|
<PAGE>
Exhibit 10.5
COMMUTATION AND RELEASE AGREEMENT
This Commutation and Release Agreement (the "Agreement") is made
by and
among Trenwick America Reinsurance Corporation, an insurance
company domiciled
in the State of Connecticut (the "REINSURER") and Philadelphia
Consolidated
Holding Corporation, a company domiciled in the State of
Pennsylvania, on behalf
of itself and its subsidiaries and affiliates including, but not
limited to,
those entities listed on Schedule A attached hereto (hereafter
individually and
collectively the "COMPANY"), effective as of the EFFECTIVE DATE
(as hereinafter
defined). The REINSURER and the COMPANY are hereinafter referred
to collectively
as the "Parties".
RECITALS
WHEREAS, the Parties have entered into various reinsurance
arrangements,
slips, understandings and agreements, excluding those set forth
on Schedule B,
pursuant to which the REINSURER reinsured certain liabilities of
the COMPANY
(all such arrangements, slips, understandings and agreements,
excluding those
set forth on Schedule B, are hereafter referred to as the
"Reinsurance
Agreements"); and
WHEREAS, the Parties now wish to fully and finally terminate,
release,
determine and fully and finally settle, commute and extinguish
all their
respective obligations and liabilities, known and unknown, fixed
and contingent,
under, arising out of, in connection with and/or pursuant to the
Reinsurance
Agreements; and
NOW, THEREFORE, in consideration of the covenants, conditions,
promises and
releases contained herein, and for other valuable consideration,
the receipt and
sufficiency of which is hereby acknowledged, the Parties agree
as follows:
ARTICLE 1. PAYMENT. On the EFFECTIVE DATE, as hereafter defined,
the
REINSURER shall pay the sum of Two Million Two Hundred Ninety
Thousand Six
Hundred Seventy Dollars ($ 2,290,670) (the "COMMUTATION AMOUNT")
and the COMPANY
shall accept said amount in full satisfaction of the REINSURER'S
liability under
the Reinsurance Agreements. Payment of the COMMUTATION AMOUNT
shall be made by
wire transfer to the COMPANY in accordance with the payment
instructions set
forth in Schedule C hereto.
As additional consideration, the COMPANY agrees to pay REINSURER
25% of all
monies recovered by COMPANY in excess of $672,000 with respect
to the claim
entitled M&F Fishing v. Sea Pac (COMPANY file number
140197-U) which was
submitted to REINSURER as part of COMPANY's overall Raleigh,
Schwarz & Powell,
Inc. claim (COMPANY's file number 104119-U) (collectively,
REINSURER claim
number T029085). Payment shall be made to REINSURER by wire
transfer within five
(5) BUSINESS DAYS of receipt of such monies by COMPANY pursuant
to the payment
instructions set forth in Schedule C hereto.
ARTICLE 2. RELEASE.
(a) Upon REINSURER's payment of the COMMUTATION AMOUNT, the
COMPANY hereby
irrevocably and unconditionally releases and forever discharges
the REINSURER,
its parents, subsidiaries and affiliates, and their respective
predecessors,
1
<PAGE>
successors, assigns, officers, directors, agents, employees,
shareholders,
representatives, and attorneys from any and all present and
future actions,
causes of action, suits, debts, liens, contracts, rights,
agreements,
obligations, promises, liabilities, claims, demands, damages,
controversies,
losses, costs and expenses (including attorneys' fees and costs
actually
incurred) of any nature whatsoever, known or unknown, suspected
or unsuspected,
fixed or contingent, which the COMPANY now has, owns or holds or
claims to have,
own, or hold, or at any time heretofore had, owned, or held or
claimed to have
had, owned, or held, or may hereafter have, own, or hold or
claim to have, own,
or hold, arising out of conduct or matters occurring prior to or
subsequent to
the EFFECTIVE DATE, against the REINSURER, arising from, based
upon, or in any
way related to the Reinsurance Agreements, sounding in tort or
contract or
otherwise; provided, however, that the provisions of this
Article 2(a) shall not
discharge obligations of the REINSURER, which have been
undertaken or imposed by
the terms of this Agreement.
(b) Contemporaneous with the payment of the COMMUTATION AMOUNT,
the
REINSURER hereby irrevocably and unconditionally releases and
forever discharges
the COMPANY, its parents, subsidiaries and affiliates, and their
respective
predecessors, successors, assigns, officers, directors, agents,
employees,
shareholders, representatives, and attorneys from any and all
present and future
actions, causes of action, suits, debts, liens, contracts,
rights, agreements,
obligations, promises, liabilities, claims, demands, damages,
controversies,
losses, costs and expenses (including attorneys' fees and costs
actually
incurred) of any nature whatsoever, known or unknown, suspected
or unsuspected,
fixed or contingent, which the REINSURER now has, owns, holds or
claims to have,
own, or hold, or at any time heretofore had, owned, or held or
claimed to have
had, owned, or held, or may hereafter have, own, or hold or
claim to have, own,
or hold, arising out of conduct or matters occurring prior to or
subsequent to
the EFFECTIVE DATE, against the COMPANY, arising from, based
upon, or in any way
related to the Reinsurance Agreements, sounding in tort or
contract or
otherwise; provided, however, that the provisions of this
Article 2(b) shall not
discharge obligations of the COMPANY, which have been undertaken
or imposed by
the terms of this Agreement.
(c) It is the intention of the Parties that the releases
contained in this
Article 2 operate to fully and finally settle and discharge each
Party's past,
present and future claims, causes of action, obligations and
liabilities to the
other Party hereto, whether known or unknown, reported or
unreported, accrued or
yet to accrue, arising directly or indirectly under or in
connection with the
Reinsurance Agreements. The Parties acknowledge that full
payment of the
COMMUTATION AMOUNT will be in complete accord, satisfaction,
settlement and
commutation of any and all past, current and future liabilities
and obligations
that each Party owes or may owe to the other arising directly or
indirectly
under or in connection with the Reinsurance Agreements.
(d) To the extent applicable, the Parties fully understand and
agree that
they are, by entering into this Agreement, expressly waiving
their rights and
benefits under section 1542 of the California Civil Code or any
similar
provisions of the law. Section 1542 provides in its material
parts that a
general release does not extend to claims which the creditor
does not know or
suspect to exist in his favor at the time of executing the
release, which if
known to him must have materially affected his settlement with
the debtor.
2
<PAGE>
provided that such third parties have been advised of the terms
and conditions
of the confidentiality provisions of this Article 7 and that the
provisions of
this Article 7 are binding upon such third parties. The
provisions of this
Article 7 shall survive any termination or rescission of this
Agreement.
ARTICLE 8. FURTHER ASSURANCES. The Parties, without further
consideration,
agree to execute and deliver such other documents and take such
other action as
may be necessary to effect this Agreement, inc
| 
