Document:

Form of Quota Share Reinsurance Agreement relating to the 2012 underwriting year

 Exhibit 10.12 
 [2012 CBL/OSIL Treaty] 
 THIS TREATY is made with effect from [the day on which
the sale of the Reinsured’s parent company’s entire issued share capital is completed] (the “Effective Date”) 
 BETWEEN 
  

	(1)	 [CANOPIUS
BERMUDA]1 LIMITED, a company incorporated under the laws of Bermuda (registered number [ — ]) whose registered office is at Canon’s Court, 22
Victoria Street, Hamilton HM12, Bermuda (the “Reinsured”); and 

  

	(2)	OMEGA SPECIALTY INSURANCE COMPANY LIMITED, a company incorporated under the laws of Bermuda (registered number EC37850) whose registered office is at Crown
House, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda (the “Reinsurer”). 

 BACKGROUND 

 

	A	The Reinsured is party (as reinsurer) to the following contracts of quota share reinsurance: 

 

	 	(i)	a contract (the “2010 CC2 LLQS”), originally made on 30 December 2009 but amended by endorsement dated 15 April 2010 and further
amended and restated with effect from the Effective Date, under which the Reinsured (as reinsurer) assumed by way of quota share reinsurance 85% of all rights and obligations of Canopius Capital Two Limited
(“CC2”) in respect of its participation as a member of Syndicate 4444 as constituted for the 2010 underwriting year of account; 

 

	 	(ii)	a contract (the “2011 Flectat LLQS”), originally made on 15 December 2010 but amended and restated with effect from the Effective
Date, under which the Reinsured (as reinsurer) agreed to assume by way of quota share reinsurance 85% of all rights and obligations of Flectat Limited (“Flectat”) in respect of its participation as a member of
Syndicate 4444 as constituted for the 2011 underwriting year of account; and 

  

	 	(iii)	a contract (the “2012 Flectat LLQS”), originally made on 1 December 2011 but amended and restated with effect from the Effective
Date, under which the Reinsured (as reinsurer) agreed to assume by way of quota share reinsurance 85% of all rights and obligations of Flectat in respect of its participation as a member of Syndicate 4444 as constituted for
the 2012 underwriting year of account. 

  

	B	The Reinsurer has agreed to provide to the Reinsured, with effect from the Effective Date: 

 
  

	1 	 Name of Reinsurer square-bracketed pending confirmation as to the date of the envisaged change of name relative to the expected date of signature of
the contract 

  
 1 

	 	(i)	reinsurance cover in respect of certain of the Reinsured’s rights and obligations pursuant to the 2010 CC2 LLQS on the terms and subject to
the conditions set out in a reinsurance treaty made between the Reinsurer and the Reinsured with effect from the Effective Date (the “2010 Treaty”); 

 

	 	(ii)	reinsurance cover in respect of certain of the Reinsured’s rights and obligations pursuant to the 2011 Flectat LLQS on the terms and subject
to the conditions set out in a reinsurance treaty made between the Reinsurer and the Reinsured with effect from the Effective Date (the “2011 Treaty”); and 

 

	 	(iii)	reinsurance cover in respect of certain of the Reinsured’s rights and obligations pursuant to the 2012 Flectat LLQS on the terms and subject
to the conditions set out in this Treaty. 

 DEFINITIONS AND INTERPRETATION 

 

	A	In this Treaty, the following words and expressions have the meanings set out below: 

2010 CC2 LLQS: the meaning given in Recital A(i); 
 2010 Net Claims Paid: the meaning given in paragraph (iii) of Article II; 
 2010 & Prior Assumed Business: the meaning given in paragraph (i)c.iii of Article IV; 
 2010 RITC Effective Date: the meaning given in paragraph (ii)c of Article IV; 
 2010 Treaty: the meaning given in Recital B(i); 
 2011 Treaty Premium
Calculation Increase: the meaning given in paragraph (ii) of Article IV; 
 2011 Treaty Premium Calculation
Reduction: the meaning given in paragraph (ii) of Article IV; 
 2011 Flectat LLQS: the meaning given in Recital
A(ii); 
 2011 & Prior RITC: the meaning given in paragraph (i)c of Article IV; 

2011 Pure Year Assumed Business: the meaning given in paragraph (i)c.i of Article IV; 

2011 RITC Effective Date: the meaning given in paragraph (i)c.ii of Article IV; 

2011 Treaty: the meaning given in Recital B(ii); 
 2012 Flectat LLQS: the meaning given in Recital A(iii); 

  
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 Additional OSIL ECA FAL: the meaning given in paragraph (iii) of Article VIII
and in the 2011 Treaty; 
 Additional OSIL 2012 Solvency FAL: the meaning given in paragraph (i) of Article VIII;

 CBL FAL: the meaning given in paragraph (i)a of Article VI; 

CBL/OSIL Interim Settlement Amount: the meaning given in paragraph (i) of Article V; 

CC2: the meaning given in Recital A(i); 
 Closing QMA: the meaning given in paragraph (iii) of Article II; 

Effective Date: the meaning given in the title to this Treaty; 

FAL: funds at Lloyd’s in such form as is determined by Lloyd’s in accordance with, inter alia, the
Membership and Underwriting Conditions and Requirements (Funds at Lloyd’s) (as amended or replaced from time to time); 

FAL Providers’ Deed: the deed with that name entered into between, inter alios, Canopius Group Limited, the
Reinsured, the Reinsurer and Omega Specialty Insurance Company Limited having effect on the Effective Date; 

Flectat: the meaning given in Recital A(ii); 
 Future 2010 & Prior Premium: the meaning given in paragraph (i)c.iv of Article IV; 
 Lloyd’s: the society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s; 
 Lloyd’s Obligations: the meaning given in the Lloyd’s Deposit Trust Deeds or (as the case may be) Security and Trust Deeds (whether interavailable or non-interavailable versions) to which
Flectat (inter alios) is a party in respect of FAL provided or procured to be provided by the Reinsurer pursuant to Article VII; 
 Managing Agent: the meaning given in paragraph (ii)a.iii of Article II; 

OSIL FAL: the meaning given in paragraph (i) of Article VII; 

Paragraph (iv) Increase: the meaning given in paragraph (v) of Article IV; 

Paragraph (ii) Reduction: the meaning given in paragraph (iii) of Article IV; 

Pre-Adjustment Premium: the meaning given in paragraph (i) of Article IV; 

Premium: the meaning given in paragraph (i) of Article IV; 

Premium Debt: the meaning given in paragraph (vi) of Article II; 

Q3 2012 QMA: the meaning given in paragraph (iii) of Article II; 

  
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 Reference Date: the meaning given in paragraph (ii)a of Article II; 

Relevant Cash Call Amount: the meaning given in paragraph (i) of Article VI; 

Relevant Percentage: the meaning given in paragraph (ii) of Article II; 

RITC: reinsurance to close (as defined in Lloyd’s Definitions Byelaw, No. 7 of 2005); 

Syndicate 4444: Syndicate 4444 at Lloyd’s; 
 Ultimate Net Loss: the meaning given in paragraph (ii) of Article II; 

YYYd: the meaning given in paragraph (iv) of Article IV; and 

YYYe: the meaning given in paragraph (ii) of Article IV. 

 

	B	The ejusdem generis rule of construction shall not apply to this Treaty and accordingly, general words shall not be given a restrictive meaning by reason of
their being preceded or followed by words indicating a particular class or examples of acts, matters or things. 

  

	C	References in this Treaty to the parties and to Recitals, Articles and paragraphs are respectively to the parties to and Recitals, Articles and paragraphs of this
Treaty. 

  

	Article I.	Commencement and Termination 

  

	(i)	 This Treaty shall commence [on the Effective Date]2. 

  

	(ii)	Without prejudice to any rights that may have accrued under this Treaty or any of its rights or remedies, either party may at any time terminate this Treaty with
immediate effect by giving written notice to the other party if the performance of this Treaty is prohibited or rendered impossible de jure or de facto, in particular as a consequence of any law or regulation which is or shall be in
force in any country or territory PROVIDED that any provisions of this Treaty which are expressly or impliedly intended to survive termination shall continue in force. 

 

	Article II.	Cover 

  

	(i)	By this Treaty, subject to the operation of Article III and on the other terms and conditions set out herein, the Reinsurer agrees to pay an amount equal to the
Ultimate Net Loss. 

  

	(ii)	For the purposes of this Treaty “Ultimate Net Loss” means: 

 

	 	a.	the Relevant Percentage of the Reinsured’s 85% share (as reinsurer of 

  
  

	2 	 Any necessary conditionality language to be added once a clear understanding of the process for completion of the Third Party Sale, flows of funds etc
has been reached 

  
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Flectat pursuant to the 2012 Flectat LLQS) of all amounts in respect of (1) claims against and other underwriting liabilities of Flectat relating to its participation as
a member of Syndicate 4444 for the 2012 underwriting year of account (including, for the avoidance of any doubt, any amounts payable for RITC of the 2012 underwriting year of account of Syndicate 4444) and (2) other
obligations and outgoings of Flectat incurred in connection with such participation, which are as applicable: 

  

	 	i.	paid by Flectat on or after 1 October 2012 (the “Reference Date”); 

 

	 	ii.	accounted for by Flectat on or after the Reference Date; or 

  

	 	iii.	allocated or (as the case may be) charged to Flectat by the managing agent of Syndicate 4444 (the “Managing Agent”) on or after
the Reference Date; plus 

  

	 	b.	89.67% of certain amounts charged to the Reinsured by Flectat on or after the Reference Date  

as specified (or more particularly specified) in paragraphs (iii) and (iv) below. 

The “Relevant Percentage” is (1) 89.67% in respect of all pure 2012 underwriting year of account business
written by Flectat as a member of Syndicate 4444 as constituted for the 2012 underwriting year of account (2) if before settlement pursuant to Article V the 2011 underwriting year of account of Syndicate 4444 (including
business assumed through the RITC of the 2010 and prior underwriting years of account of Syndicate 4444) is closed into the 2012 underwriting year of account of Syndicate 4444, (a) 89.67% in respect of all pure 2011
underwriting year of account business assumed through such RITC by Flectat as a member of Syndicate 4444 as constituted for the 2012 underwriting year of account (b) 68% in respect of all 2010 and prior underwriting year of
account business assumed through such RITC by Flectat as a member of Syndicate 4444 as constituted for the 2012 underwriting year of account. 
  

	(iii)	The amounts referred to in paragraph (ii)a above shall comprise the aggregate of: 

 

	 	a.	amounts paid by Flectat, on or after the Reference Date, in respect of claims (including in respect of unallocated loss adjustment expenses) against
Syndicate 4444 as constituted for the 2012 underwriting year of account (including, for the avoidance of any doubt, in respect of business assumed through the RITC of the 2011 and prior underwriting years of account of Syndicate
4444) less: 

  

	 	i.	recoveries received on or after the Reference Date under reinsurances protecting the business written by Syndicate 4444 as constituted for the 2012
underwriting year of account (or, as the case may be, a Lloyd’s syndicate as constituted for the 2011 or any prior underwriting year of account and closed by way of RITC into the 2012 underwriting year of account of Syndicate
4444); 

  

	 	ii.	subrogated recoveries, salvages or other recoveries received on or after the Reference Date, 

  
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 the quantum of which amounts shall (subject to paragraph (v) below) be calculated by
reference to the difference between the figures stated in line 17, column E of Form 102 (Reporting Year of Account – 2012) in the Quarterly Monitoring Return A submitted to Lloyd’s by the Managing Agent in respect of
Syndicate 4444 for Q3 2012 (the “Q3 2012 QMA”) and the figures in respect of the corresponding line items stated in the Managing Agent’s internal worksheets used for the purposes of preparing the Quarterly
Monitoring Return A submitted to Lloyd’s by the Managing Agent in respect of Syndicate 4444 for Q4 of the year as at 31 December of which the 2012 underwriting year of account of Syndicate 4444 is closed by
RITC (the “Closing QMA”); 
  

	 	b.	the amount allocated and charged to Flectat by the Managing Agent as Flectat’s share of the amount of the premium paid by the members of
Syndicate 4444 as constituted for the 2012 underwriting year of account for RITC of the 2012 underwriting year of account of Syndicate 4444, the quantum of which amount shall (subject to paragraph (v) below) be calculated
by reference to the amount shown in line 23, column E of the Closing QMA; 

 (68% of the
Reinsured’s 85% share, as reinsurer of Flectat pursuant to the 2012 Flectat LLQS, of the aggregate of the amounts referred to in paragraphs a and b above in respect of 2010 & Prior Assumed Business being the
“2010 Net Claims Paid”) 
  

	 	c.	amounts allocated and charged to Flectat by the Managing Agent, on or after the Reference Date, in respect of losses on exchange of Syndicate
4444 as constituted for the 2012 underwriting year of account that arise on realisation or (as the case may be) revaluation, the quantum of which amounts shall (subject to paragraph (v) below) be calculated by reference to the difference
(if negative) between the figure stated in line 31, column E of Form 102 of the Q3 2012 QMA and the aggregate figures in respect of the corresponding line item stated in the Managing Agent’s internal worksheets used for the
purposes of preparing the Closing QMA; 

  

	 	d.	amounts allocated and charged to Flectat by the Managing Agent, on or after the Reference Date, in respect of realised and unrealised losses on
investments of Syndicate 4444 as constituted for the 2012 underwriting year of account that arise on realisation or (as the case may be) revaluation, the quantum of which amounts shall (subject to paragraph (v) below) be calculated by
reference to the difference between the aggregate of the figures stated in lines 43 and 44, column E of Form 102 of the Q3 2012 QMA and the aggregate figures in respect of the corresponding line items stated in the Managing
Agent’s internal worksheets used for the purposes of preparing the Closing QMA; 

  

	 	e.	 amounts allocated and charged to Flectat by the Managing Agent, on or after the Reference Date, in respect of investment
management charges to Syndicate 4444 as constituted for the 2012 underwriting year of account, the quantum of which amounts shall (subject to paragraph (v) below) be calculated by reference to the difference between the figure

  
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stated in line 46, column E of Form 102 of the Q3 2012 QMA and the aggregate figures in respect of the corresponding line item stated in the Managing Agent’s internal
worksheets used for the purposes of preparing the Closing QMA; 

  

	 	f.	amounts allocated and charged to Flectat by the Managing Agent, on or after the Reference Date, in respect of Flectat’s share of those
administrative expenses and charges in respect of Syndicate 4444 as constituted for the 2012 underwriting year of account to which lines 32, 34, 35, 37 and 38 of Form 102 of the Quarterly Monitoring Return A relate, the quantum of which
amounts shall (subject to paragraph (v) below) be calculated by reference to the difference between the aggregate of the figures stated in those lines, column E of the Q3 2012 QMA and the aggregate figures in respect of the corresponding
line items stated in the Managing Agent’s internal worksheets used for the purposes of preparing the Closing QMA; 

  

	 	g.	amounts allocated and charged to Flectat by the Managing Agent, on or after the Reference Date, in respect of income on investments of Syndicate
4444 as constituted for the 2012 underwriting year of account and gains on such investments arising on realisation or (as the case may be) revaluation, the quantum of which amounts shall (subject to paragraph (v) below) be calculated by
reference to the difference between the aggregate of the figures stated in lines 40, 41, 42, 45 and 48, column E of Form 102 of the Q3 2012 QMA and the aggregate figures in respect of the corresponding line items stated in the Managing
Agent’s internal worksheets used for the purposes of preparing the Closing QMA; and 

  

	 	h.	amounts allocated and charged to Flectat by the Managing Agent, on or after the Reference Date, in respect of gains on exchange of Syndicate
4444 as constituted for the 2012 underwriting year of account that arise on realisation or (as the case may be) revaluation, the quantum of which amounts shall (subject to paragraph (v) below) be calculated by reference to the difference
(if positive) between the figure stated in line 31, column E of Form 102 of the Q3 2012 QMA and the aggregate figure in respect of the corresponding line item stated in the Managing Agent’s internal worksheets used for the
purposes of preparing the Closing QMA. 

  

	(iv)	The amounts referred to in paragraph (ii)b above shall comprise the aggregate of all amounts (if any) allocated and charged to the Reinsured by Flectat,
on or after the Reference Date, in respect of the following items payable by the Reinsured in accordance with the terms of the 2012 Flectat LLQS: 

 

	 	a.	Flectat’s standard personal expenses of Lloyd’s Central Fund contribution and Lloyd’s subscription in respect of the 2012 underwriting year of
account; 

  

	 	b.	the amount calculated by reference to Flectat’s member’s syndicate premium limit in respect of the 2012 underwriting year of account of Syndicate
4444 referred to in paragraph (1)(v)(c) of Article 6 (Premium) of the 2012 Flectat LLQS; 

  
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	 	c.	overriding commission of GBP50,000; 

  

	 	d.	the amounts charged to Flectat by Canopius Group Limited or any of its subsidiaries or third parties as letter of credit or other fees for providing Funds at
Lloyd’s or collateral to support the underwriting of Flectat as a member of Syndicate 4444 for the 2012 underwriting year of account as referred to in paragraph (1)(vii) of Article 6 (Premium) of the 2012 Flectat LLQS;
and 

  

	 	e.	the profit commission (if any) referred to in paragraph (1)(vi) of Article 6 (Premium) of the 2012 Flectat LLQS. 

 

	(v)	If at any time after the Effective Date there is a change in the syndicate financial reporting requirements of Lloyd’s (whether to the line or column
items of Form 102 within the Quarterly Monitoring Return A or otherwise), the quantum of any amounts referred to in paragraph (iii) above in respect of which any such change has an impact shall be calculated by reference to the replacements for
the affected line and column items referred to in paragraph (iii) (adjusted as may be necessary or appropriate if such replacements are not the exact equivalents of the relevant affected line and column items). 

 

	(vi)	Without prejudice to the provisions of Article VI, at any time when there remains outstanding any debt from the Reinsured to the Reinsurer in respect of
the Premium (“Premium Debt”), the Reinsurer’s liability to make payments under paragraph (i) above shall, to the extent of the amount of the Premium Debt then remaining outstanding, be satisfied
only by way of set off as referred to in Article V. 

  

	(vii)	Losses, liabilities, premium and other income, recoveries and gains on investments in currencies other than Pounds Sterling shall be converted into Pounds Sterling at
the same rates of exchange as used in Flectat’s books of account and shall be payable in Pounds Sterling. 

  

	Article III.	    Limitations on Reinsurer’s Liability 

  

	(i)	 The liability of the Reinsurer under Article II beyond an amount equal to the premium payable to the Reinsurer under this Treaty (subject
to the operation of the net settlement arrangements provided for by this Treaty) shall, when aggregated with all liabilities of the Reinsurer under the 2010 Treaty and the 2011 Treaty beyond an amount equal to the aggregate of
the premiums payable to the Reinsurer under the 2010 Treaty and the 2011 Treaty (subject to the operation of the net settlement arrangements provided for by the 2010 Treaty and the 2011 Treaty), be limited to and
in no circumstances exceed in aggregate £[ • ]3
plus the aggregate value of any Additional OSIL ECA FAL provided from time to time by the Reinsurer to Lloyd’s pursuant to the terms of this Treaty or the 2011 Treaty. 

 

	(ii)	For the avoidance of any doubt, the aggregate liability of the Reinsurer under this Treaty alone shall not exceed an amount equal to the premium payable to the
Reinsurer under this Treaty (subject to the operation of the net settlement 

  

 

	3 	 i.e. the value of the total FAL that OSIL will be providing at the outset for the benefit of CC2 and Flectat – to be ascertained

  
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arrangements provided for by this Treaty) plus £[ — ]4 plus the aggregate value of any Additional OSIL ECA FAL provided from time to time by the
Reinsurer to Lloyd’s pursuant to the terms of this Treaty or the 2011 Treaty. 
  

	Article	IV. Premium 

  

	(i)	Subject to the operation of paragraphs (ii) and (iii) or (iv) and (v) below (if and as applicable), the premium payable to the Reinsurer by
the Reinsured for the cover which the Reinsurer agrees to provide under this Treaty shall be: 

  

	 	a.	 £[ — ]5; plus 

  

	 	b.	an amount equal to 89.67% of the Reinsured’s share (as reinsurer of Flectat pursuant to the 2012 Flectat LLQS) of the aggregate amount of net
premiums written (net of acquisition costs, including in respect of amortisation after the Reference Date of the deferred acquisition costs asset established by the Managing Agent as at 30 September 2012) in respect of all
insurance and reinsurance risks (excluding any inward contract of RITC) written by Flectat as a member of Syndicate 4444 for the 2012 underwriting year of account as allocated by the Managing Agent on or after the
Reference Date, the quantum of which amount shall be calculated by reference to the difference between the aggregate of the figures in respect of line items 5, 27, 28 and 29 of Form 102 within the Quarterly Monitoring Return A as stated in
the Managing Agent’s internal worksheets used for the purposes of preparing each of the Q3 2012 QMA and the Closing QMA (provided that if at any time after the Effective Date there is a change in the syndicate
financial reporting requirements of Lloyd’s - whether to the line or column items of Form 102 within the Quarterly Monitoring Return A or otherwise - the quantum of the amount referred to in this paragraph in respect of which any such
change has an impact shall be calculated by reference to the replacements for the affected line and column items referred to in this paragraph (adjusted as may be necessary or appropriate if such replacements are not the exact equivalents of the
relevant affected line and column items)); plus 

  

	 	c.	if before settlement pursuant to Article V the business of the 2011 underwriting year of account of Syndicate 4444 (including business assumed through the
RITC of the 2010 and prior underwriting years of account of Syndicate 4444) is closed by RITC into the 2012 underwriting year of account of Syndicate 4444 (the “2011 & Prior RITC”):

  

	 	i.	an amount equal to 89.67% of the Reinsured’s share (as reinsurer of Flectat pursuant to the 2012 Flectat LLQS) of that part of the RITC
premium received (net of reinsurers’ share) by Flectat as is 

  

 

	4 	 i.e. the value of the total FAL that OSIL will be providing at the outset for the benefit of CC2 and Flectat – to be ascertained

	5 	 i.e. such amount as is equal to 89.67% of CBL's loss and loss expense reserves and unearned premium reserves, as at the Reference Date, in respect of
Flectat's underwriting as a member of S4444 for the pure 2012 year of account (based on figures which will appear in lines 8, 23 and 30 of the Q3 2012 QMA) 

  
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attributable to the pure 2011 underwriting year of account business assumed through the 2011 & Prior RITC by Flectat as a member of Syndicate 4444 as constituted for
the 2012 underwriting year of account (“2011 Pure Year Assumed Business”); plus 

  

	 	ii.	an amount equal to 89.67% of the Reinsured’s share (as reinsurer of Flectat pursuant to the 2012 Flectat LLQS) of the aggregate amount of net
premiums written (net of acquisition costs, including in respect of amortisation after the date as at which the 2011 & Prior RITC is effected – the “2011 RITC Effective Date” – of the deferred
acquisition costs asset established by the Managing Agent as at the 2011 RITC Effective Date) in respect of the 2011 Pure Year Assumed Business as allocated by the Managing Agent after the 2011 RITC Effective Date,
the quantum of which amount shall be calculated by reference to the difference between the aggregate of the figures in respect of line items 5, 27, 28 and 29 of Form 102 within the Quarterly Monitoring Return A as stated in the Managing
Agent’s internal worksheets used for the purposes of preparing each of the Quarterly Monitoring Return A (Reporting Year of Account – 2012) to be submitted to Lloyd’s by the Managing Agent in respect of Syndicate
4444 for the quarter (of the year) in which the 2011 RITC Effective Date occurs and the Closing QMA (provided that if at any time after the Effective Date there is a change in the syndicate financial reporting requirements
of Lloyd’s - whether to the line or column items of Form 102 within the Quarterly Monitoring Return A or otherwise - the quantum of the amount referred to in this paragraph in respect of which any such change has an impact shall be
calculated by reference to the replacement for the affected line and column item referred to in this paragraph (adjusted as may be necessary or appropriate if such replacements are not the exact equivalents of the relevant affected line and column
items)); plus 

  

	 	iii.	an amount equal to 68% of the Reinsured’s share (as reinsurer of Flectat pursuant to the 2012 Flectat LLQS) of that part of the RITC
premium received (net of reinsurers’ share) by Flectat as is attributable to the 2010 and prior underwriting year of account business assumed through the 2011 & Prior RITC by Flectat as a member of Syndicate
4444 as constituted for the 2012 underwriting year of account (“2010 & Prior Assumed Business”); plus 

  

	 	iv.	 “Future 2010 & Prior Premium”, being an amount equal to 68% of the Reinsured’s share (as reinsurer of
Flectat pursuant to the 2012 Flectat LLQS) of the aggregate amount of net premiums written (net of acquisition costs, including in respect of amortisation after the 2011 RITC Effective Date of the deferred acquisition costs
asset established by the Managing Agent as at the 2011 RITC Effective Date) in respect of the 2010 & Prior Assumed Business as allocated by the Managing Agent after the 2011 RITC Effective Date, the
quantum of which amount shall be calculated by reference to the difference between the aggregate of the figures in respect of line items 5, 27, 28 and 29 of Form 102 within the Quarterly Monitoring Return A as stated in the Managing
Agent’s internal 

  
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worksheets used for the purposes of preparing each of the Quarterly Monitoring Return A (Reporting Year of Account – 2012) to be submitted to Lloyd’s by the Managing Agent
in respect of Syndicate 4444 for the quarter (of the year) in which the 2011 RITC Effective Date occurs and the Closing QMA (provided that if at any time after the Effective Date there is a change in the syndicate
financial reporting requirements of Lloyd’s - whether to the line or column items of Form 102 within the Quarterly Monitoring Return A or otherwise - the quantum of the amount referred to in this paragraph in respect of which any such
change has an impact shall be calculated by reference to the replacement for the affected line and column item referred to in this paragraph (adjusted as may be necessary or appropriate if such replacements are not the exact equivalents of the
relevant affected line and column items)) 

 (such amount, prior to the operation of paragraphs (ii) and
(iii) or (iv) and (v) below (if and as applicable), the “Pre-Adjustment Premium” and after the operation of paragraphs (ii) and (iii) or (iv) and (v) below (if and as applicable), the
“Premium”). 
  

	(ii)	To the extent that an amount equal to the aggregate of: 

  

	 	a.	2010 Net Claims Paid after the 2011 RITC Effective Date less Future 2010 & Prior Premium; plus 

 

	 	b.	2010 Net Claims Paid (as defined in the 2011 Treaty except not including any amount in respect of the premium for RITC of the 2011 underwriting year of
account of Syndicate 4444) as at the 2011 RITC Effective Date less Future 2010 & Prior Premium (as defined in the 2011 Treaty) as at the 2011 RITC Effective Date; plus 

 

	 	c.	Net Claims Paid (as defined in the 2010 Treaty except not including any amount in respect of the premium for RITC of the 2010 underwriting year of account
of Syndicate 4444) as at the date as at which the 2010 underwriting year of account of Syndicate 4444 was closed by RITC (the “2010 RITC Effective Date”) less Future Premium (as defined in the
2010 Treaty) as at the 2010 RITC Effective Date 

 is more than £[amount appearing at
paragraph (i)a of Article IV in the 2010 Treaty - i.e. the 2010 & prior reserves as at 30/9/12 - to be inserted] (any such excess multiplied by 32/68, up to an amount equal to 32/68 x 3% of £[amount appearing at paragraph (i)a
of Article IV in the 2010 Treaty - i.e. the 2010 & prior reserves as at 30/9/12 - to be inserted], being “YYYe” and expressed as a positive number), the amount of the Pre-Adjustment Premium shall, subject
to the operation of paragraph (iii) below, be reduced (or increased, as the case may be): 
  

	 	i.	where there has been a reduction (expressed as a positive number) under paragraph (ii) of Article IV of the 2011 Treaty in calculating the amount of the
premium payable to the Reinsurer by the Reinsured under the 2011 Treaty (“2011 Treaty Premium Calculation Reduction”), by the amount if any by which YYYe exceeds the 2011 Treaty Premium
Calculation Reduction; or, as applicable; 

  
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	 	ii.	where there has been an increase (expressed as a negative number) under paragraph (iv) of Article IV of the 2011 Treaty in calculating the amount of the
premium payable to the Reinsurer by the Reinsured under the 2011 Treaty (“2011 Treaty Premium Calculation Increase”), by the amount if any by which YYYe exceeds the 2011 Treaty Premium
Calculation Increase. 

  

	(iii)	The amount of any reduction or increase of the Pre-Adjustment Premium that would be made under paragraph (ii) above before the operation of this paragraph
(iii) (“Paragraph (ii) Reduction”) shall be reduced by an amount equal to 100/68 x 10.33% of the amount of the Paragraph (ii) Reduction. 

 

	(iv)	To the extent that an amount equal to the aggregate of: 

  

	 	a.	2010 Net Claims Paid after the 2011 RITC Effective Date less Future 2010 & Prior Premium; plus

  

	 	b.	2010 Net Claims Paid (as defined in the 2011 Treaty except not including any amount in respect of the premium for RITC of the 2011 underwriting year of
account of Syndicate 4444) as at the 2011 RITC Effective Date less Future 2010 & Prior Premium (as defined in the 2011 Treaty) as at the 2011 RITC Effective Date; plus 

 

	 	c.	Net Claims Paid (as defined in the 2010 Treaty except not including any amount in respect of the premium for RITC of the 2010 underwriting year of account
of Syndicate 4444) as at the 2010 RITC Effective Date less Future Premium (as defined in the 2010 Treaty) as at the 2010 RITC Effective Date 

is less than £[amount appearing at paragraph (i)a of Article IV in the 2010 Treaty - i.e. the 2010 & prior reserves as
at 30/9/12 - to be inserted] (any such deficit multiplied by 32/68, up to an amount equal to 32/68 x 10% of £[amount appearing at paragraph (i)a of Article IV in the 2010 Treaty - i.e. the 2010 & prior reserves as at 30/9/12 -
to be inserted], being “YYYd” and expressed as a positive number), the amount of the Pre-Adjustment Premium shall, subject to the operation of paragraph (v) below, be increased (or reduced, as the case may
be): 
  

	 	i.	where there has been a 2011 Treaty Premium Calculation Increase (expressed as a positive number), by the amount if any by which YYYd is more than the
2011 Treaty Premium Calculation Increase; or, as applicable 

  

	 	ii.	where there has been a 2011 Treaty Premium Calculation Reduction (expressed as a negative number), by the amount if any by which YYYd is more than the
amount of the 2011 Treaty Premium Calculation Reduction. 

  

	(v)	 The amount of any increase or reduction of the Pre-Adjustment Premium

  
 12 

	 	
that would be made under paragraph (iv) above before the operation of this paragraph (v) (“Paragraph (iv) Increase”) shall be reduced by an amount equal to
100/68 x 10.33% of the amount of the Paragraph (iv) Increase. 

  

	(vi)	Payments in respect of the Premium shall be made to the Reinsurer by the Reinsured as provided in Article V. 

 

	Article V.	Settlement 

 Interim settlement

  

	(i)	Where Flectat has received from the trustees of its Premiums Trust Fund an amount representing an interim profit of Flectat in respect of its
participation as a member of the Syndicate for the 2012 underwriting year of account and the Reinsured receives from Flectat (pursuant to the terms of the 2012 Flectat LLQS) an ‘Interim Settlement Amount’ (as
defined in the 2012 Flectat LLQS), the Reinsured shall pay to the Reinsurer an amount by way of interim settlement (“CBL/OSIL Interim Settlement Amount”), reasonably determined by the Reinsurer to
be attributable to the business reinsured under this Treaty of the amount of the ‘Interim Settlement Amount’ (as defined in the 2012 Flectat LLQS). If the CBL/OSIL Interim Settlement Amount (or the aggregate of all
CBL/OSIL Interim Settlement Amounts, if more than one) paid to the Reinsurer as provided in this paragraph exceeds the amount due to the Reinsurer (before taking account of the CBL/OSIL Interim Settlement Amount(s) paid to
the Reinsurer) as shown in the statement of account prepared by or on behalf of the Reinsurer as referred to in paragraph (iii)a below, the Reinsurer shall, forthwith upon providing to the Reinsured such statement of
account, pay to the Reinsured an amount equal to the excess. 

 Final settlement 

 

	(ii)	When Syndicate 4444 as constituted for the 2012 underwriting year of account is closed by RITC (such RITC to extend, for the avoidance of doubt, to
liabilities assumed by the members of Syndicate 4444 as constituted for the 2012 underwriting year of account by way of RITC of a Lloyd’s syndicate as constituted for the 2011 or any prior underwriting year of account),
settlement between the parties shall be made in accordance with the provisions of paragraph (iii) below. 

  

	(iii)	For the purposes of settlement between the parties as referred to in paragraph (ii) above: 

 

	 	a.	there shall be prepared by the Reinsurer (or by the Managing Agent on behalf of the Reinsurer) a statement of account in a form to be agreed
between the Reinsurer and the Reinsured; 

  

	 	b.	there shall be added to the amount of the Premium an amount equal to the aggregate of any amounts which may previously have been drawn down by
Lloyd’s from the OSIL FAL (or, as the case may be, any Additional OSIL ECA FAL) to meet an interim cash call made on Flectat by the Managing Agent as referred to in paragraph (i) of Article VI, to the
extent the Reinsurer shall not previously have been reimbursed in respect of the same; 

  
 13 

	 	c.	there shall then be set off against the result of the calculation made under paragraph b the amount which the Reinsurer is liable (subject always to the
operation of Article III) to pay under paragraph (i) of Article II; 

  

	 	d.	subject to the provisions and operation of the FAL Providers’ Deed, if the result of the calculation made under paragraphs b and c is positive, the
Reinsured shall pay to the Reinsurer an amount (in £Sterling, having converted any amounts in currencies other than £Sterling into £Sterling at the rates used in Flectat’s books of account at the time of
settlement between Flectat and the Reinsured under the 2012 Flectat LLQS) equal to the result of that calculation, such payment to be made on (if it is not made before) the fifteenth day following receipt by the Reinsured
of the settlement payment due to it by Flectat under the 2012 Flectat LLQS; 

  

	 	e.	subject to the provisions and operation of the FAL Providers’ Deed, if the result of the calculation made under paragraphs b and c is negative, the
Reinsurer shall pay to the Reinsured an amount (in £Sterling, having converted any amounts in currencies other than £Sterling into £Sterling at the rates used in Flectat’s books of account at the time of
settlement between Flectat and the Reinsured under the 2012 Flectat LLQS) equal to the result of that calculation, such payment to be made on (if it is not made before) the date on which settlement is due to be made by the
Reinsured to Flectat under the 2012 Flectat LLQS. 

  

	(iv)	If a party to this Treaty fails to pay an amount (the overdue amount) payable by it under this Treaty interest shall accrue and be payable by that party on the
overdue amount from the date on which it becomes due up to the date of actual payment in full (after as well as before judgement) at the rate of 2 per cent above the base rate from time to time of National Westminster Bank Plc. Interest
calculated under this paragraph shall be calculated day to day and on the basis of a 365 day year and interest payable in accordance with this paragraph shall be payable at the end of each month failing which it shall be compounded.

  

	Article VI.	Cash Calls 

  

	(i)	The parties intend that should Flectat, after the Effective Date, become required by the Managing Agent to meet an interim cash call in respect of
Syndicate 4444’s 2012 underwriting year of account then 85% of Flectat’s share of the amount of any such cash call (the “Relevant Cash Call Amount”) should be met: 

 

	 	a.	 as to 10% from the “CBL FAL” (being FAL in the amount of £[ —
]6 provided by the Reinsured to Lloyd’s
for the benefit of CC2 and Flectat pursuant to the terms of the 2010 CC2 LLQS, the 2011 Flectat LLQS and the 2012 Flectat LLQS – not including, for the avoidance of any 

 
  

	6 	 i.e. the value of the total FAL that CBL will be providing itself at the outset of the Restructuring for the benefit of CC2 and Flectat

  
 14 

	 	
doubt, any of the OSIL FAL – plus the aggregate value of any ‘Reinsurer’s Additional ECA FAL’ (as defined in the 2011 Flectat LLQS and the 2012 Flectat
LLQS) – not including any Additional OSIL ECA FAL – provided or procured to be provided from time to time by the Reinsured to Lloyd’s pursuant to the terms of the 2011 Flectat LLQS or the 2012
Flectat LLQS); and 

  

	 	b.	as to 90% from the OSIL FAL or (as the case may be) any Additional OSIL ECA FAL. 

 

	(ii)	To the extent that there is met from the OSIL FAL or any Additional OSIL ECA FAL any part of a Relevant Cash Call Amount, the amount so met shall
be treated (to the extent not repaid to the Reinsurer before settlement between the Parties in accordance with Article V above) as a payment on account of the amount which the Reinsurer may be liable (subject always to the operation of
Article III) to pay under paragraph (i) of Article II. 

  

	Article VII.	    Provision of FAL 

  

	(i)	 In order to assist the Reinsured to satisfy its obligations under the 2010 CC2 LLQS, the 2011 Flectat LLQS and the 2012 Flectat
LLQS concerning the provision of FAL, the Reinsurer shall provide or procure the provision to Lloyd’s of one or more letters of credit, cash deposits and/or investments (in a form acceptable to Lloyd’s),
having an aggregate value of £[ — ]7, to form part of the FAL of CC2 which, by way of ‘forward interavailability’, will support the underwriting of Flectat for the 2011 and subsequent underwriting years of
account (and will also support the underwriting of CC2 for the 2010 underwriting year of account) (“OSIL FAL”). 

  

	(ii)	The cost of provision of the OSIL FAL shall be met by the Reinsurer. 

 

	(iii)	The Reinsurer may, at any time permitted by Lloyd’s, substitute for all or any part of the OSIL FAL any other assets of equivalent value
acceptable under Lloyd’s requirements as FAL. 

  

	(iv)	Subject to the provisions and operation of the FAL Providers’ Deed, the OSIL FAL stands as security for the performance (beyond set off against the
amount of the Premium of the amount which the Reinsurer is liable to pay under paragraph (i) of Article II) of the Reinsurer’s obligations under this Treaty, as well as for the performance (beyond the corresponding set
offs provided for under the 2010 Treaty and the 2011 Treaty) of the Reinsurer’s obligations under the 2010 Treaty and the 2011 Treaty. 

 

	(v)	For the avoidance of doubt, subject to the provisions of the FAL Providers’ Deed, the Reinsurer shall have no obligation to reinstate the value of
the OSIL FAL or any Additional OSIL ECA FAL following any drawdown thereon. 

  

 

	7 	 Relevant figure to be inserted to be ascertained based on calculations utilising the ECA funding requirement for purposes of coming-into-line in
November 2012 

  
 15 

	Article VIII.	    Additional FAL 

  

	(i)	If at any time after the Effective Date and before the 2012 underwriting year of account of Syndicate 4444 is closed the Reinsured is required
under the terms of the 2012 Flectat LLQS to provide to Lloyd’s any Reinsurer’s Additional 2012 Solvency FAL (as defined in the 2012 Flectat LLQS), the Reinsurer shall promptly provide to Lloyd’s, in
a form acceptable to Lloyd’s to stand as FAL supporting the underwriting of Flectat to be deposited in the FAL of Flectat (or in the FAL of CC2 and made interavailable to support the underwriting
of the Flectat) a letter of credit, cash or investments having a value equal to 89.67% of the amount of the Reinsurer’s Additional 2012 Solvency FAL (as so defined) which the Reinsured is required to provide
(“Additional OSIL 2012 Solvency FAL”). 

  

	(ii)	If the Reinsurer does not provide the full amount (or any) of the Additional OSIL 2012 Solvency FAL then: 

 

	 	a.	if the Reinsured provides Reinsurer’s Additional 2012 Solvency FAL (as defined in the 2012 Flectat LLQS) which is referable to the amount of
Additional OSIL 2012 Solvency FAL that the Reinsurer has not provided, the Reinsurer shall pay to the Reinsured, promptly following release by Lloyd’s from Flectat’s or (as the case may be)
CC2’s FAL of all or part of such Reinsurer’s Additional 2012 Solvency FAL which is so referable, an amount calculated by (I) multiplying the amount of the released Reinsurer’s Additional 2012 Solvency FAL which is
so referable by the percentage corresponding to five hundred basis points plus the LIBOR rate for a 6 month £Sterling deposit as at the date on which the Reinsured provided the Reinsurer’s Additional 2012 Solvency FAL which is so
referable and (II) multiplying the result of that calculation (“A”) by x/42 where x is the number of complete calendar months (or part thereof) for which the released Reinsurer’s Additional 2012 Solvency FAL which is so
referable was deposited in the FAL of CC2 or Flectat (as applicable) PROVIDED that the amount payable by the Reinsurer shall not exceed A; 

 

	 	b.	if the Reinsured does not provide Reinsurer’s Additional 2012 Solvency FAL (as defined in the 2012 Flectat LLQS) which is referable to the amount of
Additional OSIL 2012 Solvency FAL that the Reinsurer has not provided and Flectat provides (or permits there to be provided by another for its benefit) Other Additional 2012 Solvency FAL (as defined in the 2012 Flectat
LLQS) which is so referable, the Reinsurer shall pay to the Reinsured, promptly following release by Lloyd’s from Flectat’s or (as the case may be) CC2’s FAL of all or part of such Other
Additional 2012 Solvency FAL which is so referable, an amount calculated by (I) multiplying the amount of the released Other Additional 2012 Solvency FAL which is so referable by the percentage corresponding to five hundred basis points plus
the LIBOR rate for a 6 month £Sterling deposit as at the date on which Flectat provided (or permitted there to be provided by another for its benefit) the Other Additional 2012 Solvency FAL which is so referable and (II) multiplying the
result of that calculation (“B”) by x/42 where x is the number of complete calendar months (or part thereof) for which the released Other Additional 2012 Solvency FAL which is so referable was deposited in the FAL
of CC2 or Flectat (as applicable) PROVIDED that the amount payable by the Reinsurer shall not exceed B. 

  
 16 

	(iii)	If under the terms of the 2011 Flectat LLQS and/or the 2012 Flectat LLQS the Reinsured is required to provide (or use its reasonable endeavours to
procure that there is provided) to Lloyd’s any ‘Reinsurer’s Additional ECA FAL’ (as defined in the 2011 Flectat LLQS and the 2012 Flectat LLQS), the Reinsurer shall provide to Lloyd’s, in a
form acceptable to Lloyd’s to stand as FAL supporting the underwriting of Flectat to be deposited in the FAL of Flectat (or in the FAL of CC2 and made interavailable to support the underwriting
of Flectat), a letter of credit, cash or investments having a value equal to 89.67% of the Relevant Percentage of the amount set out in the ‘Additional ECA FAL Requirement Notification’ (as defined in the 2011 Flectat
LLQS and the 2012 Flectat LLQS) (“Additional OSIL ECA FAL”). (The Parties acknowledge that the 2011 Treaty contains a similar provision to that contained in this paragraph; that each provision concerns the
same obligation; and that performance by the Reinsurer of the obligation pursuant to one of the provisions will constitute performance of the obligation pursuant to the other provision.) 

 

	(iv)	If the Reinsurer does not provide the full amount (or any) of the Additional OSIL ECA FAL then: 

 

	 	a.	if the Reinsured provides Reinsurer’s Additional ECA FAL (as defined in the 2011 Flectat LLQS and the 2012 Flectat LLQS) which is referable to
the amount of Additional OSIL ECA FAL that the Reinsurer has not provided, the Reinsurer shall pay to the Reinsured, promptly following release by Lloyd’s from Flectat’s or (as the case may be)
CC2’s FAL of all or part of such Reinsurer’s Additional ECA FAL which is so referable, an amount calculated by (I) multiplying the amount of the released Reinsurer’s Additional ECA FAL which is so referable by the
percentage corresponding to five hundred basis points plus the LIBOR rate for a 6 month £Sterling deposit as at the date on which the Reinsured provided the Reinsurer’s Additional ECA FAL which is so referable and (II) multiplying
the result of that calculation (“C”) by x/42 where x is the number of complete calendar months (or part thereof) for which the released Reinsurer’s Additional ECA FAL which is so referable was deposited in the FAL
of CC2 or Flectat (as applicable) PROVIDED that the amount payable by the Reinsurer shall not exceed C; 

  

	 	b.	 if the Reinsured does not provide Reinsurer’s Additional ECA FAL (as defined in the 2011 Flectat LLQS and the 2012 Flectat
LLQS) which is referable to the amount of Additional OSIL ECA FAL that the Reinsurer has not provided and Flectat provides (or permits there to be provided by another for its benefit) Other Additional ECA FAL (as defined in
the 2011 Flectat LLQS and the 2012 Flectat LLQS) which is so referable, the Reinsurer shall pay to the Reinsured, promptly following release by Lloyd’s from Flectat’s or (as the case may be)
CC2’s FAL of all or part of such Other Additional ECA FAL which is so referable, an amount calculated by (I) multiplying the amount of the released Other Additional ECA FAL which is so referable by the percentage
corresponding to five hundred basis points plus the LIBOR rate for a 6 month £Sterling deposit as at the date on which Flectat provided (or permitted there to be provided by another for its benefit) the Other Additional ECA FAL which is
so referable and (II) multiplying the 

  
 17 

	 	
result of that calculation (“D”) by x/42 where x is the number of complete calendar months (or part thereof) for which the released Other Additional ECA FAL which is so
referable was deposited in the FAL of CC2 or Flectat (as applicable) PROVIDED that the amount payable by the Reinsurer shall not exceed D. 

 Article IX. Errors and Omissions 
 It is hereby understood and agreed that any inadvertent
delays, omissions or errors made in connection with this Treaty shall not be held to relieve any of the parties hereto from any liability which would have attached to them hereunder if such delay, omission or error had not occurred provided that
rectification is made upon discovery. 
 Article X. Non-Waiver etc. 
 Neither the obligations of the Reinsurer nor the rights and remedies of the Reinsured under this Treaty, or otherwise conferred by law in respect of this Treaty, shall be discharged,
prejudiced or impaired by reason of any failure on the part of the Reinsured or the Reinsurer, whether intentional or not, to insist on compliance with this Treaty or to exercise any right or remedy hereunder (and no such failure shall
constitute a waiver of any right or remedy contained herein nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising any such right or remedy in the future). 

Article XI. Arbitration 
 Any dispute
between the Reinsurer and the Reinsured arising out of or relating to the interpretation, performance or breach of this Treaty, as well as the formation, validity, binding effect and/or termination thereof and/or any non-contractual
claims, shall be referred to arbitration under ARIAS UK Arbitration Rules by a panel of three arbitrators. The Reinsurer or the Reinsured may request arbitration in writing sent to the other (the respondent) by certified or registered
post, return receipt requested. 
 One arbitrator shall be chosen by the Reinsurer and the Reinsured, and the two arbitrators
shall, before instituting the hearing, choose an impartial third arbitrator who shall preside at the hearing. If the Reinsurer fails to appoint its arbitrator within 30 days after being requested to do so by the Reinsured, the
Reinsured may appoint the second arbitrator. 
 Where the two party-appointed arbitrators have failed to appoint a third arbitrator
within 30 days of the arbitration demand, then upon application ARIAS (UK) will appoint an arbitrator to fill the vacancy. At any time prior to the appointment by ARIAS (UK) the party or arbitrators in default may make such appointment. 

All arbitrators will be disinterested persons (including those who have retired) having at least 10 years experience of insurance or reinsurance within
the industry or as lawyers or other professional advisers serving the industry. 
 Within 30 days after notice of appointment of all arbitrators
the panel will meet and determine timely periods for briefs, discovery procedures and schedules for hearings. 
 The panel may in its sole
discretion make such orders and directions as it considers to be necessary for the final determination of the matters in dispute and shall have 

  
 18 

 
the widest discretion permitted under the law governing the arbitral procedure when making such orders or directions. Unless the panel agrees otherwise, arbitration will take place in England,
but the venue may be changed when the panel deems such change to be in the best interest of the arbitration proceeding. The decision of any two arbitrators when rendered in writing will be final and binding. The panel is empowered to grant interim
relief as it may deem appropriate. 
 Each party will bear the costs of its own arbitrator and will bear, jointly and equally with the other
party, the costs of the third arbitrator. The panel will allocate the remaining costs of the arbitration. The panel may, at its discretion, award such further costs, interest and expenses as it considers appropriate, including without limitation,
with respect to legal fees. 
 The governing law of this Treaty shall be the substantive law of England and Wales. 

The provisions of this Article shall survive the expiration or termination of this Treaty. 
 Article XII. Notices 
 Any notice or other communication under or in connection with this
Treaty shall be delivered personally, sent by facsimile or email with receipt confirmed (followed by delivery of an original via next-business-day or overnight mail or delivery) or sent by air courier to the intended recipient: 

 

	(a)	in the case of the Reinsured at [ — ] (marked for the attention of[
— ]), fax no. [ — ]; 

  

	(b)	in the case of the Reinsurer at [ — ] (marked for the attention of [
— ]), fax no. [ — ] 

 or in
either case to such other addresses as the relevant party has specified in writing to the party giving notice. 
 In the absence of evidence of
earlier receipt, any notice or other communication shall be deemed to have been duly given: 
  

	(i)	if delivered personally, at the time of delivery but if delivery takes place outside business hours, the commencement of business following delivery;

  

	(ii)	if sent by facsimile or email prior to 5:00 p.m. at the place of receipt, on the day on which such facsimile or email was sent, provided that a copy is also sent by
next-business-day or overnight mail or delivery; 

  

	(ii)	if sent by air courier and not delivered personally, on the third Business Day after delivery into the hands of the courier. 

In proving service by courier it shall be sufficient to prove that the envelope containing the notice was properly addressed and delivered into the hands
of the courier. 
 Article XIII. Counterparts 
 This Treaty may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. 

  
 19 

 Article XIV. Rights of Third Parties 
 A person who is not a party to this Treaty has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Treaty but this does not affect any right or remedy of a third
party which exists or is available apart from that Act. 
 Article XV. Amendments and No Other Agreement 

Except as otherwise provided, this Treaty may be amended only by consent of the parties expressed in a written addendum executed by the parties with the
same level of formality as this Treaty, and such addendum shall be deemed to be an integral part of this Treaty and binding on the parties. The parties agree that this Treaty represents the entire understanding, and constitutes the whole agreement,
in relation to its subject matter and supersedes any previous agreement (whether oral or written) in relation thereto. Each of the parties acknowledges that, in entering into this Treaty, it is not relying on, has not been induced to enter into this
Treaty by and shall have no right or remedy in respect of, any statement, representation, warranty or understanding (whether of fact or of law and whether made innocently or negligently) (“Representation”) of any person other
than as expressly set out in this Treaty and agrees that the only rights and remedies available to it arising out of or in connection with a Representation shall be for breach of contract (provided that nothing in this paragraph shall exclude any
liability for, or remedy in respect of, fraud or fraudulent misrepresentation). 
 Article XVI. Confidentiality 

No party shall at any time divulge to any person any information relating to the terms of this Treaty, the negotiations preceding its execution or the
other parties to this Treaty, save that any party may disclose such information to the extent that it is (i) required to be disclosed pursuant to law (ii) required by the terms of this Treaty (iii) disclosed pursuant to the
requirements of Lloyd’s, the Bermuda Monetary Authority or any securities exchange or regulatory or governmental body to which any party is subject (iv) disclosed in confidence to the professional advisers of that party
(v) disclosed in confidence to any holding company of that party (vi) information which has entered the public domain without any fault of that party (vii) disclosed with the prior written approval of the other parties. 

 

			
	AS WITNESS the hands of the parties	  	
		
	Signed by	  	)
	duly authorised for	  	)
	and on behalf of	  	)
	[CANOPIUS BERMUDA] LIMITED	  	)

  
 20 

			
	Signed by	  	)
	duly authorised for	  	)
	and on behalf of	  	)
	OMEGA SPECIALTY INSURANCE	  	)
	COMPANY LIMITED	  	)

  
 21<![CDATA[Form of agreement entitled "Funds at Lloyd's Providers' Deed"]]>

 Exhibit 10.13 

 
 

 
 Canopius Capital Two Limited 
 Flectat Limited 
 Canopius Group Limited 

Canopius Managing Agents Limited 

[Canopius Bermuda] Limited 

[Canopius Holdings Bermuda] Limited 

Omega Speciality Insurance Company Limited 
 Omega Underwriting Holdings Limited 
 Funds at Lloyd’s Providers Deed

 in respect of Canopius Capital Two Limited and Flectat Limited 

							
	Contents	  			
	1	  	Definitions and Interpretation	  	 	4	  
	2	  	Drawdown of CC2/Flectat FAL	  	 	8	  
	3	  	Release, reduction, payment and substitution	  	 	12	  
	4	  	Guarantee by CGL	  	 	15	  
	5	  	Guarantee by [CHBL]	  	 	17	  
	6	  	Assignments and Transfers	  	 	19	  
	7	  	Default Interest	  	 	19	  
	8	  	Giving of Notices	  	 	19	  
	9	  	Miscellaneous	  	 	20	  
	10	  	Arbitration	  	 	21	  

  
 i 

 THIS FUNDS AT LLOYD’S PROVIDERS’ DEED is made with effect from [the day on which the
sale of the entire issued share capital of [Canopius Holdings Bermuda] Limited is completed] (the Effective Date) 
 Between:

  

	(1)	Canopius Capital Two Limited, a company incorporated in England and Wales (no. 5234105) whose registered office is at Gallery 9, One Lime Street, London EC3M 7HA
(CC2); 

  

	(2)	Flectat Limited, a company incorporated in England and Wales (no. 3073140) whose registered office is at Gallery 9, One Lime Street, London EC3M 7HA
(Flectat); 

  

	(3)	Canopius Group Limited, a company incorporated in the Island of Guernsey (no. 41279) whose registered office is at Ogier House, St Julian’s Avenue, St Peter
Port, Guernsey GY1 1WA (CGL); 

  

	(4)	Canopius Managing Agents Limited, a company incorporated in England and Wales (no. 1514453) whose registered office is at Gallery 9, One Lime Street, London EC3M
7HA (the Managing Agent); 

  

	(5)	 [Canopius
Bermuda]1 Limited, a company incorporated under the laws of Bermuda (registered number [—]) whose registered office is at [Canon’s Court, 22 Victoria
Street, Hamilton HM12, Bermuda] ([CBL]]); 

  

	(6)	 [Canopius Holdings
Bermuda]2 Limited, a company incorporated under the laws of Bermuda (registered number [—]) whose registered office is at [Canon’s Court, 22 Victoria
Street, Hamilton HM12, Bermuda] ([CHBL]); 

  

	(7)	Omega Specialty Insurance Company Limited, a company incorporated under the laws of Bermuda (registered number EC37850) whose registered office is at Crown
House, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda (OSIL); and 

  

	(8)	Omega Underwriting Holdings Limited, a company incorporated in England and Wales (no. 0347588) whose registered office is at [Gallery 9, One Lime Street, London
EC3M 7HA] (OUHL). 

 Background: 
  

	(A)	CC2 and Flectat are indirect wholly owned subsidiaries of CGL. 

  

	(B)	CC2 is a corporate underwriting member of Lloyd’s which: 

  

	 	a.	participated in Syndicate 4444 at Lloyd’s (Syndicate 4444) for the 2010 underwriting year of account; 

 

	 	b.	did not participate in any other syndicate at Lloyd’s for the 2010 underwriting year of account; and 

 

	 	c.	did not underwrite at Lloyd’s for the 2011 underwriting year of account, does not underwrite at Lloyd’s for the 2012 underwriting year of account and will not
underwrite at Lloyd’s for the 2013 underwriting year of account. 

  

	1 	 Name of CBL square-bracketed pending confirmation as to the date of the envisaged change of name relative to the expected date of signature

	2 	 Name of CHBL square-bracketed pending confirmation as to the date of the envisaged change of name relative to the expected date of signature

  
 1 

	(C)	Flectat is a corporate underwriting member of Lloyd’s which: 

  

	 	a.	will underwrite at Lloyd’s as a member of Syndicate 4444, Lloyd’s Syndicate 260 (Syndicate 260) and Lloyd’s Syndicate 958 (Syndicate 958)
(but no other Lloyd’s syndicate) for the 2013 underwriting year of account; 

  

	 	b.	participates in Syndicate 4444 and Syndicate 260 (but no other Lloyd’s syndicate) for the 2012 underwriting year of account; 

 

	 	c.	participated in Syndicate 4444 and Syndicate 260 (but no other Lloyd’s syndicate) for the 2011 underwriting year of account; and 

 

	 	d.	participated in Syndicate 260 (but no other Lloyd’s syndicate for an Underwriting Year which is not closed) for the 2010 and prior underwriting years of account.

  

	(D)	The Managing Agent is the managing agent of Syndicate 4444, Syndicate 260 and Syndicate 958. 

 

	(E)	[CBL] (as reinsurer) and CC2 (as reinsured) are parties to a quota share reinsurance agreement dated 30 December 2009 (as amended by endorsement[s] dated [—] and as further amended and restated with effect from the Effective Date) in relation to the underwriting of CC2 as a member of Syndicate 4444 for the 2010 underwriting year of account (the
2010 CC2 LLQS). 

  

	(F)	[CBL] (as reinsurer) and Flectat (as reinsured) are parties to: 

  

	 	a.	a quota share reinsurance agreement dated 15 December 2010 (as amended and restated with effect from the Effective Date) in relation to the underwriting of Flectat
as a member of Syndicate 4444 for the 2011 underwriting year of account (the 2011 Flectat LLQS); and 

  

	 	b.	a quota share reinsurance agreement dated 1 December 2011 (as amended and restated with effect from the Effective Date) in relation to the underwriting of Flectat
as a member of Syndicate 4444 for the 2012 underwriting year of account (the 2012 Flectat LLQS). 

  

	(G)	CBL is a wholly owned subsidiary of CHBL [which at the date of this Deed is in turn a wholly owned subsidiary of CGL.] 

 

	(H)	 On 25 April 2012, CGL, CHBL, Canopius Mergerco, Inc. (a Delaware corporation and an indirect wholly owned subsidiary of CHBL) (Delaware
Holdco) and Tower Group, Inc. (Tower), entered into a Master Transaction Agreement (the MTA). The MTA conferred upon Tower the right, at its election, to (i) by delivering a Merger Notice and paying the Merger Exercise Price
(each as defined in the MTA), cause certain subsidiaries of CHBL to execute and deliver, and perform their obligations under, an Agreement and Plan of Merger in the form attached to the MTA (the Merger Agreement), pursuant to which a newly
formed subsidiary of Delaware Holdco that is a Delaware corporation (Merger Sub) will merge (the Merger) with and into Tower and the outstanding shares of the capital stock of Tower will be exchanged for Class A Ordinary Shares of CHBL
(CHBL Shares) and cash and (ii) cause CGL to sell, immediately prior to the Merger, all of the issued and outstanding CHBL Shares (other than the CHBL Shares to be paid to the stockholders of Tower as consideration in connection with the
Merger) (the Third Party Sale) to certain persons to be 

  
 2 

	 	
identified who are willing and able to purchase such CHBL Shares on the terms of the Third Party Sale Agreement (as defined in the MTA). Tower delivered the Merger Notice and paid the Merger
Exercise Price in accordance with the terms of the MTA on [—] July 2012 and the Merger Agreement was entered into on [—] 2012.

  

	(I)	[If appropriate, further recital(s) describing status of Third Party Sale at time of execution of this Deed] 

 

	(J)	The MTA provides that upon delivery of the Merger Notice and payment of the Merger Exercise Price, Tower, CGL and CHBL will, prior to completion of the Third Party
Sale, effect or cause to be effected the transactions described in Exhibit C to the MTA (collectively, the Restructuring). 

  

	(K)	For the purposes of the Restructuring, OSIL (as reinsurer) and [CBL] (as reinsured) have [become / agreed to become with effect from the Effective Date] parties to:

  

	 	a.	a contract of reinsurance in respect of certain of [CBL]’s rights and obligations pursuant to the 2010 CC2 LLQS (the 2010 Treaty); 

 

	 	b.	a contract of reinsurance in respect of certain of [CBL]’s rights and obligations pursuant to the 2011 Flectat LLQS (the 2011 Treaty); and

  

	 	c.	a contract of reinsurance in respect of certain of [CBL]’s rights and obligations pursuant to the 2012 Flectat LLQS (the 2012 Treaty).

  

	(L)	 [CBL] has, as part-security for its obligations under the 2010 CC2 LLQS, the 2011 Flectat LLQS and the 2012 Flectat LLQS, [agreed to] provide[d] to
Lloyd’s, for the benefit of CC2 and Flectat, FAL [having an aggregate value of £[—]3] to form part of the FAL supporting the underwriting of CC2 for the 2010 underwriting year of account as well as, by
way of ‘forward interavailability’, the underwriting of Flectat for the 2011 and 2012 underwriting years of account. 

  

	(M)	OSIL has, pursuant to the terms of the 2010 Treaty, the 2011 Treaty and the 2012 Treaty and in order to assist [CBL] to satisfy its obligations under the 2010 CC2 LLQS,
the 2011 Flectat LLQS and the 2012 Flectat LLQS concerning the provision of FAL, [agreed to] provide[d] to Lloyd’s, FAL [having an aggregate value of £[—]] to form part of the FAL of CC2
which, by way of ‘forward interavailability’, will support the underwriting of Flectat for the 2011 and subsequent underwriting years of account (and will also support the underwriting of CC2 for the 2010 underwriting year of
account as mentioned in recital (L)). 

  

	(N)	The members of the Canopius Group other than CC2 and Flectat which provide [at the date of this Deed] Own FAL are CGL, OSIL (in support of its obligations as reinsurer
of Flectat in respect of Flectat’s participation as a member of Syndicate 4444 for the 2010 Underwriting Year) and OUHL (the FAL provided by OUHL being cash and investments deposited in the FAL of Omega Dedicated Limited which support the
underwriting of Omega Dedicated Limited for the 2010 Underwriting Year, the 2011 Underwriting Year and the 2012 Underwriting Year as well as, by way of ‘forward interavailability’ the underwriting of Flectat for the 2013 Underwriting
Year). 

  

	3 	 i.e. the value of the total FAL that CBL will be providing itself (i.e. not including the OSIL FAL) at the outset of the Restructuring for the benefit
of CC2 and Flectat 

  
 3 

	(O)	The terms of each of the 2010 CC2 LLQS, the 2011 Flectat LLQS and the 2012 Flectat LLQS provide that in certain circumstances [CBL] may be required to provide
Reinsurer’s Additional 2010 Solvency FAL (as defined in the 2010 CC2 LLQS), Reinsurer’s Additional 2011 Solvency FAL (as defined in the 2011 Flectat LLQS) or, as the case may be, Reinsurer’s Additional 2012 Solvency FAL (as defined in
the 2012 Flectat LLQS) but that the provision of any such Reinsurer’s Additional 2010 Solvency FAL, Reinsurer’s Additional 2011 Solvency FAL or, as the case may be, Reinsurer’s Additional 2012 Solvency FAL shall not operate to
increase the limit on [CBL]’s aggregate liability under the 2010 CC2 LLQS, the 2011 Flectat LLQS and the 2012 Flectat LLQS. 

  

	(P)	The terms of each of the 2010 Treaty, the 2011 Treaty and the 2012 Treaty provide that in certain circumstances OSIL may be required to provide Additional OSIL 2010
Solvency FAL (as defined in the 2010 Treaty), Additional OSIL 2011 Solvency FAL (as defined in the 2011 Treaty) or, as the case may be, Additional OSIL 2012 Solvency FAL (as defined in the 2012 Treaty) but that the provision of any such Additional
OSIL 2010 Solvency FAL, Additional OSIL 2011 Solvency FAL or, as the case may be, Additional OSIL 2012 Solvency FAL shall not operate to increase the limit on OSIL’s aggregate liability under the 2010 Treaty, the 2011 Treaty and the 2012
Treaty. 

  

	(Q)	This Deed sets out, inter alia: 

  

	 	a.	the basis on which [CBL], OSIL, CC2, Flectat, CGL and OUHL will reimburse each other if Lloyd’s does not draw down the CC2/Flectat FAL in the manner they intend;

  

	 	b.	the terms and conditions upon which CGL agrees to guarantee certain obligations of CC2, Flectat, OSIL and OUHL towards [CBL] under this Deed; and

  

	 	c.	the terms and conditions upon which [CHBL] agrees to guarantee obligations of [CBL] under this Deed. 

It is agreed as follows: 
  

	1	Definitions and Interpretation 

  

	1.1	In this Deed (including its recitals), the following words and expressions have the meanings set out below: 

2010 CC2 LLQS: the meaning given in recital (E); 
 2010 LLQS Settlement Amount: the meaning given in the meaning given in Clause 2.1(b)(i)(A); 
 2010 Treaty: the meaning given in recital (K)a; 
 2010 Treaty Settlement
Amount: the meaning given in the meaning given in Clause 2.1(b)(i)(B); 
 2010 Underwriting Year: the Underwriting
Year commencing on 1 January 2010; 
 2011 Flectat LLQS: the meaning given in the meaning given in recital (F)b;

  
 4 

 2011 LLQS Settlement Amount: the meaning given in the meaning given in Clause
2.1(d)(ii)(A)(1); 
 2011 Treaty: the meaning given in recital (K)b; 

2011 Treaty Settlement Amount: the meaning given in the meaning given in Clause 2.1(d)(ii)(A)(2); 

2011 Underwriting Year: the Underwriting Year commencing on 1 January 2011; 

2012 Flectat LLQS: the meaning given in the meaning given in recital (F)a; 

2012 LLQS Settlement Amount: the meaning given in the meaning given in Clause 2.1(f)(ii)(A)(1); 

2012 Treaty: the meaning given in recital (K)c; 
 2012 Treaty Settlement Amount: the meaning given in the meaning given in Clause 2.1(f)(ii)(A)(2); 
 2012 Underwriting Year: the Underwriting Year commencing on 1 January 2012; 
 2013 Underwriting Year: the Underwriting Year commencing on 1 January 2013; 
 Auditors: the auditors for the time being of Syndicate 4444; 
 Business
Day: a day (other than a Saturday or Sunday) on which banks are generally open for business in London, Bermuda and Guernsey; 

Canopius Group: CGL and any subsidiary undertaking or parent undertaking of CGL or any subsidiary undertaking of such parent
undertaking; 
 Cash Amount: the meaning given to that term in Clause 3.5(a); 

[CBL] FAL: the FAL provided by [CBL] as referred to in recital (L) together with any additional FAL provided by [CBL] from
time to time pursuant to the terms of the 2010 LLQS, the 2011 LLQS or (as the case may be) the 2012 LLQS, and/or such assets, cash or other instruments acceptable to Lloyd’s as FAL which [CBL] may in substitution (in whole or in part) for such
FAL deposit with Lloyd’s from time to time PROVIDED that for the purposes of Clause 2.1, “[CBL] FAL” shall not include any Reinsurer’s Additional 2010 Solvency FAL, Reinsurer’s Additional 2011 Solvency FAL or
Reinsurer’s Additional 2012 Solvency FAL as referred to in recital (O); 
 [CBL] Guaranteed Obligations: the meaning
given to that term in Clause 5.1; 
 CC2/Flectat FAL: together the Own FAL, the [CBL] FAL and the OSIL FAL; 

CGL Guarantee: the meaning given to that term in Clause 4.2; 

[CHBL] Guarantee: the meaning given to that term in Clause 5.2; 

Correct Manner: the manner in which the CC2/Flectat FAL should be drawn down in accordance with Clause 2.1 in order to satisfy any
Lloyd’s Obligations arising out of the participation of CC2 or (as the case may be) Flectat on Syndicate 4444; 

  
 5 

 Deposit Trust Deeds: the Lloyd’s Deposit Trust Deeds referred to in the
definition of Lloyd’s Obligations; 
 Deposit Trust Fund: means each Trust Fund as defined in the relevant Deposit
Trust Deed; 
 Drawdown: the process by which the FAL supporting the underwriting at Lloyd’s of an underwriting
member of Lloyd’s is utilised to meet its Lloyd’s Obligations, and Drawn down shall be construed accordingly; 
 FAL
Providers: [CBL], OSIL, CC2, Flectat, CGL and OUHL; 
 FAL Providers’ Negotiation Period: the meaning given to
that term in Clause 3.10; 
 Funds at Lloyd’s or FAL: funds provided by an underwriting member of Lloyd’s
or a third party on behalf of an underwriting member of Lloyd’s held at Lloyd’s constituting cash, securities, guarantees and/or letters of credit in such form as and as otherwise permitted or determined from time to time by Lloyd’s
in accordance with, inter alia, the Membership and Underwriting Conditions and Requirements (Funds at Lloyd’s) (as amended or replaced from time to time); 
 Incorrect Drawdown: a Drawdown upon the CC2/Flectat FAL other than in the Correct Manner, and Incorrectly Drawn down and other derivative expressions shall be construed accordingly;

 Independent Advisor: the individual (being a partner of a firm of chartered accountants experienced in auditing
Lloyd’s managing agents and syndicates) appointed in accordance with Clause 3.15; 
 Lloyd’s: the society
incorporated by Lloyd’s Act 1871 by the name of Lloyd’s; 
 Lloyd’s Negotiation Period: the meaning given
to that term in Clause 3.1; 
 Lloyd’s Obligations: the meaning given to that expression in the Lloyd’s Deposit
Trust Deeds and/or (as the case may be) Security and Trust Deeds (whether interavailable or non-interavailable versions) to which CC2 and/or Flectat (as applicable), inter alios, is/are party from time to time in respect of any part of the
CC2/Flectat FAL; 
 LOC Amount: the meaning given to that term in Clause 3.5(b); 

Make Good FAL: the meaning given to that term in Clause 3.6; 

OSIL/CC2/Flectat/OUHL Guaranteed Obligations: the meaning given to that term in Clause 4.1; 

OSIL FAL: the FAL provided by OSIL as referred to in recital (M) together with any additional FAL provided by OSIL from time
to time pursuant to the terms of the 2010 Treaty, the 2011 Treaty or (as the case may be) the 2012 Treaty, and/or such assets, cash or other instruments acceptable to Lloyd’s as FAL which OSIL may in substitution (in whole or in part) for such
FAL deposit with Lloyd’s from time to time PROVIDED that for the purposes of Clause 2.1, “OSIL FAL” shall not include any Additional OSIL 2010 Solvency FAL, Additional OSIL 2011 Solvency FAL or Additional OSIL 2012 Solvency FAL as
referred to in recital (P); 

  
 6 

 Own FAL: means such part of the CC2/Flectat FAL as is provided from time to time by
or for CC2 or Flectat, either from its own assets by way of cash and/or investments, by another member of the Canopius Group by way of a third party deposit of cash and/or investments or by way of letters of credit or bank guarantees (other than
(i) any letters of credit or bank guarantees which may from time to time constitute all or part of the [CBL] FAL and (ii) any cash, investments, letters of credit or bank guarantees which may from time to time constitute all or part of the
OSIL FAL), the other members of the Canopius Group which provide [at the date of this Deed] part of the CC2/Flectat FAL (not including the [CBL] FAL or the OSIL FAL) being those referred to in recital (N); 

Parties: the parties to this Deed; 
 Paying FAL Provider: in relation to an Incorrect Drawdown, a FAL Provider whose FAL would have been drawn down (in whole or in part) if that Drawdown had been effected in the Correct Manner;

 Payments: the meaning given to that term in Clause 3.5; 

Rearrangement Actions: the meaning given to that term in Clause 3.1 and Rearrangement Action shall be construed accordingly;

 Receiving FAL Provider: in relation to an Incorrect Drawdown, a FAL Provider whose FAL should not have been drawn down
to the extent that it was, or at all, but was (in whole or in part) drawn down because of that Incorrect Drawdown; 

Reference Date: the meaning given to that term in Clause 2.1(b)(i); 

Releases: the meaning given to that term in Clause 3.8; 
 Restructuring: the meaning given in recital (J); 
 Security and Trust
Deeds: the Lloyd’s Security and Trust Deeds referred to in the definition of Lloyd’s Obligations; 
 Syndicate
260: the meaning given in recital (C); 
 Syndicate 958: the meaning given in recital (C); 

Syndicate 4444: the meaning given in recital (B); 
 Third Party Sale: the meaning given in recital (H); 
 Transaction
Documents: the 2010 CC2 LLQS, the 2011 Flectat LLQS, the 2012 Flectat LLQS, the 2010 Treaty, the 2011 Treaty, the 2012 Treaty and this Deed; 
 Trustees: has the meaning given to that expression in the relevant Deposit Trust Deeds and Security and Trust Deeds; and 
 Underwriting Year: an underwriting year of account at Lloyd’s, being a year commencing on 1 January and ending on the following 31 December. 

 

	1.2	Any clause, sub-clause or Schedule heading in this Deed is for ease of reference only and shall not affect the interpretation of this Deed. 

  
 7 

	1.3	The Schedules form part of and are deemed to be incorporated into this Deed. 

 

	1.4	Any reference to a clause or schedule is a reference to a clause of or schedule to this Deed. 

 

	1.5	Any reference to the singular includes a reference to the plural and vice versa. 

 

	1.6	“Subsidiary undertaking” and “parent undertaking” have the meanings given to those expressions in section 1162 of the Companies Act 2006.

  

	2	Drawdown of CC2/Flectat FAL 

  

	2.1	CC2, Flectat and the Managing Agent agree that in the event the CC2/Flectat FAL is to be called upon to meet any Lloyd’s Obligations they shall use their
respective reasonable commercial endeavours to procure that: 

  

	 	(a)	if the Lloyd’s Obligations are in relation to an interim cash call on the members of Syndicate 4444 for the 2010 Underwriting Year: 

 

	 	(i)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; 

 

	 	(ii)	57.8% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the OSIL FAL; and 

 

	 	(iii)	27.2% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL; 

 

	 	(b)	if the Lloyd’s Obligations are in relation to the 2010 Underwriting Year of Syndicate 4444 and the CC2/Flectat FAL is to be called upon to meet them on (or
following) closure of the 2010 Underwriting Year of Syndicate 4444: 

  

	 	(i)	there shall be calculated: 

  

	 	(A)	the amount payable by CBL to CC2 under Article 8 (Settlement) of the 2010 CC2 LLQS (which amount, for the avoidance of doubt, shall be net of any amount drawn from the
‘Reinsurer’s FAL’ in respect of an interim cash call under Article 12 of the 2010 CC2 LLQS, to the extent not repaid before the time of this calculation) (the “2010 LLQS Settlement Amount”); and

  

	 	(B)	the amount payable by OSIL to CBL or (as the case may be) by CBL to OSIL under Article V (Settlement) of the 2010 Treaty (which amount, for the avoidance of doubt,
shall be net of any amount drawn from the OSIL FAL in respect of an interim cash call under Article VI of the 2010 Treaty, to the extent not repaid before the time of this calculation) (the “2010 Treaty Settlement Amount”);

  

	 	(ii)	If the 2010 Treaty Settlement Amount is an amount due from OSIL to CBL: 

  

	 	(A)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; 

  
 8 

	 	(B)	that amount of the Lloyd’s Obligations as is equal to the 2010 Treaty Settlement Amount shall be met by Drawdown on the OSIL FAL; and 

 

	 	(C)	the balance of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL; 

 

	 	(iii)	If the 2010 Treaty Settlement Amount is an amount due from CBL to OSIL: 

  

	 	(A)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; and 

 

	 	(B)	the balance of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL, 

and CBL shall promptly pay to OSIL an amount equal to the 2010 Treaty Settlement Amount; 

 

	 	(c)	if the Lloyd’s Obligations are in relation to an interim cash call on the members of Syndicate 4444 for the 2011 Underwriting Year: 

 

	 	(i)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; 

 

	 	(ii)	76.5% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the OSIL FAL; and 

 

	 	(iii)	8.5% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL; 

 

	 	(d)	if the Lloyd’s Obligations are in relation to the 2011 Underwriting Year: 

 

	 	(i)	where they relate to Flectat’s underwriting as a member of Syndicate 260, they shall be met by Drawdown on the Own FAL; 

 

	 	(ii)	where they relate to Flectat’s underwriting as a member of Syndicate 4444 and the CC2/Flectat FAL is to be called upon to meet them on (or following) closure of
the 2011 Underwriting Year of Syndicate 4444: 

  

	 	(A)	there shall be calculated: 

  

	 	(1)	the amount payable by CBL to Flectat under Article 8 (Settlement) of the 2011 Flectat LLQS (which amount, for the avoidance of doubt, shall be net of any amount drawn
from the ‘Reinsurer’s FAL’ in respect of an interim cash call under Article 12 of the 2011 Flectat LLQS, to the extent not repaid before the time of this calculation) (the “2011 LLQS Settlement Amount”); and

  

	 	(2)	the amount payable by OSIL to CBL or (as the case may be) by CBL to OSIL under Article V (Settlement) of the 2011 Treaty (which amount, for the avoidance of doubt,
shall be net of any amount drawn from the OSIL FAL in respect of an interim cash call under Article VI of the 2011 Treaty, to the extent not repaid before the time of this calculation) (the “2011 Treaty Settlement Amount”);

  
 9 

	 	(B)	If the 2011 Treaty Settlement Amount is an amount due from OSIL to CBL: 

  

	 	(1)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; 

 

	 	(2)	that amount of the Lloyd’s Obligations as is equal to the 2011 Treaty Settlement Amount shall be met by Drawdown on the OSIL FAL; and 

 

	 	(3)	the balance of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL; 

 

	 	(C)	If the 2011 Treaty Settlement Amount is an amount due from CBL to OSIL: 

  

	 	(1)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; and 

 

	 	(2)	the balance of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL, 

and CBL shall promptly pay to OSIL an amount equal to the 2011 Treaty Settlement Amount; 

 

	 	(e)	if the Lloyd’s Obligations are in relation to an interim cash call on the members of Syndicate 4444 for the 2012 Underwriting Year: 

 

	 	(i)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; 

 

	 	(ii)	76.5% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the OSIL FAL; and 

 

	 	(iii)	8.5% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL; 

 

	 	(f)	if the Lloyd’s Obligations are in relation to the 2012 Underwriting Year: 

 

	 	(i)	where they relate to Flectat’s underwriting as a member of Syndicate 260, they shall be met by Drawdown on the Own FAL; 

 

	 	(ii)	where they relate to Flectat’s underwriting as a member of Syndicate 4444 and the CC2/Flectat FAL is to be called upon to meet them on (or following) closure of
the 2012 Underwriting Year of Syndicate 4444: 

  

	 	(A)	there shall be calculated: 

  

	 	(1)	the amount payable by CBL to Flectat under Article 8 (Settlement) of the 2012 Flectat LLQS (which amount, for the avoidance of doubt, shall be net of any amount drawn
from the ‘Reinsurer’s FAL’ in respect of an interim cash call under Article 12 of the 2012 Flectat LLQS, to the extent not repaid before the time of this calculation) (the “2012 LLQS Settlement Amount”); and

  
 10 

	 	(2)	the amount payable by OSIL to CBL or (as the case may be) by CBL to OSIL under Article V (Settlement) of the 2012 Treaty (which amount, for the avoidance of doubt,
shall be net of any amount drawn from the OSIL FAL in respect of an interim cash call under Article VI of the 2012 Treaty, to the extent not repaid before the time of this calculation) (the “2012 Treaty Settlement Amount”);

  

	 	(B)	If the 2012 Treaty Settlement Amount is an amount due from OSIL to CBL: 

  

	 	(1)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; 

 

	 	(2)	that amount of the Lloyd’s Obligations as is equal to the 2012 Treaty Settlement Amount shall be met by Drawdown on the OSIL FAL; and 

 

	 	(3)	the balance of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL; 

 

	 	(C)	If the 2012 Treaty Settlement Amount is an amount due from CBL to OSIL: 

  

	 	(1)	15% of the amount of the Lloyd’s Obligations shall be met by Drawdown on the Own FAL; and 

 

	 	(2)	the balance of the Lloyd’s Obligations shall be met by Drawdown on the [CBL] FAL, 

and CBL shall promptly pay to OSIL an amount equal to the 2012 Treaty Settlement Amount; 

 

	 	(g)	if the Lloyd’s Obligations are in relation to: 

  

	 	(i)	the 2013 or any subsequent Underwriting Year; 

  

	 	(ii)	any syndicate on which CC2 participated or participates other than Syndicate 4444 for the 2010 Underwriting Year; or 

 

	 	(iii)	any syndicate on which Flectat participated or participates other than Syndicate 4444 for the 2011 and 2012 Underwriting Years, 

none of them shall be met from the [CBL] FAL. 
 (the Correct Manner). 
  

	2.2	CC2, Flectat and the Managing Agent undertake to each of [CBL], OSIL, CGL and OUHL that, on being notified of any Lloyd’s Obligations in relation to which the
CC2/Flectat FAL is to be Drawn down, they will (i) notify each of [CBL], OSIL, CGL and OUHL as soon as reasonably practicable of such notification and (ii) exercise their rights under the voluntary Drawdown process and execute and file
with Lloyd’s as soon as reasonably practicable a member’s request for voluntary release of funds to meet such Lloyd’s Obligations, specifying in that request the extent to which (if at all) the [CBL] FAL, the OSIL FAL and/or (as the
case may be) the Own FAL should be utilised in order to be utilised in the Correct Manner. 

  
 11 

	2.3	The Parties shall execute any deeds or documents (in such form as may be prescribed by Lloyd’s) and take any steps under Lloyd’s requirements relating to the
Drawdown, release or substitution of FAL which any Party may reasonably request for the purpose of ensuring that (or avoiding any uncertainty as to whether) the CC2/Flectat FAL shall be Drawn down in the Correct Manner. 

 

	2.4	CC2, Flectat and the Managing Agent agree to: 

  

	 	(a)	provide to each of [CBL], OSIL, CGL and OUHL as soon as reasonably practicable (and, in any event, within five (5) Business Days of any such request) all available
information reasonably required by it in order to satisfy itself that the provisions of this Clause 2 have been complied with by the Parties in full; and 

  

	 	(b)	notify each of [CBL], OSIL, CGL and OUHL in writing as soon as reasonably practicable (and, in any event, within five (5) Business Days of any such request) of any
notification received by CC2, Flectat or the Managing Agent that the CC2/Flectat FAL are being called upon to meet any Lloyd’s Obligations. 

  

	3	Release, reduction, payment and substitution 

  

	3.1	Following an Incorrect Drawdown, [CBL], OSIL, CC2, Flectat, CGL and OUHL shall reimburse each other to the extent required (if at all) to put the parties in the
position they would have been in if that Drawdown had been implemented in the Correct Manner, in accordance with the procedures set out in this Clause 3. 

  

	3.2	If in relation to the Incorrect Drawdown the [CBL] FAL has been drawn down (in whole or in part) but none of the CC2/Flectat FAL provided by any of the FAL Providers
other than [CBL] has been drawn down, CGL will pay or cause another Canopius Group company to pay to [CBL], within five (5) Business Days of the occurrence of the Incorrect Drawdown, an amount in cash equal to the amount which was drawn down
from the [CBL] FAL but which would not have been so drawn down if the Drawdown had been implemented in the Correct Manner. 

  

	3.3	In relation to an Incorrect Drawdown, the provisions of Clauses 3.4 to 3.14 (inclusive) shall apply if Clause 3.2 does not apply. 

 

	3.4	CC2 and Flectat, in consultation with the relevant Paying FAL Provider(s) and the relevant Receiving FAL Provider(s), will promptly liaise with the Trustees and
Lloyd’s and conduct good faith negotiations for no longer than ten (10) Business Days (or such longer period as may be agreed by the Receiving FAL Provider) following the date of the Incorrect Drawdown (the Lloyd’s Negotiation
Period) with a view to agreeing with the Trustees and Lloyd’s the necessary payments, releases and/or provision of Make Good FAL (as further described in Clauses 3.5 to 3.10 (inclusive) below) (together, Rearrangement Actions)
required to restore the relevant elements of the CC2/Flectat FAL to the position that would have pertained had there been no Incorrect Drawdown. 

  
 12 

	3.5	If, before the end of the Lloyd’s Negotiation Period, the Trustees and Lloyd’s have agreed upon Rearrangement Actions, then, within five (5) Business
Days of such agreement each Paying FAL Provider shall: 

  

	 	(a)	where it provides its FAL by way of cash and/or investments, direct the payment to the relevant Receiving FAL Providers (in their due proportions) of such part of the
income and capital of the relevant Deposit Trust Funds as is equal to the amount which should have been drawn down from the Paying FAL Provider’s FAL (a Cash Amount) in order for the Drawdown to have occurred in the Correct Manner;
and/or 

  

	 	(b)	where it provides its FAL by way of letter of credit or guarantee, pay in cash to the relevant Receiving FAL Providers (in their due proportions) an amount equal to the
amount which should have been drawn down from that Paying FAL Provider’s letter of credit and/or bank guarantee (a LOC Amount) in order for the Drawdown to have occurred in the Correct Manner, 

(together the Payments) and each of the Parties shall execute and complete such documents and deeds in the forms required by
Lloyd’s to give effect to the agreed Rearrangement Actions. Payments made under this Clause 3.5 to a Receiving FAL Provider shall be in such form that is permitted by Lloyd’s to constitute FAL and in such form as the Receiving FAL Provider
and the Paying FAL Provider may agree (or in the absence of agreement, in cash). 
  

	3.6	A Receiving FAL Provider who has received a Payment pursuant to Clause 3.5 above, shall provide further Funds at Lloyd’s for CC2 and/or Flectat (as applicable) in
the same amount as the Cash Amount and/or, as the case may be, the LOC Amount received by such Receiving FAL Provider (and in the case where such further Funds at Lloyd’s comprise wholly or partially a letter of credit or bank guarantee, having
the same expiry date as the letter of credit or bank guarantee originally drawn down for the purpose of paying the relevant Lloyd’s Obligations) (the Make Good FAL). 

 

	3.7	The provision of such Make Good FAL shall be conditional upon either (i) receipt by the Receiving FAL Provider of the Payments or (ii) the Receiving FAL
Provider being satisfied, acting reasonably, that it will receive the Payments promptly following provision of the Make Good FAL. 

  

	3.8	Each Paying FAL Provider shall only be obliged to make a Payment if and to the extent that either (i) the Trustees have released or (ii) the Paying FAL
Provider is satisfied, acting reasonably, that the Trustees will release promptly following the making of the Payment: 

  

	 	(a)	the Cash Amount from the Deposit Trust Fund and from the trusts of the relevant Deposit Trust Deed; and/or 

 

	 	(b)	the issuer of the Paying FAL Provider’s letter of credit and/or bank guarantee from its liability in respect of the LOC Amount, 

(together the Releases). 
  

	3.9	 Each Party acknowledges and agrees that each of the Payments, the Releases and the provision of the Make Good FAL may be conditional upon the
occurrence of the other agreed Rearrangement Actions and the Parties shall use all reasonable endeavours to ensure that the Releases, the 

  
 13 

	 	
Payments and the provision of the Make Good FAL are coordinated to the satisfaction of the Parties, Lloyd’s and the Trustees and occur simultaneously. 

 

	3.10	If, by the end of the Lloyd’s Negotiation Period, the Trustees and Lloyd’s have not agreed upon Rearrangement Actions, then CC2, Flectat, the Paying FAL
Provider and the Receiving FAL Provider will promptly negotiate in good faith for no longer than ten (10) Business Days (or such longer period as may be agreed by the Receiving FAL Provider) following the end of the Lloyd’s Negotiation
Period (the FAL Providers’ Negotiation Period) with a view to agreeing any other solution which the Receiving FAL Provider would be willing to accept in respect of the relevant Incorrect Drawdown. 

 

	3.11	If, by the end of the FAL Providers’ Negotiation Period, the Receiving FAL Provider has not agreed upon Rearrangement Actions: 

 

	 	(a)	CC2 (if the Cash Amount and/or the LOC Amount, as the case may be, is in respect of an Incorrect Drawdown relating to Lloyd’s Obligations which are in relation to
the 2010 Underwriting Year) shall within ten (10) Business Days pay to the Receiving FAL Provider an amount equal to the Cash Amount and/or the LOC Amount (as the case may be) and shall indemnify and keep the Receiving FAL Provider indemnified
against any losses, liabilities, reasonable costs and reasonable expenses suffered or incurred by the Receiving FAL Provider (other than by reason of the Receiving FAL Provider’s gross negligence or wilful misconduct) directly as a result of
the Incorrect Drawdown; 

  

	 	(b)	Flectat (if the Cash Amount and/or the LOC Amount, as the case may be, is in respect of an Incorrect Drawdown relating to Lloyd’s Obligations which are in relation
to the 2011 Underwriting Year, the 2012 Underwriting Year or the 2013 or a subsequent Underwriting Year) shall within ten (10) Business Days pay to the Receiving FAL Provider an amount equal to the Cash Amount and/or the LOC Amount (as the case
may be) and shall indemnify and keep the Receiving FAL Provider indemnified against any losses, liabilities, reasonable costs and reasonable expenses suffered or incurred by the Receiving FAL Provider (other than by reason of the Receiving FAL
Provider’s gross negligence or wilful misconduct) directly as a result of the Incorrect Drawdown. 

  

	3.12	Notwithstanding anything to the contrary in this Deed, neither CC2 nor Flectat shall be liable under this Deed to any Receiving FAL Provider pursuant to Clause 3.11 for
any amounts in excess of the aggregate face value of the CC2/Flectat FAL provided by such Receiving FAL Provider. 

  

	3.13	Upon receipt pursuant to Clause 3.11 above of an amount equal to the Cash Amount and/or the LOC Amount (as the case may be), the Receiving FAL Provider shall provide
Make Good FAL as provided in accordance with Clause 3.6 above (as if the reference in that clause to Clause 3.5 were a reference to clause 3.11 above and as if the payment from CC2 or Flectat (as the case may be) pursuant to Clause 3.11 above had
been a Payment). 

  

	3.14	If Lloyd’s and/or the Trustees subsequently agree to Releases and other Rearrangement Actions, the Paying FAL Provider shall pay (or direct the payment of) the
Cash Amount and/or the LOC Amount (as the case may be) to CC2 or Flectat (as the case may be). 

  
 14 

	3.15	In the event that there is either (i) a dispute as to whether there has been an Incorrect Drawdown or (ii) the Parties are unable, acting in good faith, to
agree within five (5) Business Days of an Incorrect Drawdown the amount of the Cash Amount or the LOC Amount (as the case may be) or who the Paying FAL Providers or Receiving FAL Providers are in relation to such amount, CC2 and Flectat shall
on the next following Business Day jointly instruct the Independent Advisor, to be agreed between the Parties at such time (and, if the parties are unable to agree an Independent Advisor by that time, the Independent Advisor shall be the Syndicate
Auditor) to determine (with full regard being paid to, inter alia, all the Transaction Documents) whether there has been an Incorrect Drawdown, the amount of the Cash Amount or the LOC Amount (as the case may be) or who the Paying FAL Providers or
Receiving FAL Providers are (as the case may be) within fifteen (15) Business Days of being so instructed. The Independent Advisor or the Syndicate Auditor (as the case may) be shall act as an expert and not as an arbitrator and its written
determination shall, save in the case of manifest or clerical error, be binding on all the Parties. If the Independent Advisor or the Syndicate Auditor (as the case may be) is required to make a determination under this Clause 3.15, the Lloyd’s
Negotiation Period or the FAL Providers’ Negotiation Period or the commencement of the period of five (5) Business Days referred to in Clause 3.2 (as the case may be) shall commence on the date of that determination.

  

	4	Guarantee by CGL 

  

	4.1	CGL unconditionally and irrevocably guarantees to [CBL] the due and punctual performance: 

 

	 	(a)	by OSIL, CC2, Flectat and OUHL of their respective obligations as a Paying FAL Provider in Clause 3.5 towards [CBL] and as a Receiving FAL Provider in Clause 3.6 and
Clause 3.13; and 

  

	 	(b)	by CC2 and Flectat of their respective obligations in Clause 3.11 of this Deed towards [CBL] in its capacity as a Receiving FAL Provider 

(together the OSIL/CC2/Flectat/OUHL Guaranteed Obligations) in each case as any of such obligations and liabilities may from time
to time be varied, extended, increased or replaced (and irrespective of the amount or degree of such variation, extension, increase or replacement) and undertakes to keep [CBL] fully indemnified against all liabilities, losses, proceedings, claims,
damages, costs and expenses of whatever nature which [CBL] may suffer or incur as a result of any failure or delay by OSIL, CC2, Flectat or OUHL (as the case may be) in the performance of any of such obligations and liabilities. 

 

	4.2	 If any obligation or liability of OSIL, CC2, Flectat or OUHL (as the case may be) expressed to be the subject of the guarantee contained in this Clause
4 (the CGL Guarantee) is not or ceases to be valid or enforceable against OSIL, CC2, Flectat or OUHL (as applicable) (in whole or in part) on any ground whatsoever (including, but not limited to, any defect in or want of powers of OSIL, CC2,
Flectat or OUHL (as applicable), or irregular exercise of such powers, or any lack of authority on the part of any person purporting to act on behalf of OSIL, CC2, Flectat or OUHL (as applicable), or any legal or other limitation, disability or
incapacity, or any change in the constitution 

  
 15 

	 	
of, or any amalgamation or reconstruction of OSIL, CC2, Flectat or OUHL (as applicable), or OSIL, CC2, Flectat or OUHL (as applicable) taking steps to enter into or entering into bankruptcy,
liquidation, administration or insolvency, or any other step being taken by any person with a view to any of those things), CGL shall nevertheless be liable to [CBL] in respect of that purported obligation or liability as if the same were fully
valid and enforceable and CGL was the principal debtor in respect thereof. 

  

	4.3	The liability of CGL to [CBL] under the CGL Guarantee shall not be discharged or affected in any way by: 

 

	 	(a)	[CBL] compounding or entering into any compromise, settlement or arrangement with OSIL, CC2, Flectat or OUHL, any co-guarantor or any other person; or

  

	 	(b)	any variation, extension, increase, renewal, determination, release or replacement of any of the Transaction Documents, whether or not made with the consent or
knowledge of CGL; or 

  

	 	(c)	[CBL] granting any time, indulgence, concession, relief, discharge or release to OSIL, CC2, Flectat or OUHL, any co-guarantor or any other person or realising, giving
up, agreeing to any variation, renewal or replacement of, releasing, abstaining from or delaying in taking advantage of or otherwise dealing with any securities from or other rights or remedies which it may have against OSIL, CC2, Flectat or OUHL,
any co-guarantor or any other person; or 

  

	 	(d)	any other matter or thing which, but for this provision, might exonerate or affect the liability of CGL. 

 

	4.4	[CBL] shall not be obliged to take any steps to enforce any rights or remedy against OSIL, CC2, Flectat or OUHL or any other person before enforcing the CGL Guarantee.

  

	4.5	The CGL Guarantee is in addition to any other security or right now or hereafter available to [CBL] and is a continuing security notwithstanding any entering into
liquidation, administration or insolvency or steps being taken by any person with a view to any of those things or other incapacity of OSIL or CC2 or Flectat or CGL or any change in the ownership of any of them. 

 

	4.6	Until the full and final discharge of the OSIL/CC2/Flectat/OUHL Guaranteed Obligations, CGL: 

 

	 	(a)	waives all of its rights of subrogation, reimbursement and indemnity against each of OSIL, CC2, Flectat and OUHL relating to the CGL Guarantee and all rights of
contribution against any co-guarantor in respect of the CGL Guarantee and agrees not to demand or accept any security from OSIL, CC2, Flectat or OUHL or any co-guarantor in respect of any such rights and not to prove in competition with [CBL] in
respect of such rights in the bankruptcy, liquidation or insolvency of OSIL, CC2, Flectat or OUHL or any such co-guarantor; and 

  

	 	(b)	agrees that it will not claim or enforce payment (whether directly or by set-off, counterclaim or otherwise) of any amount which may be or has become due to CGL by
OSIL, CC2, Flectat or OUHL (as applicable), any co-guarantor or any other person liable to [CBL] in respect of the obligations hereby guaranteed if and so long as CGL is in default under this Deed. 

  
 16 

	4.7	Any moneys received by [CBL] under the CGL Guarantee may be placed to the credit of a suspense account with a view to preserving its rights to prove for the whole of
its claims against OSIL, CC2, Flectat or OUHL or any other person. 

  

	4.8	If the CGL Guarantee is discharged or released in consequence of any performance by OSIL, CC2, Flectat or OUHL of the OSIL/CC2/Flectat/OUHL Guaranteed Obligations which
is subsequently set aside for any reason, the CGL Guarantee shall be automatically reinstated in respect of the relevant obligations. 

  

	4.9	Any right which CGL has or may at any time have under the existing or future laws of the Bailiwick of Guernsey pursuant to the principle of “droit de
discussion” or otherwise to require that recourse be had to the assets of any other person before any action is taken hereunder against CGL is hereby abandoned and waived and CGL covenants that if at any time [CBL] sues CGL in respect of the
obligations hereunder and OSIL, CC2, Flectat or OUHL (as the case may be) is not sued then CGL shall not claim pursuant to the principle of “droit de division” or otherwise that OSIL, CC2, Flectat or OUHL (as the case may be) be made a
party to the proceedings and/or that CGL’s liability be divided or apportioned with OSIL, CC2, Flectat or OUHL (as the case may be) or any other person and CGL agrees to be bound by this present security whether the formalities required by any
local custom or law whether existing or future in regard to the rights or obligations of surety shall or shall not have been observed. 

  

	5	Guarantee by [CHBL] 

  

	5.1	[CHBL] unconditionally and irrevocably guarantees to each of OSIL, CC2, Flectat and CGL the due and punctual performance by [CBL] of its obligations as a Paying FAL
Provider in Clause 3.5 and as a Receiving FAL Provider in Clause 3.6 and Clause 3.13 (the [CBL] Guaranteed Obligations) in each case as any of such obligations and liabilities may from time to time be varied, extended, increased or replaced
(and irrespective of the amount or degree of such variation, extension, increase or replacement) and undertakes to keep each of OSIL, CC2, Flectat and CGL fully indemnified against all liabilities, losses, proceedings, claims, damages, costs and
expenses of whatever nature which it may suffer or incur as a result of any failure or delay by [CBL] in the performance of any of such obligations and liabilities. 

 

	5.2	If any obligation or liability of [CBL] expressed to be the subject of the guarantee contained in this Clause 5 (the [CHBL] Guarantee) is not or ceases to be
valid or enforceable against [CBL] (in whole or in part) on any ground whatsoever (including, but not limited to, any defect in or want of powers of [CBL], or irregular exercise of such powers, or any lack of authority on the part of any person
purporting to act on behalf of [CBL], or any legal or other limitation, disability or incapacity, or any change in the constitution of, or any amalgamation or reconstruction of [CBL], or [CBL] taking steps to enter into or entering into bankruptcy,
liquidation, administration or insolvency, or any other step being taken by any person with a view to any of those things), [CHBL] shall nevertheless be liable to OSIL, CC2, Flectat or OUHL (as applicable) in respect of that purported obligation or
liability as if the same were fully valid and enforceable and [CHBL] was the principal debtor in respect thereof. 

  
 17 

	5.3	The liability of [CHBL] to each of OSIL, CC2, Flectat and OUHL under the [CHBL] Guarantee shall not be discharged or affected in any way by: 

 

	 	(a)	OSIL, CC2, Flectat or OUHL compounding or entering into any compromise, settlement or arrangement with [CBL], any co-guarantor or any other person; or

  

	 	(b)	any variation, extension, increase, renewal, determination, release or replacement of any of the Transaction Documents, whether or not made with the consent or
knowledge of [CHBL]; or 

  

	 	(c)	OSIL, CC2, Flectat or OUHL granting any time, indulgence, concession, relief, discharge or release to [CBL], any co-guarantor or any other person or realising, giving
up, agreeing to any variation, renewal or replacement of, releasing, abstaining from or delaying in taking advantage of or otherwise dealing with any securities from or other rights or remedies which it may have against [CBL], any co-guarantor or
any other person; or 

  

	 	(d)	any other matter or thing which, but for this provision, might exonerate or affect the liability of [CHBL]. 

 

	5.4	None of OSIL, CC2, Flectat and OUHL shall be obliged to take any steps to enforce any rights or remedy against [CBL] or any other person before enforcing the [CHBL]
Guarantee. 

  

	5.5	The [CHBL] Guarantee is in addition to any other security or right now or hereafter available to OSIL, CC2, Flectat or OUHL and is a continuing security notwithstanding
any entering into liquidation, administration or insolvency or steps being taken by any person with a view to any of those things or other incapacity of [CBL] or [CHBL] or any change in the ownership of any of them. 

 

	5.6	Until the full and final discharge of the [CBL] Guaranteed Obligations, [CHBL]: 

 

	 	(a)	waives all of its rights of subrogation, reimbursement and indemnity against [CBL] relating to the [CHBL] Guarantee and all rights of contribution against any
co-guarantor in respect of the [CHBL] Guarantee and agrees not to demand or accept any security from [CBL] or any co-guarantor in respect of any such rights and not to prove in competition with OSIL, CC2, Flectat or OUHL in respect of such rights in
the bankruptcy, liquidation or insolvency of [CBL] or any such co-guarantor; and 

  

	 	(b)	agrees that it will not claim or enforce payment (whether directly or by set-off, counterclaim or otherwise) of any amount which may be or has become due to [CHBL] by
[CBL], any co-guarantor or any other person liable to OSIL, CC2, Flectat or OUHL in respect of the obligations hereby guaranteed if and so long as [CHBL] is in default under this Deed. 

 

	5.7	Any moneys received by OSIL, CC2, Flectat or OUHL under the [CHBL] Guarantee may be placed to the credit of a suspense account with a view to preserving its rights to
prove for the whole of its claims against [CBL] or any other person. 

  
 18 

	5.8	If the [CHBL] Guarantee is discharged or released in consequence of any performance by [CBL] of the [CBL] Guaranteed Obligations which is subsequently set aside for any
reason, the [CHBL] Guarantee shall be automatically reinstated in respect of the relevant obligations. 

  

	6	Assignments and Transfers 

The parties to this Deed may not assign, transfer or dispose of any of their rights, benefits or obligations under this Deed. 

 

	7	Default Interest 

  

	7.1	If a party to this Deed fails to pay an amount (the overdue amount) payable by it under this Deed interest shall accrue and be payable by that party on the
overdue amount from the date on which it becomes due up to the date of actual payment in full (after as well as before judgement) at the rate of 2 per cent above the base rate from time to time of National Westminster Bank Plc.

  

	7.2	Interest calculated under this Clause 7 shall be calculated day to day and on the basis of a 365 day year. 

 

	7.3	Interest payable in accordance with this Clause 7 shall be payable at the end of each month failing which it shall be compounded. 

 

	8	Giving of Notices 

  

	8.1	Every notice or other communication given or made under or in connection with this Deed shall be in writing and may be delivered by letter or facsimile to:

  

	 	(a)	CC2, Flectat and the Managing Agent at: 

 Gallery 9 
 One Lime Street 

London EC3M 7HA 

Attention: [                    ]

  

	 	(b)	CGL at: 

 Ogier House 

St Julian’s Avenue 
 St Peter Port 
 Guernsey GY1 1WA 

Attention: [                    ]

  

	 	(c)	[CBL] and [CHBL] at: 

[                    ] 

Attention: [                    ]

  

	 	(d)	OSIL at: 

[                    ] 

Attention: [                    ]

 or at such other address [or to such other facsimile number] as the relevant party may notify in writing to the other party.

  
 19 

	8.2	Receipt of notices 

 A
notice or communication which is: 
  

	 	(a)	delivered personally or posted (by recorded delivery), shall be deemed to have been given or made at the time when it is actually delivered; 

 

	 	(b)	[sent by facsimile, shall be deemed to have been given or made when despatched provided that, an error-free transmission slip is printed out on the sender’s
facsimile machine and the recipient has not contacted the sender within two (2) hours of transmission claiming receipt of an illegible copy.] 

 However, a notice or communication given or made in accordance with this Clause 8.2 which is received on a day which is not a Business Day or after 5.00 p.m. in the place of receipt will only be deemed to
have been given or made on the next Business Day in that place and any notice or communication sent by facsimile less than two (2) hours before 5.00 p.m. on a Business Day in the place of receipt shall be deemed to have been given or made at
9.00 a.m. in the place of receipt on the next Business Day. 
  

	9	Miscellaneous 

  

	9.1	Severability 

 If any
provision of this Deed is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Deed shall be in any way affected or
impaired in that jurisdiction nor shall that or any other provision under this Deed be affected or impaired under the law of any other jurisdiction. 
  

	9.2	Counterparts 

 This Deed
may be executed in any number of counterparts and by the Parties on separate counterparts. Each counterpart shall constitute an original of this Deed, but together the counterparts shall constitute one document. 

 

	9.3	Third party rights 

 A
person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Deed, but this does not affect any rights or remedy of a third party which exists or is available otherwise than
by virtue of that Act. 
  

	9.4	Alteration or Variations 

No purported alteration or variation of this Deed shall be effective unless it is in writing, refers specifically to this Deed and is duly
executed by each party hereto. 

  
 20 

	9.5	No Partnership 

 Nothing
in this Deed, and no action taken under this Deed, shall create a partnership or establish a relationship of principal and agent between any of the Parties or otherwise authorise any Party to bind any other Party for any purpose. 

 

	9.6	Gross-up 

 All sums
payable by any Party under this Deed must be paid in full without any set-off or counterclaim and (save in so far as required by law to the contrary) free and clear of, and without, any deduction or withholding whatsoever. If any Party is at any
time required by law to make any deduction or withhold any payment to any other Party, then the paying Party must immediately pay to the receiving Party such additional amounts as will result in the receiving Party receiving the full amount it would
have received had no such deduction or withholding been required. 
  

	9.7	Termination 

 Unless
otherwise agreed by the Parties, the obligations of the Parties under this Deed shall (save for any payment obligation or other liability that arises on or prior to such date) terminate on the later of (i) the date on which the last of the 2010
Underwriting Year, the 2011 Underwriting Year and the 2012 Underwriting Year of Syndicate 4444 to be reinsured to closed is so closed and (ii) the date that the [CBL] FAL is released by Lloyd’s. 

 

	10	Arbitration 

  

	10.1	Any dispute between any of the Parties arising out of or relating to the interpretation, performance or breach of this Deed, as well as the formation, validity, binding
effect and/or termination thereof and/or any non-contractual claims, shall be referred to arbitration under ARIAS UK Arbitration Rules by a panel of three arbitrators. A party (the claimant) may request arbitration in writing sent to the other(s)
(the respondent) by certified or registered post, return receipt requested. 

  

	10.2	One arbitrator shall be chosen by the claimant and one by the respondent, and the two arbitrators shall, before instituting the hearing, choose an impartial third
arbitrator who shall preside at the hearing. If the respondent fails to appoint its arbitrator within 30 days after being requested to do so by the claimant, the claimant may appoint the second arbitrator. 

 

	10.3	Where the two party-appointed arbitrators have failed to appoint a third arbitrator within 30 days of the arbitration demand, then upon application ARIAS (UK) will
appoint an arbitrator to fill the vacancy. At any time prior to the appointment by ARIAS (UK) the party or arbitrators in default may make such appointment. 

 

	10.4	All arbitrators will be disinterested persons (including those who have retired) having at least 10 years experience of insurance or reinsurance within the industry or
as lawyers or other professional advisers serving the industry. 

  

	10.5	Within 30 days after notice of appointment of all arbitrators the panel will meet and determine timely periods for briefs, discovery procedures and schedules for
hearings. 

  
 21 

	10.6	The panel may in its sole discretion make such orders and directions as it considers to be necessary for the final determination of the matters in dispute and shall
have the widest discretion permitted under the law governing the arbitral procedure when making such orders or directions. Unless the panel agrees otherwise, arbitration will take place in England, but the venue may be changed when the panel deems
such change to be in the best interest of the arbitration proceeding. The decision of any two arbitrators when rendered in writing will be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.

  

	10.7	Each party will bear the costs of its own arbitrator and will bear, jointly and equally with the other party, the costs of the third arbitrator. The panel will allocate
the remaining costs of the arbitration. The panel may, at its discretion, award such further costs, interest and expenses as it considers appropriate, including without limitation, with respect to legal fees. 

 

	10.8	The governing law of this Deed shall be the substantive law of England and Wales. 

 

	10.9	The provisions of this Clause 10 shall survive the expiration or termination of this Deed. 

 In Witness whereof this document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it 
 [Execution clauses] 

  
 22

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