FW Canadian Account Balance	  	14
	 6.05
	  	[Intentionally omitted.]	  	16
	 6.06
	  	Investment Income	  	16
	 6.07
	  	Funds Received by Retrocedant	  	16
			
		  	ARTICLE 7	  	
			
		  	PAYMENT OF FW CANADIAN ACCOUNT BALANCE AND CASH	  	
		  	ADVANCES	  	
			
		  	ARTICLE 8	  	
			
		  	SETTLEMENTS	  	
			
		  	ARTICLE 9	  	
			
		  	TERMINATION	  	
			
	 9.01
	  	Termination Notice by Either Party	  	18
	 9.02
	  	Termination Notice by the Retrocedant	  	18
	 9.03
	  	Termination Date	  	18
	 9.04
	  	Effect of Termination Notice / Termination	  	18
			
		  	ARTICLE 10	  	
			
		  	INSOLVENCY	  	
			
	 10.01
	  	Insolvency of the Retrocedant	  	19
			
		  	ARTICLE 11	  	
			
		  	CURRENCIES	  	
			
	 11.01
	  	Currency Conversions	  	20

  

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		  	ARTICLE 12	  	
			
		  	OFFSET	  	
			
	 12.01
	  	Offset	  	20
			
		  	ARTICLE 13	  	
			
		  	THIRD PARTY RIGHTS	  	
			
	 13.01
	  	No Third Parties	  	21
			
		  	ARTICLE 14	  	
			
		  	ERRORS AND OMISSIONS	  	
			
	 14.01
	  	Errors and Omissions	  	21
			
		  	ARTICLE 15	  	
			
		  	DUTY OF COOPERATION	  	
			
	 15.01
	  	Duty of Cooperation	  	21
			
		  	ARTICLE 16	  	
			
		  	GOVERNING LAW AND JURISDICTION	  	
			
	 16.01
	  	Governing Law	  	22
	 16.02
	  	Dispute Resolution	  	22
	 16.03
	  	Jurisdiction	  	22
			
		  	ARTICLE 17	  	
			
		  	GENERAL PROVISIONS	  	
			
	 17.01
	  	Notices	  	22
	 17.02
	  	Invalidity	  	22
	 17.03
	  	Binding Agreement; Assignment	  	23
	 17.04
	  	Modification; Waiver	  	23
	 17.05
	  	Headings	  	23
	 17.06
	  	Schedules	  	23
	 17.07
	  	Entire Agreement	  	23

  

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	 SCHEDULES
	 	
		
	 SCHEDULE 1.01A –
	 	EXCHANGE RATES
		
	 SCHEDULE 1.01B –
	 	INURING AXA RE RETROCESSION AGREEMENTS
		
	 SCHEDULE 2.01A –
	 	SUBJECT BUSINESS
		
	 SCHEDULE 5.01 –
	 	INITIAL PREMIUM: BASIS OF CALCULATION AND INITIAL PRINCIPAL AMOUNTS

  

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 CANADIAN QUOTA SHARE RETROCESSION AGREEMENT 
 THIS CANADIAN QUOTA SHARE RETROCESSION AGREEMENT (this “Agreement”), dated December 21, 2006 and effective as of
January 1, 2006, is made by and between AXA RE (the “Retrocedant”), a reinsurance company organized under the laws of France (and licensed to carry on business in Canada pursuant to Part XIII of the Insurance Companies Act
(the “ICA”)), and PARIS RE (the “Retrocessionaire”), a reinsurance company organized under the laws of France and licensed to carry on business in Canada pursuant to Part XIII of the ICA. 
 WHEREAS, Retrocedant and PARIS RE Holdings Limited, an exempted limited liability company incorporated under the laws of Bermuda
(“Purchaser”), have entered into the Stock Purchase Agreement, dated as of June 5, 2006 (as such agreement may have been, or may from time to time be, amended, supplemented or otherwise modified, the “Purchase
Agreement”); 
 WHEREAS, Retrocedant, AXA Liabilities Managers, a French société par actions
simplifiée (“ALM”), Purchaser and Retrocessionaire have entered into the Master Agreement, dated as of December 21, 2006, (as such agreement may have been, or may from time to time be, amended, supplemented or
otherwise modified, the “Master Agreement”); 
 WHEREAS the Retrocedant has a composite Canadian branch and
this Agreement applies only to the non-life Policies of the Retrocedant’s Canadian branch; 
 WHEREAS, the Master Agreement
and the Purchase Agreement contemplate that the Parties execute and deliver this Agreement as a common account quota share as of the date hereof; and 
 WHEREAS, the assets in the FW Canadian Account (as defined below) are required under the ICA (for reinsurance credit) to be vested in trust pursuant to a Trust Agreement dated December 6, 2002, among
the Retrocedant, The Superintendent of Financial Institutions (“OSFI”) and the Royal Trust Company, a Quebec company, as the same may be amended or replaced from time to time (“the “Canadian Trust Agreement”).








 NOW, THEREFORE, in consideration of the promises and covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 
 ARTICLE 1 
 DEFINITIONS 
 The following terms shall have the respective meanings set forth below throughout the Agreement: 
 “Agreement” has the meaning set forth in the Preamble hereto. 
 “Allocated Loss Adjustment Expenses” means any and all amounts paid or payable by the Retrocedant as allocated loss
adjustment expenses under or in relation to a Policy that is part of the Subject Business or the relevant portion thereof, including without limitation, legal expenses and court costs, cost of bonds, appeal bonds expense, and interest accrued after
award or judgment and pre-judgment interest awarded, plus legal expenses and all other expense incurred in connection with Extra Contractual Obligations, Loss in Excess of Contract Limits and Declaratory Judgment Expenses. Allocated Loss Adjustment
Expenses shall not include office expenses and salaries of employees of the Retrocedant or ALM. 
 “ALM” has
the meaning set forth in the Recitals hereto. 
 “AXA” has the meaning set forth in the Recitals hereto.

 “Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks in
Paris, France or Montreal, Canada are required by applicable law to close. 
 “CAD” or “Canadian
Dollars” means the lawful currency of Canada. 
 “Cedant” means a ceding insurer under a Policy that
is part of the Subject Business. 
 “Canadian Branch” shall mean the Canadian non-life branch of the
Retrocedant which has an office in Montreal, Canada. 
 “Canadian Closing” has the meaning set forth in the
Purchase Agreement. 
 “Canadian Closing Date” has the meaning set forth in the Purchase Agreement. 

“Canadian Funds Withheld Balance” means the total of the FW Canadian Account Balance and Deposits. 
 “Canadian Trust Agreement” has the meaning set forth in the Recitals hereto. 
  

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 “Claims Management and Services Agreement” means the Claims Management and
Services Agreement, dated the First Closing Date, as the same may have been, or may from time to time be, amended, supplemented or otherwise modified, by and between Retrocedant and Retrocessionaire. 
 “Closing Date” has the meaning set forth in the Purchase Agreement. 
 “Declaratory Judgment Expenses” means all expenses, fees, costs and interest which the Retrocedant has paid or which are
payable by the Retrocedant in connection with or in relation to the analysis, prosecution, defense, or resolution of an action or proceeding whether for declaratory judgment or other action or proceeding brought to determine the obligations under a
Policy that is part of the Subject Business. Declaratory Judgment Expenses are deemed to have been incurred by the Retrocedant on the date of the actual or alleged claim giving rise to the declaratory judgment or other action or proceeding and shall
be payable under this Agreement irrespective of whether an actual loss has been paid or payable by the Retrocedant. 
 “Default Amount” means any amount due or claimed to be due to the Retrocedant in respect of the Subject Business under an Inuring AXA RE Retrocession Agreement that has not been paid for any reason whatsoever, including by
reason of the alleged or actual invalidity of the applicable Inuring AXA RE Retrocession Agreement and including paid amounts subsequently recovered by an Inuring AXA RE Reinsurer through litigation or otherwise and amounts not paid which are in
dispute, (1) in the event the non-payment is the result of a General Insolvency Event with respect to the Inuring AXA RE Reinsurer, within 120 days of the date on which a claim for payment of such amount has been made (or should have been made
with reasonable diligence on the part of the Retrocedant or the Retrocessionaire acting on behalf of the Retrocedant, as the case may be) and (2) in all other circumstances, within 360 days of the date on which a claim for payment of such
amount has been made (or should have been made with reasonable diligence on the part of the Retrocedant or the Retrocessionaire acting on behalf of the Retrocedant, as the case may be); provided that such 120-day or 360-day period shall be
deemed to have commenced no earlier than the First Closing Date; and provided, further, that to the extent it is determined that any such claimed amount was not due under the relevant Inuring AXA RE Retrocession Agreement or a settlement is
reached with the relevant Inuring AXA RE Reinsurer for a lower amount than initially claimed, any amount so claimed but not payable by the Inuring AXA RE Reinsurer shall no longer be deemed to be a Default Amount. 
 “Deposits” means any and all of the funds withheld, whether by way of cash, letter of credit, trust or otherwise,
(i) by any Cedant in relation to any Policy(ies) that is (are) part of the Subject Business or (ii) by any Inuring AXA RE Reinsurer in relation to any Inuring AXA RE Retrocession Agreement. 
 “Dispute” has the meaning set forth in Section 16.02. 
 “Excluded Investments” has the meaning set forth in Section 6.01. 
  

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 “Extra Contractual Obligations” means any and all liabilities,
compensatory, punitive, exemplary or consequential damages, losses, legal costs, expenses, interest, settlement amounts or other amounts assessed, incurred, awarded, paid or payable against or by the Retrocedant relating to any of the Policies that
are part of the Subject Business but which are not covered by any Policy and which directly or indirectly arise out of or relate to: (1) any actual or alleged negligence, fraud, bad faith or other tortious act or omission of or by any Cedant or
the Retrocedant, and (2) either the handling, adjustment, rejection, settlement or defense of, or offer or failure to settle within any policy limit, any claim, demand or action, or any failure to undertake the defense of any claim, demand or
action, or participation in any proceeding, trial or hearing relating to any claim, demand or action against an insured, a Cedant or the Retrocedant, or the preparation or prosecution of any appeal relating to any such claim, demand or action. For
the avoidance of doubt, any amount included in Extra Contractual Obligations shall not be duplicative of or include such amount to the extent already included in Loss in Excess of Contract Limits. An Extra Contractual Obligation shall be deemed to
have occurred on the same date as the loss covered or alleged to be covered by a Policy that is part of the Subject Business. 
 “First Closing Date” has the meaning set forth in the Purchase Agreement. 
 “First Quarter
after Closing” has the meaning set forth in Section 6.03. 
 “FW Canadian Cash Call” has the
meaning set forth in Section 7.01. 
 “FW Canadian Account” has the meaning set forth in Section 6.01.

 “FW Canadian Account Balance” means the balance described in Article 6. 
 “Future Premiums” means all original gross premiums relating to Policies that are part of the Subject Business earned on or
after January 1, 2006, including all renewal, additional, adjustment, amendment, reinstatement and other such premiums, less all brokerage, fees, commissions or other deductions and less cancellations, returned premiums and premiums on the
Inuring AXA RE Retrocession Agreements. 
 “General Insolvency Event” shall occur, with respect to any person
or entity, if such person or entity makes any formal declaration of bankruptcy, declaration of cessation of payments or any formal statement to the effect that it is insolvent or likely to become insolvent; or a judgment, case, proceeding or other
action shall be commenced under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship, liquidation, rehabilitation, or relief of debtors, seeking to have an order for
relief entered with respect to it or its debts. 
  

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 “Initial Premium” means euros 332 million (based on the exchange rates
set forth in Schedule 1.01A), as determined in accordance with the principles set forth in Section 5.01. 
 “Initial Principal Amount” means euros 323 million (based on the exchange rates set forth in Schedule 1.01A) and is equal to the Initial Premium, plus reinsurance and retrocession payables, plus bad debt,
minus reinsurance and retrocession receivables with respect to the Subject Business. 
 “Insolvency
Event” shall occur if the Retrocedant has commenced proceedings for mandat ad hoc or procédure de conciliation in accordance with articles L.611-3 to L 611-15 of the French Code de Commerce, or made any
formal declaration of bankruptcy, declaration of cessation of payments (déclaration de cessation des paiements) or any formal statement to the effect that it is insolvent or likely to become insolvent; or a procedure de
sauvegarde, a judgment for redressement judiciaire, cession totale ou partielle de l’entreprise or liquidation judiciaire is entered in relation to the Retrocedant under articles L.620-1 to L.644-6 of the
French Code de Commerce (or any analogous procedure) or a case, proceeding or other action shall be commenced in respect of the Retrocedant or the Canadian Branch under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it or its debts. 
 “Inuring AXA RE Retrocession Agreements” means those contracts of reinsurance and retrocession in effect to which Retrocedant is a party and that reinsure the obligations of Retrocedant,
including without limitation the retrocession agreements listed on Schedule 1.01B, as in effect on the date hereof, and any other new or modified reinsurance and retrocession agreements, that shall have been approved in writing by the
Retrocessionaire, between the Retrocedant (as cedant) and third party reinsurers (as reinsurers or retrocessionaires of the Retrocedant) but only to the extent inuring to the benefit of the Subject Business or the Policies that are part of the
Subject Business. For the avoidance of doubt, the Inuring AXA RE Retrocession Agreements shall include any renewal, extension, modification or amendment to any of the retrocession agreements listed on Schedule 1.01B only to the extent previously
approved in writing by the Retrocessionaire, except for any such renewal, extension, modification or amendment which is required by law or regulation. 
 “Inuring AXA RE Reinsurers” means all reinsurers or retrocessionaires that are parties to one or more Inuring AXA RE Retrocession Agreements. 
 “Investment Income” means (i) any gain or loss realized from the sale, exchange, lapse, transfer or other disposition
of securities or other assets contained in the FW Canadian Account Balance or Deposit to the extent released therefrom to the Retrocedant (or one of its Affiliates)), (ii) any gain or loss recognized or realizable on securities or assets in the
FW Canadian Account Balance or any Deposits because of the 
  

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occurrence of a General Insolvency Event in respect of (A) the issuer of such security or other asset or (B) the Cedant who is in possession of the Deposit, and (iii) any interest,
dividends or other income or loss realized in respect of securities or other assets contained in the FW Canadian Account Balance or in respect of any Deposit (to the extent released therefrom to the Retrocedant or one of its Affiliates), in each
case (x) gross of taxes, (y) net of interest paid by the Retrocedant (or one of its Affiliates) in respect of Deposits and commissions or fees paid or incurred by the Retrocedant (or one of its Affiliates) in respect of any letter of
credit facility or other security arrangement and (z) net of custodian fees and other investment expenses incurred by the Retrocedant (or one of its Affiliates) in connection with the management of such securities or other assets. Investment
Income may be positive or negative. 
 “Issuance Agreement” means the Issuance Agreement, dated the First
Closing Date, as the same may have been, or may from time to time be, amended, supplemented or otherwise modified, by and between Retrocedant and Retrocessionaire, and relating to Policies to be bound, issued, written, agreed or renewed after the
First Closing Date. 
 “Loss in Excess of Contract Limits” means any and all amounts, legal costs, expenses,
interest, settlement amounts or other amounts assessed, incurred, awarded, paid or payable against or by the Retrocedant relating to any of the Policies that are part of the Subject Business which are in excess of the limits of a policy or
reinsurance agreement, but otherwise within the coverage terms of such policy or reinsurance agreement, for which there would have been contractual liability to pay had it not been for the limit of such policy agreement, which directly or indirectly
arise out of or relate to: (1) any actual or alleged negligence, fraud, bad faith or other tortious act or omission of or by any Cedant or the Retrocedant; (2) either the handling, adjustment, rejection, settlement or defense of, or offer
or failure to settle within any policy limit, any claim, demand or action, or any failure to undertake the defense of any claim, demand or action, or participation in any proceeding, trial or hearing relating to any claim, demand or action against
an insured, a Cedant or the Retrocedant, or the preparation or prosecution of any appeal relating to any such claim, demand or action, and (3) all ex gratia payments and compromise settlements made by the Retrocedant in respect of the Policies
included in the Subject Business. Without limiting the foregoing and notwithstanding any other provisions to the contrary in this Agreement, the decision by a Cedant (or Retrocedant) to settle a claim for an amount in excess of the limit when the
Cedant (or Retrocedant) has a reasonable basis to believe that it is liable for the claim, will be deemed a Loss in Excess of Contract Limits. For the avoidance of doubt, any amount included in Loss in Excess of Contract Limits shall not be
duplicative of or include such amount to the extent already included in Extra Contractual Obligations. 
 “Master
Agreement” has the meaning set forth in the Recitals hereto. 
  

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 “Net Liability” means any and all amounts paid or payable by the
Retrocedant under or in relation to any and all Policies that are part of the Subject Business, in respect of any loss, damage, occurrence, claim, settlement, interest, bond, fine, penalty, or other such amount and including Allocated Loss
Adjustment Expenses, Extra Contractual Obligations, Loss in Excess of Contract Limits and Declaratory Judgment Expenses. “Net Liability” shall, in addition, include: (1) any and all liability for insurance premium taxes, excise taxes
and any other taxes paid or payable on account of Future Premiums, to the extent not already settled, deducted from or allowed against such premiums; (2) any and all liability of the Retrocedant for brokerage, fees, commissions or other
deductions paid or payable on or after January 1, 2006 with respect to the Subject Business, to the extent not already settled, deducted from or allowed; (3) except to the extent otherwise provided herein, any and all liability for returns
or refunds of premiums, experience adjustments related to retrospective premiums and contingent commissions, less any brokerage, fees, commissions or other deductions with respect to Subject Business minus any adjustment premium earned prior
to January 1, 2006 but which is received by the Retrocedant on or after January 1, 2006; (4) any commutations entered into by the Retrocedant in respect of the Subject Business; and (5) any participation and/or assessments
incurred by the Retrocedant in respect of mandatory pool, association, syndicate, scheme, fund or residual market mechanism and the like howsoever named arising from or in connection with the Subject Business. “Net Liability” is net in
accordance with the terms of Section 3.04. 
 “OSFI” has the meaning set forth in the Recitals and
includes any successor. 
 “Parties” has the meaning set forth in the Preamble hereto. 
 “Payee” has the meaning set forth in Section 12.01. 
 “Payee’s Obligation” has the meaning set forth in Section 12.01. 
 “Payor” has the meaning set forth in Section 12.01. 
 “Payor’s Obligation” has the meaning set forth in Section 12.01. 
 “Policy” means a cover note, treaty, slip, facultative certificate, binder, policy or contract of insurance or reinsurance,
written, issued, bound, renewed or agreed by or on behalf of the Retrocedant pursuant to which the Retrocedant assumes, insures or reinsures the risks of others, and creates, pursuant thereto, a legally binding obligation on the part of the
Retrocedant, and all legally binding addenda, endorsements, alterations, amendments and ancillary agreements in connection therewith of whatsoever nature. 
 “Principal Amount” means, with respect to the FW Canadian Account, the Initial Principal Amount allocated to the FW Canadian Account, as adjusted to give effect to the changes that would
have occurred to such FW Canadian Account, assuming this Agreement had been in effect from January 1, 2006 through the Canadian Closing Date, including, without limitation, changes that would have resulted pursuant to Section 6.04 and the
fourth sentence of Section 5.02. 
  

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 “Purchase Agreement” has the meaning set forth in the Recitals hereto.

 “Purchaser” has the meaning set forth in the Recitals hereto. 
 “Quota Share Retrocession Agreement” has the meaning set forth in the Purchase Agreement. 
 “Records” means all documents relating to the Subject Business, including underwriting files, claims files and accounting,
actuarial, reserving or reporting information or other records, including in electronic form. 
 “Reserve
Agreement” means the Reserve Agreement, dated the First Closing Date, as the same may have been, or may from time to time be, amended, supplemented or otherwise modified, by and between AXA and the Retrocessionaire. 
 “Retrocedant” has the meaning set forth in the Preamble hereto. 
 “Retrocessionaire” has the meaning set forth in the Preamble hereto. 
 “Run-Off Services and Management Agreement” means the Run-Off Services and Management Agreement, dated the date of the
Purchase Agreement, as the same may have been, or may from time to time be, amended, supplemented or otherwise modified, by and between the Retrocedant and ALM. 
 “Subject Business” means the business as defined in Article 2. 
 “Termination Amount” shall be the amount described in Section 9.04. 
 “Termination
Date” has the meaning set forth in Section 9.03. 
 “Termination Notice” means a written notice
of termination given by one Party to the other Party pursuant to Article 9. 
 “Termination Premium” means any
termination premium payable pursuant to paragraph D of Article XVI of the Novation Agreement, dated as of December 31, 2003, between the Retrocedant and National Indemnity Company. 
 “Unallocated Loss Adjustment Expenses” shall mean the overhead and other non- specific costs associated with the handling
and settlement of claims with respect to the Subject Business. 
 ARTICLE 2 
 SUBJECT BUSINESS 
 2.01 Subject Business. “Subject Business” means: 
 (a) all Policies referred to in Schedule 2.01 A to
the extent issued, written or booked by the Canadian Branch; and 
  

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 (b) all Policies to the extent bound, issued, written, agreed on, booked or renewed at or by
the Canadian Branch pursuant to the Issuance Agreement. 
 The Retrocedant represents that the disc referenced in Schedule 2.01
A and delivered by Retrocedant to Retrocessionaire on the date hereof includes only Policies that, to the knowledge of Retrocedant, were issued up to and including December 7, 2006. As soon as reasonably practicable after termination of the
Issuance Agreement pursuant to Article 6 thereof, Retrocessionaire shall, after consultation with Retrocedant, deliver to Retrocedant an updated disc containing all Policies that constitute the Subject Business. For the avoidance of doubt, the
agreed procedures hereunder shall apply to such, and any other, update of such disc. 
 2.02 Changes to Schedule 2.01A.
Schedule 2.01 A is intended to be definitive, subject only to the agreed procedures hereunder for altering Schedule 2.01 A. If any Policy not included in Schedule 2.01 A is determined after the date of execution of this Agreement by agreement of the
Parties to be part of the Subject Business, the Schedule shall be amended accordingly to include that Policy and the Parties shall make adjustments to the Canadian Funds Withheld Balance, as necessary, to reflect the inclusion of such Policy on the
Schedule as if it had been included on the Canadian Closing Date. If any Policy included in Schedule 2.01 A is determined after the date of execution and delivery of this Agreement by agreement of the Parties not to be part of the Subject Business,
the Schedule shall be amended accordingly to exclude that Policy and the Parties shall make adjustments to the Canadian Funds Withheld Balance, as necessary, to reflect the exclusion of such Policy from the Schedule as if it had been excluded on the
Canadian Closing Date. In determining whether a Policy has been properly included in or erroneously omitted from Schedule 2.01 A, regard shall be given to (1) the rationale set forth in Section 2.03 and (2) the accounting and claims
systems maintained by the Retrocedant prior to the Canadian Closing Date, provided, that the accounting and claims systems treatment of a particular Policy shall not be given any weight in making such determination if it can be shown that
such treatment was in error at the time of entry of such data onto such systems. 
 2.03 Rationale. The Subject Business
as defined in Section 2.01 comprises that part of the reinsurance business of the Canadian Branch, which consists of (a) all Policies which were written prior to 23:59 Paris time on the Canadian Closing Date howsoever underwritten by the
Canadian Branch, under the brand name “AXA”, “AXA RE” or otherwise, but excluding any Policies issued through the Retrocedant’s reinsurance life branch offices in Canada in force at such time and (b) non-life Policies
issued, written, agreed on, booked or renewed by the Canadian Branch after 23:59 Paris time on the Canadian Closing Date pursuant to the Issuance Agreement. 
  

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 ARTICLE 3 
 CESSION OF THE SUBJECT BUSINESS, SCOPE OF LIABILITY AND 
 TERM OF AGREEMENT 
 3.01 Cover. The Retrocedant shall cede to the Retrocessionaire, and the
Retrocessionaire shall accept and reinsure, on a 100% quota share basis the Subject Business in accordance with the terms and conditions of this Agreement. For the avoidance of doubt, the cession, acceptance and reinsurance of the Subject Business
means the reinsurance of all benefits and risks of the Subject Business by the Retrocessionaire and such cession, acceptance and reinsurance shall only have effect among the Parties and, save as expressly provided for in this Agreement, shall not
affect or alter the position of the Retrocedant as the sole contractual partner, creditor and debtor vis-a-vis the other parties to the Subject Business, and no such other party to the Subject Business shall have any direct claim whatsoever against
the Retrocessionaire. 
 3.02 Extended Expiration. If this Agreement should be terminated while a loss occurrence covered
by a Policy that is part of the Subject Business is in progress, subject to the other terms and conditions of this Agreement, the Retrocessionaire is responsible as if the entire loss or damage had occurred prior to the termination of this
Agreement. 
 3.03 Original Terms and Conditions and Follow the Settlements. Subject to the terms and conditions of this
Agreement, the Retrocessionaire’s liability to the Retrocedant under this Agreement shall be subject to the same terms, limits, conditions, cancellations, exclusions and endorsements contained in or relating to the Policies included in the
Subject Business, and to all interpretations, modifications, waivers and alterations thereto. All loss settlements or payments of whatsoever nature made by the Retrocedant in connection with the Policies covered by this Agreement shall be binding
upon the Retrocessionaire and shall be deemed to be within the terms and conditions of this Agreement whether or not the Retrocedant was liable in law under the terms and conditions of the Policy, or on the facts relating to the claim made under the
Policy. For the avoidance of doubt, the Retrocessionaire shall be bound by: 
 (a) any commutations entered into by the
Retrocedant in respect of the Subject Business; and 
 (b) any participation and/or assessments incurred by the Retrocedant in
respect of mandatory pool, association, syndicate, scheme, fund or residual market mechanism and the like howsoever named arising from or in connection with the Subject Business. 
 3.04 Net Basis. The liability of the Retrocessionaire towards the Retrocedant shall arise at the same time as and to the same extent
as the Net Liability of the Retrocedant, such Net Liability being after all appropriate deductions for (1) claims upon the Inuring AXA RE Retrocession Agreements, subject to Article 4 below, and (2) salvage, subrogation and other
recoveries received other than recoveries pursuant to the

  

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Inuring AXA RE Retrocession Agreements. Subject to Article 4 below, any and all amounts received as salvage or subrogation or other recovery, which are recovered subsequently to any payment or
settlement under this Agreement by the Retrocessionaire shall be for the account of the Retrocessionaire and credited to the FW Canadian Account Balance or, following a FW Canadian Cash Call of the FW Canadian Account Balance, paid in cash, to the
extent of the Retrocessionaire’s quota share participation in the Net Liability receiving the benefit of the salvage, subrogation or recovery, even if recovered after termination or expiry of this Agreement. 
 3.05 Commencement and Period. This Agreement is a continuous contract and shall commence at 00.01 A.M. Montreal time as of
January 1, 2006 and remain in full force and effect until such time as any of the Policies included in the Subject Business remain in force and as any and all Net Liability has been fully and finally discharged, or unless or until this
Agreement is terminated as provided herein. 
 ARTICLE 4 
 INURING AXA RE RETROCESSION AGREEMENTS 
 4.01
Obligations of the Parties. The Retrocedant agrees and undertakes to maintain in force the Inuring AXA RE Retrocession Agreements and to pay all relevant premiums and otherwise to take all necessary and reasonable steps to maintain in force
all Inuring AXA RE Retrocession Agreements. Except for the payment of any Termination Premium, any premiums or other amounts due to the Inuring AXA RE Reinsurers for periods on or after January 1, 2006 in respect of Inuring AXA RE Retrocession
Agreements shall be calculated in, and debited to, the FW Canadian Account Balance in accordance with the provisions of Section 6.04 hereof. 
 4.02 Receipt of Recoverables. Except as otherwise provided for in this Agreement, the amounts recovered on or after January 1, 2006 by the Retrocedant under the Inuring AXA RE Retrocession
Agreements shall continue to be received directly by the Retrocedant. 
 4.03 Default Amounts. The Retrocessionaire shall
bear the risk of any Default Amount under any and all Inuring AXA RE Retrocession Agreements, provided that upon the receipt by Retrocessionaire of a payment pursuant to the Reserve Agreement reflecting all or part of any Default Amount, the
Retrocessionaire shall immediately relinquish, and the Retrocedant shall immediately succeed to, any and all rights with regard to any such Default Amount, whether by novation or assignment, subrogation or otherwise. Any future steps to enforce or
otherwise act with regard to such rights shall be at the cost of the Retrocedant, provided, that the Retrocessionaire shall at its own cost take all necessary and reasonable steps to give full effect to the subrogation, assignment, novation
or other arrangement. 
  

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 4.04 Commutations. Any portion of the proceeds of a commutation of any Inuring AXA RE
Retrocession Agreements as relates to the Retrocessionaire’s participation in the Net Liability shall be added to the FW Canadian Account Balance, except to the extent the Retrocessionnaire shall have received a payment or participated in a
credit or benefit under the Reserve Agreement in respect of such participation in the Net Liability; provided however that the proceeds in respect of a commutation of a multi-year Inuring AXA RE Retrocession Agreement which was in effect or
otherwise covers any period prior to January 1, 2006 shall be allocated between the Retrocedant and the Retrocessionaire, in a mutually acceptable manner, such allocation to be based on the pro rata amount of aggregate loss reserves (and to the
extent appropriate, paid Losses (as defined in the Reserve Agreement)) in respect of Policies in the Guaranteed Portfolio (as defined in the Reserve Agreement) and such other Policies, respectively, that are the subject of such commutation. The
Retrocessionaire agrees that, following such a commutation, the Net Liability reinsured under this Agreement shall cease to be subject to reduction from retrocessional protection previously afforded by such commuted Inuring AXA RE Retrocession
Agreement. 
 ARTICLE 5 
 CONSIDERATION AND PREMIUM 
 5.01 Initial Premium. The Retrocedant
undertakes to pay (on a funds withheld basis) the amount in Canadian Dollars, as set out below (the “Initial Premium”): 
  

			
	Canadian Dollars (“CAD”)	  	CAD 437m
		
	United States Dollars (“USD”)	  	USD 14 m

 The Parties hereby acknowledge
that the Initial Premium number set forth above was calculated in accordance with the principles set forth in Schedule 5.01 hereto. 
 5.02 Funds Withheld; Future Premiums. It is agreed that the funds withheld basis does not require actual payment of the Initial Premium. Any such payment will be made, subject to Article 7 and the receipt of any necessary approvals
under the Canadian Trust Agreement, on September 30, 2037, provided that any amount so paid shall in no event exceed the amount of the FW Canadian Account Balance which may be released pursuant to Section 7.01 and provided
further that no such amount shall be paid or payable prior to the time the FW Canadian Account Balance is paid pursuant to Section 7.01. Further, it is agreed that the Initial Premium does not include any Future Premiums. Each such Future
Premium received by the Retrocedant shall be credited to the FW Canadian Account Balance upon the receipt of such premium, along with all interest, dividends or other income or loss on such Future Premium from the date of receipt by Retrocedant
through the date of crediting to the FW Canadian Account Balance hereunder, and for so long as the FW Canadian Account Balance is maintained pursuant to this Agreement. Following a FW Canadian Cash Call of the FW Canadian Account Balance, the
Retrocessionaire shall be entitled to cash payment in the amount of Future Premiums actually received by the Retrocedant after such FW Canadian Cash Call. The Retrocessionaire shall bear the risk of uncollected Future Premiums. 
  

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 ARTICLE 6 
 FW CANADIAN ACCOUNT BALANCE, EXPERIENCE ADJUSTMENTS, 
 INTEREST, DEPOSITS AND CREDITS 
 6.01 Establishment of Funds Withheld Account. As of the Canadian
Closing Date, the Retrocedant shall establish on its books and records for its own account a “funds withheld account” (“FW Canadian Account”) as a separate, segregated, account in the amount equal to the Principal Amount
and shall make adjustments from time to time to reflect the current Canadian Funds Withheld Balance as provided herein. The account balance represents the initial FW Canadian Account Balance for the Subject Business of this Agreement as of the
Canadian Closing Date. To the extent required for reinsurance credit, the FW Canadian Account will be maintained as part of the assets held pursuant to the Canadian Trust Agreement. The Retrocedant shall undertake that (x) as of the Canadian
Closing Date, the assets in the FW Canadian Account shall not include any collateralized debt obligations (CDOs) or private equity investments (“Excluded Investments”) and (y) it shall contribute or cause to be contributed the
cash in the amount of (i) such Excluded Investments plus interest thereon at a rate of 3% from January 1,2006 until such time as the relevant assets are substituted with assets other than Excluded Investments, minus (ii) any coupon or
dividends received in respect of such Excluded Investments between January 1, 2006 and the date of such substitution, in the case to the FW Canadian Account. For purposes of the preceding sentence, the value of such Excluded Investments as of
January 1, 2006 shall be calculated as follows: (x) in the case of securities which are listed on a securities exchange or for which a quotation from a securities quotation system is available, such listed or quoted value at
January 1, 2006, and (y) in the case of other securities, a valuation mutually agreed between the parties consistent with the basis reflected for investment valuations in the Pro Forma Statements (as defined in the Purchase Agreement).

 6.02 [Intentionally omitted]. 
 6.03 Periodic Calculation of FW Canadian Account Balance. (a) Unless otherwise agreed to by the parties, commencing with the first quarter ending following the Canadian Closing (the
“First Quarter after Closing”) and continuing until there has been a complete settlement of the FW Canadian Account Balance following a FW Canadian Cash Call or termination of this Agreement, the Retrocedant shall recalculate, or
cause to be recalculated, the FW Canadian Account Balance as of the end of each quarter in accordance with Section 6.04, reflecting all amounts actually paid or received in relation to the Subject Business (including as paid by the Retrocedant
on behalf of the Retrocessionaire by way of deduction from the FW Canadian Account Balance). The periodic calculation contemplated hereby shall also be adjusted to reflect reallocations of investments in the FW Canadian Account Balance during each
quarter that result from investment decisions made by the Retrocessionaire in accordance with the terms of the investment guidelines contained in the Claims Management and Services Agreement. 
  

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 (b) The Retrocedant will provide the Retrocessionaire quarterly reports reflecting the
details of such calculations in form and content to be mutually agreed by the parties. In addition, such reports will include information as to premium accounts, commission allowances, losses paid, loss adjustment expenses, salvage recovered, loss
reserves, allocated loss adjustment expense reserves, and such other matters to be agreed by the parties in sufficient reasonable detail, so as to enable the parties to monitor results of the Guaranteed Portfolio (as defined in the Reserve
Agreement) separately from the other business subject to this Agreement on an accident year basis, and to make all allocations between the Guaranteed Portfolio and such other business. The Retrocessionaire shall have reasonable audit rights with
respect to such reports and information. 
 6.04 Calculation of the Amount of the FW Canadian Account Balance. The
quarterly recalculation of the FW Canadian Account Balance shall be carried out in accordance with the formula set forth below with respect to all amounts actually paid or received in Canadian Dollars, except as otherwise agreed by the Parties:

 (a) starting initially with the initial FW Canadian Account Balance and subsequently with the FW Canadian Account Balance at
the end of the previous quarter; plus 
 (b) Future Premiums and Deposits (less any brokerage, fees, commissions or other
deductions) actually paid to the Retrocedant in the respective quarter; plus 
 (c) salvage, subrogation or other
recoveries (including any reduction in a Default Amount for which Retrocessionaire has provided reimbursement pursuant to Section 2.5(b) of the Reserve Agreement) which relate to and are recovered in anticipation of or subsequent to, any
payment or settlement under this Agreement; plus 
 (d) amounts received under Inuring AXA RE Retrocession Agreements
(including pursuant to the commutation thereof); plus 
 (e) profit commissions actually received by the
Retrocedant in the respective quarter to the extent relating to the Subject Business; plus 
  

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 (f) any fees paid by the Retrocessionaire to ALM pursuant to Section 8.3(b) of the Run
Off Services and Management Agreement in respect of the Subject Business; plus 
 (g) any other amounts received by the
Retrocedant, if any, in connection with the Policies that are part of the Subject Business and/or with the Inuring AXA RE Retrocession Agreements; less 
 (g-1) any fees paid by the Retrocedant to the Retrocessionaire in respect of Section 4.2 of the Issuance Agreement to the extent relating to the Subject Business; less 
 (h) the total Net Liability actually paid by the Retrocedant in the respective quarter before netting pursuant to Section 3.04 (but not
including amounts paid by the Retrocedant by reduction of a Deposit); less 
 (i) premium refunds (with relevant credit
for brokerage, fees, commissions or other deductions) actually made by the Retrocedant in the respective quarter, but only to the extent not already covered by clause (g) above; less 
 (j) profit commissions actually paid by the Retrocedant in the respective quarter to the extent relating to the Subject Business;
less 
 (k) other than with respect to the Termination Premium, amounts actually paid to purchase, maintain or renew the
Inuring AXA RE Retrocession Agreements, including reinstatement premiums; less 
 (l) any fees paid by the Retrocedant to
the Retrocessionaire in respect of the Claims Management and Services Agreement to the extent relating to the Subject Business; less 
 (m) amounts paid by the Retrocedant in respect of Deposits or other amounts in respect of Policies written, issued, bound, agreed or renewed by the Canadian Branch on behalf of Retrocessionaire pursuant
to the Issuance Agreement; less 
 (n) any other amounts paid by the Retrocedant to ALM pursuant to the Run-Off Services
and Management Agreement in respect of the Subject Business, if any, in connection with (i) Policies that are part of the Subject Business and/or (ii) Inuring AXA RE Retrocession Agreements (for the avoidance of doubt, excluding
Unallocated Loss Adjustment Expenses in respect of Net Liabilities incurred on or prior to December 31, 2005 but including Unallocated Loss Adjustment Expenses to the extent related to services provided by ALM in respect of Net Liabilities
incurred after December 31, 2005); less 
 (o) [Intentionally omitted] less 
  

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 (p) any other amounts paid by the Retrocedant for costs incurred at the direction of
Retrocessionaire and costs incurred in respect of asset management, if any, in connection with (i) Policies that are part of the Subject Business and/or (ii) Inuring AXA RE Retrocession Agreements (in each case not inconsistent with other
Transaction Agreements), but excluding Unallocated Loss Adjustment Expenses in respect of Net Liabilities incurred prior to December 31, 2005; 
 provided that, for the avoidance of doubt, all additions and subtractions under this Section 6.04 shall be made without duplication; provided, further, that the recalculation of the FW Canadian
Account Balance for the First Quarter after Closing shall reflect all activity covered by this Section 6.04 from the Canadian Closing Date through the end of such quarter. 
 6.05 [lntentionally omitted.] 
 6.06 Investment Income. The Retrocedant shall, within five Business Days of the receipt of the report delivered pursuant to the Claims Management and Services Agreement detailing changes made to
the FW Canadian Account Balance and advising of the resulting new balance, subject to the Canadian Trust Agreement, release any positive Investment Income relating to, or received in, the applicable quarter in cash to the Retrocessionaire. If a
quarterly report provided pursuant to the Claims Management and Services Agreement shows negative Investment Income relating to, or received in, the applicable quarter, then the Retrocessionaire shall pay the Retrocedant an amount in cash equal to
such negative Investment Income through the FW Canadian Account and such payment will form part of the FW Canadian Account and be vested in trust pursuant to the Canadian Trust Agreement. Such payment shall be made by the Retrocessionaire in
Canadian Dollars at the time of the delivery of the quarterly report. For the avoidance of doubt, but without duplication of any of the other provisions contained herein, the investment results of the Canadian Funds Withheld Balance from
January 1, 2006 through the First Quarter after Closing shall be included in calculating the Investment Income for the First Quarter after Closing. 
 6.07 Funds Received by Retrocedant. The Retrocedant shall notify, or cause to be notified, the Retrocessionaire of all amounts received by the Retrocedant in relation to the Subject Business as
soon as practicable following receipt. All such amounts shall be deemed to have been added to the FW Canadian Account Balance on the date of receipt as soon as reasonably practical, vested in trust, to the extent required for reinsurance credit,
pursuant to the Canadian Trust Agreement. 
 ARTICLE 7 
 PAYMENT OF FW CANADIAN ACCOUNT BALANCE AND CASH ADVANCES 
 7.01 Subject to receipt of any required regulatory approvals, the Retrocessionaire shall have the right, upon ten Business Days prior written notice to the Retrocedant, to call for payment in cash of the FW Canadian Account Balance at any

  

 -16- 








 
time (i) after September 30,2037, or (ii) on an earlier date as agreed to by the Parties, whichever first occurs. If the Retrocessionaire shall have made a call for payment in
accordance with this Section (a “FW Canadian Cash Call”), the Retrocedant shall, after providing the next quarterly statement following such FW Canadian Cash Call, be thereafter relieved from the obligation to maintain the FW
Canadian Account Balance and, except as otherwise provided herein, all amounts required under this Agreement to be debited or credited to the FW Canadian Account Balance shall be settled in cash. 
 7.02 The Retrocessionaire acknowledges and agrees that any payments from funds held under the Canadian Trust Agreement requires the consent
of OSFI. 
 ARTICLE 8 
 SETTLEMENTS 
 8.01 (a) If a quarterly report provided pursuant to the
Claims Management and Services Agreement shows a negative balance in the FW Canadian Account Balance, then (unless such negative balance is eliminated by payment by Retrocedant from another source outside of Canada), the Retrocessionaire shall pay
the Retrocedant the amount of the negative balance at the time of delivery of the report. Following a FW Canadian Cash Call of the FW Canadian Account Balance or the exhaustion of the FW Canadian Account Balance, the Retrocessionaire and the
Retrocedant shall settle all balances due between them by payment not later than five Business Days after receipt of such report if a net amount is due from the Retrocedant to the Retrocessionaire. 
 (b) Subject to receipt of any required regulatory approvals, in addition to any payments pursuant to Section 8.01(a), 90 days after the
end of each calendar year the Retrocedant shall pay the Retrocessionaire an additional amount (which shall be made by way of deduction from the FW Canadian Account Balance) to the extent (i) the Retrocedant determines based on a review of the
reserves and related losses paid in respect of Future Premiums earned that Retrocessionnaire has earned an underwriting profit after January 1, 2006 in respect of the business represented by such Future Premiums which is not offset by the
aggregate underwriting losses so calculated incurred since January 1, 2006 and (ii) such payment does not result in a negative balance in the FW Canadian Account. 
 (c) Subject to receipt of any required regulatory approvals, in addition to any payments due pursuant to Sections 8.01(a) and 8.0 l(b), the
Retrocedant shall pay itself an additional amount (which shall be deducted from the FW Canadian Account Balance), to the extent (i) Retrocessionaire is required to make a payment pursuant to Sections 2.1 through 2.3 and Section 2.4(b)(ii)
and Section 2.5(b) of the Reserve Agreement in respect of Companies Reserves (as defined in the Reserve Agreement) of the Canadian Branch (except to the extent payment in respect thereof has been made pursuant to Section 8.01(c) of the
Quota Share Retrocession Agreement), and (ii) such payment does not result in a negative balance in the FW Canadian Account. 
  

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 ARTICLE 9 
 TERMINATION 
 9.01 Termination Notice by Either
Party. Either Party shall have the right to give a written Termination Notice to the other Party: 
 (a) if the performance
of the whole or any part of this Agreement is prohibited or rendered impossible de jure or de facto for a period of thirty (30) days or more (including, but not limited to, in consequence of any law or regulation which is or shall be in force
in any country or territory or if any law or regulation shall prevent directly or indirectly the remittance of all or any part of the balance of payments due to or from either party), provided that where only part of the performance is so
affected, it must substantially impair the ability of the Parties to perform their obligations under this Agreement; and provided further however, that the Parties shall use reasonable efforts to amend the Agreement so performance is no
longer so affected; 
 (b) subject to Article 15 if the other Party has failed to comply with any of the terms and conditions of
this Agreement which is a material breach, provided that the affected Party has first notified the other Party of the failure to comply, and such Party has not rectified the failure within ninety (90) days from such notification; or

 (c) if such Party has the right to give a “Termination Notice” (as defined in the Quota Share Retrocession
Agreement) pursuant to Article 9 of the Quota Share Retrocession Agreement. 
 9.02 Termination Notice by the
Retrocedant. In addition to the rights provided in Section 9.01, the Retrocedant shall have the right to deliver a Termination Notice in the event that the Retrocessionaire or its Canadian branch becomes insolvent or is placed into
liquidation or receivership (whether voluntary or involuntary), or there is instituted against it proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator, or trustee in bankruptcy, or other agent known by whatever name,
to take possession of its assets or control its operations. 
 9.03 Termination Date. The effective date of termination
(“Termination Date”) shall be at the discretion of the Party providing written notice of termination (“Termination Notice”) and shall be stated therein, provided that it shall not be earlier than 30 days following
the date such notice is served upon the other Party. 
 9.04 Effect of Termination Notice / Termination. Upon the
delivery of a Termination Notice pursuant to Section 9.01 or 9.02 and in accordance with the provisions of Section 9.03, unless the Parties agree otherwise, (i) notwithstanding anything else therein to the contrary, the Issuance
Agreement shall terminate with respect to the Policies issued by the Canadian Branch, and any provisions herein with respect to any such Policies written thereunder after the Termination Date shall be of no further force and effect and
(ii) this Agreement shall remain in effect with respect to the Subject Business. 
  

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 ARTICLE 10 
 INSOLVENCY 
 10.01 Insolvency of the
Retrocedant. Where an Insolvency Event occurs in relation to the Retrocedant or the Canadian Branch the following terms shall apply (and in the event of any inconsistency between these terms and any other terms of this Agreement, these terms
shall prevail, in each case, subject to applicable law): 
 (a) Notwithstanding any requirement in this Agreement that the
Retrocedant shall actually make payment in discharge of its liability to its Cedants before becoming entitled to payment from the Retrocessionaire: 
  

	 	(1)	the Retrocessionaire shall be liable to pay (in accordance with Section 12.01 of this Agreement when applicable) the Retrocedant even though the Retrocedant is
unable to actually pay, or discharge its liability to its Cedants; but 

  

	 	(2)	nothing in this Article shall operate to accelerate the date for payment by one Party of any sum which may be payable to the other Party, which sum shall only become
payable as and when the relevant Party would have discharged, by actual payment, its liability for its loss but for its being the subject of any Insolvency Event. 

 (b) The existence, quantum, valuation and date for payment of any sum which the Retrocessionaire is liable to pay the Retrocedant under this
Agreement shall be those and only those for which the Retrocessionaire would be liable to the Retrocedant if the liability of the Retrocedant to its Cedants had been determined without reference to any term in any composition or scheme of
arrangement or any similar such arrangement entered into between the Retrocedant and all or any part of its Cedants, unless and until the Retrocessionaire serves written notice to the contrary on the Retrocedant in relation to any composition or
scheme of arrangement. 
 (c) Any payments due from the Retrocessionaire hereunder shall be made (i) first through
deduction from the FW Canadian Account Balance and (ii) if there are insufficient funds in the FW Canadian Account Balance, through a payment by Retrocessionaire to Retrocedant. 
  

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 ARTICLE 11 
 CURRENCIES 
 11.01 Currency Conversions. Unless
otherwise specified under this Agreement, all amounts under this Agreement shall be denominated in Canadian Dollars. 
 ARTICLE 12 
 OFFSET 
 12.01 Offset. The Parties acknowledge and agree that the Retrocedant is obligated to and will make the Net Liability payments under the Policies in respect of the Subject Business from and to the
extent of the funds available in the FW Canadian Account and that, for the purposes of this Section 12.01 and only for such purposes, a failure to do so is a default of the Retrocedant to the Retrocessionaire in an equivalent amount. Any amount
(the “Payor’s Obligation”) payable by one Party (the “Payor”) to the other Party (the “Payee”) under this Agreement, in circumstances where the Payee is in default of its
obligations under this Agreement will, at the option of the Payor and without prior notice to the Payee, be reduced by its set-off against any amount(s) (the “Payee’s Obligation”) payable (whether at such time or in the future
or upon the occurrence of a contingency) by the Payee to the Payor under this Agreement. Any such set-off will automatically satisfy and discharge the Payor’s Obligation to the Payee and, if the Payor’s Obligation exceeds the Payee’s
Obligation, the Payor’s Obligation shall be replaced by an obligation to pay to the Payee only the excess of the Payor’s Obligation over the Payee’s Obligation. The Payee’s Obligation will be discharged promptly and in all
respects to the extent it is so set off. 
 Only the liabilities of the Retrocedant at its Canadian Branch in respect of the
Subject Business, and the liabilities of the Retrocessionaire under this Agreement in respect of the Subject Business, may be taken into consideration in determining the net amount payable under this Section 12.01. 
 The Payor will give notice to the Payee of any set-off effected under this Section 12.01. Despite any other terms of this Agreement or
any other agreements) between the Payor and the Payee, a set-off under this Section 12.01 may be effected at any time before, upon and at any time after, the termination of this Agreement and despite any insolvency proceeding affecting the
Payee. 
 Nothing in this Section 12.01 shall be effective to create a charge or other security interest. Each party
acknowledges that it would be inequitable and unconscionable not to allow right of set-off. This Section 12.01 shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party
is at any time otherwise entitled (whether by operation of law, agreement or otherwise). Further, this Section 12.01 shall be without prejudice to any other rights that the parties have pursuant to this Agreement or applicable law, including
general principles of common law or equity. 
  

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 ARTICLE 13 
 THIRD PARTY RIGHTS 
 13.01 No Third Parties.
This Agreement is for the sole benefit of the Parties to this Agreement and does not give rise to or create any legal, equitable or other right, entitlement, remedy, claim or benefit enforceable by any person not a party to this Agreement and nor
shall it create any legal relation(s) directly with either the Retrocedant or the Retrocessionaire and any other person not a party to this Agreement. 
 ARTICLE 14 
 ERRORS AND OMISSIONS 
 14.01 Errors and Omissions. Any inadvertent delays, errors or omissions made in connection with this Agreement or any transaction
hereunder shall not relieve either Party from any liability which would have attached, had such delay, error or omission not occurred, provided always that such liability is not accelerated or increased in any way and provided, further,
that any such delay, error or omission is rectified as soon as possible after discovery. For the avoidance of doubt, this Article shall not constitute a waiver of any of the Parties’ rights or remedies under this Agreement, nor shall it
prevent the Parties from exercising such right or remedy in the future. 
 ARTICLE 15 
 DUTY OF COOPERATION 
 15.01 Duty of Cooperation. (a) Each Party hereto shall cooperate fully with the other Party in all reasonable respects in order to accomplish the objectives of this Agreement. The Parties further agree that each will provide, at
its own expense, to the other Party to this Agreement such cooperation and assistance as is reasonably necessary to respond to requests made by any governmental authority having regulatory jurisdiction over a Party in connection with any financial
examination or other investigation, inquiry or proceeding relating to a Party hereto, such cooperation and assistance to include, without limitation, making appropriate personnel and records available to such governmental authority and making
copies, at its own expense, reasonably necessary to respond to requests or inquiries from such governmental authority. 
 (b)
Each Party hereto shall, to the extent this would not materially adversely affect such Party, take such commercially reasonable steps upon the request and at the cost and expense of the other Party as may be necessary to preserve the statutory
accounting treatment of this Agreement at the date hereof, including through trust or similar arrangements. The Parties acknowledge that they believe mat as of the date of this

  

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Agreement (assuming that prior to and immediately subsequent to such transfer there is no event or circumstance which could be expected to result in a General Insolvency Event or similar event
with respect to either Party), a transfer of the assets in the FW Canadian Account Balance to Retrocessionaire and a simultaneous pledge, on terms satisfactory to Retrocedant, of such assets to Retrocedant would not, in and of itself, materially
adversely affect either Party, it being agreed that the foregoing shall not be binding on either Party for purposes of implementing this paragraph (b) after the date hereof, nor the basis for any other liability, action or inaction hereunder.

 ARTICLE 16 
 GOVERNING LAW AND JURISDICTION 
 16.01 Governing Law. This Agreement
shall be construed in accordance with and governed by the laws of Ontario and the laws of Canada applicable therein and without giving effect to conflicts of law principles. 
 16.02 Dispute Resolution. Any dispute arising out of or relating to this Agreement, including the breach, termination or invalidity
thereof (each, a “Dispute”), shall initially be submitted for resolution pursuant to the applicable provisions of the Master Agreement. 
 16.03 Jurisdiction. Subject to Section 16.02, all Disputes shall be subject to the exclusive jurisdiction of the competent courts within the jurisdiction of the court of appeals of Paris.

 ARTICLE 17 
 GENERAL PROVISIONS 
 17.01 Notices. Any notice or other
communication required or permitted hereunder shall be made in accordance with the Master Agreement. 
 17.02 Invalidity.
If any provision of this Agreement should be found to be illegal, invalid or unenforceable, such provision shall be severable and its illegality, invalidity or unenforceability shall not affect the legality, validity or enforceability of other
provisions, unless the whole Agreement is rendered illegal, invalid, unenforceable or incapable of performance or the illegality, invalidity or unenforceability of such provision frustrates the intent of the Parties or the purpose of this Agreement.
In the event of the foregoing, the Parties shall negotiate in good faith to replace such illegal, invalid or unenforceable provision with a provision that corresponds as closely as possible to the intentions of the Parties as expressed in such
illegal, invalid or enforceable provision. 
  

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 17.03 Binding Agreement; Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any right hereunder may be assigned by any Party without the prior written consent of the Retrocessionaire and the Retrocedant
affected thereby, which consent shall not be unreasonably withheld. 
 17.04 Modification; Waiver. Subject to the receipt
of any required regulatory approvals, this Agreement may be modified in any manner and at any time only by a duly authorized written instrument executed by an executive officer of each of the Parties hereto. No delay on the part of any Party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof. Any of the terms and conditions of this Agreement may be waived at any time by Retrocedant or Retrocessionaire by the duly authorized writing of the Party entitled
to the benefit of such term or condition. A waiver on one occasion will not be deemed to be a waiver of the same or any other breach or non-fulfillment on a future occasion. Unless expressly provided otherwise herein, all remedies, whether under
this Agreement or by applicable law or as otherwise afforded, will be cumulative and not alternative. 
 17.05 Headings.
The headings in this Agreement are for convenience of reference only and will not affect the construction of any provisions hereof. 
 17.06 Schedules. All Schedules to this Agreement are deemed to be integrated in and to form part of this Agreement in the form and substance from time to time agreed upon between the Parties concerned in writing. 
 17.07 Entire Agreement. This Agreement, together with the Purchase Agreement, the Master Agreement and the other Ancillary
Agreements, constitutes the entire agreement of the Parties with respect to its subject matter and shall supersede all previous agreements and understandings, representations and discussions, written or oral. 
  

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 IN WITNESS WHEREOF, the Retrocedant and the Retrocessionaire have caused this Agreement to
be executed by their duly authorized representatives as of the Effective Date. 
  

					
	Date and Place	 		 	AXA RE
			
	 	 		 	




		 		 	Name:
		 		 	Title:
			
	Date and Place	 		 	PARIS RE
			
	 	 		 	




		 		 	Name:
		 		 	Title:

  

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 SCHEDULE 1.01A 
 EXCHANGE RATES 
  

			
	 Exchange rates

	 CAD
	  	0.731797
	 EUR
	  	1.000000
	 USD
	  	0.848536

  

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 SCHEDULE 1.01B 
 INURING AXA RE RETROCESSION AGREEMENTS 
 [See attached disc of Inuring Policies]

  

 -26- 








 SCHEDULE 2.01A 
 SUBJECT BUSINESS 
 All Policies entered into by or on behalf of the Canadian
Branch under the brand name “AXA”, “AXA RE” or otherwise which were written prior to 23:59 Paris time on the Canadian Closing Date, to the extent issued or booked by the Canadian Branch, but excluding any Policies issued through
the Retrocedant’s reinsurance life branch offices in Canada; and (b) non-life Policies to the extent issued by the Canadian Branch after 23:59 Paris time on the Canadian Closing Date pursuant to the Issuance Agreement. 
 [See attached disc of Policies] 
  

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 SCHEDULE 5.01 
 EXPLANATORY MEMORANDUM REGARDING CALCULATION OF INITIAL PREMIUM AND INITIAL PRINCIPAL AMOUNTS 
 This explanatory memorandum is included for illustrative purposes only and sets forth the principles which were applied to calculate the Initial Premium as of January 1, 2006 with respect to all
Policies included in the Subject Business. The following principles were applied: 
  

	 	•	 	 Unearned premium reserves net of Inuring AXA RE Retrocession Agreements; plus 


  

	 	•	 	 Claims reserves and other reserves, including losses that have been incurred but not reported or incurred but not enough reported net of Inuring AXA RE
Retrocession Agreements but excluding unallocated loss adjustment expenses; plus 


  

	 	•	 	 Future policy benefit and other policy liabilities but excluding unallocated loss adjustment expenses; minus 


  

	 	•	 	 Unearned commission net of Inuring AXA RE Retrocession Agreements; minus 


  

	 	•	 	 Premiums to be written net of Inuring AXA RE Retrocession Agreements; plus 


  

	 	•	 	 Commissions to be written net of Inuring AXA RE Retrocession Agreements. 


 The amounts were determined in accordance with French GAAP and in a manner consistent with the Retrocedant’s regular and customary
practices and procedures consistently applied. 
 The following schedule details amounts of Initial Premium and Initial
Principal Amounts as of January 1, 2006. 
  

				
	 INITIAL PREMIUM (in million euros)
	  	TOTAL	 
		  	332	  
	 Cession of AXA RE claims reserves net of other reinsurance
	  	335	  
	 Cession of AXA RE unearned premiums net of other reinsurance
	  	17	  
	 Cession of AXA RE unearned commissions net of other reinsurance
	  	-3	  
	 Cession of AXA RE premiums to be written net of other reinsurance
	  	-23	  
	 Cession of AXA RE commissions to be written net of other reinsurance
	  	7	  
		
	 INITIAL PRINCIPAL AMOUNT
	  	TOTAL	 
		  	323	  
	 Initial Premium
	  	332	  
	 Reinsurance and Retrocession receivables
	  	4	  
	 Bad debts
	  	0	  
	 Reinsurance and Retrocession payable
	  	(13	) 

  

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