EXHIBIT 10.27

AGREEMENT OF TENANTS IN COMMON

AGREEMENT made as of the 23rd day of June, 2004, by and between James H. Veghte
c/o XL Reinsurance America Inc., 70 Seaview Avenue, Stamford, Connecticut 06902
(herein "Jamie") and 37 Lambert Road LLC c/o 70 Seaview Avenue, Stamford,
Connecticut 06902 (herein "The LLC”) (Jamie and The LLC herein collectively
called the "Tenants").

W I T N E S S E T H:

WHEREAS, X.L. America, Inc. executed a contract dated February 13, 2004 (the
“Contract”), a copy of which is attached hereto, for the purchase of certain
real Property located at 37 Lambert Road, New Canaan, Connecticut 06840 which
property is more specifically described in Schedule A attached hereto (the
"Property") for a purchase price of Two Million Eight Hundred Seventy-Five
Thousand ($2,875,000.00) Dollars; and

 

WHEREAS, XL America Inc. entered into the contract for the purpose of acquiring
a home for Jamie, the CEO of XL Reinsurance America Inc; and

 

WHEREAS, XL America Inc. has assigned all its right, title and interest to the
Contract to 37 Lambert Road LLC, a LLC which is wholly owned by XL America Inc.;
and

WHEREAS, Jamie and The LLC, desire to provide for the purchase, operation,
ownership, disposition of, and the Tenants' financial responsibilities with
respect to the Property.

NOW, THEREFORE, in consideration of the foregoing promises and the mutual
covenants and agreements hereinafter set forth, the sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:

 

6.            Purchase of Property. The Tenants shall purchase the Property for
a purchase price of Two Million Eight Hundred Seventy-Five Thousand
($2,875,000.00) Dollars pursuant to the terms of the Contract. Title to the
Property will be held by Jamie and The LLC as tenants-in-common with Jamie
having a 21.8% undivided interest and The LLC having a 78.2% interest.

7.           Mortgage.         There will be no acquisition mortgage placed on
the Property and the Tenants do not intend subsequent financing for as long as
The LLC holds title to a percentage of the Property.

8.           Expenses of Acquisition.           Jamie will make a Capital
Contribution of Six Hundred Twenty-Five Thousand ($625,000.00) Dollars for the
acquisition of the Property. The LLC will make a Capital Contribution of Two
Million Two Hundred-Fifty Thousand ($2,250,000.00) Dollars for the acquisition
of the Property. The LLC shall be responsible for paying all costs incurred in
connection with the acquisition of the Property; including, but not limited to,
fees for: survey costs, title insurance premium, recording costs and attorney
fees.

 

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4. Expenses of Maintenance, Repair, etc. Jamie and The LLC hereby agree that
Jamie will pay all expenses in connection with the operation of the Property
including, without limitation, all expenses for repair and maintenance,
utilities, and Home Owners Association’s dues, if any. Jamie shall indemnify and
hold the LLC harmless from any loss or damage to person or to Property arising
of or in connection with Jamie’s use and occupancy of the Property, including
claims by employees, invitees, and guests, said indemnity to include all court
costs and attorney fees.

The LLC shall pay for all real estate property taxes due and owing on the
Property. The LLC shall be each entitled to Hundred percent (100%) of any tax
deduction available under the Federal and/or State Tax Code in connection with
the payment of said real estate property taxes. In the event either Tenant fails
to pay the costs set forth in this Paragraph 4, the other Tenant may elect
either to: 1) pay the same in full and such payment shall be considered a loan
to the other Tenant hereunder, at an interest rate of ten (10%) percent per
annum; or 2) terminate this Agreement due to default by the non-paying Tenant.
If this Agreement is terminated, the parties shall have the remedies provided
for in Paragraph 13 hereof. All such Tenant advances, together with interest
thereon, if not sooner paid, shall be due and payable upon sale of the Property
or termination of the Tenancy for any reason.

5.         Personal Property.       Any personal property located on the
Property shall belong to Jamie. Upon the Sale, or termination of the Tenancy for
any reason, Jamie will be entitled to the return of his items of personal
property.

6.            Sale of the Property to a non-related third party. If both Tenants
desire to sell the Property, they shall attempt to find a purchaser to acquire
the Property at its then Fair Market Value as determined by taking the average
of two licensed appraisers who do appraisals in New Canaan. The parties shall
multiple list the Property for sale at a price upon which they shall agree,
based on the appraisals, and with a real estate agent upon whom they shall
agree. The parties agree to accept any bona fide offer to purchase the Property
at or above its then Fair Market Value, and thereafter to enter a contract for
the sale of the Property, wherein such offer shall be the Sale Price. The
proceeds of Sale shall be distributed as provided for in this Paragraph 6.

In the event of the Sale of the Property to a non-related third party, the sale
proceeds shall be distributed according to the following formula:

(a)          The proceeds of the sale shall be allocated (21.8%) to the account
of Jamie and (78.2%) to the account of The LLC.

(b)          Conveyance taxes, broker's commissions, adjustments with purchaser,
costs of sale, including attorney's fees, shall be paid in proportion to their
Capital Contribution percentages from the account of each Tenant.

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(c)           Any liens against the Property shall be paid from the account of
the Tenant who was responsible for the lien, or shall be apportioned between the
Tenants based on Capital Contribution percentage, if caused by both Tenants.

(d)         Tenant loans hereunder, if any, together with any accrued interest
thereon, shall be netted against each other. In the event that one Tenant owes
the other Tenant an amount for Tenant loans (or their interest) after such
netting, then such net amount shall be deducted from the balance of the debtor
Tenant and credited to the account of the creditor Tenant. Tenant loans
hereunder shall include, without limitation, Mortgage installment obligations,
if any, paid by one Tenant on behalf of the other, reimbursement to either
Tenant, as applicable, for payment of unauthorized liens against the Property by
the other Tenant, and reimbursement of either Tenant's payment of the
obligations of the other Tenant hereunder pursuant to Paragraph 4, together with
accrued interest thereon.

(e)           The Capital Contributions of the Tenants shall be cancelled
against each other. In the event that one Tenant has made an aggregate Capital
Contribution in an amount greater than the aggregate Capital Contribution of the
other Tenant, then such excess amount shall be deducted from the account of the
Tenant who has made the smaller Capital Contribution and credited to the account
of the Tenant who made the larger Capital Contribution. The cost of any capital
improvements made to the Property in excess of Five Thousand ($5,000) Dollars
shall be considered a Capital Contribution and shall be credited to the account
of the party that paid for the capital improvement.

Each Tenant shall be responsible for paying all amounts deductible as against
his account under subparagraphs (a) through (e) hereunder. Any amount remaining
in a Tenant's account after payment of all deductions allocable against such
account by reason of the items in subparagraphs (a) through (e) hereunder shall
belong to such Tenant and shall be defined as the Tenant's Equity and shall be
distributed to said Tenant upon disposition of the property..

7.            Assignment of Interest.       Neither Tenant shall sell, grant,
convey, mortgage, encumber or hypothecate his share of the Property or any
interest therein without first obtaining the prior written consent of the other
Tenant.

8.            Termination of Tenancy.          If not terminated by the Sale to
an unrelated third party, this Agreement shall terminate upon the earliest to
occur of the following events:

1) death or disability of Jamie;

2) termination of Jamie’s employment at XL Reinsurance America or an affiliated
X.L America or XL Capital company;

3) mutual agreement of the Tenants; or

4) four (4) years from the date of the closing on the Property (hereinafter
called “Termination by Time”).

9.           Binding Effect.                    This Agreement shall be binding
upon and inure to the benefit of the parties and their respective heirs, legal
representatives, successors and permitted assigns.

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10.          Governing Law.            This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut.

11.         Relationship of Parties. The relationship of the parties is as
tenants-in-common with respect to the Property, with each Tenant owning the
percentage interest in the Property set forth in this Agreement, which
represents a percentage of each Tenant’s Capital Contribution, and this
Agreement shall not act to create a partnership among the parties, it being the
express intent of the parties that they shall be solely tenants-in-common.

12.         Use and enjoyment. Jamie shall have the exclusive right to the use
and occupancy of the Property for his family, guests and invitees for as long as
this Agreement remains in effect. Provided, however, the following limitations
shall govern such use and enjoyment:

(a)           Jamie shall not encumber his interest in the Property without the
prior written consent of The LLC.

(b)          Jamie shall not assign or transfer his rights or responsibilities
pursuant to this Agreement without the prior written consent of The LLC.

(c)           Jamie shall not rent (either for or without consideration) any
portion of the Property without the prior written consent of The LLC. Jamie
shall be solely responsible for any capital improvement made to the Property.
Jamie shall notify and get the written consent of the LLC before making any
capital improvement in excess of Fifty Thousand ($50,000) Dollars.

(d)           In consideration for having the right to occupy the Property,
Jamie will pay to The LLC rent of the net after tax value of $9,000.00 each
month during the duration of this Agreement. The rent payment shall be derived
from a housing allowance that Jamie will receive from XL Reinsurance America
Inc. In the event Jamie’s employment at XL Reinsurance America terminates for
any reason, with or without cause, the housing allowance shall terminate and the
buy-out provisions as set forth in Paragraph 13 shall apply. In addition,
Jamie’s housing allowance shall end four (4) years from the date of closing on
the Property, and the buy-out provision, as set forth in Paragraph 13, shall
apply.

13.          Termination by, Breach, Death, Disability, Termination of
Employment, or Termination by Time. If this Agreement is terminated because of
the death or disability of Jamie, Jamie’s estate (in the event of Jamie’s death)
or Jamie or Jamie’s legal representative (in the event of Jamie’s disability)
shall have the option to purchase the interest of the LLC at the Fair Market
Value as determined in Paragraph 6 hereof. In the event of Jamie’s death or
disability, Jamie’s estate or Jamie would have ninety (90) days from the date of
death or disability to exercise the option to purchase the LLC’s interest by
giving written notice to the LLC. The closing will take place within one-hundred
twenty (120) days of the date of disability or death, subject to extension by
the LLC.

If this Agreement is terminated because: of a breach of the Agreement by Jamie
that is not cured, or because Jamie ceased to be employed by XL Reinsurance or a
related entity, or because of Termination by Time as defined in Paragraph 8
hereof, Jamie

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would have the option to purchase the interest of the LLC, at the Fair Market
Value as determined in Paragraph 6 hereof. Jamie would have thirty (30) days
from the date of breach or the date of receiving the date of notice of
termination, or Termination by Time, to exercise the option by giving notice to
the LLC and to close within sixty (60) days of the receipt of notice exercising
the option. At the closing, upon payment of the purchase price as hereinabove
established, the LLC shall convey by Quit Claim to Jamie its interest in the
Property. Jamie shall pay recording fees and shall provide the LLC with an
Agreement indemnifying and holding The LLC harmless from any further liability
with respect to the Property. Taxes and any other customary items of adjustment
shall be apportioned between the parties as of the closing date.

In the event that Jamie or Jamie’s estate does not exercise its option pursuant
to this Paragraph, the Property shall be sold as if by Mutual Agreement of the
parties pursuant to Paragraph 6. In the event Jamie or Jamie’s estate exercises
the option to purchase, the Fair Market Value will be reduced by all Capital
Contributions made by Jamie.

14.          Insurance.        During the term of this Agreement, Jamie shall
keep in full force and effect a Tenant’s liability policy naming the LLC as an
additional insured in an amount of not less than $100,000. Said liability policy
shall provide that the policy cannot be cancelled or reduced without notice to
the LLC. Jamie shall also keep in full force and effect policies adequately
insuring the contents of the Property and any automobiles, watercraft or other
vehicles which Jamie may own or lease.

The LLC shall, at its own expense, keep the Property insured against Loss by
Fire or other causality during the terms of the Agreement based on Full
Replacement Value. Jamie shall be listed as an Additional Loss Payee under this
coverage and shall not be cancelled or reduced without notice to Jamie. Any
deductible obligation of this policy shall be borne by the Parties on a pro rata
basis, according to their ownership interest, with Jamie responsible for 21.8%
of any deductible obligation and The LLC responsible for 78.2%.

15.         Risk of Loss.   In the event of Partial Destruction to the Property
during the term of this Agreement Jamie and The LLC agree that the insurance
proceeds will be used to repair and/or replace the damage. If Jamie desires
improvements which exceeds the insurance proceeds, Jamie will pay all said costs
and said costs will be deemed to increase Jamie’s Capital Contribution.

In the event of Total Destruction of the Property, Jamie will have the following
options in his sole discretion to:

1)          Use the insurance proceeds to rebuild the Property. If Jamie desires
improvements that exceeds the insurance proceeds, Jamie will be responsible to
find these improvements and all such costs shall be deemed to increase Jamie’s
Capital Contribution; or                    

 2)         Sell the Property to a third party as set forth in Paragraph 6 of
the Agreement.

If the Property is sold to a third party, the insurance proceeds will be
distributed to The LLC and Jamie in accordance with their respective ownership
interests in the Property.

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16.        Notices. All notices under this Agreement shall be in writing and
shall be delivered personally and receipted or shall be sent by facsimile
transmission or registered or certified mail or by overnight courier, addressed
to the attorney for the respective party. Notice signed by the respective
attorneys shall be deemed sufficient within the meaning of this paragraph
without the signature of the parties themselves.

Notices to the LLC shall be sent to:

 

37 Lambert Road LLC

Attention: Steven P. Agosta, VP & Manager

c/o X.L. America, Inc.

70 Seaview Avenue

Stamford, CT 06902

Tel: 203-964-5251

Fax: 203-964-9822

 

Notices to Jamie shall be sent to:

 

 

Mr. James H. Veghte

 

37 Lambert Road

 

New Canaan, CT 06840

 

Tel.: 203-964-3857

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
the day and year first above written.

Signed, sealed and delivered

in the presence of:

 

/s/ Ellen Hertensten

/s/ James H. Veghte

 

 

/s/ Julie Watson

 

James H. Veghte

 

/s/ Frank Marsala

/s/ Elizabeth Gannon

 

37 Lambert Road, LLC

 

BY: /s/ Steven P. Agosta
         Steven P. Agosta

 

ITS: Manager & Vice President

 

 

 

 

STATE OF CONNECTICUT

)

 

COUNTY OF FAIRFIELD

)

On this 23rd day of June, 2004, personally appeared before me JAMES H. VEGHTE to
me known, who executed the foregoing instrument and acknowledge same to be his
free act and deed.

 

/s/ Kenneth P. Meagher

 

Commissioner of the Superior Court

 

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