Exhibit 10.16
GENERAL SERVICES AGREEMENT
This General Services Agreement is made this 4th day of August, 2006 (the
"EFFECTIVE DATE") between
XL CAPITAL ASSURANCE INC., a New York corporation ("XLCA" or the "SERVICE
PROVIDER"); and
X.L. GLOBAL SERVICES, INC., a Delaware corporation ("XLGS" or the "COMPANY")
(each a "Party" and collectively the "Parties").
WHEREAS:
Service Provider and Company are currently wholly owned subsidiaries of the XL
Capital Ltd group of companies; and
It is contemplated that an initial public offering will be made of a portion of
the capital stock of Security Capital Assurance Ltd ("SCA"), a parent of the
Service Provider, resulting in partial public ownership of SCA; and
Service Provider and Company both desire for Service Provider to provide certain
services to the Company following the initial public offering of SCA; and
Service Provider and the Company desire to enter into this Agreement to set
forth the roles and responsibilities with regard to services to be provided by
Service Provider to the Company.
Now, in consideration for the mutual benefits contained in this General Services
Agreement, it is agreed as follows:
1 DEFINITIONS
The following words and phrases shall have the meaning given to them
below:
"Agreement" means this General Services Agreement and the Schedules
attached to it and any subsequent amendments or alterations agreed in
writing by the Parties.
"Non-SCA Third Party Contractors" means any individual, company or
other legal entity with whom Service Provider enters into a contract
for the benefit of the Company, including (but not limited to) to
enhance its ability to provide any part of the Services, where such
individual, company or other legal entity is not within the SCA group
of companies.
"Representatives" shall have the meaning specified in clause 10.1.
"SCA Third Party Contractors" means any individual, company or other
legal entity with whom Service Provider enters into a contract for the
benefit of the Company, including (but not limited to) to enhance its
ability to provide any part of the Services, where such individual,
company or other legal entity is within the SCA group of companies.
"Services" shall have the meaning specified in clause 3.1.
"Staff" means individuals employed by Service Provider or by another
company within the SCA group of companies.
"Steering Committee" shall have the meaning specified in clause 10.3.
"Third Party Contractors" means both SCA Third Party Contractors and
Non-SCA Third Party Contractors.
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2 PERIOD OF THIS AGREEMENT
2.1 This Agreement shall commence on the Effective Date and continue until
terminated in accordance with clause 19 of this Agreement.
3 PROVISION OF SERVICES
3.1 Each Schedule attached to and made a part of this Agreement describes
the services to be provided by Service Provider to the Company, as
amended from time to time by written agreement of the Parties (the
"Services"). The Parties have made a good faith effort as of the date
hereof to identify each Service and to complete the content of the
Schedules accurately. It is anticipated that the Parties will modify
the Services from time to time. In that case or to the extent that any
Schedule is incomplete, the Parties will use good faith efforts to
modify the Schedules. There are certain terms that are specifically
addressed in the Schedules attached hereto that may differ from the
terms provided hereunder. In those cases, the specific terms described
in the Schedules shall govern.
3.2 The Parties may also identify additional Services that they wish to
incorporate into this Agreement. The Parties will create additional
Schedules setting forth the description of such Services, the fees for
such Services and any other applicable terms.
3.3 Subject to the terms of this Agreement, Service Provider undertakes to
and shall provide the Services to the Company to the best of its
ability at all times and to a standard that would reasonably be
expected of it by a professional, independent person or body.
3.4 Without prejudice to clause 3.3, to the extent that Service Provider is
unable to perform any part of the Services in accordance with this
Agreement, it shall advise the Company as soon as reasonably
practicable. In addition, Service Provider shall, to the extent
possible, advise the Company of a timetable for it to be able to resume
full performance of the Services in accordance with this Agreement and
the steps it is taking in that regard. Service Provider shall notify
the Company to the extent there is likely to be any deviation from the
timetable proposed.
3.5 The Parties acknowledge and agree that Service Provider and the Staff
shall be entitled to provide similar services as the Services to any
other legal entity, provided that in doing so the operation of the
Company is not unreasonably prejudiced and the provision of the
Services to the Company is not materially adversely affected. The
Parties further acknowledge and agree that the Company may retain any
individual or legal entity, other than Service Provider and the Staff,
to perform services similar or identical to the Services; provided that
in doing so the ability of Service Provider to perform any part of the
Services in accordance with this Agreement is not materially adversely
affected.
4 PROVISION OF STAFF TO PERFORM THE SERVICES
4.1 Service Provider acknowledges it has been given sufficient information
to understand and appreciate the requirements and operations of the
Company relating to the provision of the Services currently described
in each Schedule. Service Provider shall and undertakes to provide at
all times, Staff or Non-SCA Third Party Contractors of the requisite
calibre, and with appropriate training and experience and in sufficient
numbers as required by the Company and as agreed between the Parties
and in accordance with the attached Schedules.
4.2 The Company acknowledges and agrees that at the commencement of this
Agreement the Staff or Non-SCA Third Party Contractors provided to
perform the Services are of
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the requisite calibre, have appropriate experience and training and are
of a sufficient number.
4.3 If Service Provider cannot provide Staff to perform the Services, it
shall, with the agreement of the Company, contract or subcontract with
Non-SCA Third Party Contractors to provide all or part of the Services.
The direction and management of the Non-SCA Third Party Contractors
provided to perform the Services on behalf of the Company will be the
responsibility of Service Provider, unless otherwise agreed by the
Parties in writing but only to the extent that Service Provider has
contracted directly with such Non-SCA Third Party Contractors.
5 THIRD PARTY CONTRACTORS
5.1 The Company acknowledges and agrees that the provision of the Services
may in part be delegated or contracted or subcontracted to Third Party
Contractors by Service Provider.
5.2 Service Provider may enter into contracts with Third Party Contractors,
including, but not limited to, for the provision of the Services,
either on its own behalf or on its own behalf and on behalf of the
Company, whichever Service Provider reasonably deems appropriate and in
the best interests of the Company.
5.3 When entering into contracts with Third Party Contractors, Service
Provider will have regard to the stated interests of the Company,
including, but not limited to, the identity of the Third Party
Contractor, the terms, costs and period of the contract.
5.4 To the extent Service Provider delegates to, or contracts or
subcontracts with, Third Party Contractors to perform any part of the
Services or to perform specific functions, Service Provider shall
(remain responsible and) be liable to the Company for the (non)
performance of the Services and the (non) performance of such specific
functions in their entirety (and for the oversight and management of
the Third Party Contractors) and in accordance with clause 6.1. below,
unless otherwise agreed in writing by the Company.
6 LIABILITY
6.1 Except to the extent set out in clauses 6.2, to 6.3 below, Service
Provider shall be liable to indemnify the Company for any loss the
Company incurs or as a result of a breach by the Company of its
obligations under Clause 15.1 (including defence costs) caused by (i)
the acts and/or omissions of Service Provider, its employees, directors
and officers in providing the Services, (ii) the breaches of
obligations, acts and/or omissions of Third Party Contractors, and
(iii) the failure of Service Provider to abide by the terms and
conditions of this Agreement. Both Parties shall take all reasonable
steps to mitigate any loss including pursuing recovery from any third
party. Where appropriate, the Parties further agree they will consult
each other in respect of such steps in accordance with clause 10 below.
6.2 Service Provider shall not be liable to the Company in respect of any
loss caused by acts of God, or any event beyond the reasonable control
of the Parties, including but not limited to nationalization,
expropriation, devaluation, seizure, or similar action by any
government authority, de facto or de jure; or acts of war, terrorism,
insurrection or revolution.
6.3 Service Provider agrees to take all reasonable steps to recover any
loss suffered by the Company (for which Service Provider is liable to
indemnify the Company under this Agreement) from any insurer or any
third party liable to Service Provider in respect of such loss.
Provided that Service Provider complies with such obligation in a
timely manner, the Company agrees to delay commencing proceedings
against Service
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Provider to enforce payment in respect of any claim, which it may have
under this Agreement until such time as and to the extent that Service
Provider has obtained recovery against any third party (including but
not limited to Third Party Contractors and insurers) in respect of such
losses.
7 INSURANCE
7.1 Service Provider undertakes it or one of its affiliates has and will
maintain throughout the duration and period of this Agreement
appropriate errors and omissions and directors' and officers' insurance
in full force and effect to cover its liabilities to third parties.
8 LIMITATION OF AUTHORITY
8.1 Except as expressly provided for in this Agreement, or by the Company,
neither Service Provider nor the Staff shall enter into any contract
(including verbal) on behalf of the Company or commit or bind the
Company to any agreement or obligation, or hold it or themselves out as
having authority to do so.
9 COMPLIANCE
9.1 In providing the Services, Service Provider shall, to the extent within
its control, comply with, and will not do anything or fail to do
anything, which would result in the Company failing to comply with, all
applicable laws, legislation and regulations. In addition, Service
Provider shall comply with relevant principles and guidelines, manuals,
codes and policies issued by the Company to the extent it is made aware
of such principles and guidelines, manuals, codes and policies. It is
agreed and understood that this clause does not affect or reduce the
Company's duty and responsibility with regard to its own regulatory and
legal compliance.
9.2 Service Provider shall direct all enquiries from any regulatory
authority relating to this Agreement or the Services to the Company,
unless (i) the enquiry is specifically addressed to Service Provider
(in which case Service Provider shall procure that the details or a
copy of such enquiry are promptly relayed in writing to the Company),
(ii) the enquiry relates exclusively to a third party and not to the
Company, or (iii) otherwise agreed in writing by the Parties.
10 PERSONS RESPONSIBLE FOR THE OPERATION OF THIS AGREEMENT
10.1 The Service Provider and the Company shall each appoint two individuals
to be their respective representatives (the "Representatives") for the
purpose of the operation of this Agreement. The Representatives
(identified below) shall be responsible for, among other things,
managing the relationship, and acting as the principal points of
contact, between the Parties in relation to matters and disputes under
this Agreement.
10.2 Any matters or disputes under this Agreement including matters or
disputes affecting the relationship between the Parties or the
performance of their respective obligations hereunder, shall in the
first instance, be raised to and sought to be resolved by the
Representatives.
10.3 If and to the extent that any matters or disputes cannot be resolved by
the Representatives then the Representatives shall, raise such matters
or disputes with a committee comprised of the members set forth on
Annex A hereto and established by the Parties for the purpose of
overseeing the relationship between the Parties with respect to matters
set forth in this Agreement (the "Steering Committee"). The Steering
Committee shall be responsible for the resolution of those matters and
disputes brought before it.
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10.4 The Parties may each appoint Representatives, in lieu of their
Representatives listed below, provided that prior written notice is
given to the other Party in accordance with Section 22 below.
COMPANY REPRESENTATIVES: See Annex A hereto.
SERVICE PROVIDER REPRESENTATIVES: See Annex A hereto.
11. REPORTING
11.1 Unless otherwise agreed between the Parties, Service Provider shall
provide reports on the Services in accordance with the Schedules as
amended from time to time.
11.2 Service Provider shall provide such other reports, including in
relation to Staff and Third Party Contractors, as may reasonably be
required by the Company from time to time in a timely manner.
11.3 To the extent the Schedules do not already address the issue and to the
extent appropriate, practicable and necessary, the Parties shall
establish benchmarks against which to monitor the performance of
Service Provider and Third Party Contractors. If and when such
benchmarks are established, Service Provider shall and undertakes to
provide reports, at least quarterly, in respect of such benchmarks, or
otherwise in accordance with the Schedules.
12 DOCUMENTS AND RECORDS
12.1 Service Provider shall establish and/or maintain records relating to
this Agreement and, to the extent reasonable and appropriate, the
Services, in accordance with the document retention policy established
by SCA or in accordance with applicable laws and regulations if they
provide for longer periods of retention.
12.2 The Company, its bona fide agents, auditors and/or a relevant
regulatory authority shall have the right on the giving of reasonable
prior notice, to inspect and audit any records of or held by Service
Provider relating to this Agreement and the Services, and shall have
the right to make copies or extracts of any such records.
12.3 In the event that an audit reveals that Service Provider is not
complying with the terms of this Agreement, or any applicable
regulation, principles, guidelines, laws or legislation in any material
respect, the Company may, without prejudice to its other rights under
this Agreement, require Service Provider to take all necessary remedial
action within four (4) weeks following disclosure to Service Provider
of such audit results.
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12.4 All files, materials, policies and documents prepared or obtained by
Service Provider in the course of carrying out its obligations under
this Agreement shall be and remain the property of the Company, and
Service Provider shall treat them accordingly - including keeping them
safe and secure whilst in Service Provider's possession.
13 CONFIDENTIALITY
13.1 Confidential Information means all information disclosed by either the
Company or Service Provider (whether in writing, orally or by another
means) concerning the other Party which comes into their possession as
a consequence of the operation of this Agreement including, without
limitation, information relating to the Parties products, operations,
processes, plans or intentions, product information, know-how, design
rights, trade secrets, market opportunities and business affairs.
13.2 The Parties undertake to hold the Confidential Information in
confidence and not to disclose the Confidential Information (except as
provided in this Agreement) without the prior written consent of the
other Party.
13.3 Notwithstanding clause 13.2, the Parties are entitled to disclose that
portion of the Confidential Information required in order to comply
with any legal requirement or any regulation or rule or the
requirements of any rating agency, or to the extent the Confidential
Information is already in the public domain.
14 DATA PROTECTION
14.1 The Parties undertake to comply with all applicable data protection
laws and regulations in any relevant jurisdiction in which personal
data (or any other data, the use or transfer of which is regulated by
law and regulations in that jurisdiction) is transferred or used in
connection with the provision of the Services.
15 BUSINESS CONTINUITY PLAN
15.1 The Parties shall be jointly responsible for devising and maintaining a
plan(s) to ensure the continuity of the Services in the event of an
unforeseen interruption and any other prudent procedures and measures
that are reasonably necessary to prevent the disruption of the Services
(collectively, the "Business Continuity Plan"). The Company shall be
responsible for maintaining the Business Continuity Plan and the
Service Provider shall, in the event of an unforeseen interruption,
cooperate to the best of its ability with the Company to ensure the
uninterrupted provision of Services.
16 REMUNERATION AND FEES
16.1 The Company will pay Service Provider in accordance with the provisions
of the Schedules. Within thirty (30) days of receipt of an invoice from
Service Provider, Company shall pay Service Provider semi-annually in
arrears. Such invoices shall be provided at the end of the second and
fourth quarters of each calendar year, if applicable.
16.2 Unless otherwise provided in the relevant Schedule, at the end of each
annual period commencing as of January 1, 2006, Service Provider will
perform a review of the fees being charged to the Company and if
Service Provider determines, based on a transfer pricing or similar
study, that the fees should be different, then the parties will
negotiate in good faith to change the fees to a rate consistent with
such study.
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17 TAXES
17.1 All sums payable pursuant to this Agreement shall be exclusive of any
duties and taxes. Any other duties or taxes payable on such sums shall
be payable in addition to such sums.
18 COMPLAINTS
18.1 In accordance with clause 22, the Parties shall notify one another
immediately upon becoming aware of any relevant matter arising out of
the operation of, or in connection with, this Agreement, which has
resulted or could result in a complaint to, including but not limited
to, any regulatory authority or which could give rise to litigation or
proceedings against either Party.
19 TERM AND TERMINATION
19.1 This Agreement may be terminated, either in whole or with respect to
one or more of the Services, by the Company at any time by giving the
Service Provider sixty (60) days prior written notice.
19.2 Unless the other Party specifically agrees to the contrary in writing,
this Agreement will be automatically terminated with immediate effect
in the event that one Party shall:-
(a) enter or become the subject of voluntary or involuntary
rehabilitation or liquidation proceedings;
(b) become the subject of an action in bankruptcy;
(c) make or propose any composition with its creditors or make any
assignment for the benefit of its creditors or otherwise
acknowledge its insolvency;
(d) have an administrator or administrative receiver or equivalent
office holder appointed by a court of competent jurisdiction;
(e) have a receiver or equivalent office holder appointed for the
whole or any part of its business;
(f) any past or present director, officer, partner or employee of
Service Provider is convicted of or charged with any criminal
offence involving fraud or dishonesty or any similar criminal
offence which may materially affect the operation of this
Agreement.
19.3 Each Party shall inform the other immediately upon becoming aware of
the occurrence of any of the events set out in Section 19.2 above.
19.4 In the event of persistent and material breaches of any discreet part
of the Services, the Company shall inform the Representatives of
Service Provider in writing of the nature of such breaches. The
Representatives shall meet as soon as reasonably practicable to discuss
these breaches (such meeting being expected to occur within seven (7)
business days of receipt of the written notice) and try to agree an
action plan designed to remedy the breaches within a reasonable
timeframe acceptable to the Company. Should an action plan not be
agreed within a reasonable timeframe, or the implementation of an
action plan not result in the Services being performed to the specified
standards, then the Representatives shall raise the matter with the
Steering Committee, in accordance with clause 10 above. If the material
breaches continue and the Steering Committee does not provide a
resolution to the matter within a reasonable timeframe, then the
Company has the right to terminate the relevant part of the Services
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with one (1) month's notice. Such termination will not affect the
continuance of the Services not subject to the persistent and material
breaches.
19.5 On termination of any Service provided for in any Schedule or the
entire Agreement, each Party shall bear its own associated costs;
Service Provider will cooperate in good faith with the Company to
provide the Company (or its designee) with reasonable assistance to
make an orderly transition from Service Provider to another supplier of
the Services. Service Provider undertakes to work with the Company to
ensure a smooth transition and hand-over and to minimise the costs
associated with termination for each Party. Such transition assistance
shall include the following:
(a) developing a transition plan with assistance from the Company
or its designee; and
(b) organizing and delivering to the Company records and documents
necessary to allow continuation of the Services, including
delivering such materials in electronic forms and versions as
requested by the Company.
19.6 Termination of this Agreement does not affect a Party's accrued rights
and obligations at the date of termination.
20 LAW AND JURISDICTION
20.1 This Agreement shall be construed in accordance with the laws of the
State of New York without regard to the principles of conflict of laws.
21 ASSIGNMENT
21.1 This Agreement shall not be assignable by either Party without the
express written consent of the other, and such consent shall not be
unreasonably withheld, provided however that upon delivery of notice to
the Company, Service Provider may assign all or a portion of its rights
under this Agreement to an affiliate. For purposes of this Agreement
"affiliate" shall mean any person, corporation, company partnership,
individual or group (collectively a "Person"), which directly or
indirectly, through one or more intermediaries, controls or is
controlled by, or owns or is owned by another Person, with an equity or
other financial interest of 35% or more of any management interest.
22 NOTICES
22.1 All notices hereunder shall be sent to the Party at the address set
forth below or at such other address as shall be specified by a Party
as to it in a notice duly given. Notices shall be effective upon
receipt, and shall be addressed as follows:
If to Service Provider: XL Capital Assurance Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Company: X.L. Global Services, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as a Party shall have designated by notice in
writing to the other Party in the manner provided by this clause 22.1.
23. THIRD PARTIES' RIGHTS
23.1 For the avoidance of doubt, no term of this Agreement is intended for
the benefit of any third party, and the Parties do not intend that any
term of this Agreement should be enforceable by a third party.
24 ENTIRE AGREEMENT.
24.1 This Agreement, including the attached Schedules, is the complete and
exclusive statement of the agreement between the Parties and supersedes
all prior proposals, understandings and all other agreements, oral and
written, between the Parties relating to the subject matter of this
Agreement. This Agreement may not be modified or altered except by
written instrument duly executed by both Parties.
25. FORCE MAJEURE.
25.1 Any delay or failure by either Party in the performance of this
Agreement will be excused to the extent that the delay or failure is
due solely to causes or contingencies beyond the reasonable control of
such Party.
26. SEVERABILITY.
26.1 If any provision, clause or part of this Agreement, or the application
thereof under certain circumstances is held invalid or unenforceable
for any reason, the remainder of this Agreement, or the application of
such provision, clause or part under other circumstances shall not be
affected thereby.
IN WITNESS WHEREOF, the Parties have signed this Agreement on the Effective
Date.
XL CAPITAL ASSURANCE INC. X.L. GLOBAL SERVICES, INC.
By: /s/ T. ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------------
Name: T. ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------------
Title: Senior Managing Director Title: EVP, CFO
-------------------------- ----------------------------------
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SCHEDULE #1
REAL ESTATE AND FACILITIES SERVICES - 1221 AOA -
I DESCRIPTION OF SERVICES
A. SCOPE
XL Capital Assurance Inc.("Service Provider") will provide Real Estate and
Facilities services (specifically rental of office space and furniture and
associated facilities staff services) to X.L. Global Services, Inc. (the
"Company") and, on behalf of the Company, to the various XL business segments
listed below. Such services will be provided either through Service Provider's
own resources, or the resources of its subsidiary or affiliates, as provided in
the General Services Agreement (the "Services Agreement"), dated as of July __,
2006, by and between Service Provider and Company, or by contracting with other
independent contractors, all in accordance with Section 4.1 of the Services
Agreement.
B. SPECIFIC SERVICES AND ASSOCIATED FEES
The location that will be the subject of this Services Agreement is ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ only.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("▇▇▇▇ AOA")
Service Provider is the leaseholder of the 31st and 32nd floors of 1221 AOA.
Service Provider is responsible for all building and landlord correspondence and
other communications that are necessary. Annual budgeting by Service Provider
and rent schedule review and analysis will provide updated rent and expense
adjustments that are necessary and the responsibility of Service Provider.
Operating escalations, annual operating expense, real estate tax and electrical
are reviewed on an annual basis by the Rock-McGraw, Inc. (the "Landlord" or
"LL") and any credits/debits thereby assigned are the primary responsibility of
Service Provider but will be proportionately allocated to the Company as
described herein.
Service Provider is responsible for the following services and fees based on
2006 budget numbers as presented by Service Provider: rent, operating expenses
(LL- and XLCA-generated), non-capital office projects, office supplies &
equipment, printing & stationery, subscriptions and publications, courier
service & postage, food services, real estate taxes as well as office equipment
(leased, rentals, maintenance) on an annual basis. The fees for such expenses
(the "Real Estate Expenses") are listed below:
1. Annual Rent (2006) = $5,926,400
2. LL-Generated OE (2006) = $2,120,626
3. XLCA-Generated OE (2006) = $ 473,791
----------
$8,520,817 Total
Service Provider will provide office space, existing furniture and
facilities-related services to the following XL Shared Service Departments and
other XL Business Segments:
XL CAPITAL INVESTMENT PARTNERS
XLGS - LEGAL DEPARTMENT
XLGS - GLOBAL TREASURY MGMT-CREDIT
XLGS - IT
XL WEATHER & ENERGY
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XLGS-REINSURANCE SECURITY
XLA - INTERNAL AUDIT
XL INVESTMENT MGMT
The Real Estate Expenses will be apportioned to the Company at an annual cost of
$1,476,742 (Rent and LL Generated OE based on a percentage of rentable square
footage: 15,896 rentable square feet / 92,600 total rentable square feet =
17.17% or $1,381,406; XLCA Generated OE based on a percentage of headcount: 33
XL employees / 164 total employees in location = 20.12% or $95,336) and are
subject to periodic adjustment in the event the Services Provider experiences
additional expenses that are properly proportionately allocable to the Company
such as Landlord-generated operating expenses. The Services Agreement will run
through October 31, 2007 or until such time that the Company has reviewed
available options and progressed to the stage of defining XL space requirements
in the New York City area and has negotiated a mutually agreeable contract with
Service Provider that will allow the Company to move these employees, as a
group, to the "to be determined" designated facility(ies). In addition, Service
Provider reserves the right to extend the Services Agreements to XL business
segments as per mutually agreeable terms and determination of needs.
II SERVICE FEES
The Company agrees to pay for the above space, furniture and facilities fees,
specifically noted and capped above, which include rent, operating expenses and
all facilities-related expenses.
The Company agrees to pay for any expenses incurred in connection with the
co-location of the XL Shared Service Departments and other XL Business Segments
in contiguous space on the 32nd floor. Such expense shall include, but not be
limited to, any necessary IT infrastructure improvements such as the
installation of cabling and any actual moving expenses.
The Company additionally agrees to pay for the Service Provider's Real Estate
and Facilities Staff compensation and services as noted below.
The Fee will include:
(i) The semi-annual Real Estate and Facilities rent and facilities
fees based and capped on the totals noted above;
(ii) Service Provider's Real Estate and Facilities staff compensation
and services will be apportioned to the Company at an annual
cost of $ 67,421 (based on a percentage of headcount: 33 XL
employees / 164 total employees in location = 20.12%) with a
▇▇▇▇ up of 5.7% of the aggregate amount for this service only,
totalling $3,843. The total cost to XLGS for this RE and
Facilities staff compensation and services will be capped at
$71,264 per annum.
III ADDITIONAL TERMS
The annual budgeting process will highlight and determine Real Estate and
Facilities Expense increases which will be incorporated into any renewal
agreements between Service Provider and the Company for the leased office space
at 1221 AOA. Rent and operating expense increases will be indicated in a revised
Services Agreement if an extension is deemed necessary and mutually-agreeable by
both parties.
XLGS will be credited for the funds received from the departing subtenant of the
"Front Point" space in the annual amount of $151,360.
Upon termination of this agreement and XLGS vacating of the premises and
provided this occurs on or before October 31, 2007, Service Provider agrees to
reimburse the Company for the value of the various improvements made by XL
Capital Investment Partners in 2005 for the
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"Front Point" space at a price equal to its then present value assuming
straight-line depreciation over agreed upon periods from date of purchase (i.e.
5 years for furniture; 16.5 years for leasehold improvements; and 3 years for
equipment). Assuming such termination and vacation occurs on October 31, 2007,
such reimbursement amount will equal $224,824.
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SCHEDULE #2
INFORMATION TECHNOLOGY (IT) SERVICES
I DESCRIPTION OF SERVICES
A. SCOPE
XL Capital Assurance Inc. ("Service Provider") will provide Information
Technology services to XL Global Services, Inc. ("XLGS") either through Service
Provider's own resources, the resources of its subsidiaries or affiliates, as
defined in the Master Services Agreement (the "Services Agreement"), dated as of
_______________, by and between Service Provider and XLGS, or by contracting
with other independent contractors, all in accordance with Section 4.1 of the
Services Agreement.
B. SPECIFIC SERVICES
The specific services that Service Provider will provide through XL's Shared
Service, Corporate and Business Management IT departments are as follows. All
services will be provided based on the standard service levels provided to XL
Group companies and XLCA will conform to XL IT Security standards. All work for
XLFS, XLLA, and XLWE will be maintenance/supportive based around the
applications, with no new development on current or future projects. GTS will
continue to support the surrounding infrastructure as it relates to these
applications.
1. XLFS
o Support and transition of Deal Pipeline System
2. XLLA
o Support and maintenance of Surveillance ETL Tool.
o Transition of MUCS Replacement Project.
o Transition of SS&C Debt and Derivatives ASP.
3. XLWE
o Support and transition of Phaedrus.
o Transition of Climetrix Weather Valuation ASP.
o Support and transition of Climetrix/Phaedrus Upload Tool.
o Support and transition of Silent Importer.
o Support and transition of Query Tool.
o Support and transition of Platts.
o Support and transition of the Pricing Tools used by ▇▇▇ ▇▇▇▇▇▇▇.
o Support and transition of the Outage Valuations tools.
Additional services may be included upon agreement of both parties.
II SERVICE FEES
Company will pay Service Provider semi-annually on a "cost plus" basis for each
Service as set forth herein.
The Fee will include:
(i) with respect to the services being performed and Support Services
being provided by the Service Provider, any salaries, bonuses,
benefits, fringe benefits, incentive compensation benefits (if
applicable) payroll taxes or other applicable taxes, and
depreciation/amortization of office equipment and software
attributed to the
- 14 -
employee in the group (collectively, the "Employee Costs"), based
upon the ratio of Service Provider's estimate of the time spent by
the employee on behalf of XLGS or in connection with providing
Support Services divided by the total time spent by the employee
multiplied by the Employee Costs;
(ii) a ▇▇▇▇ up of 5.7% of the aggregate amount calculated pursuant to
(i); and
(iii) third-party expenses, including travel and entertainment, consulting
fees and printing costs, incurred on behalf of XLGS by Service
Provider on behalf of XLGS or in connection with providing Support
Services;
(iv) any costs incurred by the Service Provider in providing the Services
not in the ordinary course of business.
The service fee is based on actual work effort (time and materials), with
appropriate percentage of FTE time designated on specific applications.
XLFS $4,664
XLLA $29,390
XLWE $75,805
The charges above are exclusive of any taxes and the 5.7% ▇▇▇▇ up.
III ADDITIONAL TERMS
This support will be in force until 12/31/2006, then transitioning to XL Capital
on 1/1/2007
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SCHEDULE #3
INFORMATION TECHNOLOGY (IT) SERVICES
I DESCRIPTION OF SERVICES
A. SCOPE
XL Capital Assurance Inc. ("Service Provider") will provide Information
Technology services to XL Global Services, Inc. ("XLGS") and, on behalf of XLGS,
to XL Capital Investment Partners ("XLCIP") either through Service Provider's
own resources, the resources of its subsidiaries or affiliates, as defined in
the Master Services Agreement (the "Services Agreement"), dated as of
_______________, by and between Service Provider and XLGS, or by contracting
with other independent contractors, all in accordance with Section 4.1 of the
Services Agreement.
B. SPECIFIC SERVICES
The specific services that Service Provider will provide through XL's Shared
Service, Corporate and Business Management IT departments are as follows. All
services will be provided based on the standard service levels provided to XL
Group companies and XLCA will conform to XL IT Security standards. All services
will be for those individuals and equipment resident at 1221 Avenue of the
Americas ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇ ▇▇▇▇▇. All work for XLCIP, Internal Audit,
Insurance, will be maintenance/supportive based around the infrastructure, with
no new development on current or future projects.
1. Desktop:
o Desktop Support
o Desktop MAC
2. Help Desk:
o Receive and log all Incidents and Service Requests
o Document the Incident/Request into the TrackIT System and
categorize appropriately
o Provide Level 1 triage and diagnostic services
o Answer "how to" questions and solve issues related to supported
software and hardware products, utilizing remote takeover of the
End Users' system if available
o Handle and route End User Service Requests
o Provide Level 2 and 3 resources
o Provide status information to End Users who contact them either
using the telephone or email
o Escalate incidents where service level targets are at risk of
being missed, or are missed
o Follow-up and measure satisfaction through pre-agreed quality
and satisfaction measurement methods
3. Data Network
o Support of office LANs (Local Area Network)
o Support of Bloomberg Installations
4. Telephony/Voice & Video Conferencing
o Configuration and Support of PBX Systems o Voice Mail
o Local & Long Distance provisioning
o Toll Free Service provisioning
o Video Conferencing
- 16 -
5. User Access and Provisioning:
o Directory Services ( DHCP, WINS)
o Password Management
6. Messaging & Collaboration:
o Domino Administration
o Provide Lotus Domino Administrative Functions to Support the
Vikara Installation
7. Data Center Operations:
o Monitoring Start of Day Activities
o Disaster Recovery
o Locate Servers in Data Center
8. Application Development, Maintenance & Support
o Provide Administrative Support for the Vikara Application itself
o Provide Outlook Integrator support for Vikara
o No other Application Development services to be provided.
Additional services may be included upon agreement of both parties.
II SERVICE FEES
Company will pay Service Provider semi-annually on a "cost plus" basis for each
Service as set forth herein.
The Fee will include:
(v) with respect to the services being performed and Support Services
being provided by the Service Provider, any salaries, bonuses,
benefits, fringe benefits, incentive compensation benefits (if
applicable) payroll taxes or other applicable taxes, and
depreciation/amortization of office equipment and software
attributed to the employee in the group (collectively, the "Employee
Costs"), based upon the ratio of Service Provider's estimate of the
time spent by the employee on behalf of XLGS/XLCIP or in connection
with providing Support Services divided by the total time spent by
the employee multiplied by the Employee Costs;
(vi) a ▇▇▇▇ up of 5.7% of the aggregate amount calculated pursuant to
(i); and
(vii) third-party expenses, including travel and entertainment, consulting
fees and printing costs, incurred on behalf of XLGS/XLCIP by Service
Provider on behalf of XLGS/XLCIP or in connection with providing
Support Services.
-----------------------------------------
Network/Telephony $220,684
-----------------------------------------
1221 Data Center Ops $9,792
-----------------------------------------
Help Desk Support $29,731
-----------------------------------------
Domino Server Mgmt $8,909
-----------------------------------------
Hardware Procurement $89,025
-----------------------------------------
The charges above are exclusive of any taxes and the 5.7% ▇▇▇▇ up. Some of these
costs reflect current headcount at the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (delineated in
attachment), New York Office of SCA. If there is a headcount variance of +/-
20%, these costs will have to be recalculated.
- 17 -
III ADDITIONAL TERMS
This support will be in force until 12/31/2006, then transitioning to XL Capital
on 1/1/2007.