Document:

Exhibit
10.51

 

QUOTA SHARE RETROCESSION AGREEMENT

 

This Quota Share Retrocession Agreement (this “Agreement”), dated as of
April     , 2004, is made and entered into by and between
ASSURED GUARANTY CORP., formerly known as ACE GUARANTY CORP. (the “Retrocedent”),
an insurance company organized and licensed under the laws of the State of
Maryland, and ACE TEMPEST RE USA, INC. for and on behalf of ACE AMERICAN
INSURANCE COMPANY (the “Retrocessionaire”), a Pennsylvania insurance company.

 

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

 

ARTICLE 1

 

DEFINITIONS

 

Section
1.1.  Definitions.  For all purposes with regard to this
Agreement, the following terms shall have the following meanings:

 

A.            “Allocated Loss
Adjustment Expenses” means expenses paid by the Retrocedent on or after the
Effective Date in connection with (i) the adjustment of claims under the Reinsurance
Agreements, including, without limitation, court costs, interest upon judgments
as it accrues, and allocated investigation, adjustment, and legal expenses
chargeable to the investigation, negotiation, settlement or defense of a claim
or (ii) the protection, perfection or exercise of any subrogation, salvage or
recoupment rights under a Reinsurance Agreement.  For the avoidance of doubt, “Allocated Loss Adjustment Expenses”
does not include salaries paid to employees of the Retrocedent or other overhead
expenses.

 

B.            “Collateral Amount”
has the meaning set forth in Section 8.1.

 

C.            “Commutation Amount”
means the consideration payable to a ceding company under a Reinsurance
Agreement upon the commutation of such Reinsurance Agreement.

 

D.            “Commuted
Reinsurance Agreement” means a Reinsurance Agreement that has been commuted
with the prior written consent of the Retrocessionaire, which consent will not
be unreasonably withheld.  The
Retrocessionaire’s consent in respect of the commutation of a Reinsurance
Agreement will not be unreasonably withheld if the Retrocessionaire believes,
in good faith, that the consideration demanded by the ceding company in respect
of the proposed commutation is excessive.

 

E.             “Covered Losses”
means Reinsurance Agreement Losses and Allocated Loss Adjustment Expenses.

 

 

F.             “Deposit Amount”
means, as of any date of determination, an amount equal to (i) the premiums
retained as a deposit by the Retrocedent on the Upfront Premium Payment Date in
accordance with Article 5 hereof plus
(ii) amounts previously transferred to the Retrocedent in accordance with
Article 8 hereof minus (iii)
amounts previously appropriated by the Retrocedent in accordance with Article 8
hereof minus (iv) amounts
previously transferred to the Retrocessionaire in accordance with Article 8
hereof plus (v) interest credited
in accordance with Article 8 hereof.

 

G.            “Effective Date”
means April 1, 2004.

 

H.            “Extra Contractual
Obligations” means, with respect to any Reinsurance Agreement, any and all
liabilities (whether they constitute compensatory, consequential, exemplary or
punitive damages) not covered under any provision of such Reinsurance Agreement
that arise from the handling of any claim on business covered thereunder,
including without limitation, liabilities arising due to the failure by the
Retrocessionaire (acting pursuant to the authority granted to it in Article 6
hereof) to settle within the policy limit, or by reason of alleged or actual
negligence or bad faith of the Retrocessionaire in rejecting an offer of
settlement or in the preparation of the defense or in the trial of any action
against the insured thereunder or in the preparation or prosecution of an
appeal consequent upon such action. 
Notwithstanding the preceding, Extra Contractual Obligations shall not
include such liabilities that arise from the Retrocedent’s intentional or
reckless disregard of its obligations under this Agreement (including without
limitation the Retrocedent’s obligation under Article 7 to provide copies to
the Retrocessionaire of all claims notices received by the Retrocedent).

 

I.              “Novation
Agreement” means an agreement among the Retrocedent, the Retrocessionaire and a
ceding company under a Reinsurance Agreement whereby (i) all of Retrocedent’s right, title, interest and
obligations in, to and under such Reinsurance Agreement are assigned to the
Retrocessionaire, (ii) all of Retrocedent’s obligations under such Reinsurance
Agreement are assumed by the Retrocessionaire and (iii) the Retrocedent is
released by the ceding company of all liability under such Reinsurance
Agreement.

 

J.             “Quarterly Report”
has the meaning set forth in Section 7.1.

 

K.            “Reinsurance
Agreements” means those reinsurance agreements entered into by the Retrocedent
that are described in Annex A hereto.

 

L.             “Reinsurance
Agreement Losses” means
amounts paid by the Retrocedent on or after the Effective Date under the terms
of a Reinsurance Agreement in respect of (i) claims incurred under such
Reinsurance Agreement, including, without limitation, amounts paid in
settlement of claims and in satisfaction of judgments, (ii) loss adjustment
expenses of the reinsured that are ceded to the Retrocedent under such
Reinsurance Agreement and (iii) Extra Contractual Obligations in respect of
such Reinsurance Agreement.

 

M.           “Retrocession Term”
has the meaning set forth in Article 2.

 

2

 

N.            “Upfront Premium
Payment Date” means the business day
immediately following the date upon which the Retrocedent and Retrocessionaire
execute and deliver this Agreement.

 

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

 

Section 1.3.       Other Interpretative
Provisions.  The following
interpretive provisions apply to this Agreement:  (a) a reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement; (b) the singular
includes the plural and the plural includes the singular; (c) the words
“include,” “includes,” and “including” are not limiting; and (d) the words
“herein,” “hereof,” “hereunder,” and words of like import shall refer to this
Agreement as a whole and not to any particular section or subdivision of this
Agreement.

 

ARTICLE 2

 

TERM

 

Section
2.1.  Term.  The term of this Agreement (the “Retrocession
Term”) shall commence at 12:01 a.m., Eastern Standard Time, on the Effective
Date and shall remain in force until such time as the Retrocedent has no
further liability under the Reinsurance Agreements.

 

ARTICLE 3

 

TYPE AND BUSINESS COVERED

 

Quota share retrocession in respect of the Reinsurance Agreements.

 

ARTICLE 4

 

COVERAGE

 

The Retrocedent hereby cedes to the Retrocessionaire, and the
Retrocessionaire hereby assumes as reinsurance from the Retrocedent and agrees
to pay Retrocedent, (i) 100% of  Covered
Losses paid by the Retrocedent in respect of the Reinsurance Agreements and
(ii) 100% of Commutation Amounts paid by the Retrocedent in respect of Commuted
Reinsurance Agreements.

 

3

 

ARTICLE 5

 

RETROCESSION PREMIUM

 

Section
5.1.           Upfront Premium.    On
the Upfront Premium Payment Date, the Retrocedent will pay to the
Retrocessionaire premium in the amount of [$           ] , of which (i) [$       ] will be paid to the Retrocessionaire in cash and (ii)
[$         ]will be retained by the Retrocedent as a deposit.

 

Section
5.2.           Periodic Premium.    The
Retrocedent will pay to the Retrocessionaire, in accordance with Article 7
hereof, 100% of the premiums (less brokerage and ceding commissions) received
by the Retrocedent in respect of the Reinsurance Agreements on or after the
Upfront Premium Payment Date.

 

ARTICLE 6

 

CLAIMS MANAGEMENT; SETTLEMENTS; ADMINISTRATION; RIGHTS OF
ASSOCIATION

 

Section
6.1.  Claims
Management.  The Retrocessionaire
agrees to take any and all actions necessary or appropriate for the management
of claims arising under the Reinsurance Agreements, including without
limitation investigating, assessing, adjusting, arbitrating, litigating and
settling claims, as appropriate, and shall conduct itself with the utmost good
faith in taking such actions.  The
Retrocessionaire is hereby authorized and directed to undertake all such
actions on behalf of the Retrocedent.

 

Section
6.2.  Claims
Settlements.  The Retrocedent agrees
to abide by the claim settlements of the Retrocessionaire.  The Retrocessionaire shall be the sole judge
of (i) the interpretation of the Reinsurance Agreements, (ii) what shall
constitute a claim under the Reinsurance Agreements and (iii) the Retrocedent’s
liability under the Reinsurance Agreements and the proper amounts for the
Retrocedent to pay thereunder.

 

Section
6.3.  Administration.  The Retrocessionaire agrees to take any and
all actions necessary or appropriate for the administration of the Reinsurance
Agreements, including without limitation determining the amount of collateral
to be posted under such Reinsurance Agreements, and shall conduct itself with
the utmost good faith in taking such actions. 
The Retrocessionaire is hereby authorized and directed to undertake all
such actions on behalf of the Retrocedent.

 

Section
6.4.  Rights of
Association.  Subject to the
foregoing, the Retrocedent shall have the right and shall be given the
opportunity to, at its own expense, associate with the Retrocessionaire in the
defense of any suit or proceeding arising out of or connected with any claim
under a Reinsurance Agreement.  In such
event, the Retrocessionaire and the Retrocedent shall cooperate in all aspects
of the defense of such suit or proceeding.

 

4

 

ARTICLE 7

 

REPORTS AND REMITTANCES

 

Section 7.1.  Quarterly Report.  Within 30 days following the end of each
calendar quarter during the Retrocession Term, the Retrocedent will prepare and
deliver to the Retrocessionaire a report (the “Quarterly Report”) containing
information relevant to the calculation of the amount (other than amounts due
and owing pursuant to Article 8 hereof) owed by or to the Retrocessionaire
hereunder in respect of such calendar quarter (which report shall be in such
form as the Retrocedent and the Retrocessionaire shall reasonably agree).

 

Section 7.2.  Remittances.  Net payments owed to the Retrocessionaire
shall accompany the Quarterly Report. 
Net payments owed to the Retrocedent shall be made within ten (10)
business days of delivery of the Quarterly Report; provided, however, at the
option and upon the demand of the Retrocedent, but solely when the Retrocedent
is in receipt of a cash call in excess of $100,000 arising from obligations
owed on a single Reinsurance Agreement, the Retrocedent shall be paid by wire
transfer of same day federal funds within two business days following the date
of receipt by the Retrocessionaire of a report identified as a “Special Loss
Accounting,” which shall indicate on its face that:

 

a)              the net amount then
due from the Retrocessionaire is in excess of $100,000, and

b)             the obligation arises
from a single Reinsurance Agreement and

c)              the Retrocedent’s
obligation is due to be paid by wire transfer within two business days.

 

Amounts paid pursuant to a Special Loss Accounting shall be credited in
the Quarterly Report that follows the submission of a Special Loss Accounting.

 

Section 7.3.  Claims Notices, Bordereaux and Other
Information Received from Ceding Companies.  The Retrocedent shall deliver copies of all notices (including,
without limitation, claim notices), bordereaux, requests for collateral and any
and all other information it receives in respect of the Reinsurance Agreements
within 10 business days of the Retrocedent’s receipt thereof.

 

Section
7.4.  Reserve
Report.  Within 30 days following
the end of each calendar quarter during the Retrocession Term, the
Retrocessionaire will prepare and deliver to the Retrocedent a report
containing the Retrocessionaire’s good faith estimate of the loss reserves to
be established by the Retrocedent in respect of the Reinsurance Agreements
ceded hereunder as of the end of such calendar quarter.  The Retrocedent shall have no obligation to
establish reserves in accordance with such recommendations.

 

5

 

ARTICLE 8

 

COLLATERAL

 

Section 8.1.  Quarterly True Up.  No later than five days prior to the end of
each calendar quarter during the Retrocession Term (such calendar quarter, the
“Current Quarter”), the Retrocedent will provide to the Retrocessionaire a good
faith written estimate of the amount (such amount, the “Collateral Amount”) of
collateral that the Retrocedent will be required to post as of the end of such
Current Quarter in respect of the Reinsurance Agreements and a good faith
written estimate of the Deposit Amount as of the end of such Current
Quarter.  If the Collateral Amount as of
the end of any Current Quarter exceeds the Deposit Amount as of the end of such
Current Quarter, the Retrocessionaire will transfer such difference to the
Retrocedent no later than the last business day of such Current Quarter.  If the Collateral Amount as of the end of
any Current Quarter is less than the Deposit Amount as of the end of such Current
Quarter, the Retrocedent will transfer such difference to the Retrocessionaire
no later than the last business day of such Current Quarter.

 

Section 8.2.  True Up Following Novation.  Within five business days of any day (such
day, the “Novation Date”) during the Retrocession Term upon which the
Retrocedent, the Retrocessionaire and a ceding company execute and deliver a
Novation Agreement, the Retrocedent will provide to the Retrocessionaire a
written statement of the Collateral Amount as of the Novation Date and (i) if
the Collateral Amount exceeds the Deposit Amount as of such Novation Date, the
Retrocessionaire will promptly (and in any event within five business days of
receipt of such written statement) transfer such difference to the Retrocedent
and (ii) if the Collateral Amount is less than the Deposit Amount as of such
Novation Date, the Retrocedent will promptly (and in any event within five
business days of such Novation Date) transfer such difference to the
Retrocessionaire.

 

Section 8.3.  True Up Following
Retrocessionaire’s Request.  From
time to time during the Retrocession Term, the Retrocessionaire may request
that the Retrocedent provide a written statement of the Collateral Amount as of
any day during the Retrocession Term and, if the Collateral Amount is less than
the Deposit Amount as of such day, the Retrocedent will promptly (and in any
event within five business days of such day) transfer such difference to the
Retrocessionaire.

 

Section 8.4.  Use of Deposit Amount;
Crediting of Interest.  At any time
after the Retrocessionaire fails to pay any Covered Losses or Commutation
Amounts owing to the Retrocedent under this Agreement as and when due, the
Retrocedent may appropriate so much of the Deposit Amount as may be required to
cure such default.  Until such time as
the Deposit Amount has been utilized in such manner or returned to the
Retrocessionaire pursuant to the terms hereof, interest thereon will be
credited to the Retrocessionaire quarterly at rate per annum equal to the
lesser of (i) the prime rate as of the first business day of such calendar
quarter and (ii) the interest rate payable on the first six-month U.S. Treasury
Bill issued during such calendar quarter. 
Upon expiry of the Retrocessionaire’s liability hereunder, the Retrocedent
shall return to the Retrocessionaire the balance of the Deposit Amount as of
such date of expiry.

 

6

 

Section 8.5.  Financial Statement Credit.  The Retrocessionaire agrees to take all
actions as may be necessary to permit the Retrocedent to obtain financial
statement credit in all United States jurisdictions for the reinsurance
provided by this Agreement.  It is
understood and agreed that any term or condition required to be included in
this Agreement for the Retrocedent to receive statutory financial statement
credit will be deemed to be incorporated in this Agreement by reference.

 

ARTICLE 9

 

AMENDMENT OF REINSURANCE AGREEMENTS; NOVATION AGREEMENTS

 

Section
9.1.  Amendment of Reinsurance Agreements.  Any amendments, extensions, endorsements or
alteration to the Reinsurance Agreements will be submitted to the
Retrocessionaire for advance approval, and no amendment, extension, endorsement
or alteration of any Reinsurance Agreement will be effective as between the
Retrocedent and the Retrocessionaire unless the Retrocessionaire’s prior
written approval has been obtained.

 

Section
9.2.  Novation Agreements.  The Retrocedent and the Retrocessionaire
will use commercially reasonable efforts to negotiate, execute and deliver Novation
Agreements.  Other than the
consideration set forth in this Agreement, no consideration will be payable to
or by either party hereto in connection with the execution and delivery of any
Novation Agreement.  The Retrocedent and
Retrocessionaire shall execute, acknowledge or verify, and deliver any and all
agreements, documents, instruments, reports or filings, and take any and all
other actions, which from time to time may be reasonably requested by the other
party to this Agreement to carry out the purposes and intent of this
Section.  Without limiting the
generality of the preceding sentence, at the request of the Retrocessionaire in
connection with the execution and delivery of a Novation Agreement, the
Retrocedent will deliver a letter (in form and substance satisfactory to the
Retrocessionaire) to the ceding company directing that future premiums be paid
directly to the Retrocessionaire. 
Notwithstanding anything to the contrary set forth herein, the
Retrocedent will not execute and deliver a Novation Agreement without the prior
written approval of the Retrocessionaire, which approval will not be
unreasonably withheld.  The signature of
the Retrocessionaire on a Novation Agreement will be deemed prior written
approval of such Novation Agreement by the Retrocessionaire.

 

ARTICLE 10

 

RESERVES

 

The Retrocessionaire shall maintain
reserves with respect to its share of the Reinsurance Agreements ceded
hereunder as are required by applicable law.

 

7

 

ARTICLE 11

 

Retrocedent will
indemnify and hold the Retrocessionaire harmless against any damages, claims or
causes of action incurred by or asserted against the Retrocessionaire that
arise from the intentional or reckless disregard by the Retrocedent of its
obligations under this Agreement.

 

ARTICLE 12

 

GENERAL CONDITIONS

 

Section
12.1.  Follow the
Fortunes.  This Agreement is based
on the original terms of the Reinsurance Agreements so that the
Retrocessionaire’s rights and obligations vis-à-vis the Retrocedent with
respect to the reinsurance provided under this Agreement shall, subject to the
terms of this Agreement, follow the fortunes of the Retrocedent in all respects
under the Reinsurance Agreements.

 

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

 

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

 

Section
12.4.  Access to
Records.  Upon reasonable notice,
the Retrocessionaire or its duly authorized representative shall have access to
and the right to inspect the books and records of the Retrocedent that pertain
to this Agreement or the Reinsurance Agreements.  In addition, at the request of the Retrocessionaire, the
Retrocedent shall use commercially reasonable efforts to cause the ceding
company under a Reinsurance Agreement to allow the Retrocessionaire or its duly
authorized representative to have access to and the right to inspect the books
and records of such party to the extent such books and records pertain to

 

8

 

such Reinsurance Agreement.  At
the request of the Retrocessionaire in respect of any ceding company under a
Reinsurance Agreement, the Retrocedent will appoint the Retrocessionaire as its
agent for purposes of gaining access to the books and records of such ceding
company.  At the request of the
Retrocessionaire following the execution and delivery of a Novation Agreement
and subject to any applicable confidentiality restrictions, the Retrocedent
promptly will transfer to the Retrocessionaire all books and records in the
Retrocedent’s possession relating to the novated Reinsurance Agreement.

 

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

 

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

 

Section
12.7.  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.

 

Section
12.8.  Arbitration.  Any dispute or other matter in question
relating to this Agreement that cannot be resolved by the Retrocedent and the
Retrocessionaire arising out of, or relating to, the formation, interpretation,
performance or breach of this Agreement, whether such dispute arises before or
after termination of this Agreement, will be subject to arbitration.  Arbitration will be initiated by the
delivery of a written notice of demand for arbitration by one party to the
other within a reasonable time after the dispute has arisen and cannot be
otherwise settled by the parties.

 

Within thirty (30)
days of the non-initiating party’s receipt of notice of arbitration, each party
will appoint a disinterested individual as arbitrator and the two so appointed
will then appoint a third arbitrator who will serve as the umpire.  If either party fails to appoint an
arbitrator within thirty (30) days, the other party may appoint the second
arbitrator.  If the two arbitrators do
not agree on a third arbitrator within fifteen (15) days of the date on which
the second arbitrator was appointed, the parties shall employ the ARIAS-U.S.
Umpire Appointment Procedures to appoint the third arbitrator.  If the ARIAS-U.S. Umpire Appointment
Procedures have been terminated, the parties shall jointly petition the New
York office of the American Arbitration Association to appoint the third
arbitrator.  The arbitrators will be
present or former officers of insurance or reinsurance companies or attorneys
experienced in reinsurance matters who do not have a personal or financial
interest in the result of the arbitration and who are not past or current
officers, employees or directors of the Retrocedent, the Retrocessionaire or
their respective affiliates.

 

9

 

The arbitration hearings will be held in New York, New York, or such
other place as the parties may mutually agree. 
Within thirty (30) days after appointment of the third arbitrator, the
panel shall meet and determine timely periods for briefs, discovery procedures
and schedules for hearings.  The
decision of the panel shall be rendered within forty-five (45) days following
the termination of the hearings.

 

In making its decision, the panel shall consider the customs and
practices of the reinsurance industry. 
The arbitrators will not be obliged to follow judicial formalities or
the rules of evidence except to the extent required by the laws of the State of
New York.  Insofar as the arbitration
panel looks to substantive law, it shall apply the laws of the State of New
York without regard to its conflict of laws rules.  The decision of any two arbitrators when rendered in writing
shall be final and binding.  The panel
is empowered to grant interim relief as it may deem appropriate.  Judgment upon the award may be entered in
any court having jurisdiction thereof. 
The substantive laws of the State of New York, without regard to its
conflict of laws rules, will govern any action or suit brought to compel any
such arbitration or to enforce any award rendered pursuant to such
arbitration.  It is agreed that the
arbitrators shall not have the jurisdiction to authorize any punitive,
exemplary or consequential damage awards between the parties hereto.

 

Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the cost of the third
arbitrator.  The remaining costs of the
arbitration shall be allocated by the panel. 
The panel may, at its discretion, award such further costs and expenses
as it considers appropriate, including but not limited to attorneys’ fees, to
the extent permitted by law.

 

Except as provided above, arbitration will be based, to the extent
applicable, upon ARIAS-U.S. procedures.

 

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

 

This Section shall
survive the termination of this Agreement.

 

Section 12.9.  Service of Suit.  Each party hereby irrevocably submits to the
nonexclusive jurisdiction of any Federal or State of New York court sitting in
the State of New York over any suit, action or proceeding relating to the
enforcement of the parties’ agreement to arbitrate or the enforcement of an
arbitral award.  Each party irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in such court and any claim that any suit, action or
proceeding brought in such court has been brought in an inconvenient
forum.  Each party agrees that a final
judgment, not subject to any further appeal, in any such suit, action or
proceeding brought in such a court shall be conclusive and binding upon it and
will be given effect in its state or country of domicile, as applicable, to the
fullest extent permitted by applicable law and may be enforced in any Federal
or State of New York court sitting in the State of New York, by a suit upon
such

 

10

 

judgment, provided
that service of process is effected upon it as specified in this Section or as
otherwise permitted by law.  Nothing
herein shall be deemed to limit or waive a party’s right to remove a suit,
action or proceeding to Federal court.

 

Further, each
party hereby designates the Superintendent of Insurance of the State of New
York, or his successor or successors in office, as the true and lawful attorney
upon whom may be served any lawful process in any action, suit or proceeding
instituted by or on behalf of the other party under this Agreement and arising
out of this Agreement, and hereby designates the person named in the “Notice”
provision of this Agreement as the person to whom the Superintendent or such
successor is authorized to mail such process or a true copy thereof.

 

Each party hereby
consents to process being served in any suit, action or proceeding of the
nature referred to above in any Federal or State of New York court sitting in
the State of New York by service of process as set forth above; provided that,
to the extent lawful and possible, written notice of said service shall be mailed
by registered or certified air mail, postage prepaid, return receipt requested,
to the other party at its address specified herein or to any other address of
which such party shall have given notice. 
Each party irrevocably waives, to the fullest extent permitted by law,
all claim of error by reason of any such service and agrees that such service
shall be deemed in every respect effective service of process upon such party
in any such suit, action or proceeding and shall, to the fullest extent
permitted by law, be taken and held to be valid and personal service upon and
personal delivery to such party.

 

Service of process
may be affected in any other manner permitted by law. Nothing in this Section
shall limit the right of a party to bring proceedings against the other party
in any court having jurisdiction over such other party and such proceeding for
the purpose of enforcing the parties’ agreement to arbitrate or to enforce an
arbitral award.

 

Section
12.10.  Notice.  As used in this Agreement, notice shall mean any and all notices,
requests, demands or other communications required or permitted to be given
hereunder.  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 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 the Retrocedent:

 

Assured Guaranty Corp.

1325 Avenue of the
Americas

New York, NY 10019

Telephone: 212-974-0100

Facsimile: 212-581-3268

 

11

 

Attention: General
Counsel

 

If to the
Retrocessionaire:

 

ACE American Insurance
Company

c/o ACE Tempest Re USA,
Inc.

Two Stamford Plaza

281 Tresser Boulevard

Suite 500

Stamford, CT 06901-3264

Telephone: 203-328-7001

Facsimile: 203-328-7003

Attention:  Jacques Bonneau

 

The Retrocedent and the Retrocessionaire 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
12.11.  Assignment.  This Agreement may not be assigned by either party without the
prior written consent of the other party. 
Notwithstanding the foregoing, the Retrocessionaire may assign its
rights under this Agreement to an affiliated entity so long as that entity (i)
has the same or better Standard and Poors (“S&P”) rating as then stated by
S&P for the Retrocessionaire and (ii) assumes all of the obligations of the
Retrocessionaire hereunder pursuant to a written agreement reasonably
satisfactory to the Retrocedent.

 

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

 

Section
12.13.  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.

 

Section
12.14.  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
12.15.  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.

 

12

 

Section 12.16.      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 12.17.      Further
Assurances.    Each party hereto shall, at any time and
from time to time after the first date written above, upon request of any other
party hereto, do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, all such further acts, instruments,
assignments and assurances as may be reasonably required in order to carry out
the intent of this Agreement.

 

[The next page is the signature page.]

 

13

 

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

 

	
  ASSURED GUARANTY CORP.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  
	
   

  
	
  ACE AMERICAN INSURANCE COMPANY

  
	
  Signed by ACE Tempest Re USA, Inc.

  
	
  for and on behalf of ACE American Insurance Company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

ANNEX A

 

REINSURANCE AGREEMENTS

 

[Insert list of Reinsurance Agreements]Exhibit
10.52

 

QUOTA SHARE RETROCESSION AGREEMENT

 

This Quota Share Retrocession Agreement (“Agreement”), dated as of
April       , 2004, is made and entered into by
and between ASSURED GUARANTY RE OVERSEAS LTD., formerly known as ACE CAPITAL RE
OVERSEAS LTD. (the “Retrocedent”), an insurance company registered and licensed
under the laws of the Islands of Bermuda, and ACE INA OVERSEAS INSURANCE
COMPANY LTD. (the “Retrocessionaire”), an insurance company registered and
licensed under the laws of the Islands of Bermuda.

 

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

 

ARTICLE 1

 

DEFINITIONS

 

Section
1.1.  Definitions.  For all purposes with regard to this
Agreement, the following terms shall have the following meanings:

 

A.                                   “Allocated
Loss Adjustment Expenses” means expenses paid by the Retrocedent on or after
the Effective Date in connection with (i) the adjustment of claims under the
Reinsurance Agreement, including, without limitation, court costs, interest
upon judgments as it accrues, and allocated investigation, adjustment, and
legal expenses chargeable to the investigation, negotiation, settlement or
defense of a claim or (ii) the protection, perfection or exercise of any
subrogation, salvage or recoupment rights under the Reinsurance Agreement.  For the avoidance of doubt, “Allocated Loss
Adjustment Expenses” does not include salaries paid to employees of the
Retrocedent or other overhead expenses.

 

B.                                     “Collateral
Amount” has the meaning set forth in Article 8.

 

C.                                     “Covered
Losses” means Reinsurance Agreement Losses and Allocated Loss Adjustment
Expenses, net of reinsurance (other than the reinsurance provided hereunder)
actually recovered.

 

D.                                    “Deposit
Amount” means, as of any date of determination, an amount equal to (i)
$32,200,000 plus (ii) amounts
previously transferred to the Retrocedent in accordance with Article 8 hereof minus (iii) amounts previously
appropriated by the Retrocedent in accordance with Article 8 hereof minus (iv) amounts previously transferred
to the Retrocessionaire in accordance with Article 8 hereof plus (v) interest previously credited in
accordance with Article 8 hereof.

 

E.                                      “Effective
Date” means April 1, 2004.

 

 

F.                                      “Extra
Contractual Obligations” means, with respect to the Reinsurance Agreement, any
and all liabilities (whether they constitute compensatory, consequential,
exemplary or punitive damages) not covered under any provision of the
Reinsurance Agreement that arise from the handling of any claim on business
covered thereunder, including without limitation, liabilities arising due to
the failure by the Retrocessionaire (acting pursuant to the authority granted
to it in Article 6 hereof) to settle within the policy limit, or by reason of
alleged or actual negligence or bad faith of the Retrocessionaire in rejecting
an offer of settlement or in the preparation of the defense or in the trial of
any action against the insured thereunder or in the preparation or prosecution
of an appeal consequent upon such action.

 

G.                                     “Quarterly
Report” has the meaning set forth in Section 7.1.

 

H.                                    “Reinsurance
Agreement” means that certain Quota Share Reinsurance Agreement, executed as of
December 29, 1999, by and between JCJ Insurance Company and the Retrocedent
(formerly known as KRE Reinsurance Ltd.) and attached hereto as Annex A.

 

I.                                         “Reinsurance
Agreement Losses” means amounts paid by
the Retrocedent on or after the Effective Date under the terms of the
Reinsurance Agreement in respect of (i) claims incurred under the Reinsurance
Agreement, including, without limitation, amounts paid in settlement of claims
and in satisfaction of judgments or any arbitral awards, (ii) loss adjustment
expenses of the reinsured that are ceded to the Retrocedent under the
Reinsurance Agreement and (iii) Extra Contractual Obligations in respect of the
Reinsurance Agreement.

 

J.                                        “Report
Amount” has the meaning set forth in Article 8.

 

K.                                    “Retrocession
Term” has the meaning set forth in Article 2.

 

L.                                      “Trust
Account” means a trust account established by the Retrocessionaire for the
benefit of the Retrocedent with a trustee that is reasonably acceptable to the
Retrocedent and the Retrocessionaire.

 

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

 

Section 1.3.                                Other Interpretative Provisions.  The
following interpretive provisions apply to this Agreement:  (a) a reference to any document or agreement
shall include such document or agreement as amended, modified or supplemented
from time to time in accordance with its terms and the terms of this Agreement;
(b) the singular includes the plural and the plural includes the singular; (c)
the words “include,” “includes,” and “including” are not limiting; and (d) the
words “herein,” “hereof,” “hereunder,” and words of like import shall refer to
this Agreement as a whole and not to any particular section or subdivision of
this Agreement.

 

2

 

ARTICLE 2

 

TERM

 

Section
2.1.  Term.  The term of this Agreement (the
“Retrocession Term”) shall commence at 12:01 a.m., eastern standard time, on
the Effective Date and shall remain in force until such time as the Retrocedent
has no further liability under the Reinsurance Agreement.

 

ARTICLE 3

 

TYPE

 

Quota share retrocession.

 

ARTICLE 4

 

COVERAGE

 

The Retrocedent hereby cedes to the Retrocessionaire, and the
Retrocessionaire hereby assumes as reinsurance from the Retrocedent and agrees
to pay Retrocedent, 100% of Covered Losses paid by the Retrocedent in respect
of the Reinsurance Agreement.

 

ARTICLE 5

 

RETROCESSION PREMIUM

 

The premium payable by the Retrocedent
hereunder is $32,200,000.  The Premium
will be retained by the Retrocedent as a deposit; provided however, at the
Retrocedent’s option, the Deposit Amount may be transferred to the Trust
Account at any date on or after the date of execution and delivery of this
Agreement.

 

ARTICLE 6

 

RIGHTS AND SETTLEMENTS;
RIGHTS OF ASSOCIATION

 

The Retrocessionaire agrees to take any and all actions necessary or
appropriate for the management of claims arising under the Reinsurance
Agreement, including without limitation investigating, assessing, adjusting,
arbitrating, litigating and settling claims, as appropriate, and shall conduct
itself with the utmost good faith in taking such actions.  The

 

3

 

Retrocessionaire is hereby authorized and directed to undertake all
such actions on behalf of the Retrocedent.

 

The Retrocedent agrees to abide by the claim settlements of the
Retrocessionaire.  The Retrocessionaire
shall be the sole judge of (i) the interpretation of the Reinsurance Agreement,
(ii) what shall constitute a claim under the Reinsurance Agreement and (iii)
the Retrocedent’s liability under the Reinsurance Agreement and the proper
amounts for the Retrocedent to pay thereunder.

 

Subject to the foregoing, the Retrocedent shall have the right and
shall be given the opportunity to, at its own expense, associate with any party
in the defense of any suit or proceeding arising out of or connected with any
claim under a Reinsurance Agreement.  In
such event, the Retrocessionaire and the Retrocedent shall cooperate in all
aspects of the defense of such suit or proceeding.

 

ARTICLE 7

 

REPORTS
AND REMITTANCES

 

Section 7.1.  Quarterly Report.  Within 30 days following the end of each
calendar quarter during the Retrocession Term, the Retrocedent will prepare and
deliver to the Retrocessionaire a report (the “Quarterly Report”) containing
information relevant to the calculation of the amount (other than amounts due
and owing pursuant to Article 8 hereof), if any, owed by or to the
Retrocessionaire hereunder in respect of such calendar quarter (which report
shall be in such form as the Retrocedent and the Retrocessionaire shall
reasonably agree).

 

Section 7.2.  Remittances.  Net payments owed to the Retrocessionaire
shall accompany the Quarterly Report. 
Net payments owed to the Retrocedent shall be made within ten (10)
business days of delivery of the Quarterly Report; provided, however, at the
option and upon the demand of the Retrocedent, when the amount due from the
Retrocessionaire exceeds $100,000, the Retrocedent shall be paid by wire
transfer of same day federal funds within two business days following the date
of receipt by the Retrocessionaire of a special loss accounting.

 

Section 7.3.                                Reserve
Report.           Within 30 days
following the end of each calendar quarter during the Retrocession Term, the
Retrocessionaire will prepare and deliver to the Retrocessionaire a report
containing the Retrocessionaire’s good faith estimate of the loss reserves to
be established by the Retrocedent in respect of the Reinsurance Agreement as of
the end of such calendar quarter (which report shall be in such form as the
Retrocedent and the Retrocessionaire shall reasonably agree).  The Retrocedent shall have no obligation to
establish reserves in accordance with such estimate.

 

4

 

ARTICLE 8

 

COLLATERAL/SECURITY

 

Section 8.1.                                Collateral
Report.    From time to time during the
Retrocession Term, the Retrocedent will provide to the Retrocessionaire a
written statement (the “Collateral Statement”) of the amount (such amount, the
“Collateral Amount”) of collateral, if any, that the Retrocedent is required to
post in respect of the Reinsurance
Agreement.  In addition, the
Retrocedent will provide a Collateral Statement at the request of the
Retrocessionaire.

 

Section 8.2.  Deposit.  (a)  The terms of this
Section 8.2 will apply from the date of execution and delivery of this
Agreement until the date, if any, on which the Retrocedent transfers the
Deposit Amount to the Trust Account.

 

(b)                                 Promptly
(and in any event within five business days) following receipt of a Collateral
Statement showing that the Collateral Amount exceeds the Deposit Amount, in
each case as of as of the date of such Collateral Statement, the
Retrocessionaire will promptly transfer such difference to the
Retrocedent.  If on any day during the
Retrocession Term the Collateral Amount is less than the Deposit Amount, in
each case as of such day, the Retrocedent will promptly (and in any event
within 5 business days of such day) transfer to the Retrocessionaire the lesser
of (i) such difference and (ii) the positive difference between the Deposit
Amount as of such day and $32,200,000.

 

(c)                                  At
any time after the Retrocessionaire fails to make any payment owing to the
Retrocedent under this Agreement as and when due, the Retrocedent may
appropriate so much of the Deposit Amount as may be required to cure such
default.  Until such time as the Deposit
Amount has been utilized in such manner or returned to the Retrocessionaire
pursuant to the terms hereof, interest thereon will be credited to the
Retrocessionaire quarterly at rate per annum equal to the lesser of (i) the
prime rate as of the first business day of such calendar quarter and (ii) the
interest rate payable on the first six-month U.S. Treasury Bill issued during
such calendar quarter.  Upon expiry of
the Retrocessionaire’s liability hereunder, the Retrocedent shall pay to the
Retrocessionaire the Deposit Amount as of such date of expiry.

 

Section 8.3.                                Trust
Account.  (a)  The terms of this Section 8.3 will apply
from and after the date, if any, on which the Retrocedent transfers the Deposit
Amount to the Trust Account.

 

(b)                                 In
the event the Retrocedent elects to transfer the Deposit Amount to a Trust
Account, the Retrocedent and the Retrocessionaire shall enter into a trust
agreement that establishes the Trust Account. 
The trust agreement shall be reasonably acceptable to the Retrocedent
and the Retrocessionaire in both form and substance.  The assets deposited in the Trust Account shall be valued
according to their current fair market value and shall consist only of cash
(United States legal tender), certificates of deposit issued by a United States
bank and payable in United States legal tender, and investments of the types

 

5

 

specified in paragraphs (1) and (2) of subsection (a) of section 1404
of the New York Insurance Law.  All
settlements of account between the Company and the Reinsurer shall be made in
cash or its equivalent.

 

(c)                                  The
Retrocedent and the Retrocessionaire agree that the assets in the Trust Account
(i) may be withdrawn by the Retrocedent only to pay amounts the Retrocedent
claims are due under this Agreement and (ii) shall be utilized and applied by
the Retrocedent or any successor by operation of law of the Retrocedent
(including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Retrocedent) without diminution because of insolvency on the
part of the Retrocedent or the Retrocessionaire only to pay amounts the
Retrocedent claims are due under this Agreement.

 

(d)                                 Promptly
(and in any event within five business days) following receipt of a Collateral
Statement showing that the Collateral Amount exceeds the market value of the
assets in the Trust Account, in each case as of the date of such Collateral
Statement, the Retrocessionaire will deposit in the Trust Account qualified assets
with a market value at least equal to such difference.  If on any day during the Retrocession Term
the Collateral Amount is less than the market value of the assets in the Trust
Account, in each case as of such day, the Retrocedent will promptly (and in any
event within five business days of such day) transfer to the Trust Account
assets with a market value at least equal to the lesser of (i) such difference
and (ii) the positive difference between the Deposit Amount as of such day and
$32,200,000.

 

(e)                                  The
Retrocessionaire has the right to seek approval from the Retrocedent to
withdraw from the Trust Account all or any part of the assets contained therein
and transfer such assets to the Retrocessionaire, provided that:

 

1.                           the
Retrocessionaire shall, at the time of such withdrawal, replace the withdrawn
assets with other qualified assets having a market value at least equal to the
market value of the assets withdrawn so as to maintain at all times the deposit
in the required amount; or

 

2.                           after
such withdrawal and transfer, the market value of the Trust Account is not less
than the Collateral Amount.

 

The Retrocedent shall be the sole judge as to the application of this
provision, but shall not unreasonably or arbitrarily withhold its approval.

 

Section 8.4.  Surety Bond, Etc.  If on any day during the Retrocession Term
the Retrocedent is required to procure a surety bond or some other form of
security in connection with any litigation, arbitration or similar action
(howsoever described) arising out of or in any way connected to the Reinsurance
Agreement, the Retrocessionaire shall reimburse the Retrocedent for any and all
costs incurred by the Retrocedent in connection with such procurement.

 

6

 

ARTICLE 9

 

GENERAL CONDITIONS

 

Section
9.1.  Follow the
Fortunes.  This Agreement is based
on the original terms of the Reinsurance Agreement so that the
Retrocessionaire’s rights and obligations vis-à-vis the Retrocedent with
respect to the reinsurance provided under this Agreement shall, subject to the
terms of this Agreement, follow the fortunes of the Retrocedent in all respects
under the Reinsurance Agreement.

 

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

 

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

 

Section
9.4.  Access to
Records.  Upon reasonable notice,
the Retrocessionaire or its duly authorized representative shall have access to
and the right to inspect the books and records of the Retrocedent that pertain
to this Agreement or the Reinsurance Agreement.  In addition, the Retrocedent shall use commercially reasonable
efforts to cause JCJ Insurance Company to allow the Retrocessionaire or its
duly authorized representative to have access to and the right to inspect the
books and records JCJ Insurance Company to the extent such books and records
pertain to such Reinsurance Agreement.

 

Section
9.5.  Offset.  The Retrocessionaire or the Retrocedent 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

 

7

 

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
9.6.  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
9.7.  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.

 

Section 9.8.  Arbitration.  Any
dispute or other matter in question relating to this Agreement that cannot be
resolved by the Retrocedent and the Retrocessionaire arising out of, or
relating to, the formation, interpretation, performance or breach of this
Agreement, whether such dispute arises before or after termination of this
Agreement, will be subject to arbitration. 
Arbitration will be initiated by the delivery of a written notice of
demand for arbitration by one party to the other within a reasonable time after
the dispute has arisen and cannot be otherwise settled by the parties.

 

Within thirty (30) days of the non-initiating party’s receipt of notice
of arbitration, each party will appoint a disinterested individual as
arbitrator and the two so appointed will then appoint a third arbitrator who will
serve as the umpire.  If either party
fails to appoint an arbitrator within thirty (30) days, the other party may
appoint the second arbitrator.  If the
two arbitrators do not agree on a third arbitrator within fifteen (15) days of
the date on which the second arbitrator was appointed, the parties shall employ
the ARIAS-U.S. Umpire Appointment Procedures to appoint the third
arbitrator.  If the ARIAS-U.S. Umpire
Appointment Procedures have been terminated, the parties shall jointly petition
the New York office of the American Arbitration Association to appoint the
third arbitrator.  The arbitrators will
be present or former officers of insurance or reinsurance companies or
attorneys experienced in reinsurance matters who do not have a personal or
financial interest in the result of the arbitration and who are not past or
current officers, employees or directors of the Retrocedent, the
Retrocessionaire or their respective affiliates.

 

The arbitration hearings will be held in New York, New York, or such
other place as the parties may mutually agree. 
Within thirty (30) days after appointment of the third arbitrator, the
panel shall meet and determine timely periods for briefs, discovery procedures
and schedules for hearings.  The
decision of the panel shall be rendered within forty-five (45) days following
the termination of the hearings.

 

In making its decision, the panel shall consider the customs and
practices of the reinsurance industry. 
The arbitrators will not be obliged to follow judicial formalities or
the rules of evidence except to the extent required by the laws of the State of
New York.  Insofar as the arbitration
panel looks to substantive law, it shall apply the laws of the State of New
York without regard to its conflict of laws rules.  The decision of any two arbitrators when

 

8

 

rendered in writing shall be final and binding.  The panel is empowered to grant interim
relief as it may deem appropriate. 
Judgment upon the award may be entered in any court having jurisdiction
thereof.  The substantive laws of the
State of New York, without regard to its conflict of laws rules, will govern
any action or suit brought to compel any such arbitration or to enforce any
award rendered pursuant to such arbitration. 
It is agreed that the arbitrators shall not have the jurisdiction to
authorize any punitive, exemplary or consequential damage awards between the
parties hereto.

 

Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the cost of the third
arbitrator.  The remaining costs of the
arbitration shall be allocated by the panel. 
The panel may, at its discretion, award such further costs and expenses
as it considers appropriate, including but not limited to attorneys’ fees, to
the extent permitted by law.

 

Except as provided above,
arbitration will be based, to the extent applicable, upon ARIAS-U.S.
procedures.

 

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

 

This Section shall survive the termination of this Agreement.

 

Section 9.9.  Service of Suit.  Each party hereby irrevocably submits to the
nonexclusive jurisdiction of any Federal or State of New York court sitting in
the State of New York over any suit, action or proceeding relating to the
enforcement of the parties’ agreement to arbitrate or the enforcement of an
arbitral award.  Each party irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in such court and any claim that any suit, action or
proceeding brought in such court has been brought in an inconvenient
forum.  Each party agrees that a final
judgment, not subject to any further appeal, in any such suit, action or
proceeding brought in such a court shall be conclusive and binding upon it and
will be given effect in its state or country of domicile, as applicable, to the
fullest extent permitted by applicable law and may be enforced in any Federal
or State of New York court sitting in the State of New York, by a suit upon
such judgment, provided that service of process is effected upon it as
specified in this Section or as otherwise permitted by law.  Nothing herein shall be deemed to limit or
waive a party’s right to remove a suit, action or proceeding to Federal court.

 

Further, each party hereby designates the Superintendent of Insurance
of the State of New York, or his successor or successors in office, as the true
and lawful attorney upon whom may be served any lawful process in any action,
suit or proceeding instituted by or on behalf of the other party under this
Agreement and arising out of this Agreement, and hereby designates the person
named in the “Notice” provision of this Agreement as the person to whom the
Superintendent or such successor is authorized to mail such process or a true
copy thereof.

 

9

 

Each party hereby consents to process being served in any suit, action
or proceeding of the nature referred to above in any Federal or State of New
York court sitting in the State of New York by service of process as set forth
above; provided that, to the extent lawful and possible, written notice of said
service shall be mailed by registered or certified air mail, postage prepaid,
return receipt requested, to the other party at its address specified herein or
to any other address of which such party shall have given notice.  Each party irrevocably waives, to the
fullest extent permitted by law, all claim of error by reason of any such
service and agrees that such service shall be deemed in every respect effective
service of process upon such party in any such suit, action or proceeding and
shall, to the fullest extent permitted by law, be taken and held to be valid
and personal service upon and personal delivery to such party.

 

Service of process may be affected in any other manner permitted by
law. Nothing in this Section shall limit the right of a party to bring
proceedings against the other party in any court having jurisdiction over such
other party and such proceeding for the purpose of enforcing the parties’ agreement
to arbitrate or to enforce an arbitral award.

 

Section
9.10.  Notice.  As used in this Agreement, notice shall mean
any and all notices, requests, demands or other communications required or
permitted to be given hereunder.  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 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 the Retrocedent:

 

Assured Guaranty Re Overseas Ltd.

Victoria Hall

11 Victoria Street

PO Box HM 1826

Hamilton, Bermuda HM HX

Facsimile:  441-292-1563

Attention: Corporate Secretary

 

with a copy to:

 

ACE Capital Re Inc.

1325 Avenue of the
Americas

New York, New York 10019

Telephone:  212-974-0100

Facsimile:   212-581-3268

Attention:  General Counsel

 

10

 

If to the
Retrocessionaire:

 

ACE INA Overseas
Insurance Company Ltd.

c/o ACE Financial
Solutions

1133 Avenue of the Americas

New York, NY 10036

Telephone:  212-642-7800

Facsimile:  212-642-7801

Attention:  President

 

The Retrocedent and the Retrocessionaire 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
9.11.  Assignment.  This Agreement may not be assigned by either
party without the prior written consent of the other party.

 

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

 

Section
9.13.  Changes to
Reinsurance Agreement.  The
Retrocedent shall not amend, modify, supplement or assign the Reinsurance
Agreement without the prior written consent of the Retrocessionaire (such
consent not to be unreasonably withheld).

 

Section
9.14.  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.

 

Section
9.15.  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
9.16.  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 9.17.                         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

 

11

 

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

 

 

[The next page is the signature page.]

 

12

 

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

 

	
  ASSURED GUARANTY RE OVERSEAS LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACE INA OVERSEAS INSURANCE COMPANY LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

ANNEX A

 

[Attach Reinsurance
Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]