CONFIDENTIAL — DRAFT — SUBJECT TO REVIEW AND NEGOTIATION
CALDERWOOD & HARKNESS LLP 125 Broad Street, 38th Floor New York, NY 10004 Tel: (212) 555-7800
Fax: (212) 555-7801
Matter No. 1025-00004
November 1, 2025
INTERMEDIARY AND BROKER AGREEMENT SIDE LETTER
DRAFT — Subject to Review and Negotiation
This Intermediary and Broker Agreement Side Letter (this "Side Letter") is entered into as of the date last set forth on the signature page hereto (the "Effective Date"), by and between:
QUORUM SPECIALTY INSURANCE COMPANY ("Cedent" or "QSIC"), a Connecticut-domiciled admitted property and casualty insurer (NAIC No. 42917), a wholly owned operating subsidiary of Quorum Insurance Holdings Corp., a Delaware corporation listed on the Nasdaq Stock Market (ticker: QIHC), with its principal office located at 400 Constitution Plaza, Suite 2200, Hartford, CT 06103;
and
BLACKBRIDGE ADVISORY GROUP LLC ("Intermediary" or "Broker"), a Delaware limited liability company, duly licensed as a reinsurance intermediary by the New York State Department of Financial Services (NY DFS License No. RI-00483), with offices located at 55 Water Street, Suite 1410, New York, NY 10041.
The Cedent and the Intermediary are referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Cedent is an admitted property and casualty insurance company domiciled in the State of Connecticut, engaged in the underwriting of commercial property and specialty lines of insurance, and maintaining its principal executive offices in Hartford, Connecticut;
WHEREAS, the Cedent has entered into or will enter into the following reinsurance agreements (collectively, the "Treaties"):
(a) The Amended and Restated Property Quota-Share Reinsurance Treaty (the "Quota-Share Treaty") between Quorum Specialty Insurance Company, as cedent, and Pinnacle Re Ltd., a Bermuda Class 4 insurer, with offices at Cumberland House, 1 Victoria Street, Hamilton HM 11, Bermuda, as sole reinsurer, for the treaty period commencing January 1, 2026 and ending December 31, 2026, providing for a forty percent (40%) cession of the Cedent's property book of business; and
(b) The Catastrophe Excess-of-Loss Reinsurance Contract (the "Cat XOL Contract") between Quorum Specialty Insurance Company, as cedent, and a panel of reinsurers consisting of: (i) Pinnacle Re Ltd. (fifty percent (50%) participation), (ii) Graystone Reinsurance AG, with offices at Bahnhofstrasse 72, 8001 Zürich, Switzerland (thirty percent (30%) participation), and (iii) Tidewater Re S.A., with offices at 14 Boulevard Royal, L-2449 Luxembourg (twenty percent (20%) participation), providing a thirty-five million dollar ($35,000,000) per-occurrence layer in excess of a fifteen million dollar ($15,000,000) retention, for the treaty period commencing January 1, 2026 and ending December 31, 2026;
WHEREAS, the Cedent desires to appoint Blackbridge Advisory Group LLC as the reinsurance intermediary for the placement, servicing, and administration of both the Quota-Share Treaty and the Cat XOL Contract, and Blackbridge desires to accept such appointment on the terms and conditions set forth herein;
WHEREAS, Blackbridge has acted as broker in connection with the initial market submission for the Cat XOL Contract circulated on October 17, 2025, and has historically served as the intermediary on the Quota-Share Treaty since its original inception on January 1, 2022, having facilitated the initial placement and each subsequent annual renewal thereof;
WHEREAS, Owen F. Halstead, Managing Director — Treaty Placement, has been designated by Blackbridge as the lead broker responsible for the day-to-day management of the intermediary relationship contemplated by this Side Letter;
WHEREAS, this Side Letter is intended to be read in conjunction with, and to supplement, the intermediary clauses contained in each of the Quota-Share Treaty and the Cat XOL Contract, and in the event of any conflict between the terms of this Side Letter and the intermediary clause contained in either Treaty, the terms of the applicable Treaty shall govern with respect to the relationship between the Cedent and the applicable reinsurer(s), while the terms of this Side Letter shall govern with respect to the relationship between the Cedent and the Intermediary; and
WHEREAS, the Parties wish to set forth the terms and conditions of the Intermediary's engagement, including the scope of services, brokerage commission arrangements, fiduciary obligations, and related matters.
NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
SECTION 1: APPOINTMENT OF INTERMEDIARY
1.1 Appointment. The Cedent hereby appoints Blackbridge Advisory Group LLC as its exclusive reinsurance intermediary and broker of record in connection with the Quota-Share Treaty and the Cat XOL Contract for the treaty period commencing January 1, 2026 and ending December 31, 2026, including any applicable run-off period under either Treaty. Blackbridge hereby accepts such appointment and agrees to perform the services described herein in a professional, diligent, and competent manner consistent with the standards of care customarily observed by reinsurance intermediaries acting in similar capacities in the London, Bermuda, and domestic United States reinsurance markets. This appointment shall be exclusive as to the placement, servicing, and administration of the Treaties described herein, meaning that the Cedent shall not engage any other reinsurance intermediary to perform the services described in this Side Letter with respect to the Treaties during the term hereof without the prior written consent of Blackbridge, except in the event of termination as provided in Section 9.
1.2 Scope of Engagement
The scope of Blackbridge's engagement as reinsurance intermediary shall include, without limitation, the following services in connection with each of the Treaties:
(a) Placement and Negotiation. Assisting the Cedent in the placement and, where applicable, the renewal and amendment of each Treaty, including the preparation and circulation of market submissions, the solicitation of quotations from prospective reinsurers, the negotiation of terms and conditions, and the execution and delivery of binding documentation.
(b) Premium Collection and Remittance. Collecting premiums due from the Cedent and remitting such premiums to the applicable reinsurer(s) in accordance with the terms of each Treaty and Section 3 of this Side Letter, net of applicable brokerage commissions and ceding commissions.
(c) Loss Settlement Facilitation. Facilitating the settlement of claims between the Cedent and the applicable reinsurer(s), including the transmission of loss notifications, claim reports, proof-of-loss documentation, and reinsurance recoverable payments.
(d) Bordereau Administration. Preparing, reviewing, and distributing quarterly and annual bordereaux (premium and loss) as required under each Treaty, and coordinating the reconciliation of bordereau data with the Cedent's and reinsurer(s)' records.
(e) General Treaty Servicing. Providing such other administrative and advisory services as may be reasonably necessary for the effective servicing of each Treaty, including the coordination of contract wording, the facilitation of amendments and endorsements, the management of security and collateral requirements, and the provision of market intelligence and renewal strategy recommendations.
Without limiting the generality of the foregoing, the specific scope of Blackbridge's engagement with respect to each Treaty is as follows:
(i) Quota-Share Treaty. Blackbridge shall provide intermediary services in connection with the renewal and amendment of the forty percent (40%) property quota-share with Pinnacle Re Ltd. The projected 2026 gross written premium ("GWP") of the Cedent's property book is three hundred thirty-eight million dollars ($338,000,000), resulting in projected 2026 ceded premium of approximately one hundred thirty-five million two hundred thousand dollars ($135,200,000) (calculated as $338,000,000 × 40%). Blackbridge shall facilitate the quarterly bordereau process, the calculation of provisional and adjusted ceding commissions (provisional rate of 33.5%, subject to a sliding-scale adjustment within the 30.0% to 36.0% range), and the administration of the funds withheld arrangement described in Section 3.1.
(ii) Cat XOL Contract. Blackbridge shall provide intermediary services in connection with the placement of the thirty-five million dollar ($35,000,000) excess of fifteen million dollar ($15,000,000) per-occurrence catastrophe excess-of-loss layer with the three-reinsurer panel, including the coordination of panel allocations among Pinnacle Re Ltd. (50%), Graystone Reinsurance AG (30%), and Tidewater Re S.A. (20%). Blackbridge shall facilitate the collection and distribution of quarterly deposit premiums, the administration of reinstatement premium provisions, and the coordination of loss notifications and claim settlements among the panel members.
1.3 Designated Representatives
For purposes of the day-to-day administration and management of the intermediary relationship contemplated by this Side Letter, each Party hereby designates the following individual as its primary point of contact:
(a) Intermediary. Blackbridge designates Owen F. Halstead, Managing Director — Treaty Placement, as the primary point of contact for all matters arising under this Side Letter and in connection with the Treaties. In the absence or unavailability of Mr. Halstead, Blackbridge shall designate a qualified substitute and promptly notify the Cedent of such designation.
(b) Cedent. The Cedent designates Suzanne M. Driscoll, Vice President, Reinsurance & Capital Management, Quorum Insurance Holdings Corp., as the primary point of contact for all matters arising under this Side Letter and in connection with the Treaties. The Cedent may designate a substitute representative by written notice to Blackbridge in accordance with Section 13.1.
The designation of primary points of contact shall not limit either Party's right or obligation to communicate through other officers, employees, or authorized agents as may be necessary or appropriate for the performance of the obligations contemplated hereby.
SECTION 2: BROKERAGE COMMISSION
2.1 Quota-Share Treaty Commission
In consideration of Blackbridge's services as reinsurance intermediary in connection with the Quota-Share Treaty, the Cedent and Blackbridge agree that Blackbridge shall be entitled to a brokerage commission equal to one and one-quarter percent (1.25%) of ceded premium under the Quota-Share Treaty. The brokerage commission shall be calculated on actual ceded premium as reported on the quarterly bordereaux prepared and delivered in accordance with the terms of the Quota-Share Treaty and this Side Letter.
Based on the projected 2026 ceded premium of one hundred thirty-five million two hundred thousand dollars ($135,200,000), the estimated annual brokerage commission under the Quota-Share Treaty is approximately one million six hundred ninety thousand dollars ($1,690,000). The foregoing estimate is provided for informational purposes only and is not a guarantee of the actual brokerage commission payable, which shall be determined solely by reference to actual ceded premium during the treaty period.
The brokerage commission shall be payable from premium funds received by Blackbridge from the Cedent prior to remittance to Pinnacle Re Ltd. Blackbridge's right to deduct its brokerage commission from premiums is further described in Section 2.3 of this Side Letter.
2.2 Cat XOL Contract Commission
In consideration of Blackbridge's services as reinsurance intermediary in connection with the Cat XOL Contract, the Cedent and Blackbridge agree that Blackbridge shall be entitled to a brokerage commission equal to five percent (5%) of the layer premium under the Cat XOL Contract.
The annual layer premium under the Cat XOL Contract is two million nine hundred seventy-five thousand dollars ($2,975,000), calculated by applying a rate-on-line of eight and one-half percent (8.50%) to the thirty-five million dollar ($35,000,000) layer limit. The resulting annual brokerage commission is one hundred forty-eight thousand seven hundred fifty dollars ($148,750).
The brokerage commission is applicable pro rata to each reinsurer's share of the layer premium, as follows:
In addition to the brokerage commission on the annual layer premium, Blackbridge shall be entitled to a brokerage commission of five percent (5%) of any reinstatement premium collected under the Cat XOL Contract. The Cat XOL Contract provides for one (1) reinstatement at one hundred percent (100%) additional premium, calculated pro rata as to time. In the event a reinstatement is triggered, the reinstatement premium (up to a maximum of $2,975,000, pro rata as to time from the date of the loss occurrence to the end of the treaty period) shall be subject to a five percent (5%) brokerage commission.
The brokerage commission shall also be payable on the minimum premium of two million three hundred eighty thousand dollars ($2,380,000) (eighty percent (80%) of the annual premium of $2,975,000), regardless of any premium adjustment. In the event the Cat XOL Contract provides for a premium adjustment resulting in a final premium less than the annual premium, Blackbridge's commission shall be calculated on the greater of the adjusted premium and the minimum premium.
2.3 Payment of Commission
Blackbridge shall be entitled to deduct its brokerage commission from premiums collected from the Cedent prior to remittance to the applicable reinsurer(s) under each Treaty. The commission shall be deducted on a current basis as premiums are received, such that Blackbridge remits to each reinsurer the applicable premium amount, net of the brokerage commission and any other amounts properly deductible under the terms of the applicable Treaty.
No brokerage commission shall be payable on return premiums unless otherwise agreed in writing by the Parties. In the event of a return of premium to the Cedent by any reinsurer (whether due to commutation, cancellation, or otherwise), Blackbridge shall not be required to return any brokerage commission previously deducted from such premium unless otherwise agreed by the Parties; provided, however, that the Parties shall negotiate in good faith regarding any equitable adjustment of commissions in connection with a commutation or early termination of either Treaty.
2.4 No Additional Compensation
Blackbridge shall not receive any placement fee, advisory fee, profit commission, contingent commission, override commission, or other compensation from any reinsurer participating in the Quota-Share Treaty or the Cat XOL Contract, or from any other party, in connection with the placement, servicing, or administration of the Treaties, without the prior written consent of the Cedent. Blackbridge represents that, as of the date of this Side Letter, it has not received and has no agreement or understanding to receive any such additional compensation from any reinsurer or other party in connection with the Treaties. In the event Blackbridge receives or becomes entitled to receive any such additional compensation during the term of this Side Letter, Blackbridge shall promptly disclose such compensation to the Cedent in writing and shall not retain such compensation without the Cedent's prior written consent.
SECTION 3: PREMIUM COLLECTION AND REMITTANCE
3.1 Collection Obligation — Quota-Share Treaty
Blackbridge shall collect from the Cedent and remit to Pinnacle Re Ltd. all premiums due under the Quota-Share Treaty, net of the one and one-quarter percent (1.25%) brokerage commission described in Section 2.1 and net of the ceding commission at the provisional rate of thirty-three and one-half percent (33.5%), subject to sliding-scale adjustment within the range of thirty percent (30.0%) to thirty-six percent (36.0%) in accordance with the terms of the Quota-Share Treaty.
The Parties acknowledge that the Quota-Share Treaty provides for a funds withheld arrangement pursuant to which twenty-five percent (25%) of the ceded premium shall be withheld by the Cedent and invested at three-month SOFR plus seventy-five basis points (3-month SOFR + 75 bps). Such funds withheld amounts are retained directly by the Cedent and are not routed through the Intermediary. Blackbridge shall have no responsibility for the collection, investment, or remittance of funds withheld amounts, nor shall any brokerage commission be payable on funds withheld amounts that are not remitted through Blackbridge.
Premium settlements under the Quota-Share Treaty shall be made within thirty (30) days following the Cedent's delivery of the applicable quarterly bordereau to Blackbridge. The Cedent shall use commercially reasonable efforts to deliver each quarterly bordereau to Blackbridge not later than forty-five (45) days following the end of the applicable calendar quarter.
3.2 Collection Obligation — Cat XOL Contract
Blackbridge shall collect quarterly deposit premiums from the Cedent and distribute such premiums to each member of the reinsurer panel in accordance with their respective participation percentages. The quarterly deposit premium is seven hundred forty-three thousand seven hundred fifty dollars ($743,750), representing one-quarter of the annual layer premium of two million nine hundred seventy-five thousand dollars ($2,975,000), allocated among the panel reinsurers as follows:
The first quarterly deposit premium shall be due on or before March 31, 2026. Subsequent quarterly deposit premiums shall be due on or before June 30, 2026, September 30, 2026, and December 31, 2026, respectively.
Reinstatement premiums, if any, shall be collected from the Cedent and remitted to the applicable reinsurers on a timely basis following notification of a loss event giving rise to a reinstatement under the Cat XOL Contract. Blackbridge shall coordinate the calculation of any reinstatement premium in accordance with the terms of the Cat XOL Contract and shall provide the Cedent with a written statement of the reinstatement premium due, including the allocation among panel reinsurers.
3.3 Remittance Timing
All premiums received by Blackbridge from the Cedent shall be remitted to the applicable reinsurer(s) within fifteen (15) business days of receipt, net of Blackbridge's brokerage commission as described in Section 2. Blackbridge shall use commercially reasonable efforts to effect such remittance as promptly as practicable following receipt. In no event shall Blackbridge retain premiums received from the Cedent for longer than twenty (20) business days following receipt, except in circumstances where remittance is delayed due to the failure of a reinsurer to provide accurate settlement instructions or due to force majeure events beyond Blackbridge's reasonable control.
Blackbridge shall maintain a separate fiduciary account as described in Section 4 for all funds held on behalf of the Cedent and reinsurers. All premiums received by Blackbridge shall be deposited into such fiduciary account promptly upon receipt and shall remain therein until remitted to the applicable reinsurer(s) in accordance with this Side Letter.
3.4 Premium Accounting and Statements
Blackbridge shall provide monthly premium accounting statements to the Cedent and to each reinsurer participating in the applicable Treaty, reconciling amounts collected from the Cedent, brokerage commissions deducted, ceding commissions deducted (if applicable), and amounts remitted to each reinsurer. Such statements shall be delivered within ten (10) business days after the end of each calendar month.
In addition to the monthly premium accounting statements, Blackbridge shall prepare and deliver to the Cedent quarterly reconciliation reports within twenty (20) business days after the end of each calendar quarter, summarizing all premium transactions under each Treaty for the quarter, including any variances from projected amounts and any outstanding balances due from or to any party. The quarterly reconciliation reports shall be in a format reasonably acceptable to the Cedent and shall contain sufficient detail to permit the Cedent's finance and reinsurance departments to verify the accuracy and completeness of all transactions.
SECTION 4: FIDUCIARY DUTIES AND TRUST ACCOUNT
4.1 Fiduciary Capacity
All premiums, return premiums, loss payments, salvage and subrogation recoveries, reinstatement premiums, and other funds of any kind received by Blackbridge in connection with the Quota-Share Treaty and the Cat XOL Contract shall be held by Blackbridge in a fiduciary capacity for the benefit of the parties entitled thereto. Blackbridge acknowledges and agrees that its receipt of such funds gives rise to fiduciary obligations of the highest degree, and that Blackbridge shall handle, safeguard, and account for such funds in accordance with its fiduciary obligations as a licensed reinsurance intermediary under applicable New York law, including without limitation the provisions of the New York Insurance Law applicable to reinsurance intermediaries, and the terms and conditions of its NY DFS License No. RI-00483.
4.2 Segregated Fiduciary Account
Blackbridge shall establish and maintain a segregated fiduciary premium trust account (the "Fiduciary Account") at a New York-chartered or federally chartered financial institution with a minimum long-term credit rating of A- from Standard & Poor's or A3 from Moody's Investors Service (or the equivalent from another nationally recognized statistical rating organization). The Fiduciary Account shall be maintained at all times in compliance with applicable New York law and regulatory requirements governing fiduciary accounts of reinsurance intermediaries.
Funds deposited in the Fiduciary Account shall not be commingled with Blackbridge's own operating funds, general corporate funds, or with funds relating to other clients, treaties, or transactions of Blackbridge. Blackbridge shall maintain the Fiduciary Account as a separate, clearly identified account, and shall ensure that the title or designation of the account reflects its fiduciary nature.
Interest earned on balances held in the Fiduciary Account shall accrue to the benefit of the Cedent unless otherwise directed in writing by the Cedent. Blackbridge shall report any interest earned on the Fiduciary Account to the Cedent in the monthly premium accounting statements described in Section 3.4.
4.3 Records and Audit Rights
Blackbridge shall maintain complete, accurate, and up-to-date books and records regarding all transactions under both the Quota-Share Treaty and the Cat XOL Contract, including without limitation records of all premiums received and remitted, commissions deducted, loss payments received and remitted, bordereau data, correspondence with reinsurers, and account statements for the Fiduciary Account. All such records shall be maintained in a format that permits reasonable audit and inspection.
The Cedent and each reinsurer participating in the Treaties shall have the right, upon not less than thirty (30) days' prior written notice to Blackbridge, to audit or inspect Blackbridge's books and records related to the Treaties during normal business hours at Blackbridge's offices. Such audit or inspection may be conducted by the Cedent or reinsurer, or by its authorized representatives (including outside auditors and accountants), and Blackbridge shall cooperate fully with any such audit or inspection, including by providing reasonable access to its personnel, facilities, and records. The costs of any such audit shall be borne by the party requesting the audit, except that if the audit reveals a material discrepancy (defined as a variance of more than two percent (2%) in any quarterly period), the costs of the audit shall be borne by Blackbridge.
All records required to be maintained pursuant to this Section 4.3 shall be retained by Blackbridge for a period of not less than seven (7) years following the later of: (a) the termination of this Side Letter, and (b) the final settlement under the applicable Treaty (including the conclusion of any run-off period). At the expiration of such retention period, Blackbridge shall not destroy or dispose of any records without first offering the Cedent the opportunity to take possession of such records.
SECTION 5: LOSS REMITTANCE AND CLAIMS SETTLEMENT
5.1 Loss Notification
Blackbridge shall promptly and diligently transmit all loss notifications, claim reports, proof-of-loss documentation, reserve advice, and related correspondence between the Cedent and the applicable reinsurer(s). Blackbridge shall use commercially reasonable efforts to transmit all such materials within two (2) business days of receipt from the transmitting party. The specific notification obligations applicable to each Treaty are as follows:
(a) Quota-Share Treaty. Blackbridge shall transmit to Pinnacle Re Ltd. all notifications of individual claims exceeding the per-risk retention of two million five hundred thousand dollars ($2,500,000), net of the forty percent (40%) quota-share cession, as well as any other notifications required under the Quota-Share Treaty, including aggregate loss information, catastrophe loss reports, and quarterly loss bordereaux.
(b) Cat XOL Contract. Blackbridge shall transmit to each member of the reinsurer panel all notifications of any occurrence that may give rise to a claim under the thirty-five million dollar ($35,000,000) excess of fifteen million dollar ($15,000,000) per-occurrence layer, including notice of any event meeting the one hundred sixty-eight (168) hours clause definition set forth in the Cat XOL Contract. Such notifications shall include, at a minimum, preliminary loss estimates, event descriptions, and information regarding the applicability of the hours clause.
5.2 Loss Remittance
Upon receipt of loss payments from any reinsurer in connection with either the Quota-Share Treaty or the Cat XOL Contract, Blackbridge shall remit such payments to the Cedent within five (5) business days of receipt. All loss payments received by Blackbridge shall be deposited into the Fiduciary Account described in Section 4.2 promptly upon receipt and shall be remitted to the Cedent from such account.
Blackbridge shall not deduct any commission, brokerage, fee, offset, or other charge from loss payments received from any reinsurer without the prior written consent of both the Cedent and the paying reinsurer. Loss payments are to be remitted to the Cedent in full and without any deduction, withholding, or set-off, unless otherwise expressly authorized.
5.3 Intermediary Credit Risk
Consistent with customary reinsurance intermediary practice and unless otherwise provided in the applicable Treaty, payment of premium by the Cedent to the Intermediary shall be deemed payment to the reinsurer for purposes of the Cedent's obligation to pay premium under the applicable Treaty. Accordingly, the Cedent shall be discharged from its premium payment obligation to the extent premiums are paid to Blackbridge in accordance with the terms of the applicable Treaty and this Side Letter.
Payment of losses by a reinsurer to the Intermediary shall be deemed payment to the Cedent only upon the Cedent's actual receipt of such loss payment. Until such time as the Cedent has actually received the loss payment, the reinsurer's obligation to pay the applicable claim shall remain outstanding, notwithstanding the reinsurer's payment of such amount to Blackbridge.
The Cedent acknowledges that Blackbridge does not guarantee the solvency, creditworthiness, or performance of any reinsurer participating in the Quota-Share Treaty or the Cat XOL Contract. The Cedent has made its own independent assessment of the creditworthiness of each reinsurer and has not relied on Blackbridge for any such assessment, except to the extent Blackbridge has provided market information in the ordinary course of the placement process.
SECTION 6: OBLIGATIONS REGARDING THE REINSURER PANEL (CAT XOL)
6.1 Panel Administration
Blackbridge shall serve as the central point of coordination for communications among the three Cat XOL panel reinsurers — Pinnacle Re Ltd. (as lead reinsurer), Graystone Reinsurance AG, and Tidewater Re S.A. — and the Cedent. In this capacity, Blackbridge shall:
(a) facilitate and coordinate all communications between the Cedent and each panel reinsurer relating to the Cat XOL Contract, including the circulation of contract wordings, endorsements, amendments, and notices;
(b) facilitate agreement on lead/following provisions, ensuring that the following reinsurers (Graystone Reinsurance AG and Tidewater Re S.A.) receive copies of all material communications and documentation provided to Pinnacle Re Ltd. as lead reinsurer, and that any decisions or agreements made by Pinnacle Re Ltd. in its capacity as lead reinsurer are promptly communicated to the following reinsurers;
(c) ensure that each reinsurer receives timely copies of all notices, bordereaux, loss advices, and reports required to be delivered under the Cat XOL Contract; and
(d) coordinate the allocation and collection of premiums (including reinstatement premiums) and the allocation and distribution of loss payments among the panel reinsurers in accordance with their respective participation percentages.
6.2 Confirmation of Participation
Blackbridge shall obtain and deliver to the Cedent written confirmation of each reinsurer's participation share under the Cat XOL Contract, together with signed participation schedules or signing pages, as applicable. The confirmed participation of each panel reinsurer is as follows:
Blackbridge shall deliver the written confirmations and signed participation schedules to the Cedent not later than fifteen (15) business days prior to the inception of the Cat XOL Contract on January 1, 2026. In the event any reinsurer fails to execute or deliver its participation schedule in a timely manner, Blackbridge shall promptly notify the Cedent and shall use commercially reasonable efforts to obtain the required documentation.
SECTION 7: REGULATORY COMPLIANCE AND LICENSING
7.1 Intermediary Licensing
Blackbridge represents and warrants that it is, and shall at all times during the term of this Side Letter remain, duly licensed as a reinsurance intermediary by the New York State Department of Financial Services (NY DFS License No. RI-00483) and by such other state or foreign regulatory authorities as may be required for the lawful performance of its duties hereunder. Blackbridge further represents that its license is in good standing as of the date of this Side Letter and that there are no pending proceedings or, to its knowledge, threatened proceedings that could result in the suspension, revocation, or non-renewal of its license.
Blackbridge shall promptly notify the Cedent in writing, and in any event within five (5) business days, of any suspension, revocation, non-renewal, restriction, or other material change in the status of its reinsurance intermediary license issued by the New York State Department of Financial Services or any other applicable regulatory authority. Blackbridge shall also promptly notify the Cedent of any regulatory inquiry, examination, or enforcement action that relates to or could reasonably be expected to affect the Treaties or Blackbridge's ability to perform its obligations under this Side Letter.
7.2 Compliance with Law
Blackbridge shall comply with all applicable federal, state, and foreign laws and regulations governing its activities as a reinsurance intermediary, including without limitation the applicable provisions of the New York Insurance Law (including Article 21), the regulations of the New York State Department of Financial Services, the insurance laws and regulations of the State of Connecticut (to the extent applicable to the Cedent's reinsurance transactions), and any applicable laws and regulations of Bermuda, Switzerland, and Luxembourg governing the reinsurers' participation in the Treaties.
Blackbridge shall cooperate fully with any regulatory examination or inquiry relating to the Treaties, including by providing access to its books and records, responding to regulatory inquiries in a timely manner, and assisting the Cedent in connection with any filing, reporting, or disclosure requirements imposed by applicable law or regulation.
7.3 Errors and Omissions Insurance
Blackbridge represents that it currently maintains professional liability (errors and omissions) insurance coverage with limits of not less than ten million dollars ($10,000,000) per claim and twenty million dollars ($20,000,000) in the aggregate, issued by one or more carriers of recognized financial responsibility. Blackbridge shall maintain such coverage, or substantially equivalent coverage, throughout the entire term of this Side Letter and for a period of not less than three (3) years following the termination or expiration of this Side Letter.
Evidence of such coverage, including the identity of the insurer(s), policy number(s), and applicable limits, deductibles, and material terms, shall be provided to the Cedent upon request and, in any event, not later than fifteen (15) business days following the Effective Date and upon each renewal of such coverage during the term of this Side Letter. Blackbridge shall promptly notify the Cedent in writing of any material change in, cancellation of, or failure to renew its professional liability coverage.
SECTION 8: CONFIDENTIALITY
8.1 Confidential Information
All non-public information received by Blackbridge in connection with the Quota-Share Treaty and the Cat XOL Contract, including but not limited to premium data, loss data, loss reserve information, premium and loss bordereaux, catastrophe model output (including, without limitation, Tempest Analytics CatView v11.2 results prepared by Meridian Actuarial Partners LLC for the Cedent's property portfolio), financial statements and projections of the Cedent, underwriting guidelines, policy forms, rate filings, actuarial analyses, and any other proprietary or commercially sensitive information of the Cedent (collectively, "Confidential Information"), shall be treated as strictly confidential by Blackbridge.
Blackbridge shall not disclose Confidential Information to any third party other than the reinsurers participating in the applicable Treaty, and then only to the extent necessary for the placement, servicing, and administration of the Treaties, except as may be required by applicable law, regulation, subpoena, or order of a court or regulatory body of competent jurisdiction. In the event Blackbridge is compelled by law or regulation to disclose any Confidential Information, Blackbridge shall, to the extent legally permissible, provide the Cedent with prompt written notice of such requirement prior to making any disclosure, so as to afford the Cedent the opportunity to seek a protective order or other appropriate remedy.
Blackbridge shall implement and maintain reasonable administrative, technical, and physical safeguards to protect Confidential Information from unauthorized access, disclosure, use, or destruction, consistent with industry standards for reinsurance intermediaries.
8.2 Survival. The confidentiality obligations set forth in this Section 8 shall survive the termination or expiration of this Side Letter for a period of three (3) years following such termination or expiration, regardless of the reason for termination.
SECTION 9: TERM AND TERMINATION
9.1 Term. This Side Letter shall become effective upon execution by both Parties (the "Effective Date") and shall remain in full force and effect for the duration of the treaty periods under the Quota-Share Treaty and the Cat XOL Contract (January 1, 2026 through December 31, 2026), including any run-off period applicable to either Treaty. If either Treaty is renewed or extended beyond December 31, 2026, the Parties shall negotiate in good faith regarding the continuation of this Side Letter on the same or amended terms for the renewal or extension period.
9.2 Termination for Cause
Either Party may terminate this Side Letter upon sixty (60) days' prior written notice to the other Party in the event of a material breach by the other Party of any of its obligations under this Side Letter, provided that such breach remains uncured for a period of thirty (30) days following receipt of written notice from the non-breaching Party specifying the nature of the breach and the actions required to cure such breach.
Notwithstanding the foregoing, either Party may terminate this Side Letter immediately upon written notice to the other Party upon the occurrence of any of the following events:
(a) the revocation, suspension, or non-renewal of Blackbridge's reinsurance intermediary license by the New York State Department of Financial Services or any other applicable regulatory authority, to the extent such revocation, suspension, or non-renewal materially impairs Blackbridge's ability to perform its obligations under this Side Letter;
(b) the insolvency, receivership, conservation, rehabilitation, or liquidation of either Party, or the commencement of any proceeding by or against either Party under any bankruptcy, insolvency, or similar law;
(c) the assignment by Blackbridge of its rights or obligations under this Side Letter to any third party without the prior written consent of the Cedent, in violation of Section 13.2.
9.3 Effect of Termination
Upon the termination or expiration of this Side Letter for any reason, Blackbridge shall:
(i) promptly remit to the parties entitled thereto all funds held in the Fiduciary Account or otherwise held by Blackbridge in a fiduciary capacity in connection with the Treaties;
(ii) deliver to the Cedent all records, files, documents, correspondence, and other materials (including electronic copies thereof) related to the Treaties that are in Blackbridge's possession or control;
(iii) cooperate fully and in good faith in the orderly transition of intermediary services to a successor broker designated by the Cedent, if any, including by providing reasonable assistance and information to facilitate such transition; and
(iv) provide the Cedent with a final accounting of all premiums, commissions, loss payments, and other transactions under each Treaty through the date of termination.
Termination or expiration of this Side Letter shall not affect Blackbridge's right to receive brokerage commissions that were earned and accrued prior to the date of termination, including commissions on premiums collected prior to termination that have not yet been remitted.
The following provisions of this Side Letter shall survive termination or expiration and shall continue in full force and effect in accordance with their respective terms: Section 4 (Fiduciary Duties and Trust Account), Section 5 (Loss Remittance and Claims Settlement), Section 8 (Confidentiality), Section 11 (Indemnification), and Section 12 (Dispute Resolution).
SECTION 10: REPRESENTATIONS AND WARRANTIES
10.1 Representations and Warranties of Blackbridge
Blackbridge hereby represents and warrants to the Cedent as follows, as of the date of this Side Letter and as of the Effective Date:
(a) Organization and Good Standing. Blackbridge is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified to do business in each jurisdiction in which the nature of its business or the location of its assets requires such qualification.
(b) Authority. Blackbridge has full limited liability company power and authority to execute, deliver, and perform its obligations under this Side Letter. The execution, delivery, and performance of this Side Letter have been duly authorized by all necessary limited liability company action on the part of Blackbridge.
(c) No Conflicts. The execution, delivery, and performance of this Side Letter by Blackbridge do not and will not conflict with, result in a breach or violation of, or constitute a default under (i) Blackbridge's certificate of formation or limited liability company agreement, (ii) any material contract, agreement, or instrument to which Blackbridge is a party or by which it is bound, or (iii) any applicable law, regulation, order, judgment, or decree.
(d) No Pending Proceedings. There is no pending or, to Blackbridge's knowledge, threatened litigation, arbitration, regulatory action, investigation, or proceeding against Blackbridge or any of its directors, officers, or key employees that would materially impair Blackbridge's ability to perform its obligations under this Side Letter or that could reasonably be expected to have a material adverse effect on Blackbridge's business, operations, or financial condition.
(e) Disclosure of Relationships. Blackbridge has disclosed to the Cedent in writing any financial interest in, ownership of, or control relationship with any reinsurer participating in the Quota-Share Treaty or the Cat XOL Contract, and any compensation arrangement with any such reinsurer (whether direct or indirect). As of the date of this Side Letter, Blackbridge has no undisclosed financial interest in or relationship with any participating reinsurer.
10.2 Representations and Warranties of the Cedent
The Cedent hereby represents and warrants to Blackbridge as follows, as of the date of this Side Letter and as of the Effective Date:
(a) Organization and Good Standing. Quorum Specialty Insurance Company is a property and casualty insurer duly organized, validly existing, and in good standing under the laws of the State of Connecticut, and holds NAIC No. 42917. The Cedent is duly licensed or authorized to transact the business of insurance in each jurisdiction in which the conduct of its business requires such license or authorization.
(b) Authority. The Cedent has full corporate power and authority to execute, deliver, and perform its obligations under this Side Letter. The execution, delivery, and performance of this Side Letter have been duly authorized by all necessary corporate action on the part of the Cedent.
(c) Accuracy of Information. The Cedent has provided Blackbridge with complete and accurate information necessary for the placement and servicing of the Treaties, including information regarding the Cedent's property book of business, projected premiums, loss experience, catastrophe exposure, and any other information material to the reinsurance placements contemplated hereby. The Cedent shall promptly notify Blackbridge of any material change in such information during the term of this Side Letter.
SECTION 11: INDEMNIFICATION
11.1 Indemnification by Blackbridge
Blackbridge shall indemnify, defend, and hold harmless the Cedent and its directors, officers, employees, agents, and affiliates (collectively, the "Cedent Indemnified Parties") from and against any and all losses, damages, liabilities, claims, demands, judgments, settlements, costs, and expenses (including reasonable attorneys' fees and costs of investigation) (collectively, "Losses") arising out of, relating to, or resulting from:
(a) any breach by Blackbridge of any of its representations, warranties, covenants, or obligations under this Side Letter;
(b) any negligent act or omission or willful misconduct by Blackbridge or any of its directors, officers, employees, agents, or subcontractors in the performance of Blackbridge's duties as intermediary under this Side Letter;
(c) any failure by Blackbridge to comply with applicable law, regulation, or regulatory requirement in the performance of its duties as intermediary, including any failure to maintain its reinsurance intermediary license or to comply with its fiduciary obligations; or
(d) any misappropriation, conversion, or unauthorized use of funds held by Blackbridge in a fiduciary capacity under this Side Letter.
11.2 Indemnification by the Cedent
The Cedent shall indemnify, defend, and hold harmless Blackbridge and its members, managers, officers, employees, agents, and affiliates (collectively, the "Blackbridge Indemnified Parties") from and against any and all Losses arising out of, relating to, or resulting from:
(a) any breach by the Cedent of any of its representations, warranties, covenants, or obligations under this Side Letter; or
(b) the provision by the Cedent of materially inaccurate, incomplete, or misleading information to Blackbridge in connection with the placement or servicing of the Treaties, to the extent that Blackbridge has reasonably relied upon such information in the performance of its duties.
The indemnification obligations set forth in this Section 11 shall survive the termination or expiration of this Side Letter.
SECTION 12: DISPUTE RESOLUTION
12.1 Governing Law
This Side Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to any conflicts of law principles that would require the application of the laws of another jurisdiction.
12.2 Dispute Resolution
Any dispute, controversy, or claim arising out of or relating to this Side Letter, or the breach, termination, or invalidity thereof (a "Dispute"), shall be resolved in accordance with the following procedures:
(a) Negotiation. The Parties shall first attempt to resolve any Dispute by good-faith negotiation between their respective designated representatives. Either Party may initiate such negotiation by delivering a written notice to the other Party describing the Dispute in reasonable detail (a "Dispute Notice"). The Parties shall use commercially reasonable efforts to resolve the Dispute within thirty (30) days following delivery of the Dispute Notice.
(b) Mediation. If the Dispute is not resolved by negotiation within thirty (30) days following delivery of the Dispute Notice, either Party may submit the Dispute to mediation administered by a mutually agreed-upon mediator in New York, New York. The costs of mediation shall be shared equally by the Parties.
(c) Arbitration. If the Dispute is not resolved by mediation within sixty (60) days following the submission of the Dispute to mediation, either Party may submit the Dispute to binding arbitration in accordance with the rules and procedures of ARIAS-U.S. (AIDA Reinsurance and Insurance Arbitration Society — U.S.). The arbitration shall be seated in New York, New York. The arbitration panel shall consist of three (3) arbitrators, each of whom shall be a current or former officer of an insurance or reinsurance company or a Lloyd's syndicate, or shall otherwise have not less than ten (10) years of experience in the insurance or reinsurance industry. Each Party shall appoint one (1) arbitrator, and the two Party-appointed arbitrators shall select the third arbitrator, who shall serve as the umpire of the panel. The decision of the arbitration panel shall be final and binding upon the Parties and may be entered as a judgment in any court of competent jurisdiction.
SECTION 13: GENERAL PROVISIONS
13.1 Notices. All notices, requests, demands, and other communications required or permitted under this Side Letter shall be in writing and shall be deemed to have been duly given when (a) delivered personally, (b) sent by nationally recognized overnight courier (with confirmation of delivery), (c) sent by certified or registered mail, return receipt requested, postage prepaid, or (d) transmitted by electronic mail (with confirmation of receipt), addressed as follows:
If to the Cedent:
Suzanne M. Driscoll Vice President, Reinsurance & Capital Management Quorum Insurance Holdings Corp. 400 Constitution Plaza, Suite 2200 Hartford, CT 06103
Email: s.driscoll@quoruminsurance.com
Telephone: (860) 555-3200
With a copy to:
Lionel T. Okafor General Counsel Quorum Insurance Holdings Corp. 400 Constitution Plaza, Suite 2200 Hartford, CT 06103
Email: l.okafor@quoruminsurance.com
Telephone: (860) 555-3215
And with a copy to outside counsel:
Angela Fontaine Partner Calderwood & Harkness LLP 125 Broad Street, 38th Floor New York, NY 10004
Email: a.fontaine@calderwoodharkness.com
Telephone: (212) 555-7812
If to the Intermediary:
Owen F. Halstead Managing Director — Treaty Placement Blackbridge Advisory Group LLC 55 Water Street, Suite 1410 New York, NY 10041
Email: o.halstead@blackbridgeadvisory.com
Telephone: (212) 555-4900
Either Party may change its notice address by providing written notice to the other Party in accordance with this Section 13.1. Notices sent by electronic mail shall be effective upon confirmed receipt by the receiving party.
13.2 Assignment. Blackbridge may not assign, transfer, delegate, or otherwise dispose of its rights or obligations under this Side Letter, in whole or in part, without the prior written consent of the Cedent, which consent may be withheld in the Cedent's sole discretion. Any purported assignment in violation of this Section 13.2 shall be null and void and of no force or effect.
13.3 Entire Agreement
This Side Letter, together with the intermediary clauses contained in the Quota-Share Treaty and the Cat XOL Contract, the exhibits attached hereto, and any amendments or supplements hereto executed by both Parties, constitutes the entire agreement between the Parties with respect to the intermediary arrangement contemplated hereby and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties relating to the subject matter hereof.
13.4 Amendment. No amendment, modification, supplement, or waiver of any provision of this Side Letter shall be effective unless set forth in a written instrument executed by both Parties. No waiver of any provision or right under this Side Letter shall be deemed a continuing waiver or a waiver of any other provision or right.
13.5 Counterparts. This Side Letter may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Execution and delivery of this Side Letter by facsimile or electronic transmission of a scanned original shall be effective as delivery of an original executed counterpart.
13.6 Severability. If any provision of this Side Letter is held to be invalid, illegal, or unenforceable by a court or arbitration panel of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Side Letter shall not in any way be affected or impaired thereby. The Parties shall negotiate in good faith to replace any invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that achieves, to the greatest extent possible, the economic, business, and other purposes of the provision being replaced.
13.7 No Third-Party Beneficiaries
Except as expressly provided herein — including the rights of reinsurers participating in the Treaties with respect to premium remittance, loss settlement, and the intermediary credit risk provisions set forth in Section 5.3 — this Side Letter is not intended to, and shall not, create any rights, claims, or causes of action in favor of any person or entity that is not a Party to this Side Letter.
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SIGNATURE PAGE INTERMEDIARY AND BROKER AGREEMENT SIDE LETTER
IN WITNESS WHEREOF, the Parties have caused this Intermediary and Broker Agreement Side Letter to be executed by their respective duly authorized representatives as of the date set forth below.