Document:

exv10w2

Exhibit 10.2

Commutation Agreement

BETWEEN

Cypress Reinsurance Ltd

AND

Atlantic Gateway International (SAC), Ltd

AND

Cypress II Segregated Account

(Segregated Account of Atlantic Gateway International (SAC) Ltd)

     This Commutation Agreement (“ Commutation”), effective this 31st day of August 2009, is
entered into by and between Atlantic Gateway International (SAC) Ltd, (herein after “AGIL”),
and Cypress Reinsurance Ltd. (herein after “Cypress”) and Cypress II Segregated Account
(herein after “Cypress II”)

RECITALS

WHEREAS, Cypress Reinsurance Ltd is a company organized and existing under the laws of Bermuda
and registered as an insurer entitled to avail itself of the provisions of the Act.

WHEREAS, AGIL is an approved Segregated Account Company (SAC) existing under the laws of Bermuda
and registered as an insurer entitled to avail itself of the provisions of the Act.

WHEREAS, AGIL has established a new segregated account “Cypress II” existing under the laws of
Bermuda and registered as a segregated account of AGIL and insurer entitled to avail itself of
the provisions of the Act

WHEREAS, AGIL and Cypress Reinsurance Ltd (the “Reinsurer”) have entered into a Retroactive
Reinsurance agreement executed March 29, 2004 for programs

CWHA year 2 (2002)

CWHA year 3 (2003)

and also a Master Reinsurance agreement effective June 1, 2004, and multiple Addendums for each
program and subsequent program years identified as follows:

1A - ARISA year 1 (2003)

1B - ARISA year 2 (2004)

1C - ARISA ycar 3 (2005)

2 - CMDA (2004)

3 - CWHA year 4 (2004)

4 - Bizassure (2004)

5A - Hospitality Insurance Services year 1 (2004)

5B - Hospitality Insurance Services year 2 (2005)

6 - CWHA year 5 (2005)

(Herein after called the ‘Reinsurance Agreements’)

WHEREAS, the subject business is comprised of policies issued for the Identified Programs in each
Reinsurance Addendum by Discover Re Managers, Ltd. or its designees on behalf of one or more of
its Affiliated Insurers and which have been ceded to AGIL and a quota share portion retro-ceded to
Cypress.

WHEREAS, Cypress desires to be liquidated, and transfer all current and potential future
liabilities and assets pursuant to the ‘Reinsurance Agreements’ to new AGIL segregated account
Cypress II.

 

 

PROVISIONS

     NOW, THEREFORE, in consideration of the foregoing, and for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

	A.	 	Warranties by Cypress II

     Cypress II warrants and represents to all of the other parties hereto that:

	 	1.	 	It is properly licensed to accept all of Cypress’s rights,
assume, and perform
all of Cypress’s obligations under the commutation agreement.
	 
	 	2.	 	All legal and/or regulatory approvals necessary for AGIL and
Cypress II to
accept all rights and assume and perform all of Cypress’s obligations under
the Commutation Agreement, if any, have been obtained.

	B.	 	Application and Delivery of Funds and Records

	 	1.	 	Cypress shall first transfer all assets including but not
limited to the funds held
in trust and escrow and certain liabilities pursuant to the ‘Reinsurance
Agreements’ to Cypress II as of the date of this agreement. Any assets and
liabilities thereafter received by Cypress pursuant to the ‘Reinsurance
Agreements’ shall be delivered to Cypress II as soon as practicable, by
Cypress.
	 
	 	2.	 	Cypress will pay AGIL a novation fee in the amount of $10,000
and in
addition reimburse AGIL for any further legal fees incurred for the Novation
of liabilities and/or liquidation of Cypress.

	C.	 	Assignment and Assumption. Upon performance by Cypress of the above deliveries:

	 	1.	 	Cypress shall be deemed to have assigned all of its rights and
delegated all of its duties under the Commutation Agreement to Cypress II
including, without limitation, the duty, after 12:01 a.m. of the above
“Effective Date”, to indemnify AGIL for claims under the ‘Reinsurance
Agreements’ pursuant to the Commutation Agreement, irrespective of the date of
loss occurrence.
	 
	 	2.	 	Cypress II shall be deemed to have assumed all of Cypress’
rights and duties, and agreed to perform all of Cypress’ obligations under the
‘Reinsurance Agreements’.
	 
	 	3.	 	AGIL shall be deemed to have consented to the foregoing
assignment and assumption.
	 
	 	4.	 	AGIL shall be deemed to have released Cypress from all further
obligations
under the ‘Reinsurance Agreements’ except for any obligations arising out of
the reconciliation and accounting referenced below.
	 
	 	5.	 	Cypress may at any time be liquidated, provided, however, that
any funds
relating to the ‘Reinsurance Agreements’ thereafter received by Cypress
pursuant to the Commutation Agreement shall be held in trust for the benefit

2

 

	 	 	 	of AGIL and shall be promptly delivered to AGIL; such obligation shall
survive termination of the Commutation Agreement.

	 	6.	 	Anything herein to the contrary notwithstanding, each of
the parties hereto hereby covenants with the other that, prior to and
following execution of this Commutation Agreement, it will execute and deliver
all and any such deeds, documents, and further assurances and will do or
refrain from doing all and any such acts, matters and things as may be
requisite or desirable for the purposes of carrying out the terms and intent
of this Commutation Agreement.

	D.	 	Commutation. Upon the signing of this agreement all three parties hereto shall be
deemed to
have consented to a commutation and AGIL shall be deemed to have released Cypress from
all further obligations under the Reinsurance Agreements. Cypress shall continue to
cooperate with AGIL in a reconciliation and accounting of the amounts transferred and the
parties shall properly adjust such amounts upon completion of such reconciliation and
accounting.

	E.	 	Due Authorization. Each party hereby warrants and represents to the others that all
of the
agreements it has made in this Commutation Agreement have been duly authorized by its
Board of Directors or are otherwise permitted under its organizational and other documents.

ALL OTHER TERMS AND CONDITIONS OF THE MASTER REINSURANCE AGREEMENT EXECUTED JUNE 1, 2004 AND ITS
SUBSEQUENT AFFILILATED ADDENDUMS AND THE RETROACTIVE REINSURANCE EXCUTED MARCH 29, 2004 AGREEMENT
REMAINS UNCHANGED.

IN WITNESS WHEREOF, the parties hereto have executed this Memorandum effective on the day and year
first written above.

	 	 	 	 	 
	Atlantic Gateway International (SAC) Ltd

 	 
	By:  	/s/ Richard A. Stasi
 	 
	 	Name:  	Richard A. Stasi 	 
	 	Title:  	VP / DIRECTOR 	 
	 	Date: 	9/10/09 	 
	 
	Cypress Reinsurance Ltd

 	 
	By:  	/s/ Mark Detillion
 	 
	 	Name:  	Mark Detillion 	 
	 	Title:  	DIRECTOR 	 
	 	Date: 	9/9/09 	 
	 
	Cypress II Segregated Account

 	 
	By:  	/s/ Keith Gerhardstein
 	 
	 	Name:  	Keith Gerhardstein 	 
	 	Tile: 	VP 	 
	 	Date: 	9/10/09 	 
	 

3Exhibit 10.1

Exhibit 10.1

FIRST AMENDMENT TO TAX MATTERS AGREEMENT

This First Amendment to Tax Matters Agreement (this “Amendment”) is dated as of
September 14, 2009, by and between Belo Corp., a Delaware corporation (“Belo”), and A. H.
Belo Corporation, a Delaware corporation (“A. H. Belo” and, together with Belo, each, a
“Party” and collectively, the “Parties”). Any capitalized terms used herein for
which definitions are not provided in this Amendment shall have the same meanings assigned to such
terms in the Tax Matters Agreement between the Parties dated as of February 8, 2008 (the
“Original Agreement”).

RECITALS

WHEREAS, A. H. Belo and its subsidiaries were members of the Belo Consolidated Group;

WHEREAS, Belo distributed all of the shares of stock of A. H. Belo to the shareholders of Belo
(the “Distribution”) on February 8, 2008;

WHEREAS, as a result of the Distribution, A. H. Belo Group ceased to be included in the Belo
Consolidated Group;

WHEREAS, the Parties entered into the Original Agreement in connection with the Distribution
to allocate the Tax responsibilities, liabilities and benefits of transactions that occurred on,
prior to and after the date of the Distribution and to address other Tax matters; and

WHEREAS, the Parties desire to make certain amendments to the Original Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein,
the Parties (each on behalf of itself and each of its Affiliates) hereby agree as follows:

1. Section 2.07 is deleted in its entirety and the following inserted in lieu thereof:

Section 2.07 Carrybacks.

(a) Except as otherwise provided in Sections 2.07(b) and 2.07(c), A. H. Belo
shall file (or cause to be filed) on a timely basis any available election
to waive the carryback of net operating losses, Tax credits or other Tax
Items by A. H. Belo or any Affiliate from a Post-Distribution Tax Period to
a Straddle Period or Pre-Distribution Tax Period.

(b) A. H. Belo Group shall carryback its net operating loss determined for
federal, state and local Income Tax purposes for its Post-Distribution Tax
Period ending December 31, 2008 into the Pre-Distribution Tax Period of the
Belo Consolidated Group ending December 31, 2007 by not making the election
pursuant to Treasury Regulation Section 1.1502-21(b)(3)(ii)(B) (or any equivalent state or local Income Tax authority) and
not making the election pursuant to Treasury Regulation 1.1502-

 

 

 

21(b)(3)(i)
(or any equivalent state or local Income Tax authority) for such
Post-Distribution Tax Period and by not otherwise relinquishing the
carryback period for which the A. H. Belo Group was a member of the Belo
Consolidated Group. A. H. Belo shall provide to Belo a copy of its Income
Tax Returns for its Post-Distribution Tax Period ending December 31, 2008
and any other materials and information required by Belo to file the
necessary Returns in order to obtain any available Refunds (for federal,
state or local Income Tax purposes) for the Pre-Distribution Tax Period of
the Belo Consolidated Group ending December 31, 2007. Belo shall file such
Returns and any Refunds resulting from such carrybacks shall be allocated to
the Parties on such basis as the Parties shall agree in writing. Belo shall
pay to A. H. Belo the portion of any Refund to which it is entitled within
ten (10) days of receiving the Refund from the applicable Taxing Authority
or if agreed to by the Parties in writing, Belo shall hold such portion on
behalf of A. H. Belo to satisfy other obligations of A. H. Belo to Belo.

(c) If A. H. Belo and Belo agree in writing for the A. H. Belo Group to
carryback any net operating loss determined for federal, state or local
Income Tax purposes for its Post-Distribution Tax Period ending December 31,
2009 into the Income Tax period of the Belo Consolidated Group ending
December 31, 2008, A. H. Belo shall provide to Belo a copy of its Income Tax
Returns for its Post-Distribution Tax Period ending December 31, 2009 and
any other materials and information required by Belo to file the necessary
Returns in order to obtain any available Refunds (for federal, state or
local Income Tax purposes) for the Income Tax period of the Belo
Consolidated Group ending December 31, 2008. In such case, Belo shall file
such Returns, and any Refunds resulting from such carrybacks shall be
divided between the Parties as the Parties shall agree in writing. Belo
shall pay to A. H. Belo the portion of any Refund to which it is entitled
within ten (10) days of receiving the Refund from the applicable Taxing
Authority or if agreed to by the Parties in writing, Belo shall hold such
portion on behalf of A. H. Belo to satisfy other obligations of A. H. Belo
to Belo. If the Parties fail to agree on the carryback of such net
operating losses, A. H. Belo shall make an election pursuant to Treasury
Regulation Section 1.1502-21(b)(3)(i) (and any equivalent state or local
Income Tax authority) not to carryback such net operating loss on its Income
Tax Returns for its Post-Distribution Tax Period ending December 31, 2009.

(d) If A. H. Belo has a Tax Item that must be carried back to any
Pre-Distribution Tax Period other than pursuant to Section 2.07(b) or
Section 2.07(c), A. H. Belo shall notify Belo in writing that such Tax Item
must be carried back. Such notification shall include a description in a
reasonable detail of the grounds for the Refund and the amount thereof, and a
certification by an appropriate officer of A. H. Belo setting forth

 

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A. H.
Belo’s belief (together with supporting analysis) that the Tax treatment of
such Tax Item is more likely than not correct, and is not a Tax Item arising
from a Reportable Transaction.

(e) If Belo receives a Refund pursuant to the provisions of Section 2.07(b)
or Section 2.07(c) and pays all or a portion of the Refund to A. H. Belo (or
holds all or such portion on behalf of A. H. Belo to satisfy other
obligations of A. H. Belo to Belo) pursuant to either such Section and a Tax
Contest occurs with respect to the carryback of the net operating loss, Belo
and A. H. Belo shall jointly control such Tax Contest. Neither Party shall
have the right to settle any such Tax Contest without the consent of the
other Party. All out-of-pocket costs incurred by the Parties in obtaining
the Refund, shall be borne by the Parties on such basis as the Parties shall
agree in writing. Any amount of Refund received pursuant to Section 2.07(b)
or Section 2.07(c) which is required to be repaid pursuant to a Final
Determination, together with any interest, fines, additions to tax or
additional amounts imposed by a Taxing Authority relating to such Refund and
any out-of-pocket costs incurred in handling or contesting the Tax Contest
shall be borne by the Parties on such basis as the Parties shall agree in
writing.

(f) If, notwithstanding the provisions of Section 2.07(a), A. H. Belo is
required to carryback losses or credits other than the net operating losses
described in Section 2.07(b) or Section 2.07(c), A. H. Belo shall be
entitled to any Refund of any Tax obtained by Belo or a Belo Affiliate as a
result of the carryback of losses or credits of A. H. Belo or its Affiliate
from any Post-Distribution Tax Period to any Pre-Distribution Tax Period.
Such Refund is limited to the net amount received by Belo or a Belo
Affiliate, net of any Tax cost incurred by Belo or such Affiliate resulting
from such Refund. Upon request by A. H. Belo, Belo shall advise A. H. Belo
of an estimate of any Tax cost Belo projects will be associated with any
carryback of losses or credits of A. H. Belo or its Affiliates as provided
in this Section 2.07(f).

(g) If Belo pays any amount to A. H. Belo under Section 2.07(f) and, as a
result of a subsequent Final Determination, A. H. Belo is not entitled to
some or all of such amount, Belo shall notify A. H. Belo of the amount to be
repaid to Belo, and A. H. Belo shall then repay such amount to Belo,
together with any interest, fines, additions to Tax, penalties or additional
amounts imposed by a Taxing Authority relating thereto.

2. This instrument may be executed by the Parties hereto individually or in combination, in
one or more counterparts, each of which shall be an original and all of which shall together
constitute one and the same instrument.

 

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3. To the extent that any provision herein shall directly conflict with any provision of the
Original Agreement, such provision contained herein shall control. Any provisions of the Original
Agreement which do not directly conflict with the provisions herein are hereby ratified and
confirmed in all respects, shall continue to be of full force and effect and shall bind each of the
Parties hereto.

[Signature page to follow.]

 

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed as of the date
first above written.

	 	 	 	 	 
	 	BELO CORP.

 	 
	 	By:  	/s/ Dennis A. Williamson
 	 
	 	 	Dennis A. Williamson 	 
	 	 	Executive Vice President/Chief
Financial Officer 	 
	 

	 	 	 	 	 
	 	A. H. BELO CORPORATION

 	 
	 	By:  	/s/ Alison K. Engel
 	 
	 	 	Alison K. Engel 	 
	 	 	Senior Vice President/Chief Financial
Officer and Treasurer 	 
	 

 

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