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EXHIBIT 10.64
COMMUTATION AND SETTLEMENT AGREEMENT
(hereinafter referred to as the "Agreement")
THIS Agreement is entered into by and between Zurich Reinsurance (North
America), Inc., (formerly known as Zurich Reinsurance Centre, Inc.), Stamford,
Connecticut (hereinafter referred to as the "REINSURER") and Superior National
Insurance Company, Calabasas, California (hereinafter referred to as the
"COMPANY"), and made effective June 30, 1998.
WHEREAS, the REINSURER and the COMPANY entered into that certain Workers
Compensation and Employers' Liability Quota Share reinsurance contract,
identified by Reinsurer's Reference Number WC30006A, effective January 1, 1994
(the "Contract);
WHEREAS, the REINSURER and the COMPANY entered into that certain Retrocession
agreement, effective January 1, 1994 (the "Retrocession Agreement");
WHEREAS, effective June 30, 1998, the REINSURER and the COMPANY desire fully
and finally to settle and commute all obligations and liabilities known and
unknown of the REINSURER and the COMPANY under or related to the following
agreement years under the Contract:
(i) Agreement year incepting January 1, 1994
(ii) Agreement year incepting January 1, 1995
(iii) Agreement year incepting January 1, 1996
(iv) Agreement year incepting January 1, 1997,
and the corresponding agreement years under the Retrocession Agreement
(together, the "Commuted Liabilities"); and
WHEREAS, pursuant to that certain Agreement effective June 9, 1998 between the
REINSURER and the COMPANY, the REINSURER has already paid to the COMPANY and
the COMPANY has received from the REINSURER $5,500,000 (the "Partial Payment")
in partial payment of the Commutation Payment (hereinafter defined) and now
desires to make payment of the remainder of the Commutation Payment as more
fully set forth below.
NOW, THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, IT IS HEREBY AGREED BY AND BETWEEN THE REINSURER AND THE
COMPANY THAT:
1. The REINSURER shall pay the COMPANY the sum of $84,870 (together with the
Partial Payment, the "Commutation Payment"). This Agreement shall be of no
force and effect unless and until such payment is received by the COMPANY and
shall be void if no such payment is made.
2. Subject to the receipt of the sum of the Commutation Payment described in
Paragraph 1, above herein by the COMPANY, the COMPANY hereby releases and fully
discharges the REINSURER, its predecessors, successors, parents, affiliates,
agents, officers, directors and shareholders and assigns from any and all past,
present and future payment obligations,
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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,
liabilities and/or losses whatsoever, all whether known or unknown, which the
COMPANY, and their successors and assigns ever had, now have, or hereinafter
may have, whether grounded in law or equity, in contract or in tort, against
the REINSURER or any of them by reason of any matter whatsoever arising out of
or under or relating, directly or indirectly, to the Commuted Liabilities, it
being the intention of the parties that this release operate as a full and
final settlement of the REINSURER's past, present and future liabilities to the
COMPANY under or related to the Commuted Liabilities.
3. Subject to the release by the COMPANY of the REINSURER as provided for in
Paragraph 2 herein above, the REINSURER hereby releases and fully discharges
the COMPANY, its predecessors, successors, parents, affiliates agents,
officers, directors and shareholders and assigns from any and all past, present
and future payment 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, liabilities and/or losses whatsoever, all whether
known or unknown, which the REINSURER, and their successors and assigns ever
had, now have, or hereinafter may have, whether grounded in law or equity, in
contract or in tort, against the COMPANY or any of them by reason of any matter
whatsoever arising out of or under or relating, directly or indirectly, to the
Commuted Liabilities, it being the intention of the parties that this release
operate as a full and final settlement of the Company's past, present and
future liabilities to the REINSURER under or related to the Commuted
Liabilities.
4. The rights, duties and obligations set forth herein shall inure to the
benefit of and be binding upon any and all predecessors, successors,
affiliates, officers, directors, employees, parents, subsidiaries,
stockholders, liquidators, receivers and assigns of the parties hereto.
5. The parties hereto expressly warrant and represent that they are entities
in good standings in their respective places of domicile; that the execution of
this Agreement is fully authorized by each of them, that the person or persons
executing this Agreement have the necessary and appropriate authority to do so;
that there are no pending agreements, transactions, or negotiations to which
any of them are a party that would render this Agreement or any part thereof
void, voidable, or unenforceable; and that no authorization, consent or
approval of any government entity is required to make this Agreement valid and
binding upon them.
6. This Agreement contains the entire agreement between the parties as
respects its subject matter. All discussions and agreements previously
entertained between the parties concerning the subject matter of the
commutation are merged into this Agreement. This Agreement may not be modified
or amended, nor any of its provisions waived, except by an instrument in
writing, signed by the parties hereunder.
7. The parties hereto and each of them do hereby covenant and agree to do
such things and execute such further documents, agreements and assurances as
may be necessary or advisable from time to time in order to carry out the terms
and conditions of this Agreement in accordance with their true intent.
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8. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and the parties hereto hereby irrevocably submit
to the non-exclusive jurisdiction of the Courts of New York and to the extent
permitted by law expressly waive all rights to challenge or otherwise limit
such jurisdiction.
9. This Agreement shall be read and be considered as an integral part of the
Contract and the Retrocession Agreement and in the case of any conflict with
any part of said Contract or the Retrocession Agreement the provisions of this
Agreement shall prevail.
10. This Agreement may be executed and delivered in one or more counterparts,
each of which shall together constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed this 30th day of June,
1998 by
For and on behalf of
ZURICH REINSURANCE (NORTH AMERICA), INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Date: 7/7/98
For and on Behalf of
SUPERIOR NATIONAL INSURANCE COMPANY
/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: CFO
Date: 7/8/98
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