Exhibit 10.18

 

ASSIGNMENT AND TERMINATION AGREEMENT

 

This Assignment and Termination Agreement, dated as of April 28, 2004 (this
“Agreement”), is made by and among Assured Guaranty Re International Ltd.,
formerly known as ACE Capital Re International Ltd. (“AGRI”), ACE Bermuda
Insurance Ltd. (“ACE Bermuda”) and ACE Capital Title Reinsurance Company
(“ACTRC”).

 

RECITALS

 

WHEREAS, AGRI and ACTRC have entered into that certain Per Policy Excess of Loss
Retrocession Agreement, dated as of January 1, 2000 (the “Excess of Loss
Retrocession Agreement”), a copy of which is attached hereto as Annex A;

 

WHEREAS, AGRI and ACTRC have terminated the Excess of Loss Retrocession
Agreement on a run-off basis pursuant to that certain Run-Off Termination
Agreement, dated as of April 28, 2004 (the “Termination Agreement”), by and
between AGRI and ACTRC, a copy of which is attached hereto as Annex B;

 

WHEREAS, AGRI and ACE Bermuda have entered into that certain Quota Share
Retrocession Agreement, dated as April 28, 2004 (the “Quota Share Retrocession
Agreement”), a copy of which is attached hereto as Annex C and pursuant to which
(i) AGRI and ACE Bermuda have amended and restated that certain Per Policy
Excess of Loss Second Retrocession Agreement, effective as of January 1, 2000,
between AGRI and ACE Bermuda, (ii) ACE Bermuda has agreed to indemnify AGRI for
100% of the liability of AGRI under the Excess of Loss Retrocession Agreement
and (iii) AGRI has paid ACE Bermuda an amount equal to $1,290,588;

 

WHEREAS, AGRI desires to assign, transfer and novate all of its past, present
and future right, title, interest and obligations in, to and under the Excess of
Loss Retrocession Agreement to ACE Bermuda as set forth in this Agreement;

 

WHEREAS, ACE Bermuda desires to accept all of AGRI’s past, present and future
right, title, interest and obligations in, to and under the Excess of Loss
Retrocession Agreement as set forth in this Agreement;

 

WHEREAS, AGRI and ACE Bermuda desire to terminate the Quota Share Retrocession
Agreement; and

 

WHEREAS, ACTRC desires to consent to the assignment, transfer and novation
referred to above and to release AGRI from liability under the Excess of Loss
Retrocession Agreement.

 

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NOW, THEREFORE, in consideration of the premises and covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.               Effective as of the date of approval or non-disapproval of this
Agreement by the New York Insurance Department:

 

(i)                                     AGRI hereby assigns, transfers and
novates all of its past, present and future right, title and interest in the
Excess of Loss Retrocession Agreement to ACE Bermuda;

 

(ii)                                  AGRI hereby assigns, transfers and novates
all of its past, present and future obligations which arise out of, relate to,
or are in any way connected with, the Excess of Loss Retrocession Agreement to
ACE Bermuda;

 

(iii)                               ACE Bermuda hereby accepts each assignment,
transfer and novation referred to in the immediately preceding clauses (i) and
(ii) and assumes all of the liabilities and obligations (whether past, present
or future) with respect to the foregoing;

 

(iv)                              ACTRC hereby acknowledges and consents to each
assignment, transfer and novation referred to in the preceding clauses (i) and
(ii); and

 

(v)                                 AGRI and ACE Bermuda hereby acknowledge and
agree that the Quota Share Retrocession Agreement is hereby terminated in all
respects and all of the respective rights and obligations of AGRI and ACE
Bermuda thereunder are irrevocably and unconditionally cancelled and terminated,
and each of AGRI and ACE Bermuda fully and finally releases and discharges the
other party from any obligations, claims or liabilities (of any nature
whatsoever, whether now existing, hereafter arising or contingent and whether
known or unknown) of the other party arising out of and to be performed in
connection with such Quota Share Retrocession Agreement.

 

2.                                       In furtherance of the foregoing, ACTRC
hereby releases AGRI from any and all past, present or future liabilities or
obligations with respect to the Excess of Loss Retrocession Agreement (as
modified by the Termination Agreement), and ACE Bermuda hereby agrees to
indemnify and hold AGRI harmless against any and all such liabilities and
obligations.

 

3.                                       Each party hereto shall, at any time
and from time to time after the first date written above, upon request of any
other party hereto, do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, all such further acts, instruments,
assignments and assurances as may be reasonably required in order to carry

 

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out the intent of this Agreement (including without limitation any of the
foregoing as are reasonably necessary to obtain the approval or non-disapproval
of this Agreement by the New York Insurance Department).

 

4.                                       This Agreement, together with the Quota
Share Retrocession Agreement, the Excess of Loss Retrocession Agreement and the
Termination Agreement, contains the entire agreement and understanding of the
parties hereto with respect to the matters herein and supersedes any other
agreement, whether written or oral, with respect to the subject matter of this
Agreement.  In the event of any conflict between the provisions of this
Agreement and the provisions of the Quota Share Retrocession Agreement, the
Excess of Loss Retrocession Agreement or the Termination Agreement, the
provisions of this Agreement shall control.

 

5.                                       The consideration for the transactions
contemplated by this Agreement is included in the consideration paid under the
Quota Share Retrocession Agreement.

 

6.                                       This Agreement may be executed in any
number of counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.

 

7.                                       This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of law rules thereof.

 

8.                                       Except as expressly set forth herein
and amended hereby, the Excess of Loss Retrocession Agreement shall remain in
full force and effect.

 

9.                                       This Agreement may not be modified or
amended except by mutual written consent of the parties.  The parties will not
unreasonably refuse to make any amendments hereto that are required to be made
in order to obtain the approval or non-disapproval of this Agreement by the New
York Insurance Department.

 

[The next page is the signature page.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.

 

 

ASSURED GUARANTY RE INTERNATIONAL LTD.

 

By:

/s/ Pierre Samson

 

Name:

Pierre Samson

Title:

President

 

ACE BERMUDA INSURANCE LTD.

 

By:

 

 

Name:

 

Title:

 

 

ACE CAPITAL TITLE REINSURANCE COMPANY  

 

By:

 

 

Name:

 

Title:

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.

 

 

ASSURED GUARANTY RE INTERNATIONAL LTD.

 

By:

 

 

Name:

 

Title:

 

 

ACE BERMUDA INSURANCE LTD.

 

By:

/s/ Andrew M. Gibbs

 

Name:

Andrew M. Gibbs

Title:

CFO

 

ACE CAPITAL TITLE REINSURANCE COMPANY  

 

By:

 

 

Name:

 

Title:

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.

 

 

ASSURED GUARANTY RE INTERNATIONAL LTD.

 

By:

 

 

Name:

 

Title:

 

 

ACE BERMUDA INSURANCE LTD.

 

By:

 

 

Name:

 

Title:

 

 

ACE CAPITAL TITLE REINSURANCE COMPANY  

 

By:

/s/ David A. Buzen

 

Name:

David A. Buzen

Title:

President

 

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ANNEX A

 

PER POLICY EXCESS OF LOSS

RETROCESSION AGREEMENT

 

This Per Policy Excess of Loss Retrocession Agreement dated as of January 1,
2000 is made and entered into by and between ACE Capital Re International Ltd.
(the “Reinsurer”), an insurance company organized under the laws of the Islands
of Bermuda, and ACE Capital Title Reinsurance Company (the “Company”), an
insurance company organized under the laws of the State of New York.

 

In consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Company
and the Reinsurer agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1.  Definitions.  For all purposes of this Agreement, (i) the
following terms shall have the meanings assigned to them and shall include the
plural as well as the singular, and (ii) all accounting terms involving premium
and loss calculations and surplus and reserves shall have the meanings assigned
to them under accounting principles prescribed and permitted by the laws and
regulations of the Company’s state of domicile:

 

A.                                    “Agreement” shall mean this Per Policy
Excess of Loss Retrocession Agreement made by and between the Company and the
Reinsurer.

 

B.                                    “Allocated Loss Adjustment Expenses” shall
mean those expenses relating to the adjustment of Losses, including court costs,
interest upon judgments as it accrues, and allocated investigation, adjustment,
and legal expenses chargeable to the investigation, negotiation, settlement or
defense of a claim or Loss or the protection and perfection of any subrogation
or salvage rights under any Policy.

 

C.                                    “Company’s Retention” shall mean, with
respect to a Policy, an amount of Loss  and Allocated Loss Adjustment Expenses
arising from such Policy equal to $5,000,000.

 

D.                                    “Effective Date”  shall have the meaning
set forth in Article 2.

 

E.                                      “Loss” and “Losses” shall mean the
actual loss paid by the Company during the Term arising from a Policy, including
sums paid in settlement of claims and in satisfaction of judgments, net of any
salvage and any inuring reinsurance in connection therewith.

 

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F.                                      “Notice” shall mean communications
conforming to the provisions of Section 12.10 of this Agreement.

 

G.                                    “Policy or Policies” shall mean an in
force contract of title insurance written by a title insurer and reinsured by
the Company prior to or during the Term.  Notwithstanding anything herein to the
contrary, all contracts of title insurance that pertain to one risk shall be
deemed to be one “Policy” for the purposes of this Agreement.

 

H.                                    “Policy Limit” shall mean the amount of
liability ceded to the Company with respect to a Policy.

 

I.                                         “Reinsurer’s Limit of Liability”
shall mean, with respect to a Policy, an amount of Loss and Allocated Loss
Adjustment Expenses arising from such Policy equal to the lesser of the Policy
Limit for such Policy and $195 million.

 

J.                                      “Term” shall have the meaning set forth
in Article 2.

 

In this Agreement, all terms not otherwise defined herein shall have the same
meanings such terms have in the New York Insurance Law.

 

ARTICLE 2

 

TERM

 

This Agreement shall be effective from and after 12:01 a.m., Eastern Standard
Time, on January 1, 2000 (the “Effective Date”) and shall continue in effect
until all of the Company’s exposure under Policies with Policy Limits in excess
of the Company’s Retention has expired (the “Term”).

 

ARTICLE 3

 

TYPE

 

Per policy excess of loss reinsurance.

 

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ARTICLE 4

 

COVER

 

The Reinsurer shall be liable to and will reimburse the Company for all Loss and
Allocated Loss Adjust Expenses arising from each Policy in excess of the
Company’s Retention for such Policy, subject to the Reinsurer’s Limit of
Liability for such Policy.  The Company’s Retention shall be fully paid and
satisfied by the Company before the Reinsurer shall be liable for any payment of
Losses and Allocated Loss Adjustment Expenses under this Agreement.  The
Reinsurer shall not be liable under this Agreement for any portion of the
Company’s Retention under any circumstances including, but not limited to, the
Company’s bankruptcy, insolvency, inability or unwillingness to pay for Losses
or Allocated Loss Adjustment Expenses for any reasons whatsoever or the
uncollectability of any other insurance or reinsurance covering any of the
Policies.

 

ARTICLE 5

 

EXCLUSIONS

 

This Agreement does not cover (i) business reinsured by the Company not
described herein,  (ii) bad faith, punitive damages or other extracontractual
liability asserted against the Company, its officers, directors, employees or
agents, (iii) office expenses of the Company and salaries of officials and
employees of the Company, or (iv) all liability of the Company, arising by
contract, operation of law, or otherwise, from its participation or membership,
whether voluntary or involuntary, in any Insolvency Fund.  “Insolvency Fund”
includes any guaranty fund, insolvency fund, plan, pool, association, fund or
other  arrangement, howsoever denominated, established or governed, which
provides for any assessment of or payment or assumption by the Company of part
or all of any claim, debt, charge, fee or other obligation of an insurer, or its
successors or assigns, which has been declared by the competent authority to be
insolvent, or which is otherwise deemed unable to meet any claim, debt, charge,
fee or other obligation in whole or in part.

 

ARTICLE 6

 

PREMIUM

 

For Policies with an inception date on or after the Effective Date, the Company
shall pay to the Reinsurer premium for each Policy equal to (i) (A) the Policy
Limit for such Policy minus the Company’s Retention divided by (B) the Policy
Limit for such Policy, multiplied by (ii) the premium received by the Company
with respect to such Policy (the “Premium”).  The Premium due to the Reinsurer
for each Policy shall be due during the calendar quarter during which the
Company receives its premium with regard to such Policy and shall be payable to
the Reinsurer as provided in Article 7 hereof.

 

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No Premium shall be payable to the Reinsurer with respect to Policies with an
inception date prior to the Effective Date.

 

ARTICLE 7

 

ACCOUNTS AND REPORTS

 

The Company shall provide the Reinsurer with a bordereau within forty five (45)
days following the end of each calendar quarter showing for such calendar
quarter and each Policy ceded hereunder:  Policy Limit, premium received by the
Company, Premium due to the Reinsurer, Losses and Allocated Loss Adjustment
Expenses (paid and outstanding) and the Reinsurer’s share of salvage and other
recoveries received by the Company.  The net balance shall be payable by the
debtor party within ten (10) business days after the bordereau is furnished to
the Reinsurer.

 

The Company shall also furnish to the Reinsurer such other reports or other
information as may reasonably be required by the Reinsurer and reasonably
available to the Company.

 

ARTICLE 8

 

CLAIMS

 

Section 8.1.  Notice of Claim.  The Company agrees to provide Notice of any
claim under any Policy as soon as is reasonably possible.  Failure to provide
such Notice shall not relieve the Reinsurer of its obligations hereunder for any
Loss or Allocated Loss Adjustment Expenses resulting from such claim unless the
Reinsurer has suffered undue prejudice thereby.

 

Section 8.2.  Rights and Settlements.  The Reinsurer agrees to abide by the loss
settlements of the Company.  The Company shall be the sole judge of:

 

A.                                   The interpretation of all Policies;

 

B.                                     What shall constitute a claim or Loss
covered under a Policy or Allocated Loss Adjustment Expenses in connection
therewith;  and

 

C.                                     The Company’s liability with respect to a
Policy and the amount it shall be proper for the Company to pay in respect
thereto.

 

The Reinsurer shall be bound by the judgment of the Company concerning the
salvage and subrogation rights and remedies of the Company, and the Company
shall have

 

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complete and sole control of direction of all claims and salvage and subrogation
remedies.

 

Section 8.3.  Rights of Association and Cooperation.  The Reinsurer shall not be
called upon to assume charge of the settlement or defense of any claim made or
suit brought or proceeding instituted under a Policy, but the Reinsurer shall
have the right and shall be given the opportunity to associate at its own
expense with any party in the defense and control of any such claim, suit or
proceeding if (i) the claim, suit or proceeding involves, or appears reasonably
likely to involve, the Reinsurer, and (ii) the Company has the right under the
Policy to participate in the same.  In such event, the Reinsurer and the Company
shall cooperate in all aspects of the defense of such claim, suit or proceeding.

 

ARTICLE 9

 

SALVAGE

 

All recoveries, salvages, reimbursements and reversals or reductions of verdicts
or judgments (net of the cost of obtaining such recovery, salvage, reimbursement
or reversal or reduction of a verdict or judgment), whether recovered, received
or obtained  prior or subsequent to a loss settlement under this Agreement,
shall be applied as if recovered, received or obtained prior to such settlement,
and all necessary adjustments shall be made by the parties hereto.

 

ARTICLE 10

 

CASH LOSS

 

At the option and upon the demand of the Company, when the amount due from the
Reinsurer as a result of any one loss exceeds $5,000,000, the Company shall be
paid by wire transfer of same day federal funds by 12:00 p.m. Eastern Standard
Time on the later of either (a) three business days following the date of
receipt by the Reinsurer of a special loss accounting which shall be prepared by
the Company and shall contain relevant details in connection with the loss and
(b) one business day prior to the date such loss payment is made by the
Company.  If for any reason the Company shall not make such loss payment on the
scheduled date and no such loss payment is anticipated to be made within seven
days, the Company shall immediately return to the Reinsurer the amount paid to
the Company by the Reinsurer.  If such loss payment is made within seven days
but in an amount less than the special remittance, the Company shall immediately
return to the Reinsurer the unused amount.

 

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ARTICLE 11

 

WARRANTY

 

The Company warrants that, as of the Effective Date, there are no known or
reported claims under any Policy retroceded under this Agreement that are in
excess of the Company’s Retention with respect to such Policy.

 

ARTICLE 12

 

GENERAL CONDITIONS

 

Section 12.1. Insolvency.  In the event of the insolvency of the Company, this
reinsurance shall be payable directly to the Company, or its liquidator,
receiver, conservator or statutory successor, immediately upon demand on the
basis of the liability of the Company without diminution because of the
insolvency of the Company or because the liquidator, receiver, conservator or
statutory successor of the Company has failed to pay all or a portion of any
claim.  It is agreed, however, that within a reasonable time the liquidator,
receiver, conservator or statutory successor of the Company shall give written
notice to the Reinsurer of the pendency of a claim against the Company
indicating any Policy or Policies reinsured within a reasonable time after such
claim is filed in the insolvency proceeding.  During the pendency of such claim,
the Reinsurer may investigate such claim and interpose, at its own expense, in
the proceeding where such claim is to be adjudicated, any defense or defenses
that they may deem available to the Company or its liquidator, receiver,
conservator or statutory successor.  The expense thus incurred by the Company
shall be chargeable, subject to the approval of the court, against the Company
as part of the expense of conservation or liquidation to the extent of a pro
rata share of the benefit which may accrue to the Company solely as a result of
the defense undertaken by the Reinsurer.

 

Section 12.2.  Errors and Omissions.  Any inadvertent delay, omission or error
shall not be held to relieve either party hereto from any liability which would
attach to it hereunder if such delay, omission or error had not been made,
provided such delay, omission or error is rectified as soon as possible after
discovery.

 

Section 12.3.  Access to Records.  The Reinsurer or its duly authorized
representative shall have access to and the right to inspect the books and
records of the Company at all reasonable times for the purpose of obtaining and
copying information concerning this Agreement, the Policies or the subject
matter hereof.

 

Section 12.4. Arbitration. If any irreconcilable dispute shall arise between the
Reinsurer and the Company with reference to the interpretation of this Agreement
(including, but not limited to, disputes concerning the formation or validity of
this Agreement), whether such dispute arises during or after the Term, such
dispute, upon the written request of

 

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either party, shall be submitted to three arbitrators, one to be chosen by each
party, and the third by the two arbitrators so chosen. Where a party fails to
appoint an arbitrator within fourteen (14) days of being called upon to do so or
where the two party-appointed arbitrators fail to appoint a third within twenty
eight (28) days of their appointment, then upon application the President of the
American Arbitration Association  (or his designee) will appoint an arbitrator
to fill the vacancy.  At any time prior to the appointment by the President of
the American Arbitration Association (or his designee), the party or arbitrators
in default may make such appointment. All arbitrators shall be active or retired
disinterested officers of insurance or reinsurance companies or underwriters at
Lloyd’s of London not under the control of or otherwise affiliated with either
party.

 

Except as may be otherwise provided herein, the arbitrators shall promulgate
rules to interpret this Agreement under the Commercial Rules of the American
Arbitration Association.

 

The party requesting the arbitration shall submit its case to the arbitrators
within forty five (45) days of the appointment of the third arbitrator.  The
party responding to the request for arbitration shall submit its case to the
arbitrators within forty five (45) days of the receipt of the petitioner’s
case.  A hearing shall be held within thirty (30) days after receipt of the
parties’ cases in writing.  The arbiters shall render their decision within
thirty (30) days after completion of the hearing.  The decision in writing of
any two arbiters, when filed with the parties, shall be final and binding on
both parties.  Judgment may be entered upon the final decision of the
arbitrators in any court having jurisdiction.  Each party shall bear the expense
of its own arbitrator and shall jointly and equally bear with the other party
the expense of the third arbitrator and the arbitration.  Said arbitration shall
take place in New York, New York, unless some other place is mutually agreed
upon by the parties.

 

The procedures specified herein shall be the sole and exclusive procedures for
the resolution of irreconcilable disputes between the parties arising out of or
relating to this Agreement.

 

Section 12.5.  Currency.  The currency for the purposes of this Agreement shall
be United States dollars.

 

Section 12.6 Offset.  The parties hereto have the right to offset any balance(s)
due from one to the other under this Agreement.  The party asserting the right
of offset may exercise such right at any time whether the balance(s) due are on
account of premiums or losses or otherwise.  In the event of the insolvency of a
party hereto, offsets shall only be allowed in accordance with the provisions of
Section 7427 of the New York Insurance Law and all other applicable law.

 

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Section 12.7.  Applicable Law.  This Agreement shall be interpreted in
accordance with the laws of the State of New York without giving effect to the
conflict of law rules thereof.

 

Section 12.8.  Taxes.  The Company shall pay any federal excise taxes on premium
reported to the Reinsurer hereunder.  The Company may deduct any federal excise
tax from the premium to be paid to the Reinsurer.

 

Section 12.9.  Financial Statement Credit.  The Reinsurer, upon the request and
at the discretion of the Company, shall take all steps necessary to ensure that
the Company obtains full financial statement credit  according to statutory
requirements in all applicable States of the United States for the reinsurance
provided by the Reinsurer hereunder and shall provide evidence of the same. 
Notwithstanding the foregoing, the Reinsurer shall not be required to provide
credit for statutory premium reserves or for incurred but not reported losses.

 

Section 12.10.  Notice.  As used in this Agreement, notice shall mean any and
all notices, requests, demands or other communications required or permitted to
be given hereunder, and all notices shall be sent by facsimile transmission or
by an overnight delivery service, addressed to the parties at the addresses set
forth below:

 

If to Company, to:

 

 

ACE Capital Title Reinsurance Company

 

1325 Avenue of the Americas

 

New York, New York 10019

 

Fax:  212-581-3268

 

Attn:  Corporate Secretary

 

 

If to Reinsurer, to:

 

 

ACE Capital Re International Ltd.

 

Victoria Hall

 

11 Victoria Street

 

Hamilton HM 08

 

Bermuda

 

Fax:  441-296-3379

 

Attn:  Corporate Secretary

 

The Company and Reinsurer shall provide each other with wiring instructions for
monies to be transferred under this Agreement promptly after execution of this
Agreement and at the time of any change in such instructions.

 

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Section 12.11.  Amendments.  This Agreement may be amended only by a writing
executed by the Company and the Reinsurer upon not less than 30 days’ prior
written notice by one party to the other.

 

Section 12.12.  Severability.  In the event any provision of this Agreement is
held invalid or unenforceable under applicable law, the Agreement shall be
deemed not to include such provision and all other provisions shall remain in
full force and effect.

 

Section 12.13.  Assignment.  This Agreement is not assignable by Reinsurer or
the Company without the consent of the other party hereto and such attempt at
assignment shall be void.

 

Section 12.14.  Headings.  All captions, headings or titles preceding any
Section or Article in this Agreement are solely for convenience of reference and
are not part of this Agreement and shall not affect its meaning, construction or
effect.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers and delivered as of the date first written
above.

 

 

Reinsurer: ACE Capital Re International Ltd.

 

 

 

 

 

By:

/s/ Robbin W. Conner

 

 

Title:

5/17/00

 

 

 

 

 

 

Company: ACE Capital Title Reinsurance Company

 

 

 

 

 

By:

/s/ Laurence Donnelly

 

 

Title:

President

 

 

 

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ADDENDUM #1
TO THE
PER POLICY EXCESS OF LOSS
RETROCESSION AGREEMENT

 

This Addendum #1 is entered into with respect to the Per Policy Excess of Loss
Retrocession Agreement dated the 1st day of January 2000 (the “Agreement”) by
and between ACE Capital Re International Ltd. (the “Reinsurer”), an insurance
company organized under the laws of the Islands of Bermuda, and ACE Capital
Title Reinsurance Company (the “Company”), an insurance company organized under
the laws of the State of New York.

 

For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and Reinsurer agree as follows:

 

The following Article is hereby made a part of the Agreement:

 

ARTICLE 13

 

SERVICE of SUIT

 

1.   It is agreed that in the event of the failure of the Reinsurer to pay any
amount claimed to be due hereunder, the Reinsurer, at the request of the
Company, will submit to the jurisdiction of a court of competent jurisdiction
within the United States of America to compel Arbitration. Nothing in this
Article constitutes or should be understood to constitute a waiver of the
Reinsurer’s rights to commence an action in any court of competent jurisdiction
in the United States or to remove an action to a United States District court.
It is further agreed that service of process in such suit may be made upon
Lovells, Attention David Alberts 900 Third Avenue 16th Floor, New York, New
York, 10022.

 

2.   The above named are authorized and directed to accept service of process on
behalf of the Reinsurer in any such suit and/or upon the request of the Company
to give a written undertaking to the Company that they will enter a general
appearance on behalf of the Reinsurer in the event such a suit shall be
instituted.

 

3.   Further, pursuant to any statute of any state, territory or district of the
United States of America having jurisdiction over the Company which makes
provisions therefor, the Reinsurer hereby designates the Superintendent,
Commissioner or Director of Insurance, or other officer specified for that
purpose in the statute, or other officer specified for that purpose in the
statute, or his/her successor or successors in office, as its true and lawful
attorney upon whom may be served any lawful process in any action, suit or
proceeding to compel Arbitration instituted by or on behalf of the Company or
any beneficiary hereunder arising out of this Agreement, and hereby designates
the above named as the firm or person to whom the said officer is authorized to
mail such process or a true copy thereof.

 

This Addendum is effective as of the Effective Date of the Agreement.

 

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Except as provided herein, all other terms and conditions of the Agreement
remain unchanged.

 

IN WITNESS WHEREOF, the parties have caused this Addendum #1 to be executed by
their duly authorized officers:

 

On Behalf Of:

 

Company: ACE CAPITAL TITLE REINSURANCE COMPANY.

 

 

By:

/s/ Suresh Krishnan

 

March 15, 2001

 

Name:

SURESH KRISHNAN

 

Title:

VICE PRESIDENT & ASSISTANT GENERAL COUNSEL

 

 

 

On Behalf Of:

 

Reinsurer: ACE CAPITAL RE INTERNATIONAL LTD.

 

 

By:

/s/ Robbin W. Conner

 

Name:

Robbin Conner

 

Title:

Chief Operating Officer

 

 

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ADDENDUM #2
TO THE
PER POLICY EXCESS OF LOSS
RETROCESSION AGREEMENT

 

This Addendum #2 (this “Addendum”) to the Agreement (as defined below) is
entered into as of April 15, 2002, by and between ACE Capital Re International
Ltd. (the “Reinsurer”), an insurance company organized under the laws of the
Islands of Bermuda, and ACE Capital Title Reinsurance Company (the “Company”),
an insurance company organized under the laws of the State of New York.

 

WHEREAS, the Company and the Reinsurer have entered into a Per Policy Excess of
Loss Retrocession Agreement dated as of January 1, 2000, which agreement was
amended pursuant to an Addendum #1 dated as of January 1, 2000 (as amended, the
“Agreement”); and

 

WHEREAS, the Company and the Reinsurer desire to further amend the Agreement in
accordance with the terms hereof;

 

NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Reinsurer agree as follows:

 

1.             Article 2 is deleted in its entirety and the following is
substituted in lieu thereof:

 

ARTICLE 2

 

TERM

 

This Agreement shall be effective from and after 12:01 a.m., Eastern Standard
Time, on January 1, 2000 (the “Effective Date”) and shall continue in effect
until all of the Company’s exposure under Policies with Policy Limits in excess
of the Company’s Retention has expired (the “Term”); provided, however, that
either party may terminate this Agreement on a run-off basis at the end of any
calendar quarter upon not less than 90 days’ prior written notice to the other
party. No new Policies may be ceded to the Reinsurer after the effective date of
termination, but the Reinsurer shall remain liable for Policies ceded to the
Reinsurer prior to the effective date of termination in accordance with the
terms and conditions of this Agreement.

 

2.             The first sentence of Section 8.1 of Article 8 is deleted in its
entirety and the following is substituted in lieu thereof:

 

Section 8.1. Notice of Claim. The Company agrees to provide Notice of any claim
under any Policy within 3 business days of receipt thereof.

 

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Except as provided herein, all other terms and conditions of the Agreement
remain unchanged.

 

IN WITNESS WHEREOF, the parties have executed this Addendum by their respective
duly authorized officers as of the date first above written.

 

 

ACE CAPITAL TITLE REINSURANCE COMPANY

 

 

 

 

 

By:

/s/ Norie R. Bregman

 

 

 

Name:

NORIE R. BREGMAN

 

 

 

Title:

Executive Vice President
General Counsel & Secretary

 

 

 

 

 

 

 

 

 

ACE CAPITAL RE INTERNATIONAL LTD.

 

 

 

 

 

By:

/s/ Robbin W. Conner

 

 

 

Name:

Robbin Conner

 

 

Title:

Chief Operating Officer

 

 

 

ACE Capital Re International Ltd.

 

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ANNEX B

 

RUN-OFF TERMINATION AGREEMENT

 

This Run-Off Termination Agreement, dated as of April 28, 2004 (this
“Agreement”), is made by and between Assured Guaranty Re International Ltd.,
formerly known as ACE Capital Re International Ltd. (“AGRI”), and ACE Capital
Title Reinsurance Company (“ACTRC”). Capitalized terms used herein but not
defined shall have the meanings ascribed thereto in the Retrocession Agreement
(as hereinafter defined).

 

RECITALS

 

WHEREAS, AGRI and ACTRC have entered into that certain Per Policy Excess of Loss
Retrocession Agreement, dated as of January 1, 2000 (the “Retrocession
Agreement”);

 

WHEREAS, pursuant to the terms hereof, AGRI and ACTRC desire to terminate the
Retrocession Agreement on a run-off basis;

 

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, the
parties hereto agree as follows:

 

Section 1.               Termination. Notwithstanding anything to the contrary
in the Retrocession Agreement, AGRI and ACTRC hereby acknowledge and agree that
the Retrocession Agreement is hereby terminated in respect of all Policies
having effective dates on or after January 1, 2005 and shall be of no further
force and effect with respect to such Policies.  For the avoidance of doubt,
AGRI and ACTRC hereby acknowledge and agree that the Retrocession Agreement
shall continue in full force and effect in respect of all Policies having
effective dates on or prior to December 31, 2004.

 

Section 2.               Further Assurances. Each party hereto shall, at any
time and from time to time after the first date written above, upon request of
any other party hereto, do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, all such further acts, instruments,
assignments and assurances as may be reasonably required in order to carry out
the intent of this Agreement.

 

Section 3.               Entire Agreement. This Agreement contains the entire
agreement and understanding of the parties hereto with respect to the matters
herein and supersedes any other agreement, whether written or oral, with respect
to the subject matter of this Agreement.

 

Section 4.               Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.

 

Section 5.               Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (without regard
to the conflicts of law rules thereof).

 

[The next page is the signature page.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date hereof.

 

 

ACE CAPITAL TITLE REINSURANCE COMPANY

 

 

By:

 

 

Name:

Title:

 

 

ASSURED GUARANTY RE INTERNATIONAL LTD.

 

 

By:

 

 

Name:

Title:

 

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ANNEX C

 

QUOTA SHARE RETROCESSION AGREEMENT

 

This Quota Share Retrocession Agreement (this “Agreement”), dated as of
April 28, 2004, is made and entered into by and between ASSURED GUARANTY RE
INTERNATIONAL LTD., formerly known as ACE CAPITAL RE INTERNATIONAL LTD.
(“AGRI”), and ACE BERMUDA INSURANCE LTD. (“ACE Bermuda”).

 

WHEREAS, AGRI and ACE Bermuda have entered into that certain Per Policy Excess
of Loss Second Retrocession Agreement, effective as of January 1, 2000 (the
“Second Excess of Loss Retrocession Agreement”), pursuant to which AGRI has
retroceded to ACE Bermuda, on an excess of loss basis, reinsurance assumed by
AGRI from ACE Capital Title Reinsurance Company (“ACTRC”) pursuant to that
certain Per Policy Excess of Loss Retrocession Agreement, dated as of January 1,
2000, between ACTRC and AGRI (the “First Excess of Loss Retrocession
Agreement”); and

 

WHEREAS, AGRI and ACE Bermuda desire to amend and restate the Second Excess of
Loss Retrocession Agreement as set forth herein.

 

NOW THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, AGRI and ACE Bermuda agree as follows:

 

Section 1.  Amendment and Restatement.  Effective as of April 1, 2004 (the
“Effective Date”), the Second Excess of Loss Retrocession Agreement is amended
and restated in its entirety, and replaced and superceded by this Agreement.

 

Section 2.  Cover.  Effective as of the Effective Date, AGRI retrocedes to ACE
Bermuda, and ACE Bermuda assumes from AGRI and agrees to indemnify AGRI for,
100% of the liability of AGRI under the First Excess of Loss Retrocession
Agreement.

 

Section 3.  Premium.  Within three days of the date of this Agreement, AGRI will
pay to ACE Bermuda an amount equal to $1,290,588.  In addition, AGRI will pay to
ACE Bermuda 100% of all premiums received by AGRI under the First Excess of Loss
Retrocession Agreement after the Effective Date net of any federal excise taxes.

 

Section 4.  Rights of Claims Association.  When so requested, AGRI will afford
ACE Bermuda an opportunity to be associated in the defense or control of any
claim, suit or proceeding involving this Agreement, and AGRI and ACE Bermuda
shall cooperate in every respect in the defense of such suit, claim or
proceeding.

 

Section 5.  Reports.  Within 45 days of the end of each quarter during the Term
(as defined in the First Excess of Loss Retrocession Agreement), AGRI shall
provide ACE Bermuda a bordereau showing for such calendar quarter:

 

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(i)                                     all Policies (as defined in the First
Excess of Loss Retrocession Agreement) ceded hereunder during such calendar
quarter and Policies ceded hereunder to date;

(ii)                                  losses and allocated loss adjustment
expenses with respect to the Policies ceded hereunder;

(iii)                               ACE Bermuda’s share of losses and allocated
loss adjustment expenses paid and losses and allocated loss adjustment expenses
outstanding;

(iv)                              ACE Bermuda’s share of subrogation, salvage
and other recoveries received by AGRI with respect to losses and allocated loss
adjustment expenses on Policies ceded hereunder; and

(v)                                 the net premium for each Policy ceded
hereunder during such calendar quarter and the reinsurance premium payable to
ACE Bermuda for such calendar quarter.

 

Section 6.  Follow the Fortunes.  This Agreement is based on the original terms
of the First Excess of Loss Retrocession Agreement so that ACE Bermuda’s rights
and obligations vis-à-vis AGRI with respect to the reinsurance provided under
this Agreement shall, subject to the terms of this Agreement, follow the
fortunes of AGRI in all respects under the Policy.

 

Section 7.  No Third Party Rights.  Nothing herein shall be construed to expand
the liability of ACE Bermuda beyond what is specifically assumed under this
Agreement by creating in any third party any rights hereunder.

 

Section 8.  Access to Records.  Upon reasonable notice, ACE Bermuda or its duly
authorized representative shall have access to and the right to inspect the
books and records of AGRI that pertain to this Agreement or the First Excess of
Loss Retrocession Agreement.

 

Section 9.  Offset.  ACE Bermuda or AGRI may offset any balance(s) due from one
party to the other under this Agreement or any other agreement exclusively
between the parties hereto.  The party asserting the right of offset may
exercise such right at any time whether the balance(s) due are on account of
premiums or losses or otherwise.  In the event of the insolvency of a party
hereto, offsets shall only be allowed in accordance with applicable law.

 

Section 10.  Errors and Omissions.  Any inadvertent delay, omission or error
shall not be held to relieve either party hereto from any liability which would
attach to it hereunder if such delay, omission or error had not been made,
provided such delay, omission or error is rectified as soon as possible after
discovery.

 

Section 11.  Governing Law.  This Agreement shall be governed by and is to be
construed in accordance with the laws of the State of New York without giving
effect to conflict of law rules thereof.

 

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Section 12.  Arbitration.  Any dispute, controversy, or claim arising out of or
relating to this Agreement, or the breach, termination or invalidity thereof,
shall be finally settled by arbitration in Bermuda under the provisions of the
Bermuda Arbitration Act of 1986, as amended.

 

Either party to the dispute, once a claim or demand on its part has been denied
or remains unsatisfied for a period of twenty (20) calendar days by the other
party, may notify the other party of its desire to arbitrate the matter in
dispute and at the time of such notification the party desiring arbitration
shall notify the other party of the name of the Arbitrator nominated by it.  The
other party who has been so notified shall within fourteen (14) calendar days
thereafter nominate another Arbitrator and notify the party desiring arbitration
of the name of such second Arbitrator.  The two Arbitrators nominated by the
parties shall within fourteen (14) calendar days after the appointment of the
second Arbitrator choose a third Arbitrator.

 

The Arbitrators shall fix, on giving a reasonable notice in writing to the
parties involved, a time and place for the hearing in Bermuda and may prescribe
procedural rules governing the course and conduct of the arbitration proceeding,
including without limitation discovery by the parties.

 

The Arbitrators shall, within ninety (90) calendar days following the conclusion
of the hearing, render their decision on the matter or matters in dispute in
writing and shall cause a copy thereof to be served on all parties thereto.  In
case the Arbitrators fail to reach a unanimous decision, the decision of the
majority of the Arbitrators shall be deemed to be the decision of the
Arbitrators.

 

Each party shall bear the expense of its own Arbitrator.  The remaining joint
costs of the arbitration shall be borne equally by the parties to such
arbitration.

 

The decision of the Arbitrators shall be final and binding upon the parties and
the parties hereby agree to exclude any right of appeal under Section 29 of the
Arbitration Act of 1986 against any award rendered by the Arbitrators and
further agree to exclude any application under Section 30 (1) of the Arbitration
Act of 1986 for a determination of any question of law by the Supreme Court of
Bermuda

 

All awards of the Board of Arbitration may be enforced in the same manner as a
judgment or order from the Supreme Court of Bermuda and judgment may be entered
pursuant to the terms of the award by leave from the Supreme Court of Bermuda.

 

This Section shall survive the termination of this Agreement.

 

Section 13.  Notice.  As used in this Agreement, notice shall mean any and all
notices, requests, demands or other communications required or permitted to be
given hereunder.  All notices shall be in writing and shall be (i) delivered
personally, (ii) sent by an overnight delivery service, or (iii) sent by
confirmed facsimile transmission, addressed to the parties

 

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at the addresses set forth below.  Any such notice shall be deemed given (i) in
the case of personal delivery, when so delivered personally, (ii) if sent by
overnight delivery service, one day after delivery of such notice to such
service, and (iii) if sent by confirmed facsimile transmission, at the time of
transmission.

 

If to AGRI:

 

Assured Guaranty Re International Ltd.

30 Woodbourne Ave.

Fifth floor

Hamilton, Bermuda HM 08

Facsimile:  441-296-4004

Attention: Corporate Secretary

 

If to ACE Bermuda:

 

ACE Bermuda Insurance Ltd.

ACE Global Headquarters

17 Woodbourne Avenue

Hamilton, Bermuda HM 08

Facsimile:  441-295-5221

Attention:  General Counsel

 

AGRI and ACE Bermuda shall provide each other with wiring instructions for
monies to be transferred under this Agreement promptly after execution of this
Agreement and at the time of any change in such instructions.

 

Section 14.  Assignment.  This Agreement may not be assigned by either party
without the prior written consent of the other party.

 

Section 15.  Amendments.  This Agreement may not be modified or amended except
by mutual written consent of the parties.

 

Section 16.  Changes to First Excess of Loss Retrocession Agreement.  AGRI shall
not amend, modify, supplement or assign the First Excess of Loss Retrocession
Agreement without the prior written consent of ACE Bermuda (such consent not to
be unreasonably withheld).

 

Section 17.  Waivers.  The terms of this Agreement may be waived only with the
written consent of the party waiving compliance. No failure or delay in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.

 

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Section 18.  Entire Agreement; Rights and Remedies.  This Agreement constitutes
the entire agreement between the parties relating to the subject matter hereof
and supersedes all prior written and oral statements with respect hereto.  The
rights and remedies provided herein are cumulative and are not exclusive or any
rights or remedies that any party may have at law or in equity.

 

Section 19.  Counterparts.  This Agreement may be executed in any number or
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

Section 20.  Severability.  If any term, provision, covenant or condition of
this Agreement, or the application thereof to any party or circumstances, shall
be held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants and conditions shall continue in full
force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, but only if (a) this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and (b) the deletion of such
portion of this Agreement does not substantially impair the respective benefits
or expectations for the parties to this Agreement.

 

Section 21.  Further Assurances.  Each party hereto shall, at its own cost and
expense, execute and do all such deeds, documents, acts and things as the other
party may from time to time reasonably request as may be necessary to give full
effect to this Agreement.

 

[The next page is the signature page.]

 

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IN WITNESS WHEREOF, this Agreement has been signed by a duly authorized officer
of each of the parties as of the date hereof.

 

ASSURED GUARANTY RE INTERNATIONAL LTD.

 

 

By:

 

 

Name:

 

Title:

 

 

 

ACE BERMUDA INSURANCE LTD.

 

 

By:

 

 

Name:

 

Title:

 

 

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