Termination Agreement to Fifth Amended Tax Sharing and Payment Agreement Among X.L. America, Inc. and Affiliates

Summary

This agreement, effective upon the sale of certain subsidiaries, terminates the participation of XL Capital Assurance Inc., XL Financial Administrative Services, Inc., XLCDS LLC, and XLCA Admin LLC in the Fifth Amended Tax Sharing and Payment Agreement with X.L. America, Inc. and its affiliated group. The termination is in preparation for the initial public offering of Security Capital Assurance Ltd. The terminated parties are released from further obligations under the agreement, except for providing any necessary payments or documentation as required. The agreement is governed by New York law.

EX-10.3 10 c41990_ex10-3.txt Exhibit 10.3 Termination Agreement to the Fifth Amended Tax Sharing and Payment Agreement and the New York Addendum to the Tax Sharing and Payment Agreement WHEREAS, effective April 1, 2004, X. L. America, Inc., a Delaware corporation ("XLA"), entered into a Fifth Amended Tax Sharing and Payment Agreement (the "Agreement") with the following subsidiaries: XL Reinsurance America Inc., a New York domiciled insurer, XL Specialty Insurance Company, a Delaware domiciled insurer, XL Insurance Company of New York, Inc., a New York domiciled insurer, Indian Harbor Insurance Company, a North Dakota domiciled insurer, Greenwich Insurance Company, a Delaware domiciled insurer, XL Insurance America, Inc., a Delaware domiciled insurer, XL Select Insurance Company, an Oklahoma domiciled insurer, XL Capital Assurance Inc., a New York domiciled insurer, NAC Re Corporation, a Delaware corporation, Global Credit Analytics, Inc., a Delaware corporation, ECS, Inc., a Pennsylvania corporation, ECS Child Care Center, Inc., a Pennsylvania corporation, XL Global Services, Inc., a Delaware corporation, Intercargo Corporation, a Delaware corporation, NAC Re Financial Services, Inc., a Delaware corporation, XL Global, Inc., a Delaware corporation, XL Insurance, Inc., a Delaware corporation, XL Weather & Energy Inc., a Delaware corporation, Warranty Support Services LLC, a Delaware limited liability company, XL Life and Annuity Holding Company, a Delaware corporation, XL Life Insurance and Annuity Company, an Illinois domiciled insurer, XL Financial Administrative Services, Inc., a Delaware corporation, XL Capital Investment Partners, Inc., a Delaware corporation, XLCDS LLC, a New York corporation, XLCA ADMIN LLC, a New York corporation, XL Lloyds Insurance Company, a Texas domiciled insurer, XL Management Services, LLC, a Texas corporation, XL Financial Solutions, LLC, a Delaware limited liability company, and XL Investment Management (USA) LLC, a Delaware limited liability company (collectively, the "Affiliated Group"); and WHEREAS, XL Capital Assurance Inc., XL Financial Administrative Services, Inc., XLCDS LLC and XLCA Admin LLC (the "Terminated Parties") desire to terminate their memberships in the Agreement effective upon the date of the sale of these companies out of the Affiliated group in which XLA is the parent corporation in preparation of the initial public offering of the shares of Security Capital Assurance Ltd. ("SCA"), the ultimate parent company of the Terminated Parties; and WHEREAS, effective upon the date of the sale of these companies out of the Affiliated Group in which XLA is the parent corporation in preparation of the initial public offering of the shares of SCA, the Terminated Parties will no longer be subsidiaries of X.L. America, Inc., and the membership of the Terminated Parties in the Affiliated Group shall cease, in accordance with Article VIII and Article XI of the Agreement. 1 NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Each of the parties acknowledge and confirm that the membership of the Terminated Parties in the Agreement will terminate effective upon the date of the sale of these companies out of the Affiliated Group in which XLA is the parent corporation in preparation of the initial public offering of the shares of SCA. 2. Each of the parties further acknowledge and confirm that in accordance with Article VIII of the Agreement, the membership of the Terminated Parties in the Affiliated Group shall cease effective upon the date of the sale of these companies out of the Affiliated Group in which XLA is the parent corporation in preparation of the initial public offering of the shares of SCA, in accordance with Article VIII of the Agreement. 3. Each of the parties further acknowledge and confirm that the obligations of the Terminated Parties under the terms of the Agreement are released and discharged and the Terminated Parties shall not have any further obligations thereunder, subject to the Terminated Parties being obligated to furnish to XLA. all necessary and appropriate payments and/or documentation consistent with the terms and conditions of the Agreement. 4. This Agreement may be executed in two or more counterparts each of which shall constitute an original, but all of which when taken together shall constitute one agreement. Any Party may deliver a signed counterpart signature page of this Agreement by fax and such faxed signature pages shall be deemed to be an original for all purposes. 5. The terms and conditions of this Agreement and the rights of the parties hereunder shall be governed by and construed in all respects in accordance with the laws of the State of New York, without regard to conflicts of law that would require the application of the laws of any other jurisdiction. 2 IN WITNESS WHEREOF, this Agreement is hereby executed by duly authorized officers of the parties hereto as of the date first above written. X. L. AMERICA, INC. By: ___________________________ Title:___________________________ XL REINSURANCE AMERICA INC. By:________________________________ Title:________________________________ XL SPECIALTY INSURANCE COMPANY By:________________________________ Title:________________________________ XL INSURANCE COMPANY OF NEW YORK, INC. By:________________________________ Title:________________________________ INDIAN HARBOR INSURANCE COMPANY By:________________________________ Title:________________________________ GREENWICH INSURANCE COMPANY By:________________________________ Title:________________________________ 3 XL CAPITAL ASSURANCE INC. By:________________________________ Title:________________________________ NAC RE CORPORATION By:_________________________________ Title: ________________________________ GLOBAL CREDIT ANALYTICS, INC. By:________________________________ Title:________________________________ ECS, INC. By:________________________________ Title:________________________________ ECS CHILD CARE CENTER, INC. By:________________________________ Title:________________________________ X.L. GLOBAL SERVICES, INC. By:________________________________ Title:________________________________ INTERCARGO CORPORATION By:________________________________ Title:________________________________ NAC RE FINANCIAL SERVICES, INC. By:________________________________ Title:________________________________ 4 XL INSURANCE, INC. By:________________________________ Title:________________________________ XL GLOBAL, INC. By:________________________________ Title:________________________________ XL WEATHER AND ENERGY INC. By:________________________________ Title:________________________________ WARRANTY SUPPORT SERVICES LLC By:________________________________ Title:________________________________ XL INSURANCE AMERICA, INC. By:________________________________ Title:________________________________ XL SELECT INSURANCE COMPANY By:________________________________ Title:________________________________ XL LIFE AND ANNUITY HOLDING COMPANY By:________________________________ Title:________________________________ XL LIFE INSURANCE AND ANNUITY COMPANY By:________________________________ Title:________________________________ 5 XL FINANCIAL ADMINISTRATIVE SERVICES, INC. By:________________________________ Title:________________________________ XL CAPITAL INVESTMENT PARTNERS, INC. By:________________________________ Title:________________________________ XLCDS LLC By:________________________________ Title:______________________________ XLCA ADMIN LLC By:________________________________ Title:________________________________ XL LLOYDS INSURANCE COMPANY By:________________________________ Title:________________________________ XL MANAGEMENT SERVICES, LLC By:________________________________ Title:________________________________ XL FINANCIAL SOLUTIONS, LLC By:________________________________ Title:________________________________ 6 XL INVESTMENT MANAGEMENT (USA) LLC By:________________________________ Title:________________________________ 7