EXHIBIT 10.4
May 3, 2007
Security Capital Assurance Ltd
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief Executive Officer
Re: TRANSITION AGREEMENT, DATED AUGUST 4, 2006
Ladies and Gentlemen:
Reference is made to the Transition Agreement dated August 4, 2006 among XL
Capital Ltd, a Cayman Islands company ("XL CAPITAL"), XL Insurance (Bermuda)
Ltd, a Bermuda company ("XLI"), X.L. America, Inc., a Delaware corporation
("XLA" and, together with XL Capital and XLI, the "XL PARTIES"), and Security
Capital Assurance Ltd, a Bermuda company ("SCA") (the "TRANSITION AGREEMENT").
Capitalized terms used herein and not otherwise defined shall have the meaning
provided therefor in the Transition Agreement.
Pursuant to Section 9.5 of the Transition Agreement, the parties hereto
agree, in consideration of the premises and of the mutual agreements herein
contained, to amend the Transition Agreement as follows:
1. Section 8.6 of the Transition Agreement is hereby amended by adding the
following at the end thereof:
"(d) In addition to the other indemnification provisions available under
this Agreement, XL Capital shall indemnify, defend and hold harmless any SCA
officer from and against any and all Losses of such SCA officer arising out of,
relating to, by reason of or otherwise in connection with the submission
following the Closing Time by such SCA officer of any certification regarding
the financials, disclosure controls and procedures, internal controls or related
matters of any member of the SCA Group ("SCA Certification") requested by XL
Capital and provided by such SCA officer in connection with the preparation by
XL Capital (each such SCA officer an "SCA Certifying Officer"), and the
execution by the Chief Executive Officer and Chief Financial Officer of XL
Capital, of any certification pursuant to Sections 302 or 906 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 to the same extent and subject to the same terms,
conditions and exceptions set forth in Article 109 of the Articles of
Association of XL Capital as if such SCA Certifying Officer were an officer of
XL Capital; PROVIDED, HOWEVER, that no such indemnification shall be provided in
respect of any Losses arising out of or relating to any proceeding in which XL
Capital (including, solely for purposes of this proviso, any XL Capital officer,
director or employee, acting as such) is not a subject or party; solely for
purposes of this Section 8.1(d), XL Capital shall be deemed to remain a
subject/party with respect to a proceeding even if it subsequently ceases to be
a subject/party with respect to such proceeding. Subject to the proviso in the
preceding sentence, if both XL Capital and SCA are subjects or parties with
respect to a proceeding contemplated by the second preceding sentence, the
amount of any indemnification provided to such SCA Certifying Officer by XL
Capital under this Section 8.1(d) will be determined on a basis reasonable under
the circumstances in light of the relative responsibility of XL Capital and its
officers and directors acting as such, on the one hand, and SCA and its officers
and directors acting as such, on the other hand, for the Losses."
Except as set forth herein, the Transition Agreement shall remain in full
force and effect in accordance with the original terms thereof.
This letter may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall constitute but one and the
same letter.
This letter shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to its conflict of laws
principles. The parties hereto consent to the non-exclusive jurisdiction of the
Courts of New York.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
XL CAPITAL LTD
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: EVP, General Counsel of Corporate
Affairs & Secretary
XL INSURANCE (BERMUDA) LTD
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary
X.L. AMERICA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel & Secretary
Accepted and Agreed to as of the date first above written:
SECURITY CAPITAL ASSURANCE LTD
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Executive Vice President
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