Document:

Exhibit 10.9

 

TRANSITION
SERVICES AGREEMENT

 

THIS TRANSITION SERVICES AGREEMENT (the “Agreement”)
is entered into as of the 27th day of April, 2004, between Assured Guaranty
Ltd., a Bermuda company (the “Company”), and ACE Limited, a Cayman Islands
corporation (“ACE”).

 

RECITALS

 

A.            The
Company and ACE and certain Affiliates of ACE are parties to that certain
Master Separation Agreement, dated as of April 27, 2004 (the “Separation
Agreement”), pursuant to which it is contemplated that the Company will make a
Public Offering of the Company’s Common Shares held by Subsidiaries of
ACE.  Terms used but not defined herein
have the meanings given to them in the Separation Agreement.

 

B.            The
Company and its Subsidiaries, as wholly-owned Subsidiaries of ACE, have previously
received certain administrative, support and other services from ACE and its
Affiliates.

 

C.            In
order to effect an orderly transition by the Company to a separate, stand-alone
entity following the Public Offering, each of the parties hereto desires that
certain services previously provided by the other party or its Affiliates be
provided for a period of time following the Closing Time.  For purposes of this Agreement, the party
providing the services, directly or through an Affiliate, shall be referred to
as the “Service Provider,” and the party receiving the services shall be
referred to as the “Service Receiver.”

 

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

 

ARTICLE 1

SERVICES

 

1.1           Services.  Subject to the terms and conditions of this
Agreement, each Service Provider, acting through its and/or its Affiliates’
respective employees, agents, contractors or independent third parties, agrees
to provide or cause to be provided to the Service Receiver and its Post-Closing
Subsidiaries the services set forth in Schedule 1.1 hereto (all of such
services plus any additional services provided pursuant to Section 1.3 are collectively
referred to herein as the “Services”). 
At all times during the performance of the Services, all Persons
performing such Services (including agents, temporary employees, independent
third parties and consultants) shall be construed as being independent from the
Service Receiver and its Affiliates, and such Persons shall not be considered
or deemed to be an employee of the Service Receiver or its Affiliates nor
entitled to any employee benefits of the Service Receiver or its Affiliates as
a result of this Agreement.

 

1.2           Service Coordinators. Each
party will nominate a representative to act as the primary contact Person with
respect to the provision of the Services as contemplated by this Agreement (the
“Service Coordinators”). The initial Service Coordinators shall be James

 

 

Michener for the Company and its Affiliates and Andy
Gibbs for ACE and its Affiliates. 
Unless the Company and ACE otherwise agree, ACE and the Company agree
that all notices and communications relating to this Agreement other than those
day to day communications and billings relating to the actual provision of the
Services shall be directed to the Service Coordinators in accordance with
Section 5.5 hereof.

 

1.3           Additional Services. From the
date hereof until 12 months following the Closing Time, the Company and its
Affiliates may request additional Services from ACE and its Affiliates by
providing written notice. Upon mutual agreement as to the cost, duration and
scope of such additional Services, ACE and the Company may supplement in
writing Schedule 1.1 hereto to include such additional Services.

 

1.4           Third Party Services.  The Service Providers shall have the right
to hire third party subcontractors to provide all or part of any Service
hereunder; provided, that, in the event such subcontracting is inconsistent
with past practices and the practice applied by the Service Provider generally
from time to time within its own organization, the Service Provider obtains the
prior written consent of the Service Receiver, which consent shall not be
unreasonably withheld.

 

1.5           Standard of Performance;
Limitation of Liability. The Services to be provided hereunder shall be
performed with the same general degree of care as when performed within the
Service Provider’s organization. In the event a Service Provider or its
Affiliates fails to provide the Services in accordance herewith, the sole and
exclusive remedy of the Service Receiver and its Affiliates shall be to, at the
Service Receiver’s sole discretion, either (i) have the Service reperformed, or
(ii) not pay for such Service, or if payment has already been made, receive a
refund of the payment made therefor; provided, that in the event the Service
Receiver defaults in the manner described in Section 3.3(i), the Service
Provider shall have the further rights set forth in Section 3.3; and provided
further, that in the event the Service Provider defaults in the manner
described in Section 3.3(ii), the Service Receiver shall have the further
rights set forth in Section 3.3. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION
1.5, NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, IMPLIED OR EXPRESSED, ARE
MADE BY A SERVICE PROVIDER OR ITS AFFILIATES WITH RESPECT TO THE SERVICES UNDER
THIS AGREEMENT AND ALL SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY WAIVED AND
DISCLAIMED. EACH SERVICE RECEIVER, ON ITS OWN BEHALF AND BEHALF OF ITS
AFFILIATES, HEREBY EXPRESSLY WAIVES ANY RIGHT THE SERVICE RECEIVER OR ANY OF
ITS AFFILIATES MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC
PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW OR IN
EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE PERFORMANCE, FAULTY
PERFORMANCE OR OTHER FAILURE OR BREACH BY A SERVICE PROVIDER OR ITS AFFILIATES
UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE NEGLIGENCE (WHETHER
SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR GROSS NEGLIGENCE OF A
SERVICE PROVIDER OR ITS AFFILIATES OR ANY OTHER PERSON INVOLVED IN THE
PROVISION OF SERVICES AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT,
UNDER FEDERAL, STATE OR FOREIGN LAWS OR OTHER STATUTE OR OTHERWISE.

 

2

 

1.6           Conflict with Laws.
Notwithstanding any other provision hereof, a Service Provider shall not be
required to provide a Service to the extent the provision thereof would violate
or contravene applicable law. To the extent that the provision of any such
Service would violate applicable law, the parties agree to work together in
good faith to provide such Service in a manner that would not violate any law.

 

ARTICLE 2

FEES; PAYMENTS

 

2.1           Fees. Each Service will be
provided at the price indicated in Schedule 1.1 or as otherwise agreed pursuant
to Section 1.3.

 

2.2           Payments. Charges for Services
shall be invoiced monthly by the Service Provider or its Affiliate providing
the Service. The Service Receiver shall make the corresponding payment no later
than 30 calendar days after receipt of the invoice.  Invoices shall be directed to the applicable “Invoice Contact”
designated in Schedule 1.1 or such other person designated in writing from time
to time by the Service Coordinator for the Service Receiver. The invoice shall
set forth in reasonable detail for the period covered by such invoice: (i) the
Services rendered, (ii) the basis for the calculation of the costs (if
otherwise than set forth on Schedule 1.1), and (iii) such additional
information as the Service Receiver may reasonably request at least 30 days in
advance of the billings for a particular Service. In the event there is any
dispute with respect to an invoice, the Service Receiver shall make the payment
for all non-disputed portions in accordance herewith.

 

ARTICLE 3

TERM; TERMINATION OF SERVICES

 

3.1           Term. The term of this
Agreement shall commence effective as of the Closing Time and shall continue in
force until the termination of all Services in accordance with the duration of
such Services set forth in Schedule 1.1 or as otherwise set forth herein or
agreed by the parties pursuant to Section 1.3.

 

3.2           Discontinuation of Services.  A Service Receiver may, upon written notice
to the Service Provider, elect to discontinue any individual Service from time
to time.  Except for Services for which
a duration is specified in Schedule 1.1 or otherwise agreed by the parties
pursuant to Section 1.3, a Service Provider may, upon 30 days’ written notice,
elect to discontinue providing a Service from time to time.

 

3.3           Termination for Default. In
the event (i) of a failure of the Service Receiver to pay for Services in
accordance with the terms of this Agreement, or (ii) of a failure of the
Service Provider to perform, or cause to be performed, the Services in
accordance with the terms of this Agreement, then in either case the
non-defaulting party shall have the right, at its sole discretion, to terminate
this Agreement if the defaulting party has (A) failed to cure the default
within 30 days of receipt of written notice of the default (which notice must
include a statement that it constitutes a notice of default under this
Agreement) or, (B) if such default is not reasonably

 

3

 

susceptible to cure within a 30 day period, taken
action within 30 days of receipt of the written notice of default reasonably
designed to cure such default as soon as is reasonably practicable. The right
to terminate this Agreement set forth in the immediately preceding sentence and
the rights set forth in Section 1.5 shall constitute the sole and exclusive
rights and remedies for a breach hereunder (including without limitation any breach
caused by an Affiliate of a Service Provider or other third party providing a
Service hereunder).

 

ARTICLE 4

INDEMNIFICATION

 

4.1           Personal Injury.  EACH PARTY (AS AN INDEMNIFYING PARTY) SHALL
ASSUME ALL LIABILITY FOR AND SHALL RELEASE, DEFEND, INDEMNIFY AND HOLD THE
OTHER PARTY, ITS AFFILIATES AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS
AND AGENTS (ALL AS INDEMNIFIED PARTIES) FREE AND HARMLESS FROM AND AGAINST ALL
LOSSES ARISING OUT OF OR RELATING TO ANY INJURY TO OR DEATH OR SICKNESS OF ANY
EMPLOYEE, AGENT OR REPRESENTATIVE OF THE INDEMNIFYING PARTY, ITS AFFILIATES OR
THEIR CONTRACTORS OR SUBCONTRACTORS ARISING IN CONNECTION WITH THE SERVICES AND
WHETHER OR NOT CAUSED BY THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR
ACTIVE OR PASSIVE) OR GROSS NEGLIGENCE OF THE INDEMNIFIED PARTIES, EXCEPT TO
THE EXTENT SUCH LOSS IS CAUSED BY THE WILLFUL MISCONDUCT OF AN INDEMNIFIED
PARTY.

 

4.2           Property Damage. EACH PARTY
(AS AN INDEMNIFYING PARTY) SHALL ASSUME ALL LIABILITY FOR AND SHALL RELEASE,
DEFEND, INDEMNIFY AND HOLD THE OTHER PARTY, ITS AFFILIATES AND THEIR RESPECTIVE
EMPLOYEES, OFFICERS, DIRECTORS AND AGENTS (ALL AS INDEMNIFIED PARTIES) HARMLESS
FROM AND AGAINST ALL LOSSES ARISING OUT OF OR RELATING TO ANY LOSS OF OR DAMAGE
TO PROPERTY OWNED BY SUCH INDEMNIFYING PARTY, ITS AFFILIATES, THEIR CONTRACTORS
OR SUBCONTRACTORS OR THEIR RESPECTIVE EMPLOYEES, AGENTS OR REPRESENTATIVES,
ARISING IN CONNECTION WITH THE SERVICES AND WHETHER OR NOT CAUSED BY THE
NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OR GROSS
NEGLIGENCE OF THE INDEMNIFIED PARTIES, EXCEPT TO THE EXTENT SUCH LOSS IS CAUSED
BY THE WILLFUL MISCONDUCT OF AN INDEMNIFIED PARTY.

 

ARTICLE 5

 

MISCELLANEOUS

 

5.1           Confidentiality. The Company
and ACE each acknowledge and agree that the terms of Section 9.3 of the
Separation Agreement shall apply to information, documents, plans and other
data made available or disclosed by any member of the Company Group or the ACE
Group in connection with this Agreement.

 

4

 

5.2           Force  Majeure. Continued performance of a Service may be suspended
immediately to the extent caused by any event or condition beyond the
reasonable control of the party suspending such performance, including acts of
God, fire, labor or trade disturbance, war, civil commotion, compliance in good
faith with any law, unavailability of materials or other event or condition
whether similar or dissimilar to the foregoing (a “Force Majeure Event”). The
party claiming suspension due to a Force Majeure Event will give prompt notice
to the other of the occurrence of the Force Majeure Event giving rise to the
suspension and of its nature and anticipated duration. The parties shall
cooperate with each other to find alternative means and methods for the
provision of the suspended Service.

 

5.3           Automatic Termination.
Notwithstanding any provision of this Agreement to the contrary, this Agreement
shall terminate automatically in the event the Separation Agreement is
terminated prior to the Closing Time. In the event of such termination, no
party shall have any liability of any kind to any other party on account of
such termination.

 

5.4           Governing Law. This Agreement
shall be governed by, and construed in accordance with, the laws of the state
of New York, without regard to its conflict of laws principles.

 

5.5           Notices.  All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand (with receipt confirmed), or by certified
mail, postage prepaid and return receipt requested, or facsimile transmission
addressed as follows (or to such other address as a party may designate by
written notice to the others) and shall be deemed given on the date on which such
notice is received:

 

If to ACE:

 

ACE Limited

ACE Global Headquarters

17 Woodbourne Avenue

Hamilton HM08 Bermuda

Attention:  General Counsel

Facsimile:  (441) 296-7799

 

If to the Company:

 

Assured Guaranty Ltd.

30 Woodbourne Avenue

Hamilton HM08 Bermuda

Attention:  General Counsel

Facsimile:  (441) 296-1083

 

5.6           Amendment and Modification.  The parties may by written agreement,
subject to any regulatory approval as may be required, (a) extend the time for
the performance of any of the obligations or other acts of the parties hereto;
and (b) waive compliance with or modify, amend or supplement any of the
agreements contained in this Agreement or waive or modify

 

5

 

performance of any of the obligations of any of the
parties hereto.  This Agreement may not
be amended or modified except by an instrument in writing duly signed on behalf
of the parties hereto.

 

5.7           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

5.8           No Third Party Beneficiaries.  This Agreement is solely for the benefit of
the parties hereto and shall not be deemed to confer upon third parties any
remedy, claim, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.

 

5.9           Headings.  The Article and Section headings contained
in this Agreement are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.

 

5.10         Severability.  To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remaining provisions of this Agreement shall be unaffected and
shall continue in full force and effect.

 

5.11         Waiver.  No failure by any party to take any action
or assert any right hereunder shall be deemed to be a waiver of such right in
the event of the continuation or repetition of the circumstances giving rise to
such right, unless expressly waived in writing.

 

5.12         Entire Agreement.  This Agreement, the Separation Agreement and
the Ancillary Agreements constitute the entire agreement of the parties hereto
with respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between ACE and the Company
with respect to the subject matter hereof and thereof.

 

5.13         Assignment of this Agreement.  No party may assign this Agreement without
the express written consent of the other party.

 

5.14         Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.

 

[Intentionally
left blank]

 

6

 

IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the day and year first above written.

 

	
   

  	
  ACE LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter
  Mear

  	
   

  
	
   

  	
  Name:

  	
  Peter Mear

  	
   

  
	
   

  	
  Title:

  	
  General
  Counsel and Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY
  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  B. Mills

  	
   

  
	
   

  	
  Name:

  	
  Robert B.
  Mills

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  	
   

  
								

 

 

Schedule 1.1

 

Services

 

Services Provided by ACE Limited and
Subsidiaries to Assured Guaranty Ltd. and Subsidiaries

 

	
  Service

  Provider

  	
   

  	
  Service

  Recipient(s)

  	
   

  	
  Service

  	
   

  	
  Fee

  	
   

  	
  Duration

  	
   

  	
  Invoice

  Contact

  
	
  ACE American
  Insurance Company

  	
   

  	
  Assured
  Guaranty Ltd. and Subsidiaries

  	
   

  	
  Tax
  consulting and compliance services consistent with tax consulting and
  compliance services historically provided by ACE American to Subsidiaries of
  Assured Guaranty Ltd., including without limitation providing U.S. and
  international tax advice, preparing tax returns, responding to inquiries from
  tax authorities and assisting with tax audits.  In addition, ACE American will assist Assured Guaranty Ltd. in
  transitioning the tax consulting and compliance function to a tax
  professional to be hired by Assured Guaranty Ltd. or one of its subsidiaries.

  	
   

  	
  Pro rata
  portion of ACE American’s tax department’s budget, based on time spent
  servicing Assured Guaranty Ltd. and Subsidiaries.  Billings will be based on estimated budget, with a true-up at
  year end.  Estimated monthly amount
  for 2004 is $36,072.

  	
   

  	
  May 1, 2004
  through September 15, 2005

  	
   

  	
  Madlyn  Boccio

  
	
  ACE American
  Insurance Company

  	
   

  	
  Assured
  Guaranty Ltd. and Subsidiaries

  	
   

  	
  PeopleSoft
  functional services consistent with PeopleSoft functional services
  historically provided by ACE American to Subsidiaries of Assured Guaranty
  Ltd., including without limitation:  

  	
   

  	
  $4,333 per
  month.

  	
   

  	
  May 1, 2004 through
  April 30, 2005.

  	
   

  	
  Madlyn  Boccio

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  •  Chartfield (chart of
  accounts) and tree maintenance

  •  Configuration maintenance

  •  Report maintenance and
  updates

  •  Validation and testing of
  enhancements constructed by the IT teams

  •  Assistance with minor
  development efforts and continuous functionality

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACE American
  Insurance Company

  	
   

  	
  Assured
  Guaranty Ltd. and Subsidiaries

  	
   

  	
  Information
  Technology Services as follows:

   

  PeopleSoft
  information technology services consistent with PeopleSoft information
  technology services historically provided by ACE American to Subsidiaries of
  Assured Guaranty Ltd., including without limitation:

   

  •  Helpdesk support (7 a.m. to 7 p.m.)

   

  •  Hardware and software
  hosting 

  •  Application maintenance and
  tuning

  •  Use
  of PeopleSoft software

  •  Connection
  to ACE network

   

  Three
  off-site user licenses for NILS INSource (vendor is 

  	
   

  	
  $19,000 per
  month.

  	
   

  	
  May 1, 2004
  through April 30, 2005.

  	
   

  	
  Madlyn  Boccio

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  CCH
  Insurance Services)

  

  Use of the products described on Annex A to this Schedule 1.1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACE
  Financial Solutions International Ltd.

  	
   

  	
  Assured
  Guaranty Ltd. and Assured Guaranty Re International Ltd.

  	
   

  	
  General and
  administrative expense payments consistent with general and administrative
  expense payments services historically provided by ACE Financial Solutions
  International to Assured Guaranty Re International Ltd.

  	
   

  	
  $1,336 per
  month through December 31, 2004.  Fee
  thereafter will be calculated based on a pro rata portion of the salaries of
  AFSI staff involved in general and administrative expense payments.

  	
   

  	
  May 1, 2004
  through April 30, 2005.

  	
   

  	
  Gary Burnett

  
	
  ACE Limited

  	
   

  	
  Assured
  Guaranty Ltd. and Assured Guaranty Re International Ltd.

  	
   

  	
  Human
  Resources services consistent with such services historically provided by ACE
  Limited to Assured Guaranty Re International Ltd., including without
  limitation:

   

  •  Employee recruitment and orientation

  •  Administration of Performance Management
  Process

  •  Compliance with relevant Bermuda
  employment laws and regulations

   

  Compensation
  and Benefits services consistent with such 

  	
   

  	
  $4,102 per
  month.

  	
   

  	
  May 1, 2004
  through December 31, 2004.

  	
   

  	
  Jim Michener

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  services
  historically provided by ACE Limited to Assured Guaranty Re International
  Ltd., including without limitation:

   

  •  Processing and payment of monthly salaries
  and benefits

  •  Compliance with relevant income tax laws

  •  Consulting in connection
  with Assured Guaranty Ltd.’s equity program

  •  Monthly analysis of salary
  and expense variances

  •  Guidance and direction in annual budget
  process (i.e., annual increases, bonus levels, etc.)

  •  Assist in management of employee benefit
  vendors (e.g., UBS)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACE
  Financial Solutions International Ltd.

  	
   

  	
  Assured
  Guaranty Ltd. and Assured Guaranty Re International Ltd.

  	
   

  	
  Information
  technology services as outlined in the Service Level Agreement attached
  hereto as Annex B

  	
   

  	
  Per Annex B.

  	
   

  	
  May 1, 2004
  through April 30, 2005.

  	
   

  	
  Gary Burnett

  

 

 

Services Provided by Assured Guaranty Ltd.
and Subsidiaries to ACE Limited and Subsidiaries

 

	
  Service

  Provider

  	
   

  	
  Service

  Recipient(s)

  	
   

  	
  Service

  	
   

  	
  Fee

  	
   

  	
  Duration

  	
   

  	
  Invoice

  Contact

  
	
  Assured
  Guaranty US Holdings Inc.

  	
   

  	
  ACE
  Financial Services Inc.

  	
   

  	
  Servicing of
  Mandatory Income Preferred Shares

  	
   

  	
  No fee

  	
   

  	
  May 1, 2004
  to December 31, 2004

  	
   

  	
  N/A

  

 

 

Annex A to Schedule 1.1

 

	
  Function

  	
   

  	
  Vendor
  Name

  	
   

  	
  Product
  Name

  	
   

  	
  Product
  Version

  
	
  Backups

  	
   

  	
  EMC

  	
   

  	
  EMC
  Timefinder, SRDF, BCV

  	
   

  	
   

  
	
  Backups

  	
   

  	
  IBM

  	
   

  	
  Tivoli
  Storage Manager IBM 3740 tape library

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Backups

  	
   

  	
  Oracle

  	
   

  	
  Oracle
  RMAN integrated with EMC to use BCV’s for managing backup instead of having
  to utilize the production disks

  	
   

  	
   

  
	
  Capacity
  Planning

  	
   

  	
  EMC

  	
   

  	
  EMC
  Capacity Planner

  	
   

  	
   

  
	
  Clustering
  and Failover

  	
   

  	
  Veritas

  	
   

  	
  Veritas
  Glocal Cluster Manager

  	
   

  	
  Cluster
  Server 1.3.1 / Volume Manager 3.0

  
	
  COBOL
  Compiler

  	
   

  	
  Merant

  	
   

  	
  Server
  Express Cobol Compiler for UNIX

  	
   

  	
  3.0
  (SP1) or 4.0

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COBOL
  Compiler

  	
   

  	
  Merant

  	
   

  	
  Server
  Express Cobol Compiler for UNIX - 2nd copy with Application Server

  	
   

  	
  3.0
  (SP1) or 4.0

  
	
  RDBMS

  	
   

  	
  Oracle

  	
   

  	
  Oracle
  8I Enterprise Addition

  	
   

  	
  8.1.7

  
	
  DBA
  Tools

  	
   

  	
  Embarcadero

  	
   

  	
  DB
  Artisan Oracle

  	
   

  	
  5.4

  
	
  DBA
  Tools

  	
   

  	
  Embarcadero

  	
   

  	
  Performance
  Center Client

  	
   

  	
  5.4

  
	
  DBA
  Tools

  	
   

  	
  Embarcadero

  	
   

  	
  Performance
  Center Managed Database Instance

  	
   

  	
  5.4

  
	
  DBA
  Tools

  	
   

  	
  EMC

  	
   

  	
  EMC
  Symmetrix DB Tuner

  	
   

  	
   

  
	
  ETL
  (Extract Transform & Load)

  	
   

  	
  Informatica

  	
   

  	
  PowerCenter
  Standard Class II (upgrade Peoplesoft OEM license) for site 1

  	
   

  	
  5

  
	
  ETL
  (Extract Transform & Load)

  	
   

  	
  Informatica

  	
   

  	
  PowerCenter
  Lab License (unlimited) for site 2

  	
   

  	
  5

  
	
  ETL
  (Extract Transform & Load)

  	
   

  	
  Informatica

  	
   

  	
  Unlimited
  Sources & Targets

  	
   

  	
  5

  
	
  ETL
  (Extract Transform & Load)

  	
   

  	
  Informatica

  	
   

  	
  3
  Onsite Training Days

  	
   

  	
  5

  
	
  OLAP
  (OnLine Analytical Processing)

  	
   

  	
  Hyperion/Essbase
  or Cognos Enterprise Server

  	
   

  	
  TBD

  	
   

  	
  TBD

  
	
  SAN
  Tuning & Failover

  	
   

  	
  EMC

  	
   

  	
  EMC
  PowerPath

  	
   

  	
   

  

 

 

	
  Scheduling

  	
   

  	
  Computer
  Assosiates

  	
   

  	
  AutoSys

  	
   

  	
  3.5

  
	
  Shadowing

  	
   

  	
  Citrix

  	
   

  	
  Citrix

  	
   

  	
   

  
	
  Storage
  Management

  	
   

  	
  EMC

  	
   

  	
  EMC
  Foundation Suite by Veritas

  	
   

  	
   

  
	
  Version
  Control

  	
   

  	
  Merant

  	
   

  	
  PVCS
  Professional (Suite of Version Manager, Tracker and Configuration Builder)

  	
   

  	
  6.7
  or 7.0

  
	
  Workflow
  Analyzer

  	
   

  	
  EMC

  	
   

  	
  EMC
  Workflow Analyzer

  	
   

  	
   

  

 

 

Annex B to Schedule 1.1

 

[Service Level Agreement for IT Services
dated April 28, 2004 attached hereto]Exhibit 10.10

 

REGISTRATION RIGHTS AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of April 28, 2004,
is among Assured Guaranty Ltd., a Bermuda corporation (the “Company”), ACE
Limited, a Cayman Islands corporation (“ACE”), and ACE Bermuda Insurance Ltd., a Bermuda
corporation (“ACE Bermuda”).

 

RECITALS

 

A.            The Company, ACE and ACE Bermuda are
parties to a Master Separation Agreement dated as of the date hereof relating
to the formation of the Company and this Agreement is a condition precedent to
ACE and ACE Bermuda performing its respective obligations thereunder.

 

B.            The Company will effect an initial
public offering of certain common shares of the Company beneficially owned by
ACE Bermuda and ACE
Financial Services Inc., a Delaware corporation, pursuant to a
Registration Statement on Form S-1 (the “Public Offering”).

 

C.            After the completion of the Public
Offering, ACE Bermuda will beneficially own approximately 35% (approximately
25% if the over-allotment option granted to the underwriters in the Public
Offering is exercised in full) of the outstanding common shares of the Company.

 

D.            The Company has agreed to provide
the registration rights specified in this Agreement to ACE, its affiliates and
holders of the Registrable Shares (as defined below), including ACE Bermuda,
following the Public Offering, and the Company, ACE and ACE Bermuda are
entering into this Agreement to set forth the terms and conditions applicable
to the grant and exercise of such registration rights.

 

NOW, THEREFORE,
in consideration of the promises and the mutual covenants and agreements
contained in the Master Separation Agreement and herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the Company, ACE and ACE Bermuda hereby
agree as follows:

 

Section
1.  Definitions.  In addition to the capitalized terms defined
elsewhere in this Agreement, the following capitalized terms shall have the
following meanings when used in this Agreement:

 

“ACE Entity”
means ACE and any and all Subsidiaries of ACE.

 

“Board” means
the board of directors of the Company.

 

“Commission”
means the U.S. Securities and Exchange Commission.

 

“Common
Shares” means the common shares of the Company.

 

 

“Effective
Period” means the period beginning on the Shelf Effective Date and ending on
the earlier of (1) 36 months after the Shelf Effective Date or (2) the date
that the Holders have received an opinion of counsel to the Company, in form
and substance reasonably acceptable to the Holders, that the Holders can sell
all of their Registrable Shares pursuant to Rule 144 promulgated under the
Securities Act without regard to the volume limitations contained in paragraph
(e) of such Rule.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Holder” means
each of the ACE Entities that holds Common Shares and their respective
successors and assigns contemplated by Section 13 hereof.

 

“Person” means
a natural person, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or other entity, or a governmental entity or any department,
agency or political subdivision thereof.

 

“Registrable
Shares” means, at any time, the Common Shares owned by the ACE Entities and
Common Shares transferred by the ACE Entities in accordance with Section 13
hereof.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Shelf
Effective Date” means the date that the Shelf Registration Statement is
declared effective by the Commission.

 

“Subsidiary”
of any Person means any other Person of which securities or other ownership
interests representing 50% or more of the ordinary voting power are, at the
time as of which any determination is being made, owned or controlled by such
Person or one or more Subsidiaries of such Person, or by such Person and one or
more Subsidiaries of such Person.

 

“Target
Effective Date” means the date that is 90 days after the Target Filing Date.

 

“Target Filing
Date” means 30 days following receipt of written notice from ACE pursuant to
Section 2(b).

 

Section
2.  Demand Registrations.

 

(a)           Long-Form Registrations. Subject to
the terms of this Agreement, the Holders of at least a majority of the
Registrable Shares may, at any time beginning 180 days after the effective date
of the Registration Statement for the Public Offering, request registration
under the Securities Act on Form S-1, Form S-2 or any similar long-form
registration, of Registrable Shares with an expected aggregate price to the
public of at least $5.0 million.  A
registration requested pursuant to this Section 2(a) is referred to as a
“Long-Form Demand Registration.” The Company is required to effect no more than
two Long-Form Demand Registrations.

 

(b)           Short-Form Registration. If at any
time the Company becomes eligible to register Common Shares for resale by a
Holder thereof on Form S-3 (or any successor short-form registration
statement), it shall promptly give notice thereof to each Holder and, at any
time thereafter, a majority of

 

2

 

the Holders may give written
notice to the Company to register their Registrable Shares for resale on such
Form S-3 (or successor form).  Upon receipt
of such notice, the Company shall prepare and file with the Commission no later
than the Target Filing Date a “shelf registration statement” on Form S-3 (or
successor form) for an offering to be made on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act, covering all of the Registrable
Shares then owned by the Holders that have notified the Company of their
intention to participate (the “Shelf Registration Statement,” and collectively
with the Long-Form Demand Registration, the “Demand Registrations”). The
Company will use its reasonable best efforts to have the Shelf Registration
Statement declared effective on or before the Target Effective Date and to keep
such Shelf Registration Statement continuously effective for the Effective
Period (or such shorter period which will terminate when all Registrable Shares
covered by such Shelf Registration Statement have been sold or withdrawn by the
Holders, but not prior to the expiration of the applicable period referred to
in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable).
The Company further agrees, if necessary, to supplement or amend the Shelf
Registration Statement, as required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or as reasonably requested
(which request shall result in the filing of a supplement or amendment) by any
Holder of Registrable Shares to which such Shelf Registration Statement
relates, and the Company agrees to furnish to the Holders, their counsel and
any managing underwriter copies of any such supplement or amendment prior to
its being used and/or filed with the Commission.

 

(i)            The Company may
require each Holder of Registrable Shares to which such Shelf Registration
Statement relates to furnish to the Company, upon reasonable notice, such
information concerning the Holder and the distribution of the Registrable
Shares as the Company may from time to time reasonably request, upon reasonable
notice.

 

(ii)           The Company shall
not be deemed to have satisfied its obligations under this Section 2(b) until
the Shelf Registration Statement has been declared effective by the Commission
and the Company has complied in all material respects with its obligations
under this Agreement with respect thereto (including keeping the Shelf
Registration Statement effective for the Effective Period), provided, however,
that if after it has been declared effective, the offering of Registrable Shares
pursuant to a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the Commission or any other
governmental agency or court, such Shelf Registration Statement will be deemed
not to have been effective during the period of such interference until the
offering of Registrable Shares pursuant to such Shelf Registration Statement
may legally resume and the period of time during which sales under the Shelf
Registration Statement were suspended shall be added to the Effective Period.
If a registration requested pursuant to this Section 2(b) is deemed not to have
been effected, then the Company shall continue to be obligated to effect a
registration pursuant to this Section 2(b).

 

(c)           Notice of Demand Registrations.  Whenever securities of the Company are to be
registered under the Securities Act pursuant to a Demand Registration, the
Company will give prompt written notice (and in any event within three business
days after its receipt of notice of any exercise of the demand registration
rights pursuant to this Section 2 and at least 20 days prior to the filing of
any registration statement) to the Holders of its intention to effect such a
registration and will include in such registration all Registrable Shares with
respect to which the Company has received written

 

3

 

requests for inclusion therein
within 10 days after the Company’s notice has been given, subject to Section
2(e) hereof.

 

(d)           Selection of Underwriters.  If the Holders so elect, the offering of
Registrable Shares pursuant to a Demand Registration shall be in the form of an
underwritten offering.  If they so
elect, the Holders participating in such Demand Registration shall select one
or more nationally recognized firms of investment bankers reasonably
satisfactory to the Company to act as the book-running managing underwriter or
underwriters in connection with such offering and shall select any additional
investment bankers and managers reasonably satisfactory to the Company to be
used in connection with the offering.

 

(e)           Priority on Demand Registrations. If
a Demand Registration is an underwritten public offering and the managing
underwriters advise the Company in writing that, in their opinion, the
inclusion of the number of Registrable Shares and other securities requested to
be included in such offering creates a substantial risk that the price per
share of the Common Shares will be reduced, the Company will include in such
Registration, prior to the inclusion of any securities which are not
Registrable Shares, the number of Registrable Shares requested to be included
which in the opinion of such underwriters can be sold in such offering without
creating such a risk, allocated pro rata among the participating Holders (or,
if an ACE Entity is a participating Holder, as designated by ACE).

 

(f)            Restrictions on Registrations. The
Company may postpone for a reasonable period not to exceed 90 days the filing
or the effectiveness of a registration statement for a Demand Registration if
the Company shall furnish to the Holders of Registrable Shares to be included
in such Demand Registration a certificate signed by the Company’s Chief
Executive Officer stating that the Board has determined reasonably and in good
faith that such filing would require disclosure of a material fact concerning
the Company (which the Company is not otherwise required to disclose) that
would have a material adverse effect on the Company or adversely affect any
plan by the Company or any of its Subsidiaries to engage in any acquisition of
assets (other than in the ordinary course of business) or capital stock or
other securities of any other entity, or any financing, acquisition,
reorganization, merger, amalgamation, consolidation, tender offer or other
significant transaction; provided, that the right to postpone may not be
exercised for more than 120 days in any 12-month period. The Company will not
include in any Demand Registration that is an underwritten offering any securities
which are not Registrable Shares without the written consent of the Holders of
a majority of the Registrable Shares to be included in such registration.

 

Section
3.  Piggyback Registrations.

 

(a)           Right to Piggyback.  Whenever Common Shares of the Company are to
be registered under the Securities Act (other than pursuant to a Demand
Registration and other than pursuant to a registration statement on Form S-4 or
Form S-8 or successor forms) and the registration form to be used may be used
for the registration of Registrable Shares (a “Piggyback Registration”), the
Company will give prompt written notice (and in any event within three business
days after its receipt of notice of any exercise of demand registration rights
by holders of the Company’s securities other than the Registrable Shares and at
least 20 days prior to the filing of any registration statement) to the Holders
of its intention to effect such a registration and will include in such
registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within 10 days

 

4

 

after the Company’s notice has
been given, subject to Sections 3(b) and 3(c) hereof.  The Company will have the right to select the managing
underwriters in any underwritten Piggyback Registration in which the Company is
selling Common Shares.  If a Holder
desires to include such Holder’s Registrable Shares in a Piggyback Registration
that is an underwritten offering, such Holder shall, as a condition to
including such Holder’s Registrable Shares, enter into an underwriting
agreement containing customary terms and conditions, including customary
representations and indemnities (provided that such indemnities shall not be
given by any subsidiary of the Company where such subsidiary may not give such
indemnity without being in breach of applicable law or with minimum solvency or
liquidity regulation).

 

(b)           Priority on Primary
Registrations.  If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company that in their opinion the
number of securities requested to be included in such offering in the
registration creates a substantial risk that the price per share of the Common
Shares will be reduced in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Shares requested to be included in such registration,
allocated pro rata among the participating Holders (or, if an ACE Entity is a
participating Holder, as designated by ACE), and (iii) third, other securities
requested to be included in such registration.

 

(c)           Priority on Secondary
Registrations.  If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company’s
securities (an “Initiating Securityholder”), and the managing underwriters
advise the Company that in their opinion the inclusion of the number of
securities requested to be included in such offering creates a substantial risk
that the price per share of the Common Shares will be reduced in such offering,
the Company will include in such registration (i) first, the Registrable Shares
requested to be included in such registration, allocated pro rata among the
participating Holders (or, if an ACE Entity is a participating Holder, as
designated by ACE), and (ii) second, the securities to be offered by the
Initiating Securityholder and the Company in such amounts as agreed upon
between the Initiating Securityholder and the Company.

 

(d)           Other Registrations.  If the Company has previously filed a
registration statement which includes Registrable Shares pursuant to Section 2
or pursuant to this Section 3, and if such previous registration has not been
withdrawn or abandoned, the Company will not file or cause to be effected any
other registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form S-4 or Form S-8 or successor forms), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of 90 days has elapsed from the effective date of such previous
registration, without the prior consent of the Holders of a majority of the
Registrable Shares covered by such previous registration statement.

 

Section
4.  Holdback Agreements.  (a) 
Unless the underwriters managing the registered public offering
otherwise agree, (i) the Company will not effect any public sale or
distribution of its equity securities or any securities convertible into or
exchangeable or exercisable for such securities during the seven days prior to
and during the 90-day period beginning on the effective date of the
underwriting agreement relating to any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to a registration on Form S-4 or Form S-8 or successor
forms) (the “Holdback Period”).

 

5

 

(b)           Unless the underwriters managing the
registered public offering otherwise agree, no Holder will effect any public
sale or distribution of the equity securities of the Company held by such Holder
(including sales pursuant to Rule 144), or any securities convertible into or
exchangeable or exercisable for such securities, or engage in any hedging
transactions relating to the same, during the Holdback Period relating to an
underwritten Demand Registration or an underwritten Piggyback Registration.

 

5.  Registration Procedures.

 

(a)           Whenever a Holder has requested that
any Registrable Shares be registered pursuant to the terms of this Agreement,
the Company will use its best efforts to effect the registration and the sale
of such Registrable Shares in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:

 

(i)            prepare and file
with the Commission a registration statement on the appropriate form with
respect to such Registrable Shares and use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing;

 

(ii)           prepare and file
with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective and such prospectus usable and to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement until such time as the
Registrable Shares registered thereunder have been disposed of in accordance
with the intended methods of disposition by the sellers thereof set forth in
such registration statement; provided that, at least five business days prior
to filing a registration statement or prospectus or any amendments or
supplements thereto, excluding documents incorporated by reference after the
initial filing of the registration statement, the Company shall furnish to the
Holders of the Registrable Shares covered by such registration statement (the
“Selling Holders”), Selling Holders’ counsel and the underwriters, if any,
draft copies of all such documents proposed to be filed, which documents will
be subject to the review of such Holders’ counsel and the underwriters, if any,
and the Company will not, unless required by law, file any registration
statement or amendment thereto or any prospectus or any supplement thereto to
which Holders of at least a majority of the Registrable Shares covered thereby
(the “Objecting Party”) shall reasonably object, pursuant to notice given to
the Company prior to the filing of such amendment or supplement (the “Objection
Notice”) and no later than five business days after receipt of the documents to
which the Objection Notice relates. The Objection Notice shall set forth the
objections and the specific areas in the draft documents where such objections
arise. The Company shall have five business days after receipt of the Objection
Notice to correct such deficiencies to the satisfaction of the Objecting Party,
and will notify each Selling Holder of any stop order issued or threatened by
the Commission in connection therewith and shall use its best efforts to prevent
the entry of such stop order or to remove it at the earliest possible moment if
entered;

 

(iii)          furnish to each
Selling Holder and the underwriters of the securities being registered such
number of copies of such registration statement, each amendment and

 

6

 

supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Selling Holder or
underwriters may reasonably request in order to facilitate the disposition of
the Registrable Shares owned by such Selling Holder or the sale of such
securities by such underwriters;

 

(iv)          use its reasonable
best efforts to comply with all applicable rules and regulations of the
Commission and make generally available to the security holders as soon as
practicable after the effective date of the applicable registration statement
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;

 

(v)           use its reasonable
best efforts to register or qualify such Registrable Shares under such other
securities or “blue sky” laws of such jurisdictions as any Selling Holder
reasonably requests and do any and all other acts and things which may be
necessary or desirable to enable such seller to consummate the public sale or
other disposition in such jurisdictions of the Registrable Shares owned by such
Selling Holder (provided, however, that the Company will not be required to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or consent to
general service of process in any such jurisdiction);

 

(vi)          cause all such
Registrable Shares to be listed on each securities exchange on which similar
securities issued by the Company are then listed;

 

(vii)         enter into customary
agreements (including underwriting agreements) and take all such other actions
as a Selling Holder or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Shares;

 

(viii)        make available for inspection by the
Selling Holders, any underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant or other agent
designated by any such Selling Holder or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company’s officers, directors, employees and independent accountants to
supply all information reasonably requested by any such Selling Holder,
underwriter, attorney, accountant or agent in connection with such registration
statement; provided, however, that any such records, documents, properties and
information provided by the Company that is designated in writing by the
Company in good faith as confidential at the time of delivery of such records,
documents, properties or information, as applicable, shall be kept confidential
by all such Persons unless (x) disclosure thereof is made in connection with a
court proceeding or required by law (provided, however that each such Person
shall, upon learning that disclosure of such records, documents, properties or
information, as applicable, is sought in a court proceeding or required by law,
give notice to the Company to allow the Company to undertake appropriate action
to prevent disclosure at the Company’s sole expense), or (y) such records,
documents, properties or information, as applicable, has previously been made
or becomes available to the public generally through the Company or through a
third party without an accompanying obligation of confidentiality;

 

7

 

(ix)           cause the Company’s officers,
directors and employees to participate in marketing efforts as reasonably
requested by the underwriters, including participating in “roadshow” meetings
with potential investors;

 

(x)            notify each Selling
Holder, promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any prospectus
forming apart of such registration statement has been filed;

 

(xi)           notify each Selling
Holder of any request by the Commission for the amending or supplementing of
such registration statement or prospectus or for additional information;

 

(xii)          prepare and file
promptly upon the request of any Selling Holder, any amendments or supplements
to such registration statement or prospectus which, in the reasonable opinion
of counsel selected by such Selling Holder, with the Commission as required
under the Securities Act or Exchange Act or the rules and regulations
thereunder and with the Registrar of Companies in Bermuda in accordance with
Bermuda Companies Act 1981 (“Companies Act 1981”) and elsewhere as may be
required under applicable law in connection with the distribution of
Registrable Shares by such Selling Holder;

 

(xiii)         prepare and
promptly file with the Commission and the Registrar of Companies in Bermuda or
elsewhere as may be required under any applicable law and promptly notify each
Selling Holder of such Registrable Shares of the filing of such amendment or
supplement to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating
to such securities is required to be delivered under the Securities Act or the
Companies Act 1981 or under any applicable law, any event shall have occurred
as the result of which any such prospectus would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading;

 

(xiv)        at the request of any
Selling Holder in connection with an underwritten offering, furnish on the date
or dates provided for in the underwriting agreement a customary opinion of
counsel, addressed to the underwriters and the Holders, covering such matters
as such underwriters and Holders may reasonably request;

 

(xv)         obtain “cold comfort”
letters and updates thereof from the independent certified public accountants
of the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each Selling
Holder (provided such Selling Holder furnishes the accountants with such
representations as the accountants customarily require in similar situations)
and the underwriters, if any, in customary form and covering matters of the
type customarily covered in “cold comfort” letters in connection with
underwritten offerings; and

 

(xvi)        deliver such
documents and certificates as may be reasonably requested by the Selling
Holders and the underwriters, including those to evidence compliance with any
customary conditions contained in the underwriting agreement.

 

8

 

(b)           The Company may require the Holders
to furnish to the Company such information regarding the distribution of such
securities and such other information relating to the Holders participating in
such distribution and the ownership by the Holders of Registrable Shares as the
Company may from time to time reasonably request in writing.  Each Holder shall furnish such information
to the Company and cooperate with the Company as reasonably necessary to enable
the Company to comply with the provisions of this Agreement.

 

Section
6.  Registration Expenses.  All expenses incident to the Company’s
performance of or compliance with this Agreement, including, but not limited
to, all registration and filing fees, fees and expenses of compliance with
federal, state and foreign securities laws, printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the Company and
its independent certified public accountants, underwriters (excluding discounts
and commissions attributable to the Registrable Shares included in such
registration) and other Persons retained by the Company (all such expenses
being herein called “Registration Expenses”), will be borne by the Company. In
addition, the Company will pay its internal expenses (including, but not
limited to, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance obtained by the Company and the
expenses and fees for listing the securities to be registered on each
securities exchange.  In addition, the
Company shall reimburse the Holders for the reasonable fees and disbursements
of one firm of legal counsel in connection with any registration under this
Agreement.

 

Section
7.  Indemnification.

 

(a)           The Company agrees to indemnify, to
the fullest extent permitted by law, each seller of Registrable Shares, its
officers and directors and each Person who controls such seller (within the
meaning of the Securities Act or the Exchange Act) from and against all losses,
claims, damages, liabilities and expenses (including, but not limited to,
reasonable attorneys’ fees except as limited by Section 7(c)) arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in any registration statement, preliminary prospectus or prospectus, or any
amendment thereof or supplement thereto, or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or any violation by the Company of any Federal or state
securities laws, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such seller expressly for
use therein or by such seller’s failure to deliver a copy of the prospectus or
any amendments or supplements thereto after the Company has furnished such
seller with a sufficient number of copies of the same.  In connection with an underwritten offering,
the Company will indemnify the underwriters, their officers and directors and
each Person who controls such underwriters (within the meaning of the
Securities Act or the Exchange Act) to the same extent as provided above with
respect to the indemnification of the sellers of Registrable Shares.  The reimbursements required by this Section
7(a) will be made by periodic payments during the course of the investigation
or defense, promptly after bills are received or expenses incurred.

 

(b)           In connection with any registration
statement in which a seller of Registrable Shares is participating, each seller
will furnish to the Company in writing such information as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the 

 

9

 

fullest extent permitted by
law, will indemnify the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act or the Exchange
Act) from and against any losses, claims, damages, liabilities and expenses
(including, but not limited to, reasonable attorneys’ fees except as limited by
Section 7(c)) resulting from any untrue statement or alleged untrue statement
of a material fact contained in the registration statement, preliminary
prospectus or prospectus, or any amendment thereof or supplement thereto, or
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission is contained in any information so furnished in writing by such
seller; provided that the obligation to indemnify will be several, not joint
and several, among such sellers of Registrable Shares, and the liability of
each such seller of Registrable Shares will be in proportion to the number of
Registrable Shares sold by each such seller divided by the total number of
Registrable Shares included in such registration statement, and provided
further that such liability will be limited to, in any event, the net amount
received by such seller from the sale of Registrable Shares pursuant to such
registration statement.

 

(c)           If any action is brought in respect
of which indemnity may be sought pursuant to this Agreement, the Person seeking
indemnification (the “indemnified party”) shall promptly notify the Person
against whom indemnification is sought (the “indemnifying party”) in writing of
the institution of such action (but the failure so to notify will not relieve
the indemnifying party from any liability that it may have to the indemnified
party under this Section 7 to the extent the indemnifying party is not
materially prejudiced as a result thereof, and in no event shall it relieve the
indemnifying party from any liability it may have otherwise than pursuant to
this Section 7), and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party or parties and payment of expenses.  The indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying party, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party or parties within a reasonable
time or (iii) such indemnified party or parties shall have reasonably concluded
(based on the advice of counsel) that there may be defenses available to it or
them which are different from or additional to those available to the
indemnifying party and may present a conflict for counsel representing the
indemnified party or parties and the indemnifying party (in which case the
indemnifying party shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying party and paid as
incurred (it being understood, however, that the indemnifying party shall not
be liable for the fees and expenses of more than one separate counsel (in
addition to local counsel) for the indemnified parties in any one action or
series of related actions in the same jurisdiction representing the indemnified
parties who are parties to such action). 
Anything in this paragraph to the contrary notwithstanding, the
indemnifying party shall not be liable for any settlement effected without its
written consent unless the indemnifying party shall have failed to assume the
defense of such action or reimburse the indemnified party for fees and expenses
of counsel as contemplated by this Section 7(c) within 30 days after receipt by
the indemnifying party of the request therefor.  An indemnifying party will not, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment in any action in respect of which indemnification may be sought
hereunder unless such settlement,

 

10

 

compromise or consent includes an unconditional
release of the indemnified parties from all liability arising out of the
action.

 

 (d)          If
the indemnification provided for in this Section is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the fullest extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the matters that resulted in such loss,
claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact related to
information supplied by the indemnifying party or by the indemnified party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement of omission; provided, that in no event
shall the amounts payable in indemnity by a Holder under Section 7 exceed the
net proceeds received by such Holder in the registered offering out of which
such indemnification arises. No party guilty of fraudulent misrepresentation
under Section 11(f) of the Securities Act shall be entitled to contribution
under this Section 7(d).

 

(e)           Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten pubic
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

 

(f)            The indemnification provided for
under this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive the
transfer of securities.

 

Section
8.  Compliance with Rule 144.  At any time and from time to time after the
Company has a class of securities registered under Section 12 of the Exchange
Act, the Company will (i) make available to the public and the Holders such
information as will enable the Holders to make sales pursuant to Rule 144
promulgated under the Securities Act, and (ii) file with the Commission in a
timely manner all reports and other documents required of the Company under the
Exchange Act.

 

Section
9.  Underwritten Registrations.  Each Holder shall agrees that, in connection
with any underwritten offering, such Holder will (a) sell its Registrable
Shares on the basis provided in any underwriting arrangements governing such
underwritten offering and (b) complete and execute all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

 

Section
10.  Adjustments Affecting Registrable
Shares.  The Company will not
knowingly take any action, or knowingly permit any change to occur, with
respect to its securities which would materially adversely affect the ability
of the Holders to include Registrable Shares in a registration undertaken
pursuant to this Agreement or which would materially adversely affect the
marketability of such Registrable Shares in any such registration.

 

11

 

Section
11.  Remedies. Any Person having
rights under any provision of this Agreement will be entitled to enforce such
rights specifically, to recover damages caused by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.

 

Section
12.  Amendments and Waivers.  Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of the Company and ACE, and ACE Bermuda.  Any waiver, permit, consent or approval of
any kind or character on the part of any Holders of any provision or condition
of this Agreement must be made in writing and shall be effective only to the
extent specifically set forth in writing.

 

Section
13.  Successors and Assigns.  The rights to cause the Company to register
Registrable Shares granted pursuant to this Agreement may be transferred or
assigned by any Holder to a transferee or assignee that acquires from such
Holder and any other Holder an amount of Registrable Shares equal to at least
5% of the Common Shares then outstanding, provided, however, that the
transferee or assignee of such rights assumes the obligations of such
transferor or assignor, as the case may be, under this Agreement and that such
transferee or assignee executes and delivers a copy of this Agreement to the
Company.

 

Section
14.  Termination.  Except as otherwise provided in this
Agreement and except for the provisions of Section 7, the rights of a Holder
under this Agreement shall remain in effect with respect to the Registrable
Shares of such Holder until such Registrable Shares (i) have been sold under an
effective registration statement; (ii) have been sold to the public pursuant to
Rule 144 under the Securities Act; or (iii) may be resold, without regard to
the volume limitations, under Rule 144 under the Securities Act.

 

Section
15.  Entire Agreement.  This Agreement constitutes the entire
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.

 

Section
16.  Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.

 

Section
17.  Descriptive Headings.  The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.

 

Section
18.  Notices. Any notices
required or permitted to be sent hereunder shall be delivered personally, or
mailed, certified mail, return receipt requested, or delivered by overnight
courier service to the following addresses, or such other addresses as shall be
given by notice delivered hereunder, and shall be deemed to have been given
upon receipt, if delivered personally, or mailed, or one business day after delivery
to the courier, if delivered by overnight courier service:

 

If to the
Company, to:

 

12

 

Assured Guaranty Ltd.

30 Woodbourne Avenue

Hamilton HM08 Bermuda

Attention: General Counsel

 

If to an ACE
Entity:

 

ACE Limited

ACE Global
Headquarters

17 Woodbourne
Avenue

Hamilton HM08
Bermuda

Attention:
General Counsel

 

If to any
other Holder:

 

To the address specified in writing by such Holder.

 

Section
19.  Governing Law; Dispute
Resolution.  (a)  The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of New York
applicable to contracts made and to be performed in that state.

 

(b)           Mandatory Arbitration.  The parties hereto shall promptly submit any
dispute, claim, or controversy arising out of or relating to this Agreement
and/or the transactions contemplated hereunder, including effect, validity,
breach, interpretation, performance, or enforcement (collectively, a “Dispute”)
to binding arbitration in New York, New York at the offices of Judicial
Arbitration and Mediation Services, Inc. (“JAMS”) before an arbitrator (the
“Arbitrator”) in accordance with JAMS’ Arbitration Rules and Procedures and the
Federal Arbitration Act, 9 U.S.C. Section 1, et seq. The Arbitrator shall be a
former federal judge selected from JAMS’ pool of neutrals.  The parties agree that, except as otherwise
provided herein respecting temporary or preliminary injunctive relief, binding
arbitration shall be the sole means of resolving any Dispute.

 

(c)           Costs.  The costs of the arbitration proceeding and any proceeding in
court to confirm or to vacate any arbitration award or to obtain temporary or
preliminary injunctive relief as provided in Section 19(d) hereof, as
applicable (including, without limitation, actual attorneys’ fees and costs),
shall be borne by the unsuccessful party and shall be awarded as part of the
Arbitrator’s decision, unless the Arbitrator shall otherwise allocate such
costs in such decision.

 

(d)           Injunctive Relief.  Nothing herein prevents the parties hereto
from seeking or obtaining temporary or preliminary injunctive relief in a court
for any breach or threatened breach of any provision hereof pending the hearing
before and determination of the Arbitrator. 
The parties hereby agree that they shall continue to perform any and all
obligations under this Agreement pending the hearing before and determination
of the Arbitrator, it being agreed and understood that the failure to so
perform will cause irreparable harm to each party and its affiliates and that
the putative breaching party has assumed all of the commercial risks associated
with such breach or threatened breach of any provision hereof by such party.

 

13

 

(e)           Discovery.  The parties shall be entitled to reasonably discovery, including
a production of non-privileged documents and answers to a reasonable number of
interrogatories.  Depositions may be
ordered by the arbitrator upon a showing of need.

 

(f)            Courts.  The parties agree that the State and Federal
courts in The City of New York shall have jurisdiction for purposes of
enforcement of their agreement to submit Disputes to arbitration and of any
award of the Arbitrator.

 

Section
20.  Counterparts. This Agreement
may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed an original, and such counterparts together shall
constitute one instrument.  Each party
shall receive a duplicate original of the counterpart copy or copies executed
by it and the Company.

 

[Intentionally left blank]

 

14

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.

 

	
   

  	
  ASSURED
  GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  B. Mills

  	
   

  
	
   

  	
  Name: Robert
  B. Mills

  
	
   

  	
  Title: Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACE LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter
  Mear

  	
   

  
	
   

  	
  Name: Peter
  Mear

  
	
   

  	
  Title:
  General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACE BERMUDA
  INSURANCE LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew
  M. Gibbs

  	
   

  
	
   

  	
  Name: Andrew
  M. Gibbs

  
	
   

  	
  Title: Chief
  Financial Officer

  

 

15

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