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EXHIBIT 10.113
AMENDMENT NO. 1 TO SETTLEMENT AGREEMENT
This Amendment No. 1 to Settlement Agreement ("Amendment") is entered into
this 2nd day of June 1997, by and between The Central National Insurance
Company Of Omaha, a Nebraska insurance corporation in rehabilitation
("Central"), Transre Insurance Services, a California corporation ("Transre")
and TCO Holdings, Inc., a California corporation ("Holdings").
WHEREAS, on November 9, 1995, the parties entered into a Settlement
Agreement ("Settlement Agreement") pursuant to which they sought to settle
certain matters;
WHEREAS, on November 11, 1996, as a consequence of Transre's apparent
inability to meet its November 15, 1996, payment obligation, the parties
modified the Settlement Agreement ("11/12/96 Modification") to provide for
installment payments of the $366,666 due on or before November 15, 1996;
WHEREAS, Transre now has informed Central that Transre is incapable of
meeting its remaining payment obligations under the Settlement Agreement and
the 11/12/96 Modification, and has proposed an alternative to Central; and
WHEREAS, the parties now wish to amend the Settlement Agreement and
the 11/12/96 Modification as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, and other consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. PAYMENTS.
In lieu of the remaining payments due pursuant to the Settlement
Agreement and the 11/12/96 Modification, Transre and/or Holdings
shall cause to be paid to Central the amounts set forth below:
A. $100,000 in cash to be paid to Central within five business
days following the execution of this Amendment; and
B. Subject to final approval by the Illinois Department of
Insurance, and additionally subject to execution of various
settlement and related agreements with other parties not
directly related to this Amendment, $1,550,000 payable from
26.67% of the 3.75% override commission ("Override
Commission") to be paid by Alpine Insurance Company
("Alpine") to Holdings with respect to the quota share
reinsurance between United Capitol Insurance Company and its
affiliates and Alpine, as evidenced by the Casualty Quota
Share Slip attached as Exhibit I hereto (the "Reinsurance
Agreement").
1) Such amounts shall be paid to Central quarterly by the
end of the month following the end of each such quarter.
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2) In the event the experience under the Reinsurance
Agreement in any quarter is such that the maximum
Override Commission is not generated, Central shall be
entitled to receive amounts equal to 26.67% of the
Override Commission which is generated. Except as set
forth in Subsection 1.B.3, such amounts shall be
limited to 26.67% of the premiums actually received by
Alpine by the end of the quarters with respect to which
the payments are payable. If, in any one quarter, the
amount paid to Central is limited, by reason of this
Subsection 1/B.2, to less than 26.67% of 3.75% of the
gross premiums assumed by Alpine in the quarter, the
balance owing to Central shall be carried forward to
successive quarters in which the amounts of premiums
actually received by Alpine under the Reinsurance
Agreement exceed 3.75% of the gross premiums assumed by
Alpine, until the full amount owing has been paid.
3) At such time, if ever, as Holdings shall have met its
obligations to use 73.33% of the 3.75% Override
Commission to satisfy certain of Holdings' obligations
to Geneva Syndicate, Inc., Transre shall cause to be
paid to Central 100% of the 3.75% Override Commission
until Central shall have received a total of $1,550,000
pursuant to this Subsection 1.B.
2. REPORTING
Transre shall prepare for Central a quarterly report on the
business produced under the Reinsurance Agreement, summarizing
premiums assumed by Alpine, Alpine's unearned premiums,
Alpine's return premiums, Alpine's ceding commissions,
Alpine's losses and loss adjustment expenses paid, Alpine's
loss reserves, Alpine's salvage recoveries, and Alpine's
amounts of Override Commissions. This report shall be
delivered to Central by the end of the month following the end
of each quarter. Transre shall honor any reasonable request
by Central to audit, at Central's expense, the books and
records of Transre, Holdings, or Alpine relative to the
Reinsurance Agreement. Transre shall immediately notify
Central should the Reinsurance Agreement be terminated.
3. CONSIDERATION.
Central acknowledges that it believes it likely would not
receive the remaining payments due from Transre in accordance
with the Settlement Agreement and the 11/12/96 Modification,
and that, among other things, Central is entering into this
Amendment in consideration of Transre's agreement to cause its
affiliates to pay to Central the amounts set forth in Section
1 of this Agreement.
4. EFFECT.
This Amendment shall supersede the Settlement Agreement and
the 11/12/96 Modification only as expressly set forth herein,
and only for so long as Central receives an annual average
amount of at least $50,000 (beginning with calendar year 1997)
pursuant to Subsection 1.B of this Agreement. If at the end of
any year (beginning with calendar year 1997) Central has not
received an average annual
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amount of at least $50,000 pursuant to Subsection 1.B of this
Agreement, or in the event that the Reinsurance Agreement is
terminated, this Amendment automatically shall terminate and
all of the terms and conditions of the Settlement Agreement
and the 11/12/96 Modification immediately shall be reinstated
as if this Amendment had never been executed; provided,
however that (i) the total amount due Central pursuant to the
Settlement Agreement and the 11/12/96 Modification shall be
reduced by amounts paid pursuant to this Amendment, with the
payments paid pursuant to this Amendment being applied first
to reduce amounts due to Central pursuant to the 11/12/96
Modification, and then successively to reduce amounts due
pursuant to the Settlement Agreement from the earliest amount
due to the latest amount due; and (ii) the periods of any
statutes of limitations applicable to the Settlement Agreement
and the 11/12/96 Modification shall have been tolled while
this Amendment was effective. All other terms and conditions
of the Agreement among the parties, as evidenced by the
Settlement Agreement and the 11/12/96 Modification, shall
remain in full force and effect.
IN WITNESS WHEREOF, the undersigned agree to this Amendment and signify
their acceptances and approvals by signing below this 2nd day of June 1997.
THE CENTRAL NATIONAL INSURANCE
COMPANY OF OMAHA (In Rehabilitation) TRANSRE INSURANCE SERVICES
By: /s/ Houghton Xxxx,Jr.
--------------------------------- By: /s/ Xxxxxx X. Xxxxx
Houghton Xxxx, Jr. ------------------------------
Deputy Rehabilitator Xxxxxx X. Xxxxx
TCO HOLDINGS, INC.
BY: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Acknowledged:
XXXXX X. X'XXXXXXXXXXX
By: /s/ Xxxxx X. X'Xxxxxxxxxxx
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Date: 2/6/97
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