Document:

mdwt_Ex10_1

		
			Exhibit 10.1
		

		
			 
		

		
			EXECUTION COPY
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			FUNDS WITHHELD COINSURANCE AND MODIFIED COINSURANCE AGREEMENT 
		

		
			(MYGA and FIA BUSINESS)
		

		
			 
		

		
			 
		

		
			 
		

		
			between
		

		
			 
		

		
			SDA ANNUITY & LIFE RE
		

		
			and
		

		
			 
		

		
			AMERICAN LIFE & SECURITY CORP.
		

		
			 
		

		
			effective as of September 30, 2019
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			Treaty Number 01
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

		

		
			TABLE OF CONTENTS
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Page

				
	
					
						ARTICLE I

					
					
						GENERAL PROVISIONS

					
1
				
	
					
						Section 1.01

					
					
						Defined Terms

					
1
				
	
					
						Section 1.02

					
					
						Other Definitional Provisions

					
6
				
	
					
						ARTICLE II

					
					
						COVERAGE

					
7
				
	
					
						Section 2.01

					
					
						Scope and Basis of Reinsurance

					
7
				
	
					
						Section 2.02

					
					
						Policy Changes

					
8
				
	
					
						Section 2.03

					
					
						Reinstatement of Surrendered Policies

					
8
				
	
					
						Section 2.04

					
					
						Misstatement of Fact

					
8
				
	
					
						Section 2.05

					
					
						Non-Guaranteed Elements

					
8
				
	
					
						Section 2.06

					
					
						Crediting Rates

					
8
				
	
					
						Section 2.07

					
					
						Programs of Internal Replacement

					
9
				
	
					
						Section 2.08

					
					
						Conservation Program

					
9
				
	
					
						Section 2.09

					
					
						Retrocession

					
9
				
	
					
						Section 2.10

					
					
						Interest Maintenance Reserve

					
9
				
	
					
						Section 2.11

					
					
						Valuation of Liabilities

					
9
				
	
					
						ARTICLE III

					
					
						REINSURANCE PREMIUMS

					
11
				
	
					
						Section 3.01

					
					
						Reinsurance Premiums

					
11
				
	
					
						Section 3.02

					
					
						Initial Settlement Amount

					
11
				
	
					
						ARTICLE IV

					
					
						CEDING COMMISSION

					
11
				
	
					
						Section 4.01

					
					
						Ceding Commission

					
11
				
	
					
						ARTICLE V

					
					
						ADMINISTRATION FEE

					
11
				
	
					
						Section 5.01

					
					
						Policy Expenses

					
11
				
	
					
						ARTICLE VI

					
					
						REINSURED LIABILITIES

					
12
				
	
					
						Section 6.01

					
					
						Reinsured Liabilities

					
12
				
	
					
						Section 6.02

					
					
						Claims Settlement

					
12
				
	
					
						Section 6.03

					
					
						Recoveries

					
12
				
	
					
						ARTICLE VII

					
					
						REPORTING AND SETTLEMENTS

					
12
				
	
					
						Section 7.01

					
					
						Ceding Company Reporting

					
12
				
	
					
						Section 7.02

					
					
						Reinsurer Reporting

					
13
				
	
					
						Section 7.03

					
					
						Settlements & Adjustments

					
14
				
	
					
						ARTICLE VIII

					
					
						THE MODCO ACCOUNT, THE FUNDS WITHHELD ACCOUNT AND THE TRUST ACCOUNT

					
16
				
	
					
						Section 8.01

					
					
						ModCo Deposit

					
16
				
	
					
						Section 8.02

					
					
						Funds Withheld Account

					
17
				
	
					
						Section 8.03

					
					
						Trust Account

					
17
				
	
					
						ARTICLE IX

					
					
						[RESERVED]

					
19
				
	
					
						ARTICLE X

					
					
						ADMINISTRATION

					
19
				
	
					
						Section 10.01

					
					
						Policy Administration

					
19
				
	
					
						Section 10.02

					
					
						Record-Keeping

					
19
				
	
					
						ARTICLE XI

					
					
						TERM AND TERMINATION

					
20
				
	
					
						Section 11.01

					
					
						Duration of Agreement

					
20
				
	
					
						Section 11.02

					
					
						Recapture

					
20
				

		
			
		

		
			

		 

		

			i

		

		

		
			TABLE OF CONTENTS
		

		
			(continued)
		

			
					
						 

					
					
						 

					
					
						Page

				
	
					
						Section 11.03

					
					
						Recapture Payment

					
21
				
	
					
						Section 11.04

					
					
						Survival

					
22
				
	
					
						ARTICLE XII

					
					
						ERRORS AND OMISSIONS

					
22
				
	
					
						Section 12.01

					
					
						Errors and Omissions

					
22
				
	
					
						ARTICLE XIII

					
					
						DISPUTE RESOLUTION

					
22
				
	
					
						Section 13.01

					
					
						Negotiation

					
22
				
	
					
						Section 13.02

					
					
						Arbitration; Waiver of Trial by Jury

					
22
				
	
					
						ARTICLE XIV

					
					
						INSOLVENCY

					
24
				
	
					
						Section 14.01

					
					
						Insolvency

					
24
				
	
					
						ARTICLE XV

					
					
						TAXES

					
25
				
	
					
						Section 15.01

					
					
						Taxes

					
25
				
	
					
						ARTICLE XVI

					
					
						REPRESENTATIONS, WARRANTIES AND COVENANTS

					
25
				
	
					
						Section 16.01

					
					
						Representations and Warranties of the Ceding Company

					
25
				
	
					
						Section 16.02

					
					
						Covenants of the Ceding Company

					
27
				
	
					
						Section 16.03

					
					
						Representations and Warranties of the Reinsurer

					
28
				
	
					
						Section 16.04

					
					
						Covenants of the Reinsurer

					
29
				
	
					
						ARTICLE XVII

					
					
						MISCELLANEOUS

					
30
				
	
					
						Section 17.01

					
					
						Currency

					
30
				
	
					
						Section 17.02

					
					
						Interest

					
30
				
	
					
						Section 17.03

					
					
						Right of Setoff and Recoupment

					
30
				
	
					
						Section 17.04

					
					
						No Third-Party Beneficiaries

					
30
				
	
					
						Section 17.05

					
					
						Amendment

					
30
				
	
					
						Section 17.06

					
					
						Notices

					
31
				
	
					
						Section 17.07

					
					
						Consent to Jurisdiction

					
32
				
	
					
						Section 17.08

					
					
						Service of Process

					
32
				
	
					
						Section 17.09

					
					
						Inspection of Records

					
32
				
	
					
						Section 17.10

					
					
						Confidentiality

					
33
				
	
					
						Section 17.11

					
					
						Successors

					
34
				
	
					
						Section 17.12

					
					
						Entire Agreement

					
34
				
	
					
						Section 17.13

					
					
						Severability

					
34
				
	
					
						Section 17.14

					
					
						Construction

					
34
				
	
					
						Section 17.15

					
					
						Non-Waiver

					
34
				
	
					
						Section 17.16

					
					
						Further Assurances

					
35
				
	
					
						Section 17.17

					
					
						Governing Law

					
35
				
	
					
						Section 17.18

					
					
						Counterparts

					
35
				

		
			 
		

		
			Schedules
		

			
	
			
				 I.
			

			
	
			
			Policy Forms and Riders

			
	
			
				 II.
			

			
	
			
			Policy Expenses

			
	
			
				 III.
			

			
	
			
			Initial ModCo Assets and Funds Withheld Assets

			
	
			
				 IV.
			

			
	
			
			Permitted Ex-Gratia Payments  

			
	
			
				 V.
			

			
	
			
			Determination of Crediting Rate and Quota Share 

		
			

		 

		

			ii

		

		

			
	
			
				 VI.
			

			
	
			
			§1.848-2(g)(8) Election

			
	
			
				 VII.
			

			
	
			
			Determination of Cede Commission

			
	
			
				 VIII.
			

			
	
			
			Allocation Percentage

			
	
			
				 IX.
			

			
	
			
			Reinsured Policies issued prior to the Effective Date 

			
	
			
				 X.
			

			
	
			
			Leverage Measure

			
	
			
				 XI.
			

			
	
			
			Asset Reserves

			
	
			
				 XII.
			

			
	
			
			Hedging Returns

			
	
			
				 XIII.
			

			
	
			
			Trust Account Funding

			
	
			
				 XIV.
			

			
	
			
			Investment Manager

			
	
			
				 XV.
			

			
	
			
			Non-Guaranteed Elements

		
			 
		

		
			Exhibits
		

			
	
			
				 A.
			

			
	
			
			Form of Monthly Accounting Report

			
	
			
				 B.
			

			
	
			
			Trust Agreement 

		
			 
		

		
			 
		

		
			

		 

		

			iii

		

		

		
			FUNDS WITHHELD COINSURANCE AND MODIFIED COINSURANCE AGREEMENT

(MYGA and FIA BUSINESS)
		

		
			This FUNDS WITHHELD COINSURANCE and MODIFIED COINSURANCE AGREEMENT (this “Agreement”), effective as of September 30, 2019 (the “Effective Date”), is made by and between American Life & Security Corp., an insurance company organized under the laws of the State of Nebraska (the “Ceding Company”) and SDA ANNUITY & LIFE RE, a Cayman Islands-domiciled reinsurance company (the “Reinsurer”).
		

		
			W I T N E S S E T H:
		

		
			WHEREAS, subject to the terms, conditions and limitations contained herein, the Ceding Company desires to cede, on a funds withheld coinsurance and modified coinsurance basis, and the Reinsurer desires to accept, a Quota Share of certain liabilities with respect to certain MYGA and FIA business of the Ceding Company (the “Reinsurance Treaty”);
		

		
			WHEREAS, the parties have entered into a letter of intent with respect to the Reinsurance Treaty with an effective date of September 30, 2019;
		

		
			NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the Ceding Company and the Reinsurer hereby agree as follows:
		

			
	
			
				ARTICLE I
			
GENERAL PROVISIONS

			
	
			
				 Section 1.01
			Defined Terms.   As used in this Agreement, the following terms shall have the following meanings: 

		
			“3rd Party Actuary” shall initially mean a member of the Academy of Actuaries that meets the Academy of Actuaries Qualifications Standards for issuing an actuarial opinion related to the matters of this agreement to be mutually agreed-upon by the parties no later than 30 days following the Initial Settlement Date but may be replaced by the Ceding Company with the consent of the Reinsurer (such consent not to be unreasonably withheld).
		

		
			 
		

		
			“Accounts” shall mean collectively the ModCo Deposit and the Funds Withheld Account, each one an “Account.”
		

		
			“Account Adjustment” shall mean a payment made pursuant to Section 7.03(b).
		

		
			“Accounts Balance” shall mean the aggregate of book value the ModCo Deposit Balance and Funds Withheld Account Balance, as of any date of determination, as such book value is determined in accordance with Nebraska SAP. 
		

		
			“Accounts Required Reserves” shall mean Accounts Required Reserves-Funds Withheld plus Accounts Required Reserves-ModCo, as of any date of determination.
		

		
			

		 

		

			 

		

		

		
			 
		

		
			“Accounts Required Reserves-Funds Withheld”  shall mean an amount equal to the Quota Share of the Net Statutory Reserves times the Funds Withheld Allocation Percentage plus the Asset Reserves for assets included in the Funds Withheld Account, as of any date of determination.
		

		
			“Accounts Required Reserves-ModCo” shall mean an amount equal to the Quota Share of the Net Statutory Reserves times the ModCo Allocation Percentage plus the Asset Reserves for assets included in the ModCo Deposit, as of any date of determination.
		

		
			“Action” shall mean (a) any civil, criminal or administrative action, suit, claim, litigation, arbitration or similar proceeding, in each case, before a Governmental Entity, or (b) any investigation or written inquiry by a Governmental Entity other than any examination by a taxing authority, including a tax audit.
		

		
			“Affiliate” shall mean, with respect to any Person, another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such first Person, and the term “Affiliated” shall have a correlative meaning.  For the purposes of this definition, “control”, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly through the ownership of voting securities, and the terms “controlling” and “controlled” have the meanings correlative to the foregoing.  For the avoidance of doubt, the Ceding Company and the Reinsurer shall not be deemed “Affiliates” for purposes of this Agreement.
		

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

		
			“Allocation Percentage” shall mean the percentages set forth in Schedule VIII for the ModCo Deposit and the Funds Withheld Account.
		

		
			“Asset Reserves” shall have the meaning specified in Schedule XI.
		

		
			“Authorized Representative” shall have the meaning specified in Section 14.01(a)(i).
		

		
			“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which banking institutions are authorized or required by Law to close in New York, New York. 
		

		
			“Ceding Commission” shall mean the percentage initially as set forth on Schedule VII, as may be amended by mutual agreement of the parties from time to time.  
		

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

		
			“Code” shall mean the Internal Revenue Code of 1986, as amended.
		

		
			“Covered Business” shall have the meaning specified in Section 2.01(b)(i).  
		

		
			“Crediting Rate” shall be the percentage determined based on the procedures set forth on Schedule V.      
		

		
			

		 

		

			2

		

		

		
			“Custodian” shall have the meaning specified in Section 8.01.
		

		
			“Effective Date” shall have the meaning specified in the Preamble hereto.
		

		
			“Excluded Liabilities” shall mean without duplication (a) all Extra-Contractual Obligations other than Reinsurer Extra-Contractual Obligations, (b) any liabilities resulting from any change to the terms of any Reinsured Policy after the Effective Date, unless such change is required by applicable Law or by the express terms of the Reinsured Policies, or has been approved in writing in advance by the Reinsurer, (c) any ex gratia payments made by the Ceding Company (i.e., payments the Ceding Company is not required to make under the terms of the Reinsured Policies) unless such payment has been approved in writing in advance by the Reinsurer, or is set forth in Schedule IV.
		

		
			“Extra-Contractual Obligations”  shall mean any and all costs, expenses, damages, liabilities or obligations of any kind or nature which arise out of, result from or relate to any act or omission, whether or not in bad faith, intentional, willful, negligent, reckless, careless or otherwise, in connection with a Reinsured Policy, and which are not contractually covered by the terms and conditions of the Reinsured Policy.
		

		
			“Factual Information” shall have the meaning specified in Section 16.01(d).
		

		
			“Fair Market Value”  means with respect to any asset, and as of any date of determination, the price that would be received in a sale of such asset in accordance with GAAP accounting at the determination date (the “Price”), determined as: (i) for liquid assets, the Price for such asset as published by a nationally recognized pricing service where such prices are available and (ii) otherwise, the Price for such asset as determined by a qualified independent securities valuation firm, each pricing service or valuation firm to be selected by the Investment Manager with the consent of the Ceding Company, such consent not to be unreasonably withheld, conditioned or delayed. In the event that the Ceding Company and the Investment Manager cannot agree on a valuation firm, such valuation firm shall be Houlihan Lokey.  The “fair market value” of any asset shall include any accrued but unpaid interest or dividend on such asset.
		

		
			“Funds Withheld Account” shall have the meaning specified in Section 8.02(a).
		

		
			“Funds Withheld Account Balance” shall mean the Statutory Carrying Value of assets in the Funds Withheld Account, as of any date of determination. 
		

		
			“GAAP” means generally accepted accounting principles in effect in the United States, consistently applied.
		

		
			“Governmental Entity” shall mean any foreign, federal, state, local or other governmental, legislative, judicial, administrative or regulatory authority, agency, commission, board, body, court or entity or any instrumentality thereof or any self-regulatory body or arbitral body or arbitrator.
		

		
			“Initial Settlement Amount” shall have the meaning set forth in Section 3.02.  
		

		
			“Initial Settlement Date” shall mean November 7,  2019.
		

		
			

		 

		

			3

		

		

		
			“Investment Guidelines” shall be as set forth in the Investment Management Agreement,  as may be amended from time to time.
		

		
			“Investment Manager” shall have the meaning specified in Schedule XIV.
		

		
			“Investment Management Agreement” shall have the meaning specified in Section 8.04 (as may be amended or supplemented from time to time). 
		

		
			“Investment Manager” shall have the meaning specified in Section 8.04 and in the Investment Management Agreement.
		

		
			“Law” shall mean any law, statute, ordinance, written rule or regulation, order, injunction, judgment, decree, principle of common law, constitution or treaty enacted, promulgated, issued, enforced or entered by any Governmental Entity.
		

		
			“Leverage Measure” shall have the meaning set forth in Schedule X.
		

		
			“Leverage Measure Limit” shall have the meaning set forth in Schedule X.
		

		
			“Loss”  or “Losses”  shall mean claim payments (including returns and waivers of premium and other adjustments), Loss Adjustment Expenses, and reasonable legal fees and settlements, commissions, general expenses, premium taxes, assessments, filing fees, fines, penalties, in each case, actually incurred by, and as determined by, the Ceding Company in good faith but in any event excluding Extra Contractual Obligations other than Reinsurer Extra Contractual Obligations.
		

		
			“Loss Adjustment Expenses”  shall mean loss adjustment expenses incurred in investigating, processing and settling losses that can be attributed to specific claims, including payments to outside vendors, such as lawyers and independent claim adjusters.
		

		
			“ModCo Deposit” shall have the meaning specified in Section 8.01(a).
		

		
			“ModCo Deposit Balance” shall mean the Statutory Carrying Value of assets in the ModCo Deposit, as of any date of determination.
		

		
			“Monthly Accounting Period” shall have the meaning specified in Section 7.01(a).
		

		
			“Monthly Settlement” shall mean the making of all payments and adjustments specified in Section 7.03, including, without limitation, Account Adjustments and Reinsurer Top-Up Payments.
		

		
			 “Nebraska SAP” shall mean the statutory accounting principles and practices prescribed or permitted for Nebraska domiciled life insurance companies by the Nebraska Department of Insurance, or, if different, of the state of domicile of the Ceding Company, consistently applied .
		

		
			“Net Statutory Reserves”  shall mean the statutory reserves of the Ceding Company in respect of the Reinsured Policies, which shall be calculated in good faith in accordance with Nebraska SAP and determined in a manner consistent with the Ceding Company’s historical practices; provided,  however, that Net Statutory Reserves shall not include  (a) any asset valuation 

		 

		

			4

		

reserves (as used in connection with Nebraska SAP) established by the Ceding Company, (b) any interest maintenance reserves (as used in connection with Nebraska SAP) established by the Ceding Company, (c) any additional actuarial reserves (as used in connection with Nebraska SAP), if any, established by the Ceding Company as a result of its annual cash flow testing or (d) any other reserve not directly attributable to specific Reinsured Policies. 
		

		
			“Non-Guaranteed Elements”  shall have the meaning specified in Schedule XV.  
		

		
			“Non-Public Personal Information” shall have the meaning specified in Section 17.10.  
		

		
			“Permits” shall mean any licenses, certificates of authority or other similar certificates, registrations, franchises, permits, approvals or other similar authorizations issued to a Person by a Governmental Entity.
		

		
			“Permitted Assets” shall mean any asset which: (i) is a permitted asset under applicable Law, (ii) is an admitted asset of the Ceding Company under the applicable Laws of the State of Nebraska and (iii) is permitted under the Investment Guidelines set forth in the Investment Management Agreement, and (iv) solely with respect to the Accounts, is a permissible asset to provide credit for reinsurance  with respect to the ModCo Deposit or Funds Withheld Account (as the case may be) under Nebraska SAP.
		

		
			“Person” shall mean an individual, corporation, partnership, joint venture, limited liability company, association, trust, unincorporated organization, Governmental Entity or other entity.
		

		
			“Policy Expenses” shall have the meaning specified in Section 5.01.  
		

		
			“Proprietary Information” shall have the meaning specified in Section 17.10(a).
		

		
			“Quota Share” shall have the meaning specified in Schedule V.  
		

		
			“Recapture Effective Date” shall mean the date on which the liability of the Reinsurer with respect to all of the Reinsured Liabilities is terminated pursuant to Section 11.02 or the effective date of the rejection of this Agreement by any Receiver or of a recapture in full. 
		

		
			“Reallocation Payment” shall mean a payment made pursuant to Section 7.03(a)(iii). 
		

		
			“Receiver” shall have the meaning specified in Section 11.03(a).
		

		
			“Reinsurance Premiums” shall mean the Quota Share of the premiums, policy loan principal and interest payments, and other fees, amounts, payments, and collections received by the Ceding Company with respect to the Reinsured Policies.
		

		
			“Reinsured Block” shall have the meaning specified in Section 2.01(b)(ii).
		

		
			“Reinsured Liabilities” shall mean the Quota Share of (a) Losses and liabilities of the Ceding Company with respect to the Reinsured Policies, (b) the Reinsurer Extra-Contractual Obligations divided by the applicable Quota Share, (c) liabilities with respect to premium taxes payable by the Ceding Company to the extent relating to premiums with respect to the Reinsured 

		 

		

			5

		

Policies and (d) trail commissions payable to producers with respect to the Reinsured Policies and other commissions payable with respect to premiums received by the Ceding Company after the Effective Date and paid to the Reinsurer; provided, that in no event shall “Reinsured Liabilities” include any Excluded Liabilities.
		

		
			“Reinsured Policies” shall mean all insurance policies of the Ceding Company hereunder, written on the policy forms that are listed on Schedule I and (i) in the case of policies listed on Schedule IX in force on the Effective Date, and (ii) policies entered into after the Effective Date and ceded in accordance with the provisions of this Agreement (including without limitation Schedule V) and including any riders that are listed on Schedule I and any amendments or endorsements attached thereto as of the Effective Date
		

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

		
			“Reinsurer Extra-Contractual Obligations” shall mean Extra-Contractual Obligations relating to the Reinsured Policies to the extent caused by, arising from or related to any act of, or failure to act by, the Reinsurer or any of its Affiliates following the Effective Date.
		

		
			 “Reinsurer Top-Up Payment” shall have the meaning specified in Section 7.03(c). 
		

		
			“Statutory Carrying Value” shall mean, with respect to any asset, as of the relevant date of determination, the carrying value amount permitted to be carried by the Ceding Company as an admitted asset consistent with Nebraska SAP in its statutory financial statements.
		

		
			“Terminal Accounting Report” shall have the meaning specified in Section 11.03(a).
		

		
			“Treasury Regulations” shall mean all proposed, temporary and final regulations promulgated under the Code, as such regulations may be amended from time to time.
		

		
			“Trust Account” shall have the meaning specified in Section 8.03 and attached as Exhibit B.  
		

		
			“Trust IMA” shall have the meaning specified in Section 8.04 (as may be amended or supplemented from time to time). 
		

		
			“Trustee” shall have the meaning specified in Section 8.03.
		

		
			 
		

			
	
			
				 Section 1.02
			Other Definitional Provisions.

			
	
			
				 (a)
			For purposes of this Agreement, the words “hereof,” “herein,” “hereby” and other words of similar import refer to this Agreement as a whole, including all Schedules and Exhibits to this Agreement, unless otherwise indicated.

			
	
			
				 (b)
			Whenever the singular is used herein, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate.

		
			

		 

		

			6

		

		

			
	
			
				 (c)
			The term “including” means “including but not limited to.”

			
	
			
				 (d)
			Whenever used in this Agreement, the masculine gender shall include the feminine and neutral genders and vice versa.

			
	
			
				 (e)
			The Schedules and Exhibits hereto are hereby incorporated by reference into the body of this Agreement.

			
	
			
				 (f)
			All references herein to Articles, Sections, Subsections, Paragraphs, Exhibits and Schedules shall be deemed references to Articles and Sections and Subsections and Paragraphs of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.

			
	
			
				 (g)
			All terms defined in this Agreement shall have the defined meaning when used in any Schedule, Exhibit, certificate, report or other documents attached hereto or made or delivered pursuant hereto unless otherwise defined therein.

			
	
			
				 (h)
			Any reference to an agreement, statute, regulation or rule is to the same as amended from time to time, and at any time.

			
	
			
				ARTICLE II
			
COVERAGE

			
	
			
				 Section 2.01
			Scope and Basis of Reinsurance.

			
	
			
				 (a)
			This Agreement shall be effective as of 12:00:01 a.m. Eastern Time on the Effective Date.

			
	
			
				 (b)
			 Cession:

			
	
			
				 (i)
			Subject to the terms, conditions and limits of this Agreement (including the exclusion from coverage of Excluded Liabilities), the Ceding Company shall automatically cede, and the Reinsurer shall automatically reinsure, on a funds withheld coinsurance and a modified coinsurance basis, respectively based on the Allocation Percentage, the Reinsured Liabilities (the “Covered Business”).

			
	
			
				 (ii)
			Subject to the terms, conditions and limits of this Agreement (including the exclusion from coverage of Excluded Liabilities), the Ceding Company shall cede, and the Reinsurer shall reinsure, on a funds withheld coinsurance and a modified coinsurance basis, respectively based on the Allocation Percentage, the Reinsured Policies issued prior to the Effective Date specified in Schedule IX (the “Reinsured Block”).

			
	
			
				 (c)
			Subject to the terms, conditions and limits of this Agreement (including the exclusion from coverage of Excluded Liabilities), the Reinsurer shall follow the fortunes of the Ceding Company, and to that end the Reinsurer’s liability for the Reinsured Policies shall be identical to that of the Ceding Company and shall be subject to the same risks, terms, conditions, interpretations, waivers, modifications, alterations and cancellations to which the Ceding Company is subject with respect to the Reinsured Policies, subject in each case to the Ceding Company’s duty to adhere to its obligations pursuant to Article X.

		
			

		 

		

			7

		

		

			
	
			
				 (d)
			Notwithstanding anything to the contrary herein, the Reinsurer shall not be liable for any Excluded Liabilities.

			
	
			
				 Section 2.02
			Policy Changes.

			
	
			
				 (a)
			The Ceding Company shall not, without the prior written consent of the Reinsurer, terminate, amend, modify or waive any provision or provisions of the Reinsured Policies, except to the extent required by applicable Law or the express terms of the Reinsured Policies. 

			
	
			
				 (b)
			Any such terminations, amendments, modifications or waivers made without the prior written consent of the Reinsurer shall be disregarded for purposes of this Agreement, and the reinsurance with respect to the affected Reinsured Policy will continue as if such termination, amendment, modification or waiver had not been made.

			
	
			
				 Section 2.03
			Reinstatement of Surrendered Policies.   If a Reinsured Policy that has been surrendered (other than in connection with a surrender upon maturity) is reinstated according to its terms and the Ceding Company’s reinstatement policies, the Reinsurer will, upon notification, automatically reinstate the reinsurance with respect to such Reinsured Policy; provided, that, to the extent that the reinstatement of such Reinsured Policy requires payment of premiums in arrears or reimbursement of claims paid, the Ceding Company shall pay to the Reinsurer all Reinsurance Premiums in arrears and Reinsurer shall pay all reimbursements of Reinsured Liabilities paid on such Reinsured Policy.

			
	
			
				 Section 2.04
			Misstatement of Fact.   In the event of a change in the amount payable under a Reinsured Policy due to a misstatement of fact, the Reinsurer’s liability with respect to such Reinsured Policy will change proportionately.  Such Reinsured Policy will be rewritten from commencement on the basis of the adjusted amounts using premiums and such other terms based on the correct facts, and the proper adjustment for the difference in Reinsurance Premiums, without interest, will be made.

			
	
			
				 Section 2.05
			Non-Guaranteed Elements.   The Ceding Company will be responsible for determining the Non-Guaranteed Elements of the Reinsured Policies in good faith and consistent with its standard business practices;  provided, that the Reinsurer shall be permitted to provide recommendations regarding the Non-Guaranteed Elements and, to the extent such recommendations comply with applicable Law, generally accepted actuarial standards of practice, the terms of the Reinsured Policies and the Ceding Company’s internal policies, the Ceding Company shall not unreasonably take any actions that contravene such recommendations and shall promptly incorporate such recommendations.  If the Ceding Company fails to adhere to such recommendations in any material respect, then the Ceding Company shall promptly notify the Reinsurer in writing of such failure. Crediting Rates shall be subject to Section 2.06 exclusively and not to this Section 2.05.

			
	
			
				 Section 2.06
			Crediting Rates.   The Ceding Company and the Reinsurer shall establish the Crediting Rate on any date of determination as set forth based on the procedures in Schedule V.

		
			

		 

		

			8

		

		

			
	
			
				 Section 2.07
			Programs of Internal Replacement.   The Ceding Company shall not solicit, or allow any of its Affiliates to solicit, directly or indirectly, policy holders of the Reinsured Policies in connection with any program of internal replacement without the prior written consent of the Reinsurer.  The term “program of internal replacement” means any program sponsored or supported by the Ceding Company or any of its Affiliates that is offered to a class of policy owners and in which a Reinsured Policy or a portion of a Reinsured Policy is exchanged for another policy that is written by the Ceding Company or any Affiliate of the Ceding Company or any successor or assignee of any of them. 

			
	
			
				 Section 2.08
			Conservation Program.   Upon the request of the Reinsurer, the Ceding Company shall reasonably cooperate and work with the Reinsurer in good faith to develop and implement a conservation program with respect to the Reinsured Policies.

			
	
			
				 Section 2.09
			RESERVED

			
	
			
				 Section 2.10
			Asset Reserves.   The Ceding Company and the Reinsurer agree that the Asset Reserves shall be ceded to the Reinsurer and maintained in the ModCo Deposit and/or Funds Withheld Account (as the case may be).      

			
	
			
				 Section 2.11
			Valuation of Liabilities.   The Ceding Company shall calculate the Net Statutory Reserves with respect to the Reinsured Policies in good faith in accordance with Nebraska SAP and determined in a manner consistent with the Ceding Company’s historical practices; provided, that, the Ceding Company shall provide the Reinsurer supporting information promptly upon request and in the event there is a disagreement with respect to the calculation, the Dispute Resolution procedures herein shall be applied. 

			
	
			
				 Section 2.12
			Credit For Reinsurance.  In the event the Ceding Company does not receive credit for reinsurance in its statutory financial statements for the Reinsured Liabilities, the parties shall amend this Agreement and take such commercially reasonable actions as are required to provide the Ceding Company with full credit for the reinsurance ceded hereunder.

			
	
			
				 Section 2.13
			ModCo Reserves Allocation.  The Ceding Company shall retain a proportional amount of reserves related to the Reinsured Liabilities equal to the Accounts Required Reserves-ModCo.

			
	
			
				 Section 2.14
			Options Budget and Payoff for FIA.

		
			(a)     With respect to FIA Reinsured Policies, the Ceding Company shall purchase derivatives in respect of the Reinsured Policies (each, a “Hedge” and collectively, the “Hedges”), in the form of futures contracts and equity index options, to hedge any index risk associated with the Reinsured Policies.  
		

		
			(b)      The Reinsurer shall pay to the Ceding Company for each accounting period, in accordance with Section 7.3, the Quota Share of all amounts becoming due in connection with 

		 

		

			9

		

the purchase of derivatives by the Ceding Company (the “Option Budget”), as defined in Schedule XII.
		

		
			(c)The Ceding Company shall pay to the Reinsurer for each accounting period, in accordance with Section 7.3, the Quota Share of all amounts becoming due and payable to the Ceding Company during the applicable period in connection with the exercise by the Ceding Company or maturity of any Hedges, whether or not collected (the “Option Payoff”), as defined in Schedule XII. 
		

		
			(d)The Option Budget payable by the Reinsurer to the Ceding Company pursuant to subsection (b) above shall be paid without regard to the actual costs paid by the Ceding Company for the Hedges purchased. The Option Payoff payable by the Ceding Company to the Reinsurer pursuant to subsection (c) above shall be paid without regard to the actual proceeds received by the Ceding Company with respect to the Hedges collected.  The Ceding Company shall have no obligation to pay to the Reinsurer any portion of the actual proceeds received by the Ceding Company with respect to the Hedges, or any other amounts in respect of the Hedges, other than the Option Payoff amounts.  For the avoidance of doubt, the Reinsurer has no liability for any hedge effectiveness and hedging is assumed to be 100% effective for purposes of Settlement.
		

		
			(e)The Ceding Company shall use reasonable care in its hedging activities with respect to the Reinsured Policies, and such activities shall (a) be conducted in good faith and (b) conform with Applicable Law.
		

		
			(f)With respect to a FIA Fixed Interest Account, the Reinsurer shall pay the Option Budget to the Ceding Company and the Ceding Company shall pay an Option Payoff to the Reinsurer equal to the actual fixed interest rate established by the Ceding Company.
		

			
	
			
				 Section 2.15
			FATCA.

		
			(a)                Prior to any payment being made under this Agreement, the Reinsurer shall provide to the Ceding Company (or the applicable withholding agent, as defined in Treasury Regulation Section 1.1471-1(b)(147) a valid IRS Form W-8BEN-E or other documentation establishing that they are not subject to any withholding requirement pursuant to the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Code) (“FATCA”).
		

		
			(b)               The Reinsurer shall update the forms or other documentation referenced herein upon a change in facts or circumstance rendering such previously supplied information incorrect.  If the Reinsurer has not provided the Ceding Company with updated documentation attesting to its FATCA compliance within thirty (30) days prior to any premium due date, or becomes non-compliant with FATCA at any later date, the withholding agent (as defined in Treasury Regulation Section 1.1471-1(b)(147)) shall be entitled to 30% (or such other percentage as required by law) of any premium payment to the Reinsurer under this Agreement and shall promptly notify the Reinsurer of such withholding.
		

		
			 
		

		
			

		 

		

			10

		

		

			
	
			
				ARTICLE III
			
REINSURANCE PREMIUMS

			
	
			
				 Section 3.01
			Reinsurance Premiums.   The payment of Reinsurance Premiums is a condition precedent to the liability of the Reinsurer under this Agreement.   All Reinsurance Premiums shall be payable in accordance with this Section on the Initial Settlement Date and in accordance with Section 7.03.

			
	
			
				 Section 3.02
			Initial Settlement Amount.

			
	
			
				 (a)
			On the Initial Settlement Date, the Ceding Company shall transfer to the Funds Withheld Account and/or the ModCo Deposit (in accordance with the Allocation Percentage) an amount equal to [Redacted] (the “Initial Settlement Amount”) calculated based on the line items set forth in Schedule III-A,  as agreed upon the parties in good faith on the Covered Business and the Reinsured Block 

			
	
			
				 (b)
			A list of the assets to be deposited in the ModCo Deposit and the Funds Withheld Account in payment of the Initial Settlement Amount is set forth on Schedule III-B attached hereto.

			
	
			
				ARTICLE IV
			
CEDING COMMISSION

			
	
			
				 Section 4.01
			Ceding Commission.   The Reinsurer shall pay to the Ceding Company the Ceding Commission on all Reinsurance Premiums paid to the Reinsurer (including on the Initial Settlement Date). 

			
	
			
				 Section 4.02
			Excise Tax.  In the event that any excise tax is due with respect to any amounts payable by the Ceding Company to the Reinsurer under this Agreement, the Ceding Company shall pay the entire amount of such excise tax.  The Reinsurer shall reimburse the Ceding Company for any such excise tax paid by the Ceding Company.

			
	
			
				ARTICLE V
			
ADMINISTRATION FEE

			
	
			
				 Section 5.01
			Policy Expenses.   The Reinsurer shall pay the ceding company an administrative expense fee (“Policy Expenses”) to cover the cost of providing all administrative and other services necessary or appropriate in connection with the administration and distribution (including the product development fee) of the Reinsured Policies and the Reinsured Liabilities, determined in accordance with Schedule II attached hereto.  

			
	
			
				 (a)
			With respect to the Reinsured Block. the Reinsurer shall pay Policy Expenses on the Initial Settlement Date for Policy Expenses that were incurred prior to the Effective Date and on a monthly basis for Policy Expenses incurred after the Effective Date.   

			
	
			
				 (b)
			With respect to Covered Business, the Reinsurer shall pay the Policy Expenses on a monthly basis.  

		
			

		 

		

			11

		

		

			
	
			
				 (c)
			Policy Expenses shall be payable by the Reinsurer to the ceding company in accordance with Section 7.03.

			
	
			
				ARTICLE VI
			
REINSURED LIABILITIES

			
	
			
				 Section 6.01
			Reinsured Liabilities.  Subject to Sections 6.02 and 6.03, the Reinsurer shall pay to the Ceding Company all Losses on Reinsured Liabilities.

			
	
			
				 Section 6.02
			Claims Settlement.

			
	
			
				 (a)
			Subject to Section 6.02(b) and 6.03, the Ceding Company shall be responsible for the settlement of claims with respect to the Reinsured Liabilities in accordance with Article X, applicable Law and the terms and conditions of the Reinsured Policies.

			
	
			
				 (b)
			The Ceding Company shall notify the Reinsurer in writing if the Ceding Company determines that a claim for payment under a Reinsured Policy either requires investigation or should be contested or denied.  The Reinsurer and the Ceding Company shall consult in good faith regarding the disposition of any such claim.  The Reinsurer may, but shall not be required to, recommend to the Ceding Company how to handle such claim.  In the event of any disagreement between the Ceding Company and the Reinsurer as to the validity or amount of such a claim, the Ceding Company shall have final authority over the disposition of such claim.

			
	
			
				 Section 6.03
			Recoveries.   Subject to Section 6.02(b), if the Ceding Company obtains any recoveries in respect of a claim with respect to the Reinsured Liabilities paid by it in accordance with the terms of any Reinsured Policy, the Ceding Company shall promptly pay to the Reinsurer such recoveries (“Recoveries”).

			
	
			
				ARTICLE VII
			
REPORTING AND SETTLEMENTS

			
	
			
				 Section 7.01
			Ceding Company Reporting.

			
	
			
				 (a)
			Within ten (10) Business Days of the Initial Settlement Date and within five (5) Business Days following the end of each calendar month following the Initial Settlement Date, the Ceding Company shall deliver to the Reinsurer a monthly accounting report (a “Monthly Accounting Report”) substantially in the form set forth in Exhibit A for such calendar month (a “Monthly Accounting Period”).  The parties shall from time to time amend Exhibit A as necessary to appropriately effectuate the terms and conditions of this Agreement and to ensure the accounting and settlements made hereunder are correctly computed.  The net amount due as set forth in such Monthly Accounting Report shall be due within five (5) Business Days following the date of delivery of such Monthly Accounting Report.

			
	
			
				 (b)
			Within ten (10) Business Days following the end of each calendar quarter and any Recapture Effective Date, the Ceding Company shall deliver to the Reinsurer a report setting forth the Asset Reserves as of the end of such calendar quarter or such Recapture Effective Date, as applicable.

		
			

		 

		

			12

		

		

			
	
			
				 (c)
			Within ten (10) Business Days following the end of each Monthly Accounting Period or Recapture Effective Date, the Ceding Company shall deliver to the Reinsurer, as of the end of such Monthly Accounting Period or the Recapture Effective Date, as applicable, a report of the Reinsured Policies in the form as mutually agreed by the parties.  

			
	
			
				 (d)
			The Ceding Company shall deliver to the Reinsurer, as of the end of such Monthly Accounting Period or the Recapture Effective Date, as applicable, within ten (10) Business Days following the end of each Monthly Accounting Period or the Recapture Effective Date, an  investment accounting report of the assets held in the Funds Withheld Account, the ModCo Deposit and the Trust Account which shall include the holdings,  Statutory Carrying Value, and such other information agreed to by the parties in each case, on a CUSIP level.

			
	
			
				 (e)
			The Ceding Company shall deliver to the Reinsurer: (i) within five (5) Business Days following the filing of the Ceding Company’s unaudited annual statement with the Nebraska Department of Insurance but no later than March 20 of each year, a copy of such unaudited annual statement; (ii) within five (5) Business Days of the filing of the Ceding Company’s audited annual statutory financial statements with the Nebraska Department of Insurance but no later than June 20 of each year, a copy of such annual statutory financial statements; and (iii) within five (5) Business Days following the filing of the Ceding Company’s unaudited quarterly statutory financial statements with the Nebraska Department of Insurance but no later than sixty (60) calendar days following the end of each calendar quarter, a copy of such unaudited quarterly statutory financial statements.

			
	
			
				 (f)
			Upon request, the Ceding Company will, within a reasonable timeframe, promptly provide the Reinsurer with any additional information related to the Reinsured Policies reasonably available to the Ceding Company and not reasonably available to the Reinsurer which the Reinsurer requires in order to complete its financial statements or is otherwise required to comply with regulatory requirements.  The Reinsurer will identify and communicate any such requests to the Ceding Company sufficiently in advance of any required deadlines such that the applicable information and timing for the provision thereof can be mutually agreed by the parties.

			
	
			
				 Section 7.02
			Reinsurer Reporting.

			
	
			
				 (a)
			The Reinsurer shall deliver to the Ceding Company: (i) within five (5) Business Days of the filing of the Reinsurer’s audited annual financial statements with the Cayman Islands Monetary Authority (“CIMA”) but no later than June 20 of each year, a copy of such annual financial statements; (ii) within fifteen (15) Business Days following the end of each calendar quarter a calculation of its Leverage Measure,  and (iii) within five (5) Business Days following the filing of the Reinsurer’s unaudited quarterly financial statements with CIMA but no later than sixty (60) calendar days following the end of each calendar quarter, a copy of such unaudited quarterly financial statements.

			
	
			
				 (b)
			Upon request, the Reinsurer will, within a reasonable timeframe, provide the Ceding Company with any additional information related to the Reinsured Policies available to the Reinsurer and not reasonably available to the Ceding Company which the Ceding Company reasonably requires in order to complete its financial statements or is otherwise required to comply with regulatory requirements (if any).  The Ceding Company will identify and communicate any such 

		 

		

			13

		

	requests to the Reinsurer sufficiently in advance of any required deadlines such that the applicable information and timing for the provision thereof can be mutually agreed by the parties.

			
	
			
				 Section 7.03
			Settlements & Adjustments.

		
			(a) Following the Initial Settlement Date, there shall be an adjustment to the Accounts based on the following: 
		

			
	
			
				 (i)
			Investment Performance; Transfers.  On a monthly basis, the Funds Withheld Account Balance and the ModCo Deposit Balance, as determined as of the end of the immediately preceding Monthly Accounting Period shall be:

			
	
			
				 (A)
			increased by the amount of any increase in Statutory Carrying Value of the investments in the applicable Account and any transfers from the Trust Account as set forth in 7.03(b)(i); and 

			
	
			
				 (B)
			decreased by the amount of any reductions in Statutory Carrying Value of the investments in the applicable Account and any transfers to the Trust Account as set forth in 7.03(b)(ii).

			
	
			
				 (ii)
			Additional Premiums and Other Recoveries.  On a weekly basis, the Ceding Company shall deliver into the Accounts the Reinsurance Premiums and Recoveries received in connection with the  Covered Business and Reinsured Block (allocation between the Funds Withheld Account and the ModCo Deposit shall be in accordance with the Allocation Percentage) and each of the Funds Withheld Account Balance and the ModCo Deposit Balance, as the case may be, shall be increased by such allocation of Reinsurance Premiums and Recoveries.  

			
	
			
				 (iii)
			Reallocation Payments.  On any day that the Allocation Percentage changes, the Ceding Company may reallocate funds between the Accounts by making a  transfer from one Account to the other and such reallocation shall be reflected in the Funds Withheld Account Balance and the ModCo Deposit Balance.

			
	
			
				 (iv)
			Payments due from Reinsurer.   On any day the Ceding Company may apply funds from the Accounts to pay amounts due from Reinsurer and as such the Accounts Balance will be decreased by an amount equal to any payments due from the Reinsurer to the Ceding Company hereunder, such deductions to be allocated between the Accounts according to the Allocation Percentage.  All such deductions will be effectuated in cash or by the liquidation of assets (at the direction of the Investment Manager) in the applicable Account(s) into cash (in the event there is insufficient cash in the account) in an amount sufficient to pay all amounts owed by the Reinsurer to the Ceding Company and the transfer of such cash to the Ceding Company in settlement of the payments due from the Reinsurer to the Ceding Company.

			
	
			
				 (c)
			As of the end of each Monthly Accounting Period three (3) Business Days following the delivery of each Monthly Accounting Report:

		
			

		 

		

			14

		

		

			
	
			
				 (i)
			 Ceding Company Withdrawals from Trust Account. 

			
	
			
				 (A)
			In the event the Accounts Required Reserves-Funds Withheld is greater than the Funds Withheld Account Balance,  the absolute value of such difference shall be withdrawn from the Trust Account by the Ceding Company (in accordance with the terms of the Trust Agreement) and deposited into the Funds Withheld Account.   Any assets other than cash that are withdrawn from the Trust Account and deposited into the Funds Withheld Account must satisfy clause (iv) of the definition of Permitted Asset and shall be valued according to Fair Market Value.

			
	
			
				 (B)
			In the event the Accounts Required Reserves-ModCo is greater than the ModCo Deposit Balance, the absolute value of such amount shall be withdrawn from the Trust Account by the Ceding Company (in accordance with the terms of the Trust Agreement) and deposited into the ModCo Deposit.   Any assets other than cash that are withdrawn from the Trust Account and deposited into the ModCo Deposit must satisfy clause (iv) of the definition of Permitted Asset and shall be valued according to Fair Market Value.

			
	
			
				 (ii)
			Over-Funding of Accounts Balance.    

			
	
			
				 (A)
			In the event the Funds Withheld Account Balance is greater than the Accounts Required Reserves-Funds Withheld, the absolute value of such difference shall be paid to the Trust Account at the direction of the Reinsurer; provided any payment made hereunder in assets other than cash shall be at the Fair Market Value of such asset. 

			
	
			
				 (B)
			In the event the ModCo Deposit Balance is greater than the Accounts Required Reserves-ModCo, the absolute value of such difference shall be paid to the Trust Account at the direction of the Reinsurer; provided any payment made hereunder in assets other than cash shall be at the Fair Market Value of such asset. 

			
	
			
				 (d)
			Reinsurer’s Top-Up Obligation.

		
			In the event there are insufficient funds in the Trust Account to pay an amount required to be withdrawn under clause 7.03(b)(i) above, the Reinsurer shall pay the amount of such insufficiency to the Ceding Company promptly and in any event, within 15 Business Days to the account or accounts designated by the Ceding Company; provided however in the event the Reinsurer disputes any determinations made by the Ceding Company, then the Reinsurer shall pay the full amount until the calculation is re-determined by the 3rd Party Actuary and the determinations of the 3rd Party Actuary shall be conclusive absent manifest error (any such payment by the Reinsurer under this Section 7.03(c) a “Reinsurer Top-Up Payment”).
		

			
	
			
				 (e)
			Other.

			
	
			
				 (i)
			The Reinsurer may at any time withdraw amounts from the Trust Account in accordance with Section 8.03 and the terms of the Trust Agreement.

		
			

		 

		

			15

		

		

			
	
			
				 (ii)
			Except as otherwise set forth herein, any amount due under this Agreement shall be paid by wire transfer of immediately available funds to the account or accounts designated by the recipient thereof. 

			
	
			
				ARTICLE VIII
			
THE MODCO DEPOSIT, THE FUNDS
WITHHELD ACCOUNT, THE TRUST ACCOUNT, AND INVESTMENT MANAGEMENT AGREEMENT

			
	
			
				 Section 8.01
			ModCo Deposit.

			
	
			
				 (a)
			 Prior to the Initial Settlement Date, the Ceding Company shall establish a modified coinsurance account (the “ModCo Deposit”) to hold the modified coinsurance deposit on the books and records of the Ceding Company, which shall consist of a custody account established by the Ceding Company with Wells Fargo Bank N.A. (as custodian of such custody account, the “Custodian”).

			
	
			
				 (b)
			The ModCo Deposit and the assets maintained therein will be owned and maintained by the Ceding Company and will be used exclusively for the purposes set forth in this Agreement.  The assets maintained in the ModCo Deposit shall be invested by the Investment Manager and consist only of Permitted Assets, and the Permitted Assets shall be valued, for the purposes of this Agreement, according to their Statutory Carrying Value. 

			
	
			
				 (c)
			Notwithstanding any other provision hereof, assets held in the ModCo Deposit may be withdrawn by the Ceding Company at any time and shall be utilized and applied by the Ceding Company or any of its successors in interest by operation of law, including any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of insolvency on the part of the Ceding Company or the Reinsurer, only in accordance with Section 7.03.  

			
	
			
				 (d)
			Determinations of statutory impairments of assets maintained in the ModCo Deposit shall be made by the Ceding Company and shall be (i) based upon the statutory rules and guidelines and the impairment policy used by the Ceding Company and its auditors for purposes of calculating statutory impairments reflected in the Ceding Company’s statutory financial statements and (ii) subject to consultation between the Investment Manager, the Reinsurer and the Ceding Company.  The Ceding Company shall promptly notify the Reinsurer in writing if the Ceding Company determines that any assets maintained in the ModCo Deposit have become impaired for purposes of determining Statutory Carrying Value.  Such notice shall describe any such assets, the reason for the impairment and the effect on Statutory Carrying Value of such assets.

			
	
			
				 (e)
			The Ceding Company shall bear the administrative costs and expenses related to the establishment and maintenance of the ModCo Deposit, including the fees of the Custodian to the extent relating to the ModCo Deposit.  

			
	
			
				 (f)
			The performance of the assets maintained in the ModCo Deposit, including of all investment income paid or accrued, investment gains or losses, defaults and/or statutory impairments, will inure to the sole benefit or cost of the Reinsurer.

		
			

		 

		

			16

		

		

			
	
			
				 Section 8.02
			Funds Withheld Account.

			
	
			
				 (a)
			 Prior to the Initial Settlement Date, the Ceding Company shall establish a funds withheld account (the “Funds Withheld Account”) to secure the payment liability of the Reinsurer on the books and records of the Ceding Company, which shall consist of a custody account established by the Ceding Company with the Custodian.    

			
	
			
				 (b)
			The Funds Withheld Account and the assets maintained therein will be owned and maintained by the Ceding Company and will be used exclusively for the purposes set forth in this Agreement.  The assets maintained in the Funds Withheld Account shall be invested by the Investment Manager and consist only of Permitted Assets, and the Permitted Assets shall be valued, for the purposes of this Agreement, according to their Statutory Carrying Value. 

			
	
			
				 (c)
			Notwithstanding any other provision hereof, assets held in the Funds Withheld Account may be withdrawn by the Ceding Company at any time and shall be utilized and applied by the Ceding Company or any of its successors in interest by operation of law, including any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of insolvency on the part of the Ceding Company or the Reinsurer, only in accordance with Section 7.03.

			
	
			
				 (d)
			Determinations of statutory impairments of assets maintained in the Funds Withheld Account shall be made by the Ceding Company and shall be (i) based upon the statutory rules and guidelines and the impairment policy used by the Ceding Company and its auditors for purposes of calculating statutory impairments reflected in the Ceding Company’s statutory financial statements and (ii) subject to consultation between the Investment Manager, the Reinsurer and the Ceding Company.  The Ceding Company shall promptly notify the Reinsurer in writing if the Ceding Company determines that any assets maintained in the Funds Withheld Account have become impaired for purposes of determining Statutory Carrying Value.  Such notice shall describe any such assets, the reason for the impairment and the effect on Statutory Carrying Value of such assets.

			
	
			
				 (e)
			The Ceding Company shall bear the administrative costs and expenses related to the establishment and maintenance of the Funds Withheld Account, including the fees of the Custodian to the extent relating to the Funds Withheld Account. 

			
	
			
				 (f)
			The performance of the assets maintained in the Funds Withheld Account, including of all investment income paid or accrued, investment gains or losses, defaults and/or statutory impairments, will inure to the sole benefit or cost of the Reinsurer.

			
	
			
				 Section 8.03
			Trust Account.

			
	
			
				 (a)
			Prior to the Initial Settlement Date, the Ceding Company and the Reinsurer shall establish a trust account (the “Trust Account”) with Wells Fargo Bank N.A. (as trustee of such Trust Account, the “Trustee”)with the Reinsurer as grantor thereof, and the Ceding Company as beneficiary.  The Trust Account shall initially contain certain capital assets of the Reinsurer (which prior to the Initial Settlement Date shall be set out in Schedule XIII and such additional amounts as distributed in accordance with Section 7.03.  

			
	
			
				 (b)
			The Reinsurer expects to contribute additional amounts to the Trust Account as set out in Schedule XIII. 

		
			

		 

		

			17

		

		

			
	
			
				 (c)
			The assets maintained in the Trust Account shall be invested by the Investment Manager and consist only of Permitted Assets.

			
	
			
				 (d)
			Subject to the requirements of the Trust Agreement, assets held in the Trust Account may be withdrawn by the Reinsurer at any time, and from time to time for any lawful purpose, in accordance with the Trust Agreement.  

			
	
			
				 (e)
			The administrative costs and expenses related to the establishment and maintenance of the Trust Account shall be paid out of the assets of the Trust Account. 

			
	
			
				 (f)
			The performance of the assets maintained in the Trust Account, including of all investment income paid or accrued, investment gains or losses, defaults and/or statutory impairments, will inure to the sole benefit or cost of the Reinsurer.

			
	
			
				 (g)
			The Reinsurer shall be obligated to deposit assets into the Trust Account as required by the Trust Agreement.  Assets may be withdrawn from the Trust Account only in accordance with the provisions of the Trust Agreement.

			
	
			
				 Section 8.04
			Investment Management Agreement.   

			
	
			
				 (a)
			Pursuant to an investment management agreement (the “Investment Management Agreement”), the Ceding Company shall appoint the Investment Manager as investment manager to provide investment management services with respect to the assets maintained in the ModCo Deposit and the Funds Withheld Account.  The Ceding Company shall not amend, modify or change the terms of the Investment Management Agreement, including the Investment Guidelines attached as an exhibit thereto, or remove or replace the Investment Manager without the prior written consent of the Reinsurer, such consent not to be unreasonably withheld.  If the Ceding Company and the Reinsurer agree to any amendments, modifications or changes to the investment management agreement, then the Ceding Company shall propose such changes in writing to the Investment Manager in accordance with the terms of the Investment Management Agreement.  The Ceding Company shall not propose any additional limitations (including with respect to asset allocations) on the assets maintained in the ModCo Deposit or the Funds Withheld Account without the prior written consent of the Reinsurer.  In the event that the Investment Manager is removed or resigns, the Ceding Company and the Reinsurer shall mutually agree (in good faith) on a replacement investment manager.  The replacement investment manager shall accept its appointment by entering into an investment management agreement in a form acceptable to the Ceding Company and the Reinsurer. 

			
	
			
				 (b)
			Pursuant to an investment management agreement (the “Trust IMA”), the Reinsurer shall appoint the Investment Manager to provide investment management services with respect to the assets maintained in the Trust Account.  The Reinsurer shall not amend, modify or change the terms of the Trust IMA, including the investment guidelines attached as an exhibit thereto, or remove or replace the Investment Manager without the prior written consent of the Ceding Company, such consent not to be unreasonably withheld.  If the Ceding Company and the Reinsurer agree to any amendments, modifications or changes to the investment management agreement, then the Reinsurer shall propose such changes in writing to the Investment Manager in accordance with the terms of the Trust IMA.  The Reinsurer shall not propose any additional limitations (including with respect to asset allocations) on the assets maintained in the Trust Account without the prior 

		 

		

			18

		

	written consent of the Ceding Company.  In the event that the Investment Manager is removed or resigns, the Ceding Company and the Reinsurer shall mutually agree (in good faith) on a replacement investment manager.  The replacement investment manager shall accept its appointment by entering into an investment management agreement in a form acceptable to the Ceding Company and the Reinsurer.  

			
	
			
				ARTICLE IX
			
RESERVED

			
	
			
				ARTICLE X
			
ADMINISTRATION

			
	
			
				 Section 10.01
			Policy Administration.   The Ceding Company shall provide all required, necessary and appropriate claims, administrative and other services, including reporting under Article VII, with respect to the Reinsured Policies and the Accounts.  The Ceding Company shall conduct its administration and claims practices with respect to the Reinsured Policies (a) with a level of skill, diligence and expertise that would reasonably be expected from experienced and qualified personnel performing such duties in similar circumstances, (b) in accordance with applicable Law and the terms of the Reinsured Policies, and (c) in a manner no less favorable to the Reinsurer and the Reinsured Policies than those used by the Ceding Company with respect to other policies of the Ceding Company not reinsured by the Reinsurer hereunder or other hedges of the Ceding Company.  The Ceding Company shall not outsource any administrative functions or claims administration to a non-affiliate with respect to the Reinsured Policies or this Agreement without the prior written consent of the Reinsurer, such consent not to be unreasonably withheld.  If the Reinsurer consents to any outsourcing of any administrative functions or claims administration with respect to the Reinsured Policies or this Agreement, the Ceding Company shall secure the Reinsurer’s right to audit and inspect the party performing such outsourced services. 

			
	
			
				 Section 10.02
			Record-Keeping.

			
	
			
				 (a)
			Each of the Ceding Company and Reinsurer shall maintain all records and correspondence for services performed by such party hereunder relating to the Reinsured Policies in accordance with industry standards of insurance record- keeping.  In addition, such records shall be made available for examination, audit, and inspection by the other party, or the department of insurance of any jurisdiction within which either the Ceding Company or the Reinsurer operates.  The Ceding Company and the Reinsurer further agree that in the event of the termination of this Agreement, any such records in the possession of the Reinsurer shall promptly be duplicated and forwarded to the Ceding Company unless otherwise instructed.

			
	
			
				 (b)
			The Ceding Company shall establish and maintain an adequate system of internal controls and procedures for financial reporting relating to the Reinsured Policies and the Accounts, including associated documentation, and shall make such documentation available for examination and inspection by the Reinsurer.  All reports provided by the Ceding Company pursuant to Article VII shall be prepared in accordance with such system and procedures and shall be consistent with the Ceding Company’s books and records.

		
			

		 

		

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				ARTICLE XI
			
TERM AND TERMINATION

			
	
			
				 Section 11.01
			Duration of Agreement.   This Agreement shall continue in force until: 

			
	
			
				 (a)
			Such time as the Ceding Company has no further liabilities or obligations with respect to the Reinsured Liabilities. 

			
	
			
				 (b)
			The Agreement is terminated as to new business on 30 days prior written notice by either the Ceding Company or the Reinsurer subject to any limitations in Schedule V.

			
	
			
				 (c)
			 The Agreement is terminated as to new business on 30 days prior written notice by the Ceding Company following the Reinsurer failing to maintain its Leverage Measure at or above the Leverage Measure Limit for two  (2) consecutive quarters.

			
	
			
				 (d)
			The Agreement is terminated by mutual agreement of the parties. 

			
	
			
				 Section 11.02
			Recapture.

			
	
			
				 (a)
			Neither party shall be permitted to cause a recapture of the Reinsured Policies except in accordance with this Section 11.02.  For the avoidance of doubt, neither party shall be permitted to cause a partial recapture of the Reinsured Policies pursuant to this Section 11.02 other than as set out in 11.02(c) or 11.02(f).

			
	
			
				 (b)
			Recapture for Non-Payment.  Either party may cause the Reinsured Policies to be recaptured in full and this Agreement to be terminated as to all Reinsured Policies if the other party fails to pay any amounts due under this Agreement within thirty (30) calendar days following written notice of non-payment from the non-defaulting party.  The Ceding Company may cause the Reinsured Policies to be recaptured in full and this Agreement to be terminated as to all Reinsured Policies if the Reinsurer breaches in any material respect any representation, warranty or covenant under this Agreement and fails to cure such breach within thirty (30) days of receipt of written notice thereof. 

			
	
			
				 (c)
			Recapture of Renewals.   In the event that this Agreement has been terminated with respect to new business under 11.01, the Ceding Company may recapture any Reinsured Policy under this Agreement that is either subject to a renewal under its terms for MYGAs or out of its surrender charge period for FIAs; provided the Ceding Company must provide notice to the Reinsurer no later than 10 Business Days prior to the maturity date of each such Reinsured Policy.

			
	
			
				 (d)
			Recapture by Ceding Company for Other Material Breach.  The Ceding Company may terminate this Agreement and recapture all of the Reinsured Policies in the event the Reinsurer materially breaches this Agreement and fails to substantially cure such material breach within thirty (30) calendar days following written notice thereof from the Ceding Company.

			
	
			
				 (e)
			Recapture for Insolvency of Reinsurer.  The Ceding Company may terminate this Agreement and recapture all of the Reinsured Policies in the event that the Reinsurer becomes insolvent (as set forth in Article XIV) by promptly providing the Reinsurer or its Authorized 

		 

		

			20

		

	Representative with written notice of recapture, to be effective as of the date on which the Reinsurer’s insolvency is established by the authority responsible for such determination.  Any requirement for a notification period prior to the termination of this Agreement shall not apply under such circumstances.

			
	
			
				 (f)
			Hedging Recapture Event.  The Ceding Company may recapture any FIA Reinsured Policy under this Agreement that has a Guaranteed Minimum Cash Surrender Value that is greater than its Contract Value as such terms are defined in the Reinsured Policy form; and provided the Ceding Company complies with such required timing of notice set out in Schedule XII.

			
	
			
				 Section 11.03
			Recapture Payment.

			
	
			
				 (a)
			In the event the Reinsured Policies are recaptured in full (including if this Agreement is rejected by any liquidator, receiver, rehabilitator, trustee or similar Person acting on behalf of the Ceding Company (a “Receiver”)), a net accounting and settlement as to any balance due under this Agreement shall be undertaken by the Ceding Company in accordance with Article VII, which calculations shall be as of the Recapture Effective Date.  Within ten (10) Business Days following the later of the Recapture Effective Date or becoming aware that a recapture event has occurred, the Ceding Company shall deliver to the Reinsurer a final Monthly Accounting Report starting as of the prior Monthly Accounting Report and ending on the Recapture Effective Date (the “Terminal Accounting Report”), and all amounts required to be paid in connection with the final settlement (including all Account Adjustments and Reinsurer Top-Up Payments) set forth in such Terminal Accounting Report shall be paid in accordance with Section 7.03 as if the Recapture Effective Date were the end of the month.    In addition to all amounts required to be paid in connection with the final settlement, the Reinsurer shall pay an amount equal to the Accounts Required Reserves to the Ceding Company, such payment to be effectuated by the Ceding Company retaining assets in the Accounts with an aggregate fair value equal to the Accounts Required Reserves.  Following the making of all payments required to be made by the Reinsurer hereunder (including any Account Adjustments and/or Reinsurer Top-Up Payments and the payment of the Accounts Required Reserves to the Ceding Company) any remaining assets in the Accounts or the Trust Account shall be delivered to one or more accounts as directed by the Reinsurer.

			
	
			
				 (b)
			Either party’s right to terminate the reinsurance provided hereunder will not prejudice its right to collect amounts owed to it hereunder, including applicable interest as specified in Section 17.02, for the period during which such reinsurance was in force, through and including any notice period.

			
	
			
				 (c)
			In the event of a renewal recapture under Section 11.02(c) or a hedging recapture under 11.02(f), the Reinsured Liability to such Reinsured Policy shall be extinguished upon the Reinsurer’s settlement of those items in Section 7.03 and the payment of the Quota Share of the Net Statutory Reserves with respect to the recaptured policy (such payment to be effectuated by the Ceding Company retaining assets in the Accounts with an aggregate book value equal to the Net Statutory Reserves), and in each case, solely related to such Reinsured Policy.

			
	
			
				 (d)
			For the avoidance of doubt, in the event this Agreement terminates for new business pursuant to Section 11.01 Reinsurer shall remain liable for the Reinsured Policies ceded 

		 

		

			21

		

	hereunder in accordance with the terms of this Agreement.  Reinsurer shall not be liable for any risks arising after the recapture date of any recaptured Reinsured Policies as provided for in Section 11.02.

			
	
			
				 Section 11.04
			Survival.   All provisions of this Agreement will survive any termination of this Agreement and recapture of the Reinsured Policies to the extent necessary to carry out the purpose of this Agreement.

			
	
			
				ARTICLE XII
			
ERRORS AND OMISSIONS

			
	
			
				 Section 12.01
			Errors and Omissions.   Any unintentional or accidental failure to comply with the terms of this Agreement which can be shown to be the result of an oversight or clerical error relating to the administration of reinsurance by either party will not constitute a breach of this Agreement; provided, that, upon discovery, the error shall be promptly corrected so that both parties are restored to the position they would have occupied had the oversight or clerical error not occurred.  In the event a payment is corrected, the party receiving the payment shall be entitled to interest in accordance with Section 17.02.  Should it not be possible to restore both parties to this position, the party responsible for the oversight or clerical error will be responsible for any resulting liabilities and expenses.

			
	
			
				ARTICLE XIII
			
DISPUTE RESOLUTION

			
	
			
				 Section 13.01
			Negotiation.

			
	
			
				 (a)
			Within fifteen (15) calendar days after the Reinsurer or the Ceding Company has given the other party written notification of a specific dispute arising out of or relating to this Agreement, each party will appoint a designated officer of its company to attempt to resolve such dispute.  The officers will meet at a mutually agreeable time and location as soon as reasonably possible and as often as reasonably necessary in order to gather and furnish the other with all appropriate and relevant information concerning the dispute.  Any such meetings may be held by telephone or video conference.  The officers will discuss the matter in dispute and will negotiate in good faith without the necessity of formal arbitration proceedings.  During the negotiation process, all reasonable requests made by one officer to the other for information will be honored.  The specific format for such discussions will be decided by the designated officers.

			
	
			
				 (b)
			If the officers cannot resolve the dispute within thirty (30) calendar days of their first meeting, the dispute will be submitted to formal arbitration pursuant to Section 13.02, unless the parties agree in writing to extend the negotiation period for an additional thirty (30) calendar days.

			
	
			
				 Section 13.02
			Arbitration; Waiver of Trial by Jury.

			
	
			
				 (a)
			It is the intention of the Reinsurer and the Ceding Company that the customs and practices of the insurance and reinsurance industry will be given full effect in the operation and interpretation of this Agreement.  If the Reinsurer and the Ceding Company cannot mutually resolve a dispute that arises out of or relates to this Agreement, including the validity of this Agreement, and 

		 

		

			22

		

	the dispute cannot be resolved through the negotiation process, then the dispute will be finally settled by arbitration in accordance with the provisions of this Section 13.02.

			
	
			
				 (b)
			To initiate arbitration, either the Ceding Company or the Reinsurer will notify the other party by certified mail of its desire to arbitrate, stating the nature of the dispute and the remedy sought.

			
	
			
				 (c)
			Any arbitration pursuant to this Section 13.02 will be conducted before a panel of three (3) arbitrators who will be current or former officers of life insurance or reinsurance companies other than officers or directors of the parties to this Agreement, their Affiliates or subsidiaries, or other professionals with experience in life insurance or reinsurance; provided, that such professionals shall not have performed services for either party or its Affiliates within the previous three (3) years.  Each of the arbitrators will be familiar with the prevailing customs and practices for reinsurance in the life insurance and reinsurance industry in the United States.  Each of the parties will appoint one arbitrator and the two (2) so appointed will select the third arbitrator who shall be independent and impartial.  If either party refuses or fails to appoint an arbitrator within sixty (60) calendar days after the other party has given written notice to such party of its arbitrator appointment, the party that has given notice may appoint the second arbitrator.  If the two (2) arbitrators do not agree on a third arbitrator within thirty (30) calendar days of the appointment of the second arbitrator, then the third arbitrator shall be selected by the ARIAS-U.S.  Umpire Selection Procedure (available at www.ARIAS-US.org), subject to the arbitrator qualification requirements of this paragraph. 

			
	
			
				 (d)
			Each arbitration hearing under this Agreement will be held on the date set by the arbitrators at a mutually agreed upon location.  In no event will this date be later than six (6) months after the appointment of the third arbitrator.  As soon as possible, the arbitrators will establish arbitration procedures as warranted by the facts and issues of the particular case.  Notwithstanding Section 17.17, the arbitration and this Section 13.02 shall be governed by Title 9 (Arbitration) of the United States Code.

			
	
			
				 (e)
			The arbitrators will base their decision on the terms and conditions of this Agreement and the customs and practices of the insurance and reinsurance industries rather than on strict interpretation of the law.  The decision of the arbitrators will be made by majority rule and will be final and binding on both parties, unless (i) the decision was procured by corruption, fraud or other undue means; (ii) there was evident partiality by an arbitrator or corruption in any of the arbitrators or misconduct prejudicing the rights of any party; or (iii) the arbitrators exceeded their powers.  Subject to the preceding sentence, neither party may seek judicial review of the decision of the arbitrators.  The arbitrators shall enter an award which shall do justice between the parties and the award shall be supported by written opinion.  The parties agree that the federal courts in the State of Nebraska, or the State courts of such State, have jurisdiction to hear any matter relating to compelling arbitration or enforcing the judgment of an arbitral panel, and the parties hereby consent to such jurisdiction.  Each party hereby waives, to the fullest extent permitted by Law, any objection it may now or hereafter have to the laying of such venue, or any claim that a proceeding has been brought in an inconvenient forum.  In addition, the Ceding Company and the Reinsurer hereby consent to service of process out of such courts at the addresses set forth in Section 17.06.

		
			

		 

		

			23

		

		

			
	
			
				 (f)
			Unless the arbitrators decide otherwise, each party will bear the expense of its own arbitration activities, including its appointed arbitrator and any outside attorney and witness fees.  The parties will jointly bear the expense of the third arbitrator.

			
	
			
				 (g)
			Waiver of Trial by Jury.  THE REINSURER AND THE CEDING COMPANY HEREBY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT.

			
	
			
				ARTICLE XIV
			
INSOLVENCY

			
	
			
				 Section 14.01
			Insolvency.

			
	
			
				 (a)
			A party to this Agreement will be deemed “insolvent” when it:

			
	
			
				 (i)
			applies for or consents to the appointment of a receiver, rehabilitator, conservator, liquidator or statutory successor (the “Authorized Representative”) of its properties or assets;

			
	
			
				 (ii)
			is adjudicated as bankrupt or insolvent;

			
	
			
				 (iii)
			  files or consents to the filing of a petition in bankruptcy, seeks reorganization or an arrangement with creditors or takes advantage of any bankruptcy, dissolution, liquidation, rehabilitation, conservation or similar Law; 

			
	
			
				 (iv)
			fails to maintain its Leverage Measure at or above the Leverage Measure Limit for two  (2) consecutive quarters,  or

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

			
	
			
				 (vi)
			In the event of the insolvency of either party, the rights or remedies of this Agreement will remain in full force and effect.

			
	
			
				 (b)
			Insolvency of the Ceding Company.   In the event of the insolvency, liquidation or rehabilitation of the Ceding Company or the appointment of a liquidator, receiver or statutory successor of the Ceding Company, the reinsurance coverage provided hereunder shall be payable by the Reinsurer directly to the Ceding Company or to its liquidator, receiver or statutory successor except (1) when the contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer or (2) when the assuming insurer, with the consent of the direct insured, has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees, on the basis of the liability of the Ceding Company for the Reinsured Liabilities without diminution because of such insolvency, liquidation, rehabilitation or appointment or because such liquidator, receiver or statutory successor has failed to pay any claims or any portion thereof.  In any such event, the reinsurance being provided hereunder shall be payable immediately upon demand, with reasonable provision for verification, on the basis of claims allowed against the Ceding Company by any court of competent jurisdiction or by any 

		 

		

			24

		

	liquidator, receiver or statutory successor.  In any such event, the liquidator, receiver or statutory successor of the Ceding Company shall give written notice to the Reinsurer of the pendency of each claim against the Ceding Company with respect to such Reinsured Liabilities within a reasonable time after each such claim is filed in the insolvency, liquidation or rehabilitation proceeding.  During the pendency of any such claims, the Reinsurer may, at its own expense, investigate such claim and interpose in the proceeding in which such claim is to be adjudicated any defense or defenses that the Reinsurer may reasonably deem available to the Ceding Company or its liquidator, receiver or statutory successor.  For the avoidance of doubt, the Reinsurer will be liable only for benefits reinsured as benefits become due under the terms of the Reinsured Policies and will not be or become liable for any amounts or reserves to be held by the Ceding Company as to the Reinsured Policies or for any damages or payments resulting from the termination or restructuring of the Reinsured Policies, in each case, that are not otherwise expressly covered by this Agreement.

			
	
			
				ARTICLE XV
			
TAXES

			
	
			
				 Section 15.01
			Taxes.  No taxes, allowances, or other expenses will be paid by the Reinsurer to the Ceding Company for any Reinsured Policy, except as specifically referred to in this Agreement.

			
	
			
				ARTICLE XVI
			
REPRESENTATIONS, WARRANTIES AND COVENANTS

			
	
			
				 Section 16.01
			Representations and Warranties of the Ceding Company.   The Ceding Company hereby represents and warrants to the Reinsurer, as of the Effective Date, as follows:

			
	
			
				 (a)
			Organization and Qualification.  The Ceding Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Nebraska and has all requisite corporate power and authority to operate its business as now conducted, and is duly qualified as a foreign corporation to do business, and, to the extent legally applicable, is in good standing, in each jurisdiction where the character of its owned, operated or leased properties or the nature of its activities makes such qualification necessary, except for failures to be so qualified or be in good standing that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement.

			
	
			
				 (b)
			Authorization.  The Ceding Company has all requisite corporate power to enter into, consummate the transactions contemplated by and carry out its obligations under, this Agreement.  The execution and delivery by the Ceding Company of this Agreement, and the consummation by the Ceding Company of the transactions contemplated by, and the performance by the Ceding Company of its obligations under, this Agreement have been duly authorized by all requisite corporate action on the part of the Ceding Company.  This Agreement has been duly executed and delivered by the Ceding Company, and (assuming due authorization, execution and delivery by the Reinsurer) this Agreement constitutes the legal, valid and binding obligation of the Ceding Company, enforceable against it in accordance with its terms, subject to the effect of any 

		 

		

			25

		

	applicable bankruptcy, reorganization, insolvency, moratorium, or similar Laws relating to or affecting creditors’ rights generally.

			
	
			
				 (c)
			No Conflict.  The execution, delivery and performance by the Ceding Company of, and the consummation by the Ceding Company of the transactions contemplated by, this Agreement do not and will not (i) violate or conflict with the organizational documents of the Ceding Company, (ii) conflict with or violate any Law or Permit of any Governmental Entity applicable to the Ceding Company or by which it or its properties or assets is bound or subject, or (iii) result in any breach of, or constitute a default (or event which, with the giving of notice or lapse of time, or both, would become a default) under, or give to any Person any rights of termination, acceleration or cancellation of, any agreement, lease, note, bond, loan or credit agreement, mortgage, indenture or other instrument, obligation or contract of any kind to which the Ceding Company or any of its subsidiaries is a party or by which the Ceding Company or any of its subsidiaries or any of their respective properties or assets is bound or affected, except, in the case of clause (iii), any such conflicts, violations, breaches, loss of contractual benefits, defaults or rights that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement.

			
	
			
				 (d)
			Factual Information Relating to the Reinsured Policies.  To the knowledge of the Ceding Company, the information relating to the business reinsured under this Agreement and the Reinsured Policies that was supplied by or on behalf of the Ceding Company to the Reinsurer or any of the Reinsurer’s representatives in connection with this Agreement (such information, the “Factual Information”), as of the date supplied (or if later corrected or supplemented prior to the date hereof, as of the date corrected or supplemented), was complete and accurate in all material respects taken as a whole, as of the date of such information, provided that the Ceding Company makes no representation or warranty with respect to any projection, model, methodology, forecasting, analysis, assumption or estimate other than that the projections, models, methodologies, forecasts, analyses, assumptions or estimates on the basis of which such projection, model, methodology, forecasting, analysis, assumption or estimate were prepared (i) are reasonable and (ii) were prepared in good faith and in accordance with sound actuarial principles.  The Ceding Company makes no representation or warranty as to the sufficiency or adequacy of any reserves or the future profitability of the Reinsured Policies.  Any actuarial data included in the Factual Information was compiled in accordance with generally accepted actuarial principles in all material respects given the intended purpose at the time compiled.  The Factual Information was compiled in a commercially reasonable manner given its intended purpose.

			
	
			
				 (e)
			Solvency.  The Ceding Company is and will be Solvent on a statutory basis immediately after giving effect to this Agreement.  For the purposes of this Section 16.01(e), “Solvent” means that: (i) the aggregate assets of the Ceding Company are greater than the aggregate liabilities of the Ceding Company, in each case determined in accordance with Nebraska SAP; (ii) the Ceding Company does not intend to, and does not believe that it will, incur debts or other liabilities beyond its ability to pay such debts and other liabilities as they come due; and (iii) the Ceding Company is not engaged in a business or transaction, and does not contemplate engaging in a business or transaction, for which the Ceding Company’s assets would constitute unreasonably insufficient capital.

		
			

		 

		

			26

		

		

			
	
			
				 (f)
			Governmental Licenses.  The Ceding Company has all Permits necessary to conduct its business as currently conducted and execute and deliver, and perform its obligations under, this Agreement, except in such cases where the failure to have a Permit has not had and would not reasonably be expected to have a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement.  All Permits that are material to the conduct of the Ceding Company’s business are valid and in full force and effect.  The Ceding Company is not subject to any pending Action or, to the knowledge of the Ceding Company, any threatened Action that seeks the revocation, suspension, termination, modification or impairment of any Permit that, if successful, would reasonably be expected to have, or with the passage of time become, a material adverse effect on the Ceding Company’s ability to perform its obligations under this Agreement.

			
	
			
				 (g)
			Accounts.  Each Account has been maintained in accordance with applicable Law.  No plan of operations with respect to the Accounts was required to be filed and approved by any Governmental Entity.

			
	
			
				 Section 16.02
			Covenants of the Ceding Company.

			
	
			
				 (a)
			Investigations.  To the extent permitted by applicable Law, the Ceding Company shall promptly notify the Reinsurer, in writing, of any and all investigations of the Ceding Company conducted by any Governmental Entity commencing after the date hereof, other than routine State insurance department examinations that do not relate to the business reinsured pursuant to this Agreement or would not otherwise reasonably be expected to adversely affect the performance by the Ceding Company of its obligations under this Agreement.

			
	
			
				 (b)
			Statutory Accounting Principles.   The Ceding Company shall prepare its financial statements as required by, and in accordance with, Nebraska SAP in all material respects.  

			
	
			
				 (c)
			Existence; Conduct of Business.   The Ceding Company shall do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, Permits and privileges material to the conduct of its business.

			
	
			
				 (d)
			Compliance with Law.   The Ceding Company shall comply with all Laws applicable to, and all Permits issued by any Governmental Entity to, the Ceding Company or by which it or its properties or assets is bound or subject, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Ceding Company’s ability to perform its obligations, or on the Reinsurer’s rights or obligations, under this Agreement.

			
	
			
				 (e)
			Governmental Notices.   The Ceding Company shall provide the Reinsurer, within five (5) Business Days after receipt thereof, copies of any material written notice or report from any Governmental Entity with respect to the business reinsured under this Agreement and a written summary of any material oral communication with any Governmental Entity with respect to the business reinsured under this Agreement.

			
	
			
				 (f)
			Restrictions on Liens.  The Ceding Company shall not create, incur, assume or suffer to exist any material liens on the assets in the ModCo Deposit or the Funds Withheld Account or on any interest therein or the proceeds thereof. 

		
			

		 

		

			27

		

		

			
	
			
				 (g)
			Reliance.  The Ceding Company hereby represents, warrants and covenants that it has not relied, and shall not rely, on any representation, warranty or statement or duty of the Reinsurer other than the representations and warranties contained in Section 16.03 and the covenants contained in Section 16.04.  The Reinsurer makes no representations or warranties in connection herewith other than those contained in Section 16.03 and makes no covenants other than those contained in Section 16.04.

			
	
			
				 Section 16.03
			Representations and Warranties of the Reinsurer.   The Reinsurer hereby represents and warrants to the Ceding Company, as of the Effective Date, as follows:

			
	
			
				 (a)
			Organization and Qualification.  The Reinsurer is a corporation duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands and has all requisite corporate power and authority to operate its business as now conducted, and is duly qualified as a foreign corporation to do business, and, to the extent legally applicable, is in good standing, in each jurisdiction where the character of its owned, operated or leased properties or the nature of its activities makes such qualification necessary, except for failures to be so qualified or be in good standing that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement.

			
	
			
				 (b)
			Authorization.   The Reinsurer has all requisite corporate power to enter into, consummate the transactions contemplated by and carry out its obligations under, this Agreement.  The execution and delivery by the Reinsurer of this Agreement, and the consummation by the Reinsurer of the transactions contemplated by, and the performance by the Reinsurer of its obligations under, this Agreement have been duly authorized by all requisite corporate action on the part of the Reinsurer.  This Agreement has been duly executed and delivered by the Reinsurer, and (assuming due authorization, execution and delivery by the Ceding Company) this Agreement constitutes the legal, valid and binding obligation of the Reinsurer, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, or similar Laws relating to or affecting creditors’ rights generally.

			
	
			
				 (c)
			No Conflict.   The execution, delivery and performance by the Reinsurer of, and the consummation by the Reinsurer of the transactions contemplated by, this Agreement do not and will not (i) violate or conflict with the organizational documents of the Reinsurer, (ii) conflict with or violate any Law or Permit of any Governmental Entity applicable to the Reinsurer or by which it or its properties or assets is bound or subject, or (iii) result in any breach of, or constitute a default (or event which, with the giving of notice or lapse of time, or both, would become a default) under, or give to any Person any rights of termination, acceleration or cancellation of, any agreement, lease, note, bond, loan or credit agreement, mortgage, indenture or other instrument, obligation or contract of any kind to which the Reinsurer or any of its subsidiaries is a party or by which the Reinsurer or any of its subsidiaries or any of their respective properties or assets is bound or affected, except, in the case of clause (iii), any such conflicts, violations, breaches, loss of contractual benefits, defaults or rights that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement.

		
			

		 

		

			28

		

		

			
	
			
				 (d)
			Governmental Licenses.   The Reinsurer has all Permits necessary to conduct its business as currently conducted and execute and deliver, and perform its obligations under, this Agreement, except in such cases where the failure to have a Permit has not had and would not reasonably be expected to have a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement.  All Permits that are material to the conduct of the Reinsurer’s business are valid and in full force and effect.  The Reinsurer is not subject to any pending Action or, to the knowledge of the Reinsurer, any threatened Action that seeks the revocation, suspension, termination, modification or impairment of any Permit that, if successful, would reasonably be expected to have, or with the passage of time become, a material adverse effect on the Reinsurer’s ability to perform its obligations under this Agreement.  The Reinsurer is duly licensed as an authorized insurer in the Ceding Company’s state of domicile. 

			
	
			
				 (e)
			Solvency.  The Reinsurer is and will be Solvent on a statutory basis immediately after giving effect to this Agreement.  For the purposes of this Section 16.03(e), “Solvent” means that: (i) the aggregate assets of the Reinsurer are greater than the aggregate liabilities of the Reinsurer, in each case determined in accordance with statutory accounting principles and practices prescribed or permitted for life insurance companies in its state of domicile by the insurance regulator in that state, consistently applied by the Reinsurer; (ii) the Reinsurer does not intend to, and does not believe that it will, incur debts or other liabilities beyond its ability to pay such debts and other liabilities as they come due; and (iii) the Reinsurer is not engaged in a business or transaction, and does not contemplate engaging in a business or transaction, for which the Reinsurer’s assets would constitute unreasonably insufficient capital.

			
	
			
				 Section 16.04
			Covenants of the Reinsurer.

			
	
			
				 (a)
			Investigations.  To the extent permitted by applicable Law, the Reinsurer shall promptly notify the Ceding Company, in writing, of any and all investigations of the Reinsurer conducted by any Governmental Entity commencing after the date hereof, other than routine State insurance department examinations that do not relate to the business reinsured pursuant to this Agreement or would not otherwise reasonably be expected to adversely affect the performance by the Reinsurer of its obligations under this Agreement.

			
	
			
				 (b)
			Statutory Accounting Principles.  The Reinsurer shall prepare its financial statements as required by, and in accordance with GAAP.

			
	
			
				 (c)
			Existence; Conduct of Business.  The Reinsurer shall do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, Permits and privileges material to the conduct of its business.

			
	
			
				 (d)
			Compliance with Law.  The Reinsurer shall comply with all Laws applicable to, and all Permits issued by any Governmental Entity to, the Reinsurer or by which it or its properties or assets is bound or subject, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Reinsurer’s ability to perform its obligations, or on the Ceding Company’s rights or obligations, under this Agreement.

			
	
			
				 (e)
			Governmental Notices.  The Reinsurer shall provide the Ceding Company, within five (5) Business Days after receipt thereof, copies of any written notice or report from any 

		 

		

			29

		

	Governmental Entity with respect to the business reinsured under this Agreement and a written summary of any material oral communication with any Governmental Entity with respect to the business reinsured under this Agreement.

			
	
			
				 (f)
			Reliance.  The Reinsurer hereby represents, warrants and covenants that it has not relied, and shall not rely, on any representation, warranty or statement or duty of the Ceding Company other than the representations and warranties contained in Section 16.01 and the covenants contained in Section 16.02.  The Ceding Company makes no representations or warranties in connection herewith other than those contained in Section 16.01 and makes no covenants other than those contained in Section 16.02.

			
	
			
				ARTICLE XVII
			
MISCELLANEOUS

			
	
			
				 Section 17.01
			Currency.   All payments due under this Agreement shall be made in U.S. Dollars. 

			
	
			
				 Section 17.02
			Interest.   All amounts due and payable by the Ceding Company or the Reinsurer under this Agreement that remain unpaid for more than fifteen (15) calendar days from the date due hereunder will incur interest from the date due hereunder.  Except as otherwise set forth in this Agreement, such interest shall accrue at a rate equal to twelve percent (12%) per annum, calculated on a 30/360 basis.

			
	
			
				 Section 17.03
			Right of Setoff and Recoupment.

			
	
			
				 (a)
			Each of the Ceding Company and the Reinsurer shall have, and may exercise at any time and from time to time, the right to setoff or recoup any balance or balances, whether on account of Reinsurance Premiums, allowances, credits, Reinsured Liabilities or otherwise, due from one party to the other under this Agreement and may setoff or recoup such balance or balances against any balance or balances due to the former from the latter under this Agreement.

			
	
			
				 (b)
			The parties’ setoff rights may be enforced notwithstanding any other provision of this Agreement including the provisions of Article XIV.

			
	
			
				 Section 17.04
			No Third-Party Beneficiaries.   This Agreement is an indemnity reinsurance agreement solely between the Ceding Company and the Reinsurer.  The acceptance of risks under this Agreement by the Reinsurer will create no right or legal relation between the Reinsurer and the insured, owner, beneficiary, or assignee of any insurance policy of the Ceding Company.  In addition, nothing expressed or implied in this Agreement is intended to or shall confer remedies, obligations or liabilities upon any Person other than the parties hereto and their respective administrators, successors, legal representatives and permitted assigns or relieve or discharge the obligation or liability of any third party to any party to this Agreement.

			
	
			
				 Section 17.05
			Amendment.   This Agreement may not be changed or modified or in any way amended except by a written instrument duly executed by the proper officers of both parties to this Agreement, and any change or modification to this 

		 

		

			30

		

	Agreement will be null and void unless made by amendment to this Agreement and duly executed by the proper officers of both parties to this Agreement.  

			
	
			
				 Section 17.06
			Notices.

			
	
			
				 (a)
			All demands, notices, reports and other communications provided for herein shall be delivered by the following means: (i) hand-delivery; (ii) overnight courier service (e.g., FedEx, Airborne Express, or DHL); (iii) registered or certified U.S. mail, postage prepaid and return receipt requested; or (iv) facsimile transmission or e-mail; provided, that the fax or e-mail is confirmed by delivery using one of the three (3) methods identified in clauses (i) through (iii).  All such demands, notices, reports and other communications shall be delivered to the parties as follows:

			
					
						 

					
						 

					
						0 S. 70th Street

					
						 

					
						 68506

					
						 

					
						 [Redacted]

					
						[Redacted]

					
						 

					
						 

				
	
					
						if to the Ceding Company:

					
						 

					
						American Life & Security Corp.  

					
						2900 S. 70th Street

					
						Suite 400 

					
						Lincoln, NE  68506

					
						Attn:  Michael Salem and Mike Minnich 

					
						Tel:  [Redacted]

					
						Email:  [Redacted]

					
						 

				
	
					
						if to the Reinsurer:

					
						 

					
						SDA Annuity & Life Re

					
						c/o Aon Insurance Managers (Cayman) Limited 

					
						18 Forum Lane, Second Floor, Camana Bay, 

					
						Grand Cayman, Cayman Islands

					
						Attn: Ghislain Ghyoot

					
						 

					
						With a copy to:

					
						Maples Corporate Services Limited, Ugland House, 

					
						Grand Cayman, 

					
						KY1-1104, Cayman Islands

					
						 

					
						 

					
						 

				
	
					
						With a copy to the Investment Manager: 

					
						 

					
						1505 Capital LLC

					
						100 Wall Street, 28th Floor

					
						New York, NY  10005

					
						Attn:  Richard Vecchiolla

					
						Tel:  [Redacted]

					
						Email:  [Redacted]

					
						 

				

		
			 
		

		
			

		 

		

			31

		

		

			
	
			
				 (b)
			Either party hereto may change the names or addresses where notice is to be given by providing notice to the other party of such change in accordance with this Section 17.06.

			
	
			
				 (c)
			If either party hereto becomes aware of any change in applicable Law restricting the transmission of notices or other information in accordance with the foregoing, such party shall notify the other party hereto of such change in Law and such resulting restriction.

			
	
			
				 Section 17.07
			Consent to Jurisdiction.   Subject to the terms and conditions of Article XIII, each party hereto hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of any United States court sitting in Nebraska and of any Nebraska state court for purposes of all legal proceedings arising out of or relating to this Agreement or for recognition and enforcement of any judgment in respect thereof.  In any action, suit or other proceeding, each party hereby irrevocably waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of the venue of any such proceedings brought in such court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.  Each party hereto also agrees that any final and nonappealable judgment against a party in connection with any action, suit or other proceeding shall be conclusive and binding on such party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United States.  A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment.  Each party hereto agrees that any process or other paper to be served in connection with any action or proceeding under this Agreement shall, if delivered, sent or mailed in accordance with Section 17.06, constitute good, proper and sufficient service thereof.  This Section 17.07 is not intended to conflict with or override Article XIII.

			
	
			
				 Section 17.08
			Service of Process.   The Reinsurer hereby designates the CT Corporation as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Ceding Company.  A copy of any such process shall be delivered to the Reinsurer in accordance with Section 17.06.  This Section is not intended to conflict with or override Article XIII.

			
	
			
				 Section 17.09
			Inspection of Records.

			
	
			
				 (a)
			Upon giving at least five (5) Business Days’ prior written notice, the Reinsurer, or its duly authorized representatives, will have the right to audit, examine and copy, electronically or during regular business hours, at the home office of the Ceding Company, any and all books, records, statements, correspondence, reports, and other documents that relate to the Reinsured Policies, the assets maintained in the Funds Withheld Account, the assets maintained in the ModCo Deposit or this Agreement, subject to the confidentiality provisions contained in this Agreement and preservation of attorney-client privilege .  In the event the Reinsurer exercises its inspection rights, the Ceding Company must provide a reasonable work space for such audit, examination or copying, cooperate fully and faithfully, and produce any and all materials reasonably requested to be produced, subject to confidentiality provisions contained in this Agreement.  The expenses related to any two (2) such inspections in any calendar year shall be borne by the Ceding 

		 

		

			32

		

	Company; provided, that if any breach of this Agreement by the Ceding Company has occurred, the expenses relating to all such inspections shall be borne by the Ceding Company.

			
	
			
				 (b)
			The Reinsurer’s right of access as specified above will survive until all of the Reinsurer’s obligations under this Agreement have terminated or been fully discharged.

			
	
			
				 Section 17.10
			Confidentiality.

			
	
			
				 (a)
			The parties will keep confidential and not disclose or make competitive use of any shared Proprietary Information, as defined below, unless:

			
	
			
				 (i)
			The information becomes publicly available or is obtained other than through unauthorized disclosure by the party seeking to disclose or use such information;

			
	
			
				 (ii)
			The information is independently developed by the recipient; or

			
	
			
				 (iii)
			The disclosure is required by Law; provided, that, if applicable, the party required to make such disclosure will allow the other party to seek an appropriate protective order.

		
			“Proprietary Information” includes, but is not limited to, underwriting manuals and guidelines, applications, policy forms, agent lists and premium rates and allowances of the Reinsurer and the Ceding Company, but shall not include the existence of this Agreement and the identity of the parties.  Additionally, Proprietary Information may be shared by either party on a need-to-know basis with its officers, directors, employees, Affiliates, third-party service providers, auditors, consultants or retrocessionaires, or in connection with the dispute process specified in this Agreement.
		

			
	
			
				 (b)
			Except as embedded in records during an audit as set forth in 17.09, the Ceding Company shall not provide to the Reinsurer, and the Reinsurer shall have no right to access, any Non-Public Personal Information except to the extent (i) necessary for purposes of administration of this Agreement and (ii) requested in writing by a duly authorized representative of the Reinsurer.  The Reinsurer and its representatives and service providers will protect the confidentiality and security of Non-Public Personal Information (as defined below) provided to it hereunder by:

			
	
			
				 (i)
			holding all Non-Public Personal Information in strict confidence;

			
	
			
				 (ii)
			maintaining appropriate measures that are designed to protect the security, integrity and confidentiality of Non-Public Personal Information; and

			
	
			
				 (iii)
			disclosing and using Non-Public Personal Information received under this Agreement solely for purposes of carrying out the Reinsurer’s obligations under this Agreement, for purposes of retrocession (provided that the retrocessionaire has agreed to maintain the confidentiality of such Non-Public Personal Information to the same extent as the Reinsurer  hereunder), or as may be required or permitted by Law, in each case solely to the extent permitted by Law.

		
			

		 

		

			33

		

		

		
			“Non-Public Personal Information” is personally identifiable medical, financial, and other personal information about proposed, current and former applicants, policy owners, contract holders, insureds, annuitants, claimants, and beneficiaries of Reinsured Policies or contracts issued by the Ceding Company, and their representatives, that is not publicly available.  Non-Public Personal Information does not include de-identified personal data, i.e., information that does not identify, or could not reasonably be associated with, an individual.
		

			
	
			
				 Section 17.11
			Successors.   This Agreement will be binding upon the parties hereto and their respective successors and assigns including any Authorized Representative of either party.  Neither party may effect any novation or assignment of this Agreement without the prior written consent of the other party and the Nebraska Department of Insurance. 

			
	
			
				 Section 17.12
			Entire Agreement.   This Agreement and the Schedules and Exhibits hereto constitute the entire agreement between the parties with respect to the business reinsured hereunder and supersede any and all prior representations, warranties, prior agreements or understandings between the parties pertaining to the subject matter of this Agreement.  There are no understandings between the parties other than as expressed in this Agreement and the Schedules and Exhibits hereto.  In the event of any express conflict between this Agreement and the Schedules and Exhibits hereto, the Schedules and Exhibits hereto will control.

			
	
			
				 Section 17.13
			Severability.   The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any Person or entity or any circumstance, is found by a court or other Governmental Entity of competent jurisdiction to be invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

			
	
			
				 Section 17.14
			Construction.   This Agreement will be construed and administered without regard to authorship and without any presumption or rule of construction in favor of either party.  This Agreement is between sophisticated parties, each of which has reviewed this Agreement and is fully knowledgeable about its terms and conditions.

			
	
			
				 Section 17.15
			Non-Waiver.   Neither the failure nor any delay on the part of the Ceding Company or the Reinsurer to exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof.  No single or partial exercise of any right, remedy, power or privilege shall preclude the further exercise of that right, remedy, power or privilege or the exercise of any other right, remedy, power or privilege.  No waiver of any right, remedy, power or privilege with respect to any 

		 

		

			34

		

	occurrence shall be construed as a waiver of that right, remedy, power or privilege with respect to any other occurrence.  No prior transaction or dealing between the parties will establish any custom, usage or precedent waiving or modifying any provision of this Agreement.  No waiver shall be effective unless it is in writing and signed by the party granting the waiver.

			
	
			
				 Section 17.16
			Further Assurances.   From time to time, as and when requested by a party hereto, the other party hereto shall execute and deliver all such documents and instruments and shall take all actions as may be reasonably necessary to consummate the transactions contemplated by this Agreement.

			
	
			
				 Section 17.17
			Governing Law.   This Agreement will be governed by and construed in accordance with the Laws of the State of Nebraska without giving effect to any principles of conflicts of law thereof that are not mandatorily applicable by Law and would permit or require the application of the Laws of another jurisdiction.

			
	
			
				 Section 17.18
			Counterparts.   This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party hereto and delivered to the other party.  Each party hereto may deliver its signed counterpart of this Agreement to the other party by means of electronic mail or any other electronic medium utilizing image scan technology, and such delivery will have the same legal effect as hand delivery of an originally executed counterpart.  When this Agreement has been fully executed by the Ceding Company and the Reinsurer, it will become effective as of the Effective Date.

		
			[Remainder of Page Intentionally Blank]
		

		
			 
		

		
			 
		

		
			

		 

		

			35

		

		

			 

		

		

		
			IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed effective as of the Effective Date.
		

		
			 
		

		
			 
		

		
			 
		

		
			AMERICAN LIFE & SECURITY CORP. 
		

		
			 
		

		
			 
		

		
			 
		

		
			By: /s/ Mark A Oliver
		

		
			Name: Mark A Oliver
		

		
			Title: Vice President & Secretary
		

		
			 
		

		
			 
		

		
			 
		

		
			SDA ANNUITY & LIFE RE
		

		
			 
		

		
			 
		

		
			By:  /s/ Erik Fell
		

		
			Name:  Erik Fell
		

		
			Title:  CFOExhibit

Exhibit 4.2
SERIES E COMMON STOCK PURCHASE WARRANT

 ZOSANO PHARMA CORPORATION
Warrant Shares: _______                Initial Exercise Date: March 6, 2020

THIS SERIES E COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on March 6, 2025 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Zosano Pharma Corporation, a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). 
Section 1.    Definitions.  In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Registration Statement” means the Company’s registration statement on Form S-3 (File No. 333-229686).
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer Agent” means Computershare Trust Company, N.A., the current transfer agent of the Company, with a mailing address of 462 South 4th Street, Louisville, KY 40202 and a facsimile number of (818) 502-0674, and any successor transfer agent of the Company.
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
 “Warrants” means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section 2.    Exercise.
a)Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b)Exercise Price.  The exercise price per share of Common Stock under this Warrant shall be $0.8025, subject to adjustment hereunder (the “Exercise Price”).  

c)Cashless Exercise.  If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein or related prospectus is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
 (A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and 

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.  The Company agrees not to take any position contrary to this Section 2(c).

Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

d)Mechanics of Exercise. 
		
	i.
	Delivery of Warrant Shares Upon Exercise.  The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).   Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise.  If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares 

are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. 
ii.Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii.Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v.No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi.Charges, Taxes and Expenses.  Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.Withholding.  Notwithstanding anything herein to the contrary, if the Company or other applicable withholding agent pays withholding taxes or backup withholding on behalf of the Holder as a result of an adjustment to the Exercise Price (or any other adjustment, non-adjustment, or distribution with respect to the Warrant treated for U.S. tax purposes as a distribution to which Section 301 of the Internal Revenue Code of 1986, as amended, applies), the Company or other applicable 

withholding agent may, at its option, set off such payments against payments or other deliveries on the Warrant.
viii.Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

e)Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%, by written notice to the Company) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder, upon written notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. 

Section 3.    Certain Adjustments.
a)Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares 

of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

b)Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). 

c)Pro Rata Distributions.  During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).  

d)Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement, but not including the sale of equity securities in a bona fide financing transaction) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence 

of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company's control, including not approved by the Company's Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction.  “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction, (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow.  The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction).  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

e)Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued 

and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

f)Notice to Holder.  
i.Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment. 
ii.Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (and all of its Subsidiaries, taken as a whole) is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4.    Transfer of Warrant.
a)Transferability.  This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.  

b)New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto. 

c)Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

Section 5.    Miscellaneous.
a)No Rights as Stockholder Until Exercise; No Settlement in Cash.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.  Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

b)Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c)Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

d)Authorized Shares.  
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).  
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e)Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New 

York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable and documented attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

f)Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

g)Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable and documented attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h)Notices.  Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail or sent by a nationally recognized overnight courier service, addressed to the Company, at 34790 Ardentech Court, Fremont, CA 94555, Attention: Steven Lo, CEO, email address: stockadmin@zosanopharma.com, or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

i)Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j)Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k)Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l)Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder, on the other hand.

m)Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n)Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

	
			
	 
	ZOSANO PHARMA CORPORATION

	 
	By:
	 

	 
	 
	Name: Steven Lo

	 
	 
	Title: Chief Executive Officer

	 
	 
	 

NOTICE OF EXERCISE

To:    ZOSANO PHARMA CORPORATION

(1)The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2)Payment shall take the form of (check applicable box): 

[  ] in lawful money of the United States; or
[  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
            

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________
            
_______________________________
            
_______________________________

[SIGNATURE OF HOLDER]

    
	
		
	Name of Investing Entity:
	 

	Signature of Authorized Signatory of Investing Entity:
	 

	Name of Authorized Signatory:
	 

	Email address:
	 

	Title of Authorized Signatory:
	 

	Date:
	 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information.  Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
	
		
	Name:
	 

	 
	(Please Print)

	Address:
	 

	 
	(Please Print)

	Phone Number:
	 

	 
	 

	Email address:
	 

	 
	 

	Dated: _______________ __, ______
	 

	 
	 

	Holder’s Signature: ___________________
	 

	 
	 

	Holder’s Address: ______________________

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