q22019exhibit102amtrustm






                                                            EXECUTION COPY                    COMMUTATION AGREEMENT          AND RELEASE         This Commutation and Release Agreement ("Commutation Agreement") entered into and  effective as of July 31, 2019 (the "Eliective Date"), is entered into by AmTrust  International  Insurance, Ltd (the "Company") and Maiden Reinsurance Ltd., (the "Reinsurer," and, together  with the Company, each a "Party" and, collectively, the "Parties").                                      RECITALS       I. The Company and Rei.usurer are patties to the Amended and Restated Quota Share         Reinsurance Agreement. as amended (the "AR Quota Share"), which was in effect for the         period from July I, 2007 through January I, 2019, by which the Company ceded and the        Rei.usurer assumed fo1ty percent (40%) of Affiliate Subject Premium, as defined in the        AR Quota Share, and forty percent (40%) of Ultimate Net Loss, as defined in the AR        Quota Share, with respect to business classified by the Company as workers'        compensation business, among other Covered Business, as defined in the AR Quota        Share.      2. The Parties wish to enter into th is Commutation Agreement to provide: (a) for the re­       assumption by the Company from the Reinsurer of all reserves, including IBNR, ceded         by the Company to the Reinsurerwith respect to the Reinsurer' s forty percent (40%) of        Ultimate Net Loss related to: (a) all losses incurred in Accident Year 2017 and Accident        Year 2018 under California workers' compensation policies issued by the Company's        Affiliates, as defined in the AR Quota Share (the "Commuted California Business"); and        (b) all losses incurred in Accident Year 2018 under New York workers' compensation         policies issued by the Company's Affiliates (the "Commuted New York Business" and,        together with the Commuted California Business, the "Commuted Business"), in        exchange for the release and full discharge ofReinsurer of all of its obligations to the        Company with respect to the Commuted Business. For the avoidance of doubt, the        Commuted Business does not include any business (i) classified by the Company as        Specialty Program or Specialty Middle-Market business or (ii) issued by a Republic        Group company. A "Republic Group company" means any Company Affiliate which        also is a direct or indirect subsidiary of Republic Companies, Inc.   NOW, THEREFORE, the Parties agree as follows:       A . Commutation and Release          I. The Company and the Reinsurer agree that their liability to each other solely with           respect to the Commuted Business shall be discharged by the Reinsurer's delivery to           the Company of cash and invested assets in the amount of$312,785,677 (the           "Commutation Pavment"), which is the sum of the net ceded reserves in the amount           of $330,68 1,515 with respect to the Commuted Business as of 12.31. 18 less payments                           [Commutation Agreement and Release]  





 






       in the amount of $ 17,895,838 made by the Reinsurer with respect to the Commuted        Business from 1. 1.19 through the Effective Date. The Commutation Payment plus        interest on that amount at the rate of3.3% per annum from January I, 2019 through        the Eflective Date, inclusive of both dates, shall be made by the Reinsurer within live         business days of the Effective Date. The Company and the Reinsurer acknowledge        that they are patties to a Reinsurer Trust Assets Collateral Agreement dated as of        December I, 2008, as amended (the "Collateral Agreement"), pursuant to which the         Reinsurer posts collateral for the benefit of the Company and/or it5 Affiliates in order        to satisfy Reinsurer's obligation to provide security pursuant to Article XXIII of AR        Quota Share. The Company and the Reinsurer agree that it is their intent that the        Commutation Payment will be funded on behalf of the Reinsurer by the Company        and the Reinsurer jointly directing the trnstee holding the collateral under the        Collateral Agreement to release to the Company assets jointly selected by the        Company and the Reinsurer with an aggregate fair market value equal to the        Collateral Payment.      2. Upon receipt of the Commutation Payment by the Company, the Company and the        Reinsurer mutually release and forever discharge each other and their predecessors,        successors, parents, assigns, officers, directors, agents, employees, representatives,         liquidators, rehabilitators, receivers, shareholders, heirs, executors, administrators and        attorneys from any and all past, present and future obligations, adjustments, liability        for payment of interest, offsets, actions, causes of action, suits, debts, sum of money,        accounts, premium payments, reckonings, bonds, bills, covenants, contracts,        controversies, agreements, promises, damages, judgments, liens, rights, costs and        expenses (including attorneys' fees and costs actually incurred), claims and demands,         liabilities and losses of any nature, kind, character and description whatsoever,        whether grounded in law or in equity, in admiralty, in contract, in tort or otherwise        (including any claims based on fraud, bad faith or extra-contractual liabilities), all        whether known or unknown, repo1ted or unreported, discovered or undiscovered,        suspected or unsuspected, vested or contingent that the Company or the Reinsurer, as        the case may be, now has, owns or holds or claims to have, own or hold or at any time        had, owned or held, or claimed to have had, owned or held, arising of conduct or        matters occurring prior to, at or subsequent to the execution of this Commutation        Agreement against the Company or the Reinsurer, as the case may be, to the extent        arising from, based upon or in any way related to the Commuted Business, it being        the intention of the Parties that this release operate as a foll and final settlement of        each of the Company's and the Reinsurer's past, current and future liabilities to the        other to the extent arising out of or in connection with the Commuted Business and        obligations arising under or related to the Commuted Business.   B. Amendment of AR Quota Share.                                        2  





 






   The Company and the Reinsurer agree that as of the Effective Date, the AR Quota Share     shall be deemed amended as applicable so that the Commuted Business is no longer     included as patt of the Covered Business thereunder. This Commutation Amendment is      limited by its terms and does not and shall not serve 10 amend or waive any other      provision oftbe AR Quota Share Agreement.   C. Independent Investigation; Special \1/aiver       I. The Parties acknowledge that they have each entered into this Commutation        Agreement in reliance on their own independent investigation and analysis of the         facts underlying their participation in the AR Quota Share, and that no        representations, warranties or promises of any kind have been made, directly or        indirectly, to induce them to execute this Commutation Agreement other than those        which are expressly set forth herein. Nevertheless, the Parties acknowledge that they        may later discover facts different from or in addition to those now known or believed        to be known regarding their participation in AR Quota Share and agree that this        Commutation Agreement shall remain in force notwithstanding the existence of or         belief regarding any different or additional facts.      2.  The Parties explici tly agree that a ll rights under Section 1542 of the California Civil        Code or any similar provisions of law are hereby expressly waived. Section 1542 of        the California Civil Code provides as follows:            A  GENERAL   RELEASE   DOES  NOT  EXTEND   TO  CLAIMS           WHICH THE CREDITOR DOES NOT KNOW        OR SUSPECT TO           EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING           THE  RELEASE, WHJCH   IF KNOWN   BY HIM OR HER MUST            HA VE MATERIALLY AFFECTED    HIS OR HER  SETTLEMENT           WTTH THE   DEBTOR.   D. Representations and \Varra ntics       l . Each Party hereto represents and warrants to the other Party that:         (a)    it is a company in good standing in its jurisdiction of domicile;         (b)    it is fully authorized to execute and deliver this Commutation Agreement;         (c)    this Commutation Agreement is enforceable against each of the Parties in              accordance with its terms subject to applicable bankruptcy, reorganization,               insolvency, or other similar laws affecting creditors' rights generally from time              to time in effect, and to general principles of equity;         (d)    the person or persons executing this Commutation Agreement on its behalf has              the power, legal capacity and is fully authorized to do so;                                        3  





 






      (e)   there are no pending conditions, agreements, transactions or negotiations to              which it is a party or are likely to be made a party that would render this              Commutation Agreement or any pan thereof, void, voidable or unenforceable              no authorization, consent, or approval of any person or entity, governmental or              otherwise, is required to make this Commutation Agreement valid and              enforceable; and         (t)    no claim or loss being paid or settled by this Commutation Agreement has been               previously assigned, sold and/or transferred to any other entity.    E. Further Assurances      The Parties agree to execute promptly any and all supplemental agreements, releases,     affidavits, waivers and all other documents of any nature or kind which the other Party     may reasonable require in order to implement the provisions or objectives of this     Commutation Agreement.    F. Miscellaneous      I. All notices, requests and other communications to any Party hereunder shall be in        writing (including email transmission) and shall be given:                  (a)  ifto the Company:                       AmTrust International Insurance, Ltd.                      7 Reid Street, Suite 400                      HM  11                      Hamilton, Bennuda                        Attention:  Chris Souter                       Telephone:  (4 41 ) 444-4806                        E-mail:    chris.souler@amtrustgroup.com                       with a copy to:                       AmTrust Financial Services, Inc.                      59 Maiden Lane, 43rd Floor                      New York, New York 10038                      Attention: Stephen Ungar                      Telephone: (646) 458-7913                      Emai l:  steve.ungar@amtrustgroup.com                  (b)   if to the Reinsurer:                        Maiden Reinsurance Ltd.                       Ideation House                                       4  





 






                  94 Pitts Bay Road                    Pembroke HM 08                    Bermuda                     Attention:  Patrick J. Haveron                                Lawrence F. Metz                     Telephone:  (441) 298-4902                     E-mail:     PHaveron@maiden.bm                                 LMetz@maidenre.com       or such other address as such Party may hereafter specify for the purpose by noti ce to     the other Parties hereto. All such notices, requests and other communications shall be     deemed received immediately ifreceived via email or, otherwise, on the date ofreceipt      by the recipient thereof if received prior to 5:00 p.m. on a business day in the place of     receipt. Otherwise, any such notice, request or communication other than email shall      be deemed to have been received on the next succeeding business day in the place of     receipt.   2. This Commutation Agreement contains the entire agreement of the Parties with respect     to the subject matter of this Commutation Agreement, and supersedes all other prior     agreements, understandings, statements, representations and warranties, oral or written,     express or implied, between the Parties and their respective affiliates, representatives     and agents in respect of the subject matter hereof and thereof   3. This Commutation Agreement and any dispute arising hereunder shall be governed i n     all respects by the laws of New York, without giving effect to New York principles     or rules of conflict of laws to the extent such principles or m ies would require or      pennit the application of the Jaws of another j urisdiction. Each party also hereby      irrevocably and unconditionally consents to submit to the exclusive jurisdiction of     the courts ofNew York for any actions, suits or proceedings arising out of or     relating 10 this Comm u I at i on Agreement and the transactions contemplated     hereby, and each pa1ty agrees not to commence any action, suit or proceeding     relating thereto except in such courts. Each party hereby irrevocably and      unconditionally waives any objection to the laying of venue of any action, suit or      proceeding arising out of th is Commutation Agreement or the transactions     contemplated hereby in the courts of New York, and hereby further irrevocably     and unconditionally waives and agrees not to plead or claim in any such court that     any such action, suit or proceeding brought in any such court has been brought in     an inconvenient forum. This Commutation Agreement may be executed in multiple     counterparts, each of which, when so executed and delivered, shall be an original,                                    5  





 






    bul such counterparts shall together constitute one and the same instrument and     Commutation Agreement.   4. This Commutation Agreement shall be binding upon and shall inure solely to the      benefit of the Parties hereto and their respective successors, assigns, receivers,     liquidators, rehabilitators, conservators and supervisors, it not being the intent of the     Parties to create any third pa1ty beneficiaries, except as specifically provided in     Article I, provided that this Commutation Agreement and the obligations of the     Parties shall not be assigned by any Party hereto without the prior written consent of     the other Parties.   5. This Commutation Agreement may not be changed, altered or modified unless the     same shall be in writing executed by the each of the Parties.   6. No consent or waiver, express or implied, by any Party to or of any breach or default      by any of the other Parties in the performance by such other Pa1ty of its obligations     hereunder shall be deemed or construed to be a consent or waiver to or of any other      breach or default in the performance of obligations hereunder by such other Party     hereunder. Failure on the part of any Party to complain of any act or failure to act of     any other Party or to declare any other Party in default, irrespective of how long such     failure continues, shall not constitute a waiver by such first Party of any of its rights     hereunder. The rights and remedies provided are cumulative and are not exclusive of     any rights or remedies that any Party may otherwise have at law or equity.    7. In consideration of the mutual covenants and agreements contained herein, each Patty     hereto does hereby agree that this Commutation Agreement, and each and every      provision hereof, is and shall be enforceable by and between them according to its     terms, and each Party does hereby agree that it shall not, directly or indirectly, contest     the validity or enforceability hereof.   8. All expenses incurred in connection with this Commutation Agreement, including     fees and disbursements of legal, actuarial, accounting and other advisors shall be paid      by the Party incurring such expenses.   9. If any provision of this Commutation Agreement is held to be void or unenforceable,      in whole or in part, (a) such holding shall not affect the validity and enforceability of     the remainder of this Commutation Agreement, including any other provision,      paragraph or subparagraph, and (b) the Parties agree to attempt in good faith to     refonn such void or unenforceable provision lo the extent necessary to render such      provision enforceable and to carry out its original intent.   I0 . This Commutation Agreement may be executed by the Parties hereto in any number     of counterparts, and by each of the Parties hereto in separate countcrpa1ts, each of                                    6  





 






which counterparts, when so executed and delivered, shall be deemed to be an  original, but all such counterparts shall together constitute but one and the same  instrument.                           [Signature Page to Follow]                                  7  





 






                                                  EXECUTION COPY         IN WITNESS WHEREOF, the Parties hereto have caused this Commutation Agreement  to be executed by their duly authorized representatives.   AMTRUST INTERNATIONAL INSURANCE, LTD   By:. _____________              _       Stephen Ungar       Secmary               {  MAIDEN REJNSURANCE LTD.   By.  ~       ~       President                       [Commutation Agreement and Release]  71513863v.8  





 






                                                          EXECUTION COPY          IN WITNESS  WHEREOF, the Parties hereto have caused this Commutation Agreement  to be executed by their duly authorized representatives.   AMTRUST INTERNATIONAL INSURANCE, LTD   .,   ~4fv/Wphenl}ngar         Secretary   MAIDEN   REINSURANCE   LTD.   By:. _______________         Patrick J. Haveron        President                          [Conunutation Agreement and Release]  7 I 5 I 3863v.8  





 






                            Schedule A   6t~u~          BANK           ACCQUlil  NUMBER         NAME           NAME   P 01652        JPMORGAN       AMTRUST INTERNATIONAL &                                TECHNOLOGY INSURANCE COMPANY -                               SEGREGATED   258612000      USBANK.        AMTRUST INTERNATIONAL INSURANCE,                                LTD. fbo AMTRUST INTERNATIONAL                                UNDERWRITERS DAC   261939000      US BANK        AMTRUST INTERNATIONAL INSURANCE,                                LTD. fbo AMTRUST EUROPE LIMITED    Updated Schedule A as of the version date, herby approved: -  RBrNSURBR                          COMPANY   Maiden ll\~ce 1rtd£   \            Am.Trust International Insurance, Ltd.  By:   ~           7~               By: .l4n,dy  Name: Michael Tait                 Name: Chris Souter  Tide: CFO                          Title: CFO                                 Schedule A                            Version 05.23.2019