Document:

Amendment No. 1 to Amended and Restated Customer Agreement and Trading Authoriza

 
EXHIBIT 10.17

 
AMENDMENT NO. 1 TO AMENDED AND RESTATED
CUSTOMER 
AGREEMENT AND TRADING AUTHORIZATION 
 
 
This is Amendment No. 1 to that
certain Amended and Restated Customer Agreement and Trading Authorization, dated as of June 14, 2002 (the “Agreement”), by and between Moore Capital Management, Inc. and Max Re Diversified Strategies, Ltd. (“MDS”).
Unless otherwise specifically defined herein, capitalized terms shall have the meanings ascribed to them in the Agreement. 
 
RECITALS 
 
WHEREAS, the Agreement provides that Moore Capital Management, Inc. shall act as trading manager for MDS subject to the “investment
guidelines” of MDS as the same shall from time to time be amended; 
 
WHEREAS, effective November 25, 2002, Moore Capital Management, Inc. reorganized through merger as a New York limited liability company named Moore Capital Management, LLC (“MCM”); 
 
WHEREAS, MDS wishes to acknowledge such reorganization and to
agree that MCM shall for all purposes be deemed to take the place of Moore Capital Management, Inc. under the Agreement; and 
 
WHEREAS, the board of directors of Max Re Ltd., a company organized under the laws of Bermuda and the controlling/majority shareholder of
MDS (“Max Re”), has approved the initiation of certain fees to be paid to MCM under the Agreement beginning on January 1, 2003. 
 
NOW, THEREFORE, in consideration of the premises set forth above, the parties hereto hereby agree as follows: 
 
1.    The parties agree that MCM shall take the place of
Moore Capital Management, Inc. under the Agreement. As such: (I) all references to ‘MCM’ or ‘Moore Capital Management, Inc.’ in the Agreement shall instead refer to Moore Capital Management, LLC, and (II) without limiting the
generality of the foregoing, Moore Capital Management, LLC is the trading manager for the Customer under the Agreement. In furtherance thereof, MCM hereby assumes and agrees to keep, fulfill, observe and perform each and every covenant, duty and
obligation on its part to be performed that may have become performable prior to the date hereof, or that may become performable after the date hereof, under the terms of the Agreement. 

 
2.    (A)
As compensation for MCM’s services to be rendered to the Customer pursuant to the Agreement, commencing on January 1, 2003, the Customer shall pay to MCM fees in accordance with the following fee arrangements: 
 
(i) Management Fee. A management fee, calculated at
each month- end and billed quarterly in arrears, without regard to whether the Customer’s account (the “Account”) is profitable, equal to 5.8333 basis points times the total month-end Non-Moore Net Assets (defined in
paragraph 2(B) below) (adjusting Non-Moore Net Assets for the purpose of calculating such management fee by (a) adding back the management fees and incentive fees of MCM accrued or payable and any withdrawals (by redemption, distribution or
otherwise), to the extent such amounts withdrawn were invested in Non-Moore Investments (defined in paragraph 2(B) below), from the Account since the last month-end, and (b) deducting any additional funds deposited in the Account, to the
extent such deposit is invested in Non-Moore Investments, since the last month-end), which management fee equals an aggregate of 70 basis points (0.70%) per annum, and 
 
(ii) Incentive Fee. An annual incentive fee, calculated at each month-end and billed annually in
arrears, equal to 7.5% of the increase, if any, in the Non-Moore Net Assets, as adjusted, in excess of the “Hurdle Level” (as defined below) at each Determination Date (as defined below) over the higher of (x) the amount of
Non-Moore Net Assets, as adjusted, at the immediately preceding Determination Date, or (y) any prior Determination Date (or as of January 1, 2003 with respect to the first year). For the purpose of calculating such incentive fee, Non-Moore Assets on
the current Determination Date shall be adjusted by (a) adding back (i) any incentive fees of MCM accrued pursuant to this Agreement, (ii) a portion of any decline in Non-Moore Assets since the prior Determination Date used to calculate the
incentive fee (the “High Water Mark Date”) calculated by multiplying such decline by a percentage equal to net withdrawals from the Account (to the extent such amounts withdrawn were invested in Non-Moore Investments) during the
period divided by Non-Moore Net Assets on the dates of the withdrawals, and (iii) any withdrawals from the Account (to the extent such amounts withdrawn were invested in Non-Moore Investments) since the High Water Mark Date (or since January 1, 2003
with respect to the first year), and (b) deducting any additional funds deposited in the Account since the High Water Mark Date (or since January 1, 2003 with respect to the first year) to the extent such deposit is invested in Non-Moore
Investments. For the purpose of calculating such incentive fee, Non-Moore Assets on any prior Determination Date shall be adjusted by adding back all incentive fees paid pursuant to this Agreement. In the event that any incentive fee is paid to MCM
and the Account thereafter incurs a net loss for any subsequent period, MCM will retain the incentive fee previously paid. The “Hurdle Level” means an increase of 10.0% in Non-Moore Net Assets over the amount of Non-Moore Net Assets
at the higher of (A) the previous Determination Date, or (B) any prior Determination Date (or at January 1, 2003 with respect to the first year). A “Determination Date” means the close of business on the last business day of each
December. 
 
 

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(B) The term
“Non-Moore Investments” means all assets in the Account, except for those assets that are invested in any fund (or comparable entity) in respect of which MCM (or its affiliates) either earns a fee or is an equity owner of the
manager of the fund (or comparable entity). The term Non-Moore Net Assets” means the total assets in the Account attributable to Non-Moore Investments less all liabilities of the Account attributable to Non-Moore Investments
(including but not limited to accrued legal, accounting, and auditing fees, and any management or incentive fees accrued or payable), determined in accordance with the principles specified herein or, where no principle is specified, in accordance
with U.S. generally accepted accounting principles consistently applied under the accrual basis of accounting. In valuing the Non-Moore Net Assets, the parties agree that the valuation of portfolio funds in which the Account is invested shall be as
provided by the respective portfolio funds from time to time. 
 
(C) If the Agreement is terminated or the appointment in paragraph 1 of the Agreement is terminated, in either case on a date other than at a Determination Date, incentive fees shall be calculated as if such termination date were a
Determination Date by annualizing the Hurdle Level for such year. By way of example, if the Agreement or such appointment were terminated as of July 1 in a year and at that point the Non-Moore Net Assets had increased by 7% from the prior
Determination Date, the Account would be billed for incentive fees by annualizing the Hurdle Level for such year (six months, or 1⁄2 of one year, would result in an adjusted Hurdle Level of 5% (i.e., 1⁄2 of 10%)), so that MCM would be
entitled to an incentive fee based on the increase in the Non-Moore Net Assets above the 5% adjusted Hurdle Level (i.e., MCM would receive incentive fees on the 2% increase in the Non-Moore Net Assets). In addition, if this Agreement is
terminated or the appointment in paragraph 1 of the Agreement is terminated, in either case on a date other than at a Determination Date, management fees shall be calculated as if such termination date were a Determination Date. Thereafter, the
Customer’s obligation to pay future fees shall terminate. 
 
(D) (i) Within 15 days following each quarter and each Determination Date, MCM shall send to the Customer a calculation of management and/or incentive fees, as applicable, that shall be due to MCM hereunder based on the estimated
Non-Moore Net Assets in the Account. Such calculation shall be deemed sent to the Customer upon MCM’s electronic transmission of such calculation to the Customer. Assuming no objection to the calculation, 30 days following each quarter and each
Determination Date, as applicable, the parties agree that MCM may collect from the Account 100% of the management fee and 90% of the incentive fee so calculated by MCM. 
 
(ii) Within 60 days following each quarter and each Determination Date, MCM shall send to the Customer a
final calculation of management and/or incentive fees, as applicable, that shall be due to MCM hereunder based on the final Non-Moore Net Assets in the Account. Such 
 

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calculation shall be deemed
sent to the Customer upon MCM’s electronic transmission of such calculation to the Customer. Assuming no objection to the calculation, within five business days after the transmission of a calculation by MCM pursuant to this paragraph, the
parties agree that MCM may collect from the Account the remainder of the management and/or incentive fee not collected pursuant to paragraph (i) above or shall promptly pay to the Account any management and/or incentive fee collected pursuant
to paragraph (i) above that is in excess of the management and/or incentive fee as finally calculated. 
 
3.    Except to the extent provided for herein, the Agreement shall remain in full force and effect in accordance with its terms. 
 
 
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of January 1, 2003. 
 
 
 
 
MOORE CAPITAL MANAGEMENT, LLC 
 
 
 
By:                                     
                      
Name: Zack Bacon 
Title:   Portfolio Manager 
 
 
 
 
MAX RE DIVERSIFIED STRATEGIES, LTD. 
 
 
 
By:                                     
                      
Name: 
Title: 
 

4Total Return Swap Confirmation

EXHIBIT 10.19 
 

	

	
	 Date:  February 18, 2003
	 	 
	
	 To:  Max Re Ltd.
	 	 From:  Canadian Imperial Bank of Commerce

	
	 Attention:  Keith S. Hynes
	 	 Contact:  Tyler Ratcliffe

	
	 Phone Number:  (441) 296-8800
	 	 Phone Number:  212-885-4413

	
	 Facsimile Number:  (441) 296-8811
	 	 Facsimile Number:  212-885-4378

	
	 Re:  Reference # NY OT00146
	 	 
	

 
TOTAL RETURN SWAP CONFIRMATION 
 
The
purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between Canadian Imperial Bank of Commerce (“CIBC”) and Max Re Ltd., (“Counterparty”) on the
Trade Date specified below (the “Transaction”). This Confirmation constitutes a “Confirmation” as referred to in the Master Agreement 
 
The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap Definitions”) and in the 1996 ISDA Equity Derivatives
Definitions (the “Equity Definitions,” and together with the Swap Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation.
In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

 

	1.	 	This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated as of February 18, 2003 as amended and supplemented from time
to time (the “Agreement”), between CIBC and Counterparty. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below. The parties hereto each acknowledges that the interests acquired under
this Transaction will not be registered under the Securities Act of 1933 (the “Act”) and are being sold in reliance upon the exemption for private placements pursuant to Section 4(2) of the Act. 

 

	2.	 	The terms of the particular Transaction to which this Confirmation relates are as follows: 

 
GENERAL TERMS: 

	
	 Trade Date:
	 	 February 18, 2003

	
	 Effective Date:
	 	 February 18, 2003

	
	 Termination Date:
	 	 February 28, 2005, subject to adjustment in accordance with the Modified Following Business Day
Convention.

	
	 Shares:
	 	 Common Stock of Max Re Diversified Strategies Ltd. (the “Fund”).

	
	 Calculation Agent:
	 	 CIBC

	
	 Settlement Currency:
	 	 USD

 
EQUITY AMOUNTS PAYABLE BY
CIBC: 

	
	 Equity Amount Payer:
	 	 CIBC

	
	 Number of Shares:
	 	 On the Effective Date, 127,549, subject to adjustment as provided below under Adjustments and Mandatory
Redemptions.

	
	 Quarterly Valuation Date:
	 	 Each May 31, August 31, November 30, February 28 and the Termination Date.

	
	 Unit NAV:
	 	 The Fund’s total net assets, including without limitation investments, cash, accrued interest receivable and any
other category of assets, less its liabilities including any obligations (whether present or future, contingent or otherwise, as principal or surety or otherwise) as calculated on a per share basis and reported by the Fund and by Bank of Bermuda
(the “Custodian”) in accordance with U.S. GAAP. Provided, that on any Valuation Date, if the Fund has suspended reporting Unit NAV, then the Calculation Agent shall determine Unit NAV.

	
	 Maximum Notional Amount:
	 	 USD 160,000,000

	
	 Equity Value:
	 	 With respect to any Business Day other than a final Quarterly Valuation Date, the product of (a) Unit NAV and (b) the
Number of Shares. On a final Quarterly Valuation Date, the Equity Value shall be the higher of (i) the highest bid price received by the Calculation Agent after soliciting bids from (A) at least three nationally recognized broker / dealers and, (B)
at the Counterparty’s option, the Counterparty or (ii) the Redemption Amount (as defined below). For this purpose, if Shares submitted by CIBC for redemption are not redeemed by the Fund, the Calculation Agent shall determine the Unit
NAV.

	
	 Capped Equity Value:
	 	 The lesser of the Maximum Notional Amount and the Equity Value.

	
	 Equity Notional Amount:
	 	 Initially, USD 150,000,000, subject to adjustment on each Quarterly Valuation Date and Mandatory Redemption Date so
that the Equity Notional Amount equals the Capped Equity Value on such Quarterly Valuation Date and Mandatory Redemption Date subject to adjustment as provided below under Adjustments.

	
	 Appreciation Amount:
	 	 With respect to the first Quarterly Valuation Date, an amount equal to the Capped Equity Value minus the Equity
Notional Amount and thereafter, except for a final Quarterly Valuation Date, an amount equal to the Capped Equity Value calculated on the relevant Quarterly Valuation Date minus the Capped Equity Value calculated on the immediately preceding
Quarterly Valuation Date, as applicable. On a final

	
	 	 	 Quarterly Valuation Date, the Appreciation Amount will be an amount equal to the Equity Value calculated on such final
Quarterly Valuation Date minus the Capped Equity Value calculated on the immediately preceding Quarterly Valuation Date.

	
	 Equity Payment Dates:
 

	 	 (i)     The sixth Business Day following each Quarterly
Valuation Date, subject to adjustment in accordance with the Modified Following Business Day Convention; and
  
 (ii)    In the case of a Mandatory Redemption Date and the Termination Date, each date on which CIBC
receives a cash payment from the Fund in exchange for Shares purchased by CIBC under the Stock Purchase Agreement (the “Redemption Amount”).

	
	 Equity Payments:
	 	 On each Equity Payment Date CIBC will pay the Counterparty an amount equal to algebraic sum of (a) the amount of all
dividends and similar cash distributions paid by the Fund on the Number of Shares during the period from the Effective Date or the preceding Equity Payment Date, as the case may be and (b) the Appreciation Amount, if such sum is positive. If such
sum is negative then Counterparty shall pay CIBC the absolute value of such sum.

 
FLOATING
AMOUNTS PAYABLE 
BY COUNTERPARTY: 
 

	
	 Floating Amount Payer:
	 	 Counterparty

	
	 Notional Amount:
	 	 The Equity Notional Amount

	
	 Payment Dates:
	 	 Each Equity Payment Date.

	
	 Floating Rate for the Initial Calculation Period:
	 	 1.39068%

	
	 Initial Calculation Period
	 	 From the Effective Date to and including the first Quarterly Valuation Date.

	
	 Floating Rate Option:
	 	 USD-LIBOR-BBA

	
	 Designated Maturity:
	 	 3 months, pro-rated where applicable

	
	 Spread:
	 	 0.90%

	
	 Floating Rate Day Count Fraction:
	 	 Actual/360

	
	 Reset Days:
	 	 Each Payment Date.

	
	 Business Days:
	 	 New York

 

	
	 ADJUSTMENTS
	 	 On the Effective Date and each Valuation Date, the Unit NAV shall be as reported by the Custodian on
the last Business Day of the most recent month for which

	 	 	 it has provided a Monthly Valuation Report as described in the Agreement. If such month is not the month immediately
preceding the Effective Date or any Quarterly Valuation Date, on the date the Counterparty provides to CIBC the Monthly Valuation Report (i) in the case of the Monthly Valuation Report for the month immediately preceding the Effective Date, the
Number of Shares shall be adjusted so that the Number of Shares times the Unit NAV as of the last Business Day of the month immediately preceding the Effective Date equals the initial Equity Notional Amount and (ii) in the case of the Monthly
Valuation Report for the month corresponding to the Quarterly Valuation Date, CIBC or Counterparty, as appropriate, shall pay to the other that amount, after taking into account any payment made on the relevant Equity Payment Date, necessary to make
such other party whole as a result of any adjustment made to the Unit NAV reported on the relevant Quarterly Valuation Date.

	
	 ADDITIONAL COUNTERPARTY PAYMENTS:
	 	 (A) By 1:00 p.m. on the first Business Day after receipt of written notice from CIBC, Counterparty will pay to CIBC an
amount equal to all amounts which are required to be refunded to the Fund by CIBC, as the result of an adjustment after the Termination Date, to Unit NAV. If CIBC receives an additional payment after the Termination Date from the Fund as a result of
an adjustment after the Termination Date, to Unit NAV, CIBC shall pay such amount to Counterparty on the first Business Day after receipt of such additional payment.
 (B) By 1:00 p.m. on the first Business Day after receipt of written notice from CIBC, Counterparty will pay to CIBC an amount equal to the amount that the Fund or the Fund’s bankruptcy liquidators, trustee or any court
having apparent jurisdiction over the Fund requires CIBC to pay or repay to the Fund, the Fund’s bankruptcy estate or any creditor of the Fund in respect of the Shares.

	
	 MANDATORY REDEMPTIONS:
	 	 In the event of a mandatory redemption by the Fund of all or part of the Shares on any Business Day (the
“Mandatory Redemption Date”), then the Equity Notional Amount and the Number of Shares shall be adjusted accordingly on the relevant Equity Payment Date. Such Equity Payment Date is considered to be a Termination Date that is applicable to
only the Redemption Amount.

	
	 3. ACCOUNT DETAILS:
	 	 
	     Payments to CIBC:
	 	 
	         Account for Payments:
	 	 Chase Manhattan Bank, New York

	         For the Account of:
	 	 Canadian Imperial Bank of Commerce

	         Account No.:
	 	 544-708-234

	         ABA No.:
	 	 021-000-021

 

	
	       Attention:
	 	 Financial Products

	
	     Payments to Counterparty:
	 	 
	         Account for Payments:
	 	 ITEM 1. Federal Reserve Bank of Boston

	         For the Account of:
	 	 Max Re Ltd. (Gen-Re-NEAM)

	         Account No.:
	 	 MRLF 0020502

	         ABA No.:
	 	 011-001-234
 BOS SAFE DEP

	         DDA No.:
	 	 162299

	
	 4. OFFICES:
	 	 
	      (a) The Office of CIBC for the Transaction is Toronto.
	 	 
	
	      (b) The Office of Counterparty for the Transaction is Hamilton,
Bermuda.
	 	 
	
	 5. BROKER/ARRANGER:
	 	 None.

	
	 6. This Confirmation may be executed in one or more counterparts,
either in original or facsimile form, each of which shall constitute an original and all of which together shall constitute one and the same agreement. When executed by the parties through facsimile transmission, this Confirmation shall constitute
the original agreement between the parties and the parties hereby adopt the signatures printed by the receiving facsimile machine as the original signatures of the parties.

	
	 7. COVENANTS:
	 	 The Calculation Agent hereby covenants that all determinations made by the Calculation Agent under this Confirmation
will be made in good faith and in a commercially reasonable manner at all times.

	
	 8. OTHER PROVISIONS:
	 	 
	      Optional Early Termination:
 

	 	 The Counterparty shall have the right, under Section 2.3 (b) (ii) of the Liquidity Agreement, to terminate the
Transaction in whole, but not in part, on any Business Day, such Business Day shall be deemed the Termination Date.
  
 After February 28, 2004, upon 30 days written notice to CIBC, the Counterparty shall have the right to terminate the Transaction in whole, but not in
part, on any Business Day, such Business Day shall be deemed the Termination Date.

	
	      Governing Law:
	 	 The laws of the State of New York (without reference to the choice of law doctrine).

 
EXHIBIT 10.19

 
Entering into a derivative transaction involves certain risks.
An identification of the principal risks is provided in the CIBC World Markets Risk Disclosure Statement, which has been delivered to you. If you have not received a copy, please let us know and one will be provided to you. You should always
consider those risks in determining whether to enter into derivative transactions. 
 
Except as if expressly agreed to by you or us in writing, neither of us has acted as advisor to the other with respect to the desirability or appropriateness of entering into the Transaction confirmed hereby or with respect
to the other party’s risk management needs generally. This pertains not only to the financial and market risk management risks and consequences of the confirmed or any proposed Transaction, but also to any legal, regulatory, tax, accounting and
credit issues generated by such transactions, which each party must evaluate for itself and in reliance on its own professional advisors. 
 
The Transaction confirmed hereby might be one which includes one or more elements not found in more basic swap structures with which you should be
familiar, such as single currency interest rate swaps. These elements, if present, could include leverage, one or more embedded options or one or more embedded forwards or some other structural elements which could significantly affect the
Transaction’s price behavior As with any other financial market transaction, you should monitor the Transaction’s value frequently throughout its term to protect yourself as well as possible against unanticipated or undesired changes in
its value and to insure its continued utility relative to your financial management needs and your appetite for the market, legal, regulatory, credit, tax and accounting risks that can attend the Transaction. 

 
Please confirm that the foregoing correctly
sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us or by sending to us a letter or telex substantially similar to this letter, which letter or telex sets forth the
material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms. 
 
Yours Sincerely, 
 
CANADIAN IMPERIAL BANK OF COMMERCE 
 
By:                                   
          
Name: Gina S. Ghent 
Title: Executive Director 
 
Confirmed as of the date first above written: 
 
MAX RE LTD. 
 
By:                                     
        
Name: 
Title:

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