Exhibit
10.17


 


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restated in its entirety, and replaced and superceded by this Agreement.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:


 

















 


(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:

  	
     /s/
  Pierre Samson

  	
   

  
	
   

  	
  Name:  Pierre Samson

  
	
   

  	
  Title:  President

  
	
   

  
	
   

  
	
  ACE
  BERMUDA INSURANCE LTD.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 

















 


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:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  ACE
  BERMUDA INSURANCE LTD.

  
	
   

  
	
   

  
	
  By:

  	
      /s/
  Andrew Gibbs

  	
   

  
	
   

  	
  Name:
  Andrew Gibbs

  
	
   

  	
  Title:  CFO