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Exhibit 10.31
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").
WITNESSETH
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, reported or unreported,
and
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