COMMUTATION AND RELEASE
AGREEMENT
This Commutation
and Release Agreement is made effective as of September 29,
2006 (hereinafter the “Commutation Date”) by and
between Clearwater Insurance Company (formerly known as Odyssey
Reinsurance Corporation and previously as Skandia America
Reinsurance Corporation) (hereinafter the “Reinsured”)
and nSpire Re Limited (formerly known as ORC Re Limited)
(hereinafter the “Reinsurer”).
WHEREAS ,
the Reinsured and the Reinsurer are parties to that certain
Stop-Loss Reinsurance Agreement originally effective as of
December 31, 1995, whereby the Reinsurer reinsured the
Reinsured (the “Reinsurance Agreement”), a copy of
which is attached hereto as Exhibit A; and
WHEREAS ,
the Reinsurer made a cash payment to the Reinsured in the amount of
Seventy-Eight Million Dollars ($78,000,000) under the Reinsurance
Agreement in the first quarter of 2006; and
WHEREAS ,
the parties desire to terminate any and all remaining obligations
under the Reinsurance Agreement, and to fully and finally settle
and commute all of their respective rights, privileges, duties,
obligations and liabilities whether past, present or future and
whether known or unknown under the Reinsurance Agreement and to
fully and forever release and discharge one another with respect to
the Reinsurance Agreement.
NOW,
THEREFORE, in consideration of the covenants set forth herein
and the payment to be made hereunder, it is agreed between the
Reinsured and the Reinsurer as follows:
1. Within seven
(7) business days of the execution of this Commutation and
Release Agreement by both the Reinsured and the Reinsurer, or
otherwise as agreed between the parties, the Reinsurer shall pay to
the Reinsured by check or wire an amount equal to
Sixty-Three
Million Two Hundred Forty-One Thousand Four Hundred Eighty-Four
Dollars ($63,241,484), as set forth in Exhibit B attached
hereto, which amount, together with the payment received by the
Reinsurer in the first quarter of 2006 (together, the
“Commutation Amount”), constitutes the full
consideration for this Commutation and Release
Agreement.
2. The
Reinsured shall accept the Commutation Amount as full and final
settlement of any and all amounts claimed heretobefore or hereafter
to be due from the Reinsurer to the Reinsured arising under or in
respect of the Reinsurance Agreement.
3. Each of the
parties hereto agrees that in consideration of payment of the
Commutation Amount, they hereby release and discharge each other,
their predecessors, parents, affiliates, subsidiaries, agents,
officers, directors, employees, shareholders, policyholders,
successors and assigns from any and all liabilities, including, but
not limited to, all obligations, adjustments, executions, offsets,
actions, causes of action, suits, debts, sums of money, accounts,
reckonings, bonds, bills, covenants, contracts, controversies,
agreements, promises, damages, judgments, claims, demands, duties,
doings, omissions, costs, expenses and/or losses whatsoever,
whether known or unknown, report
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