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Tax Indemnification Agreement

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October 28, 1992


Commonwealth Land Title Insurance Company Reliance Insurance Company Reliance Group Holdings, Inc. Park Avenue Plaza 55 East 52nd Street New York, NY 10055


Dear Sirs:


This letter is written to confirm certain understandings among CMAC Investment Corporation (the "Company"), Commonwealth Mortgage Assurance Company and its subsidiaries, Commonwealth Mortgage Assurance Company of Arizona and Commonwealth Mortgage Assurance Company Service Company (collectively, "CMAC"), Commonwealth Land Title Insurance Company ("CLTIC"), Reliance Insurance Company ("RIC") and Reliance Group Holdings, Inc. ("Reliance") with respect to the registration and public offering of (a) 5,700,000 shares of common stock of the Company held by CLTIC, and (b) 3,404,000 shares of common stock to be issued by the Company (the shares to be sold by CLTIC and the Company being referred to herein as the "Shares").


1. For purposes of Paragraph 2 hereof, the following definitions shall apply:


(a) "CMAC shall mean and include CMAC and the Company.


(b) "Federal Taxes" shall mean all income taxes (including estimated taxes) imposed by the United States.


(c) "Adjustment" shall mean any change in an item of income, gain, loss, deduction or credit of CMAC or the Company, including but not limited to, changes attributable to amended federal tax returns, deficiencies asserted by a federal taxing authority, audit, examination, proceeding or litigation resulting from any of the foregoing events, but only after such change becomes final by virtue of an agreement between the pertinent taxpayer and the Internal Revenue Service or of the conclusion of any administrative or judicial proceedings in connection with the items that are the subject of the proposed adjustment; provided that "Adjustment" shall not include any disallowance of the worthless stock deduction for CMAC's investment in the common stock of Telemundo Group, Inc.
(d) "Pre-Closing Date Interest" shall mean all interest payable for periods ending on or before the Closing Date on federal income tax assessments attributable to CMAC.


(e) "Post-Closing Date Interest" shall mean all interest payable for periods after the Closing Date on federal income tax assessments attributable to CMAC.


(f) "Federal Tax Rate" shall mean 34%.


2. Consolidated Group Tax Matters. (a) Reliance shall file a consolidated federal tax return for the taxable year ended December 31, 1992, which tax return shall include in the consolidated taxable income therein reported for the Reliance consolidated group the taxable income of CMAC for the period commencing January 1, 1992 and ending on the date on which the closing of the sale of the Shares shall occur (the "Closing Date") computed in accordance with Treasury Regulation Section 1.1502-76(b)(4).


(b) Reliance shall file, or cause to be filed, when due, all federal income tax and information returns and reports (including federal estimated tax returns) which are required to be filed with respect to CMAC for all periods during which CMAC has been a member of the Reliance consolidated group and will pay, or cause to be paid, when due, all amounts which are shown as due and owing on such returns and reports.


(c) Reliance agrees to indemnify and hold harmless CMAC against any and all Federal Taxes, together with any related interest, penalties or additions to tax, relating to members of Reliance's consolidated group other than CMAC arising pursuant to Treasury Regulation Section 1.1502-6(a) with respect to all periods during which CMAC has been a member of the Reliance consolidated group.


(d) On or before the Closing Date, CMAC shall pay to CLTIC, in cash, an amount equal to Federal Taxes of CMAC for the period from January 1, 1992 through October 31, 1992 as determined in accordance with t
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