Contract analysis

Section 1.1 — Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below: "Agreement" means this Reinsurance Trust Agreement, as it may be amended, supplemented, or modified from time to time in accordance with Section 13.4 hereof. "Beneficiary" means Quorum Specialty Insurance Company, a Connecticut-domiciled admitted insurer, assigned NAIC No. 42917, with its principal offi

Section 1.2 — Rules of Construction (a) References herein to any statute, law, regulation, or rule shall be deemed to include all amendments, modifications, re-enactments, and successor provisions thereto, unless otherwise expressly provided. (b) The headings and captions contained in this Agreement are for reference and convenience purposes only and shall not affect the interpretation or construction of any provisio

ARTICLE II — ESTABLISHMENT OF THE TRUST

Section 2.1 — Creation of Trust The Grantor hereby establishes an irrevocable trust (the "Trust") for the sole benefit of the Beneficiary. The Trust is established as a multi-beneficiary reinsurance trust pursuant to Section 1308 of the New York Insurance Law and Part 125 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (11 NYCRR 125). The Trustee hereby accepts the Tru

Section 2.2 — Trust Account The Trustee shall establish and maintain a segregated trust account titled "Graystone Reinsurance AG — Reinsurance Trust Account FBO Quorum Specialty Insurance Company" (the "Trust Account"). The Trust Account shall be and shall at all times remain separate and distinct from all other accounts, assets, and funds of the Trustee, the Grantor, and any other person or entity. The Trustee shall

Section 2.3 — Irrevocability The Trust established hereunder is irrevocable during the term of the Reinsurance Agreement and during any run-off or development period following the expiration or termination of the Reinsurance Agreement, until all of the Grantor's obligations thereunder have been fully discharged, commuted, or novated. The Grantor shall not have the right or power to revoke, amend, alter, or terminate

Section 2.4 — Initial Funding On or before the Required Funding Date (December 15, 2025), the Grantor shall deposit into the Trust Account cash or Permitted Investments (or a combination thereof) having an aggregate fair market value of not less than Twenty-One Million Four Hundred Twenty Thousand Dollars ($21,420,000), being the Minimum Trust Balance. All assets deposited shall be denominated in United States dollar

Section 2.5 — Subsequent Deposits (a) The Grantor shall make such additional deposits of cash or Permitted Investments into the Trust Account as may be necessary to maintain the fair market value of Trust Assets at or above the Minimum Trust Balance at all times during the term of this Agreement. (b) If, as of any valuation date established pursuant to Section 5.5 of this Agreement, the fair market value of Trust Ass

ARTICLE III — WITHDRAWAL OF TRUST ASSETS BY BENEFICIARY

Section 3.1 — Right of Withdrawal The Beneficiary shall have the right to withdraw Trust Assets from the Trust Account at any time and from time to time, without notice to or the consent of the Grantor, upon delivery to the Trustee of a written withdrawal notice in the form attached hereto as Exhibit A (or in such other form as may be reasonably acceptable to the Trustee). The Beneficiary may make withdrawals for any

Section 3.2 — Form of Withdrawal Notice Each withdrawal notice submitted by the Beneficiary to the Trustee shall be (a) in writing, (b) signed by a duly authorized officer of the Beneficiary, and (c) delivered to the Trustee at its notice address set forth in Section 13.3 of this Agreement by hand delivery, overnight courier service, or electronic mail (with a confirmation copy sent by overnight courier). Each withdr

Section 3.3 — Trustee's Obligation to Honor Withdrawals Upon receipt of a valid withdrawal notice from the Beneficiary, the Trustee shall disburse the requested funds or assets to the Beneficiary (or as otherwise directed in the withdrawal notice) within two (2) Business Days following the Trustee's receipt of such notice. The Trustee shall not be required or permitted to inquire into the Beneficiary's right, entitle

Section 3.4 — Limitation on Withdrawals Notwithstanding any provision of this Agreement to the contrary, the Beneficiary may not withdraw amounts in excess of the then-current aggregate fair market value of the Trust Assets held in the Trust Account as of the date of such withdrawal. In the event that a withdrawal request exceeds the then-current fair market value of Trust Assets, the Trustee shall disburse Trust Ass

Section 3.5 — Excess Withdrawals and Replenishment If the Beneficiary withdraws Trust Assets from the Trust Account such that the remaining fair market value of Trust Assets falls below the Minimum Trust Balance, the Grantor shall replenish the Trust Account by depositing additional cash or Permitted Investments in an amount sufficient to restore the fair market value of Trust Assets to at least the Minimum Trust Bal

ARTICLE IV — WITHDRAWAL BY GRANTOR

Section 4.1 — Conditions for Grantor Withdrawal Except as expressly provided in Section 4.2 of this Agreement, the Grantor may withdraw Trust Assets from the Trust Account only with the prior written consent of the Beneficiary. Any request by the Grantor to withdraw Trust Assets shall be submitted in writing to both the Trustee and the Beneficiary, specifying the amount and nature of the assets to be withdrawn and th

Section 4.2 — Permitted Grantor Withdrawals Without Consent Notwithstanding Section 4.1, the Grantor may, without the Beneficiary's prior written consent, undertake the following actions: (a) Substitution of Trust Assets. The Grantor may withdraw Trust Assets from the Trust Account and simultaneously substitute therefor other assets of equal or greater fair market value, provided that (i) the substituted assets quali

Section 4.3 — Return of Trust Assets upon Termination (a) Upon the final termination, commutation, or novation of all obligations of the Grantor under the Reinsurance Agreement, and upon the full and final discharge of all claims, losses, and liabilities arising thereunder, the Grantor may request the return of all remaining Trust Assets held in the Trust Account by delivering a written request to both the Trustee an

ARTICLE V — INVESTMENT OF TRUST ASSETS

Section 5.1 — Investment Authority Trust Assets shall be invested and reinvested by the Trustee in accordance with written investment guidelines provided by the Grantor from time to time, subject in all cases to the restrictions and limitations set forth in Section 5.2 and Schedule D of this Agreement. The Grantor shall provide the Trustee with initial written investment guidelines on or before the Required Funding D

Section 5.2 — Permitted Investments Trust Assets shall be invested only in the following categories of assets, as required by NY Insurance Law § 1308 and 11 NYCRR 125 and as further specified in Schedule D hereto: (a) Cash and cash equivalents denominated in United States dollars, including demand deposits and money market funds invested exclusively in obligations described in clauses (b) and (c) below; (b) Obligatio

Section 5.3 — Maturity and Liquidity Restrictions (a) No single investment held in the Trust Account shall have a remaining term to maturity in excess of three (3) years from the date of acquisition. (b) At all times, at least fifty percent (50%) of the aggregate fair market value of Trust Assets shall be invested in assets with a remaining term to maturity of one (1) year or less, or in cash or cash equivalents. (c)

Section 5.4 — Income on Trust Assets All income, interest, dividends, distributions, and other earnings generated by or accruing on Trust Assets shall be credited to the Trust Account and shall constitute part of the Trust Assets for all purposes under this Agreement. Income on Trust Assets that is in excess of the Minimum Trust Balance may be withdrawn by the Grantor in accordance with Section 4.2(b) of this Agreeme

Section 5.5 — Valuation (a) Trust Assets shall be valued at fair market value as of each valuation date. For purposes of this Agreement, the "valuation date" shall be the last Business Day of each calendar month. (b) The Trustee shall determine the fair market value of Trust Assets as of each valuation date using pricing sources and methodologies consistent with standard industry practice and in accordance with any a

ARTICLE VI — DUTIES AND RESPONSIBILITIES OF THE TRUSTEE

Section 6.1 — Standard of Care The Trustee shall hold, invest, administer, and disburse Trust Assets in accordance with the terms and conditions of this Agreement and in compliance with the standard of care required of fiduciaries under the laws of the State of New York. The Trustee shall act in good faith and with the degree of care, skill, and diligence that a prudent professional trustee would exercise under simil

Section 6.2 — Record Keeping The Trustee shall maintain complete, accurate, and current books and records of all transactions, deposits, withdrawals, investment purchases and sales, income receipts, disbursements, and other activities relating to the Trust Account. Such books and records shall be maintained in a manner consistent with generally accepted accounting principles and applicable regulatory requirements, an

Section 6.3 — Reporting Obligations The Trustee shall provide the following reports and statements in connection with the administration of the Trust Account: (a) Monthly Statements. Within five (5) Business Days after the end of each calendar month, the Trustee shall deliver to both the Grantor and the Beneficiary a written statement of Trust Account activity for such month, including a summary of all deposits, with

Section 6.4 — Tax Reporting The Trustee shall prepare and file (or cause to be prepared and filed) all applicable federal, state, and local tax returns, information reports, and other tax filings relating to the Trust Account, including Internal Revenue Service Forms 1099 and such other forms as may be required. All income, gains, losses, and deductions attributable to the Trust Assets shall be treated as income, gai

Section 6.5 — Compliance with Law The Trustee shall at all times administer the Trust and the Trust Account in compliance with NY Insurance Law § 1308, 11 NYCRR 125, and all other applicable laws, regulations, rules, and orders of any governmental or regulatory authority having jurisdiction over the Trust, the Trustee, or the Trust Assets. The Trustee shall promptly notify the Grantor and the Beneficiary of any regul

Section 6.6 — No Offset or Lien The Trustee shall not subject Trust Assets, or any portion thereof, to any charge, lien, encumbrance, offset, security interest, claim, or right of setoff of the Trustee, any creditor of the Trustee, the Grantor, or any other person or entity. Trust Assets are held exclusively for the benefit of the Beneficiary as required by NY Insurance Law § 1308 and 11 NYCRR 125, and no party other

ARTICLE VII — TRUSTEE FEES AND EXPENSES

Section 7.1 — Fee Schedule The Grantor shall pay to the Trustee an annual administration fee calculated at the rate of [●] basis points per annum on the average monthly fair market value of Trust Assets, as more fully set forth in the fee schedule attached hereto as Schedule C. The annual minimum fee payable to the Trustee shall be $[●], regardless of the fair market value of Trust Assets. Fees shall be calculated an

Section 7.2 — Expenses In addition to the fees set forth in Section 7.1, the Grantor shall reimburse the Trustee for all reasonable and documented out-of-pocket expenses incurred by the Trustee in connection with the establishment, administration, and maintenance of the Trust Account, including but not limited to legal fees and expenses, accounting and audit fees, transaction and settlement costs, wire transfer fees,

Section 7.3 — Payment of Fees Trustee fees and reimbursable expenses shall be paid by the Grantor directly and shall not be deducted from or charged against the Trust Assets without the prior written consent of the Beneficiary. In no event shall the payment of Trustee fees or expenses, whether deducted from Trust Assets or otherwise, reduce the fair market value of Trust Assets held in the Trust Account below the Min

ARTICLE VIII — RESIGNATION AND REMOVAL OF TRUSTEE

Section 8.1 — Resignation of Trustee The Trustee may resign from its duties and obligations under this Agreement upon not less than ninety (90) days' prior written notice to both the Grantor and the Beneficiary. Such resignation shall not become effective until a successor trustee has been duly appointed in accordance with Section 8.3, has accepted the trusteeship in writing, and has received all Trust Assets and rel

Section 8.2 — Removal of Trustee The Trustee may be removed by the Grantor with the prior written consent of the Beneficiary, or by the Beneficiary acting alone in its sole discretion, upon thirty (30) days' prior written notice to the Trustee and the other Party. No removal of the Trustee shall become effective until a successor trustee has been appointed, has accepted the trusteeship, and has received all Trust Ass

Section 8.3 — Appointment of Successor Trustee (a) Upon the resignation or removal of the Trustee, the Grantor shall, with the written consent of the Beneficiary (which consent shall not be unreasonably withheld, conditioned, or delayed), appoint a successor trustee. The successor trustee must be a trust company duly chartered under the laws of the State of New York, or a national bank with trust powers authorized to

Section 8.4 — Transfer of Trust Assets (a) The outgoing Trustee shall transfer and deliver all Trust Assets to the successor trustee within ten (10) Business Days following the successor trustee's written acceptance of the trusteeship, or such shorter period as the Beneficiary may reasonably require. (b) Together with the transfer of Trust Assets, the outgoing Trustee shall deliver to the successor trustee all books,

ARTICLE IX — INDEMNIFICATION AND LIABILITY

Section 9.1 — Indemnification of Trustee The Grantor shall indemnify, defend, and hold harmless the Trustee and its officers, directors, employees, agents, and affiliates from and against any and all losses, liabilities, claims, damages, costs, and expenses (including reasonable attorneys' fees and expenses) arising out of or relating to the Trustee's acceptance of the trusteeship, the performance or non-performance

Section 9.2 — Limitation of Trustee Liability (a) The Trustee shall not be liable to the Grantor, the Beneficiary, or any other person for any loss, diminution in value, or damage to Trust Assets resulting from: (i) market fluctuations, changes in interest rates, or other changes in the fair market value of Permitted Investments held in the Trust Account, provided the Trustee has complied with the investment guidelin

Section 9.3 — No Liability for Reinsurance Obligations The Trustee assumes no responsibility for, and shall have no liability whatsoever with respect to, the Reinsurance Agreement or any obligations, duties, or liabilities of the Grantor or the Beneficiary arising under or in connection with the Reinsurance Agreement. The Trustee's sole obligations are those expressly set forth in this Agreement, and the Trustee shal

ARTICLE X — TERM AND TERMINATION

Section 10.1 — Effective Date This Agreement shall become effective upon the later of (a) execution and delivery of this Agreement by all three Parties and (b) funding of the Trust Account with Trust Assets having an aggregate fair market value of not less than the Minimum Trust Balance.

Section 10.2 — Term This Agreement shall remain in full force and effect for the duration of the Treaty Period (January 1, 2026 through December 31, 2026) and shall continue thereafter until all of the Grantor's obligations under the Reinsurance Agreement have been fully and finally discharged, commuted, novated, or otherwise terminated, and the Beneficiary has provided written confirmation of such discharge and rele

Section 10.3 — Run-Off Period Following the expiration of the Treaty Period on December 31, 2026, the Trust shall continue in full force and effect during any development or run-off period, until all incurred but not reported (IBNR) claims, outstanding loss reserves, loss adjustment expenses, and any other obligations of the Grantor arising under or in connection with the Reinsurance Agreement have been settled, paid

Section 10.4 — Final Distribution Upon written confirmation from the Beneficiary that all of the Grantor's obligations under the Reinsurance Agreement have been fully and finally discharged, and that no outstanding, contingent, or IBNR obligations remain, the Trustee shall distribute all remaining Trust Assets to the Grantor within ten (10) Business Days following the Trustee's receipt of written instructions signed

ARTICLE XI — REPRESENTATIONS AND WARRANTIES

Section 11.1 — Representations of Grantor The Grantor hereby represents and warrants to the Beneficiary and the Trustee, as of the Execution Date and as of the Required Funding Date, as follows: (a) Organization and Good Standing. The Grantor is a corporation (Aktiengesellschaft) duly organized, validly existing, and in good standing under the laws of Switzerland, and is regulated by FINMA. The Grantor has all necess

Section 11.2 — Representations of Beneficiary The Beneficiary hereby represents and warrants to the Grantor and the Trustee, as of the Execution Date, as follows: (a) Organization and Good Standing. The Beneficiary is a Connecticut-domiciled admitted insurer, assigned NAIC No. 42917, duly organized, validly existing, and in good standing under the laws of the State of Connecticut. The Beneficiary is duly licensed to

Section 11.3 — Representations of Trustee The Trustee hereby represents and warrants to the Grantor and the Beneficiary, as of the Execution Date, as follows: (a) Organization and Authorization. The Trustee is a trust company duly chartered and authorized under the banking laws of the State of New York, and is authorized to act as trustee and to exercise fiduciary powers in the State of New York. (b) Power and Author

Section 12.1 — Grantor Covenants The Grantor hereby covenants and agrees as follows, for the benefit of the Beneficiary and, as applicable, the Trustee: (a) Maintenance of Minimum Trust Balance. The Grantor shall maintain the fair market value of Trust Assets in the Trust Account at or above the Minimum Trust Balance at all times during the term of this Agreement, including during any run-off period. (b) Notice of Ma

Section 12.2 — Beneficiary Covenants The Beneficiary hereby covenants and agrees as follows: (a) Good Faith. The Beneficiary shall exercise its withdrawal rights under Article III in good faith and solely in connection with legitimate obligations arising under or in connection with the Reinsurance Agreement or as otherwise permitted by NY Insurance Law § 1308 and 11 NYCRR 125. (b) Refund of Excess Withdrawals. The Be

ARTICLE XIII — MISCELLANEOUS PROVISIONS

Section 13.1 — Governing Law This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without regard to or application of any conflicts of law principles that would result in the application of the laws of any other jurisdiction. Each Party hereby irrevocably submits to the jurisdiction of the courts of the State of New York and the federal courts of th

Section 13.2 — Dispute Resolution Any dispute, controversy, or claim arising out of or relating to this Agreement, including any question regarding its formation, existence, validity, interpretation, performance, breach, or termination, shall be resolved by arbitration before a panel of three (3) arbitrators seated in the City of New York, State of New York, in accordance with the rules and procedures of ARIAS-U.S. (