Exhibit 10.11


 


FORM OF
TAX SHARING
AGREEMENT


 


This TAX SHARING AGREEMENT (the ‘Agreement”),
dated March 
        , 2004, is by and among
Assured Guaranty Limited (“AGL”), a Bermuda corporation having its principal
office at 30 Woodbourne Avenue, Hamilton, Bermuda,  ACE Financial Services, Inc. (“AFS”), a Delaware corporation
having its principal office at 1325 Avenue of the Americas, New York, New York
10018, ACE Prime, Inc (“ACE Prime”), a Delaware corporation having its
principal office at 1209 Orange Street, Wilmington, Delaware, 19801, Assured
Guaranty US Holdings, Inc (“AG US Holdings”), a Delaware corporation having its
principal office at 1325 Avenue of the Americas, New York, New York 10018, ACE
Guaranty Corp. (“AGC”), a Maryland Corporation having its principal office at
1325 Avenue of the Americas, New York, New York 10018, AGR Financial Products
(“AGR FP”), a New York Corporation having its principal office at 1325 Avenue
of the Americas, New York, New York 10018, and ACE Risk Assurance (“ARA”), a New
York Corporation having its principal office at 1325 Avenue of the Americas,
New York, New York 10018 .


 


WITNESSETH:


 


WHEREAS, AG US Holdings,
AGC, AGR FP, and ARA have been members of an affiliated group of corporations
filing consolidated federal income tax returns with ACE Prime (the common
parent) within which AFS is the common parent of a subgroup comprised of AFS,
AG US Holdings, AGC, AGR FP and ARA;


 


WHEREAS, AGL is
acquiring all of the outstanding stock of AG US Holdings (the “Transfer”), the
direct parent of AGC and AGR FP, pursuant to a Master Separation Agreement
dated the date hereof among AFS and AGL (the “MSA”);


 


WHEREAS, upon
consummation of the Closing (defined below), AGL and AG US Holdings and
Subsidiaries will become members of a worldwide affiliated group of
corporations (the “Buyer Group”), of which AG US Holdings will be the common
parent of the affiliated US group within the Buyer Group,  and AG US Holdings and subsidiaries will
cease to be a member of the ACE Prime affiliated group which includes the AFS
subgroup;


 


WHEREAS, AFS and each of the AG US Holdings
and Subsidiaries were a party to the Amended and Restated Agreement Concerning
Filing of Consolidated Federal Income Tax Returns (“AFS Tax Sharing Agreement”)
dated November 13, 1995 with respect to the AFS subgroup included within the
ACE Prime consolidated US group; and


 


WHEREAS, the parties wish to assign
responsibility for the preparation and filing of tax returns; to set forth the
methodology for determining their respective liabilities for


 

















 


Taxes (defined below) and for
allocating such liabilities among themselves for all Taxes that may be owed to
or assessed by the Internal Revenue Service or any other comparable state or
local governmental authority attributable to the periods before, after and
including the Closing Date (defined below); to establish procedures for
reimbursing one party for Taxes allocated to the other under this Agreement;
and to provide for certain tax elections and for the division of any tax benefits
which may arise as a result of such elections;


 


NOW THEREFORE, in
consideration of the mutual covenants and agreements hereinafter set forth, the
parties hereby agree as follows:


 


1. Definitions. For
purposes of this Agreement, the following terms shall be defined as follows:


 


1.1           “AG US Holdings and Subsidiaries” means AG US Holdings, its
direct subsidiaries AGC and AGR FP, and its indirect subsidiary ARA.


 


1.2           “Buyer” means AGL, and any successors thereto.


 


1.3           “Closing” means the closing of the Transfer and the sale by AFS
of the stock of AGL to underwriters for public sale as described in the
Registration Statement on Form S-1 filed
            .


 


1.4           “Closing Date” means the date on which the Closing occurs.


 


1.5           “Code” means the Internal Revenue Code of 1986, as amended.


 


1.6           “Current
Amount” has the meaning specified in Section 8 hereof.


 


1.7           “Election”
has the meaning specified in Section 4 hereof.


 


1.8           “Estimated
Tax Payment Date” means any of the dates specified in Section 6655 of the Code
for the payment of Buyer’s or AG US Holdings and Subsidiaries’ estimated
federal income tax.


 


1.9           “Returns”
means all returns, declarations, reports, statements and other documents
required to be filed with a Tax Authority in respect of Taxes, and the term
“Return” means any one of the foregoing Returns.


 


1.10         “Tax
Authority” means the Internal Revenue Service or any other comparable state,
local or foreign governmental authority.


 


1.11         “Tax
Benefit Base Amount” for any Taxable Period means (i) any increase in an amortization,
depreciation or loss deduction in such


 

















 


Taxable Period
or any decrease in an item of income or gain in such Taxable Period arising as
a result of a basis increase occurring as a result of the Election, including
any basis increase arising from payments made pursuant to this Agreement, or
(ii) any increase in any net operating or capital loss carryover or carryback
or tax credit which is carried to such Taxable Period and which arose or arises
in a prior or subsequent Taxable Period as a result of any such increase in
deduction or decrease in income or gain in such prior or subsequent Taxable
Period.


 


1.12         “Tax Benefit Issue” has
the meaning specified in Section 9.3.1
hereof.


 


1.13         “Tax Benefits” means, for
any Taxable Period, the excess, if any, of (a) the total amount of federal,
state, local and foreign income and franchise taxes, respectively, that would
be payable by AG US Holdings and Subsidiaries in respect of such Taxable Period
if the Tax Benefit Base Amount for such Taxable Period were not taken into
account (“Notional Tax Liability”), over (b) the total amount of federal,
state, local and foreign income and franchise taxes, respectively, actually
payable by AG US Holdings and Subsidiaries in respect of such Taxable Period
after taking into account the Tax Benefit Base Amount for such Taxable Period
(“Actual Tax Liability”). Any Tax Benefits hereunder shall be determined using
the method of reporting (i.e. consolidated, combined or separate returns)
actually utilized by AG US Holdings and Subsidiaries or the particular member
of the AG US Holdings US affiliated Group. In any Taxable Period ending after
the Closing, the Tax Benefits shall be no less than the Tax Benefits calculated
without giving effect to any items of income, expense, loss, deduction or
credit of, or attributable to any businesses, assets or liabilities other than
(i) historic businesses conducted by AG US Holdings and Subsidiaries as of the
Closing, (ii) any assets held by AG US Holdings and Subsidiaries prior to the Closing,
(iii) any assets acquired by AG US Holdings and Subsidiaries from the ACE Prime
Group subsequent to the Closing, and (iv) any liabilities of AG US Holdings and
Subsidiaries as of the Closing or incurred or assumed by AG US Holdings and
Subsidiaries with respect to
any asset described in (iii) above.


 


1.14         “Taxable Period” means any taxable year ending after the date of
the Closing.


 


1.15         “Taxes” means any and all U.S. federal, state, local and foreign
taxes,


 

















 


assessments or similar charges, including
interest, additions to tax, and penalties, on, based on, measured by or with
respect to income, net worth or capital, and the term “Tax” means any one of
the foregoing Taxes.


 


1.16         “Underpayment
Rate” has the meaning specified in Section 9.3 hereof.


 


2. Tax Returns. AFS agrees to prepare and
file or cause to be prepared and filed timely any and all applicable Returns in
respect of AG US Holdings and Subsidiaries that (i) are required to be filed on
or before Closing; or (ii) are required to be filed after Closing that (A) are
required to include, on a consolidated or combined basis, the operations of AG
US Holdings and Subsidiaries for any tax period ending on or before Closing; or
(B) are required to be filed by AG US Holdings and Subsidiaries on a separate
return basis for any tax period ending on or before Closing. To the extent
requested by AFS in writing, AG US Holdings and Subsidiaries shall participate
in the filing of and, at the direction of AFS, shall file any required separate
basis Returns with respect to any period that ends on or before Closing. The
Buyer shall prepare or cause to be prepared the schedules in respect of AG US
Holdings and Subsidiaries containing the information necessary for AFS to
prepare any consolidated or combined returns. The Buyer shall also prepare or
cause to be prepared and shall file or cause to be filed all other Returns
required of AG US Holdings and Subsidiaries, or in respect of its activities,
for any Taxable Period ending after Closing that includes the operations of AG
US Holdings and Subsidiaries prior to Closing.


 


3. Obligation for Payment of Taxes.  AFS and AG US Holdings and its Subsidiaries
agree to the termination of the AFS Tax Sharing Agreement as of the Closing
date subject to the following provisions. 
The terms of the AFS Tax Sharing Agreement, including paragraphs 4 and 5
thereof regarding effects of termination, shall be adhered to for the timely
payment of Taxes covered thereunder subject to the following modifications:


 


(i)            AFS,  AGL and AG US Holdings and its Subsidiaries
agrees that the tax liability or benefit associated with any deferred
inter-company transactions under Internal Revenue Code Section 267 or 1502
triggered as a result of the Transfer will be the sole liability or benefit of
AFS.


 


(ii)           AFS,
AGL and AG US Holdings and its Subsidiaries agree that the tax liability
associated with the recapture of AGC’s contingency reserve deductions
previously taken for income tax purposes that will be triggered as a result of
the Election in Section 4 will be the sole liability of AFS.  Any proceeds associated with the sale of the
Tax and Loss bonds will be retained by AGC.


 


(iii)          All
Taxes associated with the Election in Section 4 will be the responsibility of
AFS.


 

















 


The terms under the AFS Tax
Sharing Agreement relating to the payment of the tax liability associated with
the tax period ending on the Closing Date (subject to the above modifications)
will continue until the final cash settlement for the period including the
Closing Date is completed based on a filed tax return for each of AG US
Holdings and Subsidiaries as included in the ACE Prime, Inc. and Subsidiaries
consolidated income tax return which includes the period ending on the Closing
Date.  All other Taxes will be the
responsibility of Buyer. The parties hereto will, to the extent permitted by
applicable law, elect with the relevant Tax Authority to treat for all purposes
the Closing Date as the last day of a taxable period of each of AG US Holdings
and its subsidiaries, and such period shall be treated as a “Short Period” for
purposes of this Agreement. In any case where applicable law does not permit AG
US Holdings and its subsidiaries to treat the Closing Date as the last day of a
Short Period, then for purposes of this Agreement, the portion of such Taxes
that is attributable to the operations of AG US Holdings and its subsidiaries
for such Interim Period (as defined below) shall be, the Taxes that would be
due with respect to the Interim Period, if such Interim Period were a Short
Period. “Interim Period” means with respect to any Taxes imposed on AG US
Holdings and its subsidiaries on a periodic basis for which the Closing Date is
not the last day of a Short Period, the period of time beginning on the first
day of the actual taxable period that includes (but does not end on) the
Closing Date and ending on and including the Closing Date.


 


4. Election Under Section 338 (h) (10). Buyer
and AFS shall timely make or cause to be made a valid joint election under
Section 338(h) (10) of the Code and under any comparable provisions of state
law in respect of the Transfer so as to have the transfer treated as a deemed
sale of assets of AG US Holdings and each of its subsidiaries and the deemed
asset sale gain recognized in ACE Prime’s consolidated federal income tax
return and any relevant state income or franchise tax returns that include the
Short Period for AG US Holdings and each of its subsidiaries ending on the
Closing Date (collectively, the “Election”).


 


5. Valuation and Allocation of Consideration.
The parties agree that the “aggregate deemed sale price” and “adjusted
grossed-up basis” (as such terms are defined in the regulations under Section
338 of the Code) with respect to the Transfer and Election shall be determined
by AFS, such determination to be made, in part, based on allocable proceeds of
the sales price per share of the common stock of AGL in the initial public
offering of such stock. The value of the consideration shall be allocated among
the assets of AG US Holdings and each of its subsidiaries as indicated on a
schedule (the “Tax Allocation Schedule”) to be prepared by AFS and delivered to
AG US Holdings and each of its subsidiaries no later than sixty days prior to
the date the Election must be filed, subject to adjustment by AFS to the extent
necessary to make such allocations consistent with any post-Closing
adjustments. The parties agree that any and all payments made pursuant to this
Agreement with respect to Tax


 

















 


Benefits shall be treated as an
adjustment to the “aggregate deemed sale price” and allocated in accordance
with the terms of the Tax Allocation Schedule. Absent a final and unappealable
decision, judgment, decree or other order by any court of competent
jurisdiction or a closing agreement under Section 7121 of the Code to the
contrary, the parties (i) shall be bound by such allocation for purposes of
determining any Taxes and (ii) shall prepare and file all Returns in a manner
consistent with such allocation. In the event that any Tax Authority disputes such
allocation, the party receiving notice of such dispute shall promptly notify
and consult with the other party hereto concerning resolution of such dispute.


 


6. Tax Reporting. AFS and AGL (including the
post election tax returns of AG US Holdings and Subsidiaries) shall file, or
cause to be filed, its respective federal income tax Returns treating the
Transfer as a purchase of the assets of AG US Holdings and Subsidiaries
pursuant to Sections 338(a) and 338(h) (10) of the Code. AFS and AGL (including
the post election tax returns of AG US Holdings and Subsidiaries) shall file,
or cause to be filed, on a similar basis all state and local tax returns to the
extent that such treatment is consistent with such state and local tax law.


 


7. Liability for
Assessments or Refunds. AFS shall pay any assessments for income Taxes incurred
(subsequent to AG US Holdings and Subsidiaries satisfying its obligations under
Section 3) and be entitled to receive all refunds of income Taxes (i) with
respect to all periods ending on or prior to the Closing Date; and (ii) with
respect to any period beginning before the Closing Date and ending after the
Closing Date, but only with respect to the portion of such period up to and
including the Closing Date for which Taxes are allocated to AFS in accordance
with Section 3 above. AFS shall have sole and exclusive discretion at its
expense to contest or not to contest, negotiate and settle proposed adjustments
relating to the inclusion in any Return of the income, deductions, credits, allowances
or other tax items of AG US Holdings and subsidiaries for any period ending
prior to or on the Closing Date.


 


8. Tax Benefit Sharing Payment to AFS.


 


8.1           Estimated Tax Payments.  AG US Holdings and Subsidiaries shall pay to
AFS, on each Estimated Tax Payment Date, an amount equal to the estimated Tax
Benefits for the applicable Taxable Period. For this purpose, 25 percent (or,
in the case of Taxable Periods of less than one year, one divided by the number
of Estimated Tax Payment Dates in such Period) of Tax Benefits as then
estimated for the applicable Taxable Period shall be deemed to accrue and the
applicable percentage thereof set forth in the preceding sentence shall be paid
at each Estimated Tax Payment Date. For the avoidance of doubt, estimated Tax
Benefits shall be calculated utilizing the notional/actual method set forth in
Section 1.13 above and using consistent methods and assumptions between periods
and notional/actual comparisons.


 

















 


8.2           Current Amount Adjustment. At the time AG US
Holdings and Subsidiaries or successors files its federal income tax return for
each Taxable Period, to the extent that the amounts paid to AFS pursuant to
Section 8.1 hereof for such Taxable Period exceeded the Tax Benefits for the
applicable Taxable Period (the “Current Amount”), such excess amounts paid
shall be refunded together with interest at the Underpayment Rate from the
close of such Taxable Period by AFS to AG US Holdings. To the extent that the
amounts paid to AFS pursuant to Section 8.1 hereof for such Taxable Period were
less than the Current Amount, such deficit in amounts paid shall be paid to AFS
by AG US Holdings together with interest at the Underpayment Rate from the
close of such Taxable Period.


 


8.3           Tax Computation Assumptions. When allocation
factors are required for any tax computation, the factors used in AG US
Holdings’ most recently filed consolidated Return or the affected member of AG
US Holdings and Subsidiaries most recently filed Returns in the relevant
jurisdictions shall be used.


 


8.4           Subsequent Transactions by Buyer. Buyer
agrees that it shall not enter into any transactions a significant effect of
which is to reduce the amount of the Tax Benefits otherwise payable to AFS
under this Agreement.


 


8.5           Benefit Estimates. AG US Holdings and
Subsidiaries shall prepare and deliver to AFS no less than 60 days prior to the
end of each calendar year, an estimate of the amount of the Tax Benefits that
will be payable to AFS during the immediately following year, such estimate to
be agreed upon by the parties in good faith and subject to the provisions of
Section 9.3.3. AG US Holdings and Subsidiaries shall revise and update each
such estimate on a quarterly basis to be delivered to AFS no less than 15 days
prior to the end of each quarter, such revision or update to be agreed upon by
the parties in good faith and subject to the provisions of Section 9.3.3.


 


8.6           Payments in General. All payments to AFS
pursuant to this Agreement shall be made directly by wire transfer of
immediately available funds prior to 10:30 A.M., New York time, on the date of
payment, to
                            ,
for the account of
                        ,  Account No. 
                        
(or such other account as directed by AFS)


 


8.7           Termination Payment. As promptly as
practicable following close of the fifteenth taxable year of Buyer ending after
the Closing Date, Buyer and AFS shall negotiate in good faith to reach an
agreement which requires Buyer to pay AFS an amount, if any, equal to the then
present value (determined by using the then current Underpayment Rate) of the
aggregate Tax Benefits which AG US Holdings and Subsidiaries would reasonably be expected to
realize as a result of the Election in any taxable year beginning after Buyer’s
fifteenth taxable year ending after the Closing Date, in consideration of Buyer
and AG US Holdings and Subsidiaries being relieved thereafter of its future
obligations under this Section 8.


 

















 


9.             Tax Issues Arising After the Closing
Date.


 


9.1           Mutual Cooperation. The parties
agree to consult in good faith and to provide each other with such assistance
as reasonably may be requested in writing by any of them in connection with (i)
the preparation and execution of any Return, (ii) the negotiation and
settlement of any audit or other examination of any Return by any Tax
Authority, or (iii) the handling of any judicial or administrative proceeding
relating to any Tax liability for periods of AG US Holdings and Subsidiaries
prior to the Closing Date. The parties’ general obligation to cooperate shall
require, but not be limited to requiring, each party (i) to notify the other of
any Tax Authority’s initiating an audit, requesting information or proposing
adjustment, or any extension of statutes of limitation and of final determinations
of adjustment, (ii) to preserve records, documents and other information
relevant to liabilities for Taxes until the expiration of the applicable
statute of limitations or extensions thereof and to provide, upon written
request, copies of such records and/or reasonable access thereto, (iii) to make
available without charge at a location determined by Buyer or AG US Holdings
and Subsidiaries during normal working hours, upon written request, personnel
responsible for preparing, maintaining, or explaining information, records and
documents in connection with matters relating to Taxes, and (iv) to execute and
deliver such powers of attorney, consents, and other documents as are necessary
to carry out the intent of this Agreement.


 


9.2           Buyer’s and AG US Holdings and
Subsidiaries’ Discretion to Contest, Negotiate and Settle. Buyer and AG US
Holdings and Subsidiaries’ shall have sole and exclusive discretion to contest
or not to contest, negotiate and settle proposed adjustments relating to the
inclusion in any Return of the income, deductions, credits, allowances or other
tax items of AG US Holdings and Subsidiaries for any period after the Closing
Date, subject to Sections 7 and 9.3 hereof.


 


9.3           Contesting Disputed Tax Benefits.


 


9.3.1 Control
of Proceedings. In the event that the Internal Revenue Service or a state Tax
Authority disputes the existence or amount of the Tax Benefit Base Amount or of
any Tax Benefits, including any challenge to the Tax Allocation Schedule (the
“Tax Benefit Issue”), Buyer or AG US Holdings and Subsidiaries shall contest
the matter on audit, through Internal Revenue Service or state appellate
proceedings and through judicial proceedings. Representatives of AFS shall be
allowed to participate in such proceedings in so far as they relate to the Tax
Benefit Issue and such participation shall be reflected by the grant of
appropriate powers of attorney. Decisions regarding the conduct of such contest
shall be made by AFS or its representatives after consultation with Buyer and
its representatives, provided, however, that ultimate control over contesting
the Tax Benefit Issue, including control over procedural matters that
necessarily relate to all issues being contested (including, without
limitation, choice of forum), shall be exercised in good faith by AFS and its
representatives, and Buyer and AG US Holdings and Subsidiaries shall take any
action as is necessary to effectuate the decisions of AFS. Decisions relating
solely to tax issues unrelated


 

















 


to the Tax Benefit Issue shall
be made exclusively by Buyer and its representatives, provided, however, that
such decisions could not reasonably have an adverse tax consequence on the Tax
Benefits Issue. Decisions regarding the settlement of a contest of the Tax
Benefit Issue shall be made jointly by AFS and Buyer and their respective
representatives, provided, however, that if AFS or Buyer declines a settlement
proposal relating to the Tax Benefit Issue that the other wishes to accept, the
contest will continue and the declining party will (i) bear all further contest
costs, (ii) indemnify the party wishing to accept the settlement against any outcome more
adverse than that of the proposed settlement, and (iii) be entitled to all
benefits more advantageous than those of the proposed settlement.


 


9.3.2 Adverse Outcome and Repayment. If, as
the result of a contest subject to Section 9.3.1, Tax Benefits are less than
those taken into account in computing any payments made under Section 8 hereof,
such payments will be recomputed on the basis of such revised Tax Benefits, and
any excess payments shall be refunded by AFS to AG US Holdings and Subsidiaries
together with any related penalties imposed by a Tax Authority. Interest shall
be payable at the rates prescribed for underpayments in Section 6621(a) of the
Code (the “Underpayment Rate”) with respect to Tax Benefits or at the
corresponding state underpayment rate in connection with revisions relating to
state tax revisions.


 


9.3.3 Resolution of Computational Disputes.
If the parties hereto are unable to agree on the amount of the Tax Benefit Base
Amount or of any Tax Benefits reflected in an estimate delivered pursuant to
Section 8.5 (the “Disputed Amount”), the determination of such Disputed Amount
shall be made by an independent firm of certified public accountants jointly
selected by AFS and AG US Holdings and Subsidiaries, whose cost shall be borne
equally by AFS and AG US Holdings and Subsidiaries. Each party shall bear their
own amount of all other costs arising in connection with a dispute under this
Section 9.3.3. If AFS and AG US Holdings and Subsidiaries cannot agree on the
selection of an independent firm of certified public accountants, such firm
will be jointly selected by the firms of certified public accountants that
certify (or selected by the firm of certified public accountants that
certifies) the financial statements of AFS and Buyer and that is other than the
selecting firm(s). Such accountants shall be given access by AFS, Buyer and
their respective subsidiaries to all information necessary to determine the
Disputed Amount, subject to the agreement of such accountants that such
information shall be kept confidential and shall not be released without the
written consent of AFS or Buyer, as appropriate, except as compelled by legal
process. Any amount otherwise due under this Agreement that is a Disputed
Amount shall be paid, together with interest at the Underpayment Rate from the
date on which such payment was originally due, within 10 days of the
determination of such Disputed Amount.


 


9.3.4
Expenses. Except as otherwise provided in this Agreement, fees and expenses
paid to third-party service providers and incurred after the date hereof by
AFS, Buyer or any of their subsidiaries for the purpose of obtaining the Tax
Benefits, including, without limitation, legal and accounting expenses relating
to the resolution of any dispute with any


 

















 


Tax Authority regarding a Tax
Benefit Issue or any related activity shall be borne by AFS in the same
percentage as the Tax Benefits in controversy bears to the Tax Benefits paid to
AFS pursuant to this Agreement for such Taxable Period. All other such fees and
expenses shall be borne by Buyer. Notwithstanding the above, the obligation of
any party to bear any portion of such fees or expenses related to service
providers not retained by it shall be contingent upon prior written
approval by such party of the retention of any such advisers.


 


9.4           Attorney’s Fees. AFS on the one hand
and AG US Holdings and Subsidiaries and Buyer on the other hand shall, upon a
breach of this Agreement, in addition to other penalties, damages or
liabilities, be responsible for and shall pay (or cause to be paid) to the
non-breaching party an amount equal to reasonable out-of-pocket attorney’s fees
actually incurred by such party in its efforts to enforce its rights under this
Agreement.


 


10.           Construction. Each of the parties hereto
agree that (i) the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation or construction of this Agreement, and (ii) except as
specifically provided in this Agreement,
no usage of trade, course of dealing, course of performance or enforcement or
surrounding circumstance shall be used in interpreting or construing this
Agreement.


 


11.           Notices. Any notice required under
any provision of this Agreement shall be made in the manner provided in the
section entitled “Notices” in the Stock Agreement.


 


12.           Governing Law. This Agreement shall be
governed by and construed in accordance with the law of the State of New York
applicable to contracts made and to be performed therein, without effect to its
choice of law.


 


13.           Binding Effect; Successors. This
Agreement shall be effective as of the date of this Agreement and shall apply
to the first taxable year, or portion thereof, beginning on or after the
Closing and shall be binding upon and inure to the benefit of any successor, by
merger, acquisition of assets or otherwise, to any of the parties hereto (including
but not limited to any successor of AFS, AG US Holdings and Subsidiaries or
Buyer succeeding to the tax attributes of AFS, AG US Holdings and Subsidiaries
or Buyer under Section 381 of the Code) , to the same
extent as if such successor had been an original party to the Agreement. In
addition, in the event of any acquisition of the assets of AGC US Holding and
Subsidiaries in which gain or loss is not recognized, in whole or in part, for
federal income tax purposes, AG US Holdings and Subsidiaries and Buyer shall
ensure that any purchaser of such assets shall assume the obligations set forth
in this Agreement. Any other tax sharing agreement other than as referenced in
Section 3, or provision of such tax sharing agreement other than as referenced
in Section 3, among any parties to this Agreement or their predecessors, shall
have no force and effect for any taxable years, or portions thereof, beginning
on or after the Closing.


 

















 


14.           Severability. In the event that any
term or provision of this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein.


 


15.           Headings.
The headings in the sections of this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof.


 


16            Amendments.  This Agreement may not be modified or amended except by agreement
in writing signed by each of the parties hereto.


 


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


 


 


	
  ACE Financial Services, Inc.

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Assured Guaranty Limited

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Assured Guaranty US Holdings, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  ACE Guaranty Corp.

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


	
  AGR Financial Products, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  ACE Risk Assurance

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  ACE Prime, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title