Document:

Exhibit 10.39

 

Restricted Stock
Agreement under

Assured Guaranty Ltd. 2004 Long-Term Incentive Plan

 

THIS AGREEMENT, entered into as of the Grant Date (as
defined in paragraph 1), by and between the Participant and Assured Guaranty
Ltd. (the “Company”):

 

WITNESSETH THAT:

 

WHEREAS, the Company maintains the Assured Guaranty
Ltd. 2004 Long-Term Incentive Plan (the “Plan”), and the Participant has been
selected by the committee administering the Plan (the “Committee”) to receive a
Restricted Stock Award under the Plan;

 

NOW, THEREFORE, IT IS AGREED, by and between the
Company and the Participant, as follows:

 

1. Terms
of Award. The following words and phrases used in this Agreement
shall have the meanings set forth in this paragraph 1:

 

(a)           The “Participant”
is                          .

 

(b)           The “Grant
Date” is                        
..

 

(c)           The number
of “Covered Shares” shall be                 shares
of Stock.

 

Other words and phrases used in this Agreement are
defined pursuant to paragraph 18 or elsewhere in this Agreement.

 

2. Restricted Stock
Award. This Agreement specifies the terms of the “Restricted Stock Award”
granted to the Participant.

 

3. Restricted
Period. Subject to the limitations of this Agreement, the “Restricted
Period” for each Installment of Covered Shares of the Restricted Stock Award
shall begin on the Grant Date and end as described in the following schedule
(but only if the Date of Termination has not occurred before the end of the
Restricted Period):

 

 

	
  INSTALLMENT

  	
   

  	
  RESTRICTED PERIOD WILL END ON:

  
	
  1⁄4 of Covered Shares

  	
   

  	
  One year anniversary of
  the Grant Date

  
	
  1⁄4 of Covered Shares

  	
   

  	
  Two year anniversary of
  the Grant Date

  
	
  1⁄4 of Covered Shares

  	
   

  	
  Three year anniversary
  of the Grant Date

  
	
  1⁄4 of Covered Shares

  	
   

  	
  Four year anniversary
  of the Grant Date

  

 

The Restricted Period shall end prior to the date
specified in the foregoing schedule to the extent set forth below:

 

(a)           For
Installments as to which the Restricted Period has not ended prior to the Date
of Termination, the Restricted Period for such Installments shall end upon the
Participant’s Date of Termination, if the Date of Termination occurs by reason
of the Participant’s Disability or death.

 

(b)           For
Installments as to which the Restricted Period has not ended prior to the date
of a Change in Control, the Restricted Period for such Installments shall end
upon a Change in Control, provided that such Change in Control occurs on or
before the Date of Termination.

 

(c)           For
Installments as to which the Restricted Period has not ended prior to the Date
of Termination, if the Participant’s Date of Termination occurs because of
Retirement, the Participant shall be treated as though employed by the Company
and Subsidiaries after the Participant’s actual Date of Termination until the
Restricted Period has ended with respect to all Installments.

 

4. Transfer and Forfeiture of Shares. If the
Restricted Period with respect to any Installment of the Covered Shares ends on
or before the Participant’s Date of Termination, then at the end of such
Restricted Period, that Installment of Covered Shares shall be transferred to
the Participant free of all restrictions (except for restrictions described in
paragraph 10). If the Restricted Period with respect to any Installments does
not end on or before the Participant’s Date of Termination, then as of the
Participant’s Date of Termination, the Participant shall forfeit such
Installments. However, the Committee, in its sole discretion, may accelerate
the end of the Restricted Period or provide for the vesting of the Covered
Shares under circumstances that such vesting would not otherwise occur in its
sole discretion, based on such factors as the Committee deems appropriate.

 

5. Withholding.
All deliveries and distributions under this Agreement are subject to
withholding of all applicable taxes. At the election of the Participant, and
subject to such rules and limitations as may be established by the Committee
from time to time, such withholding obligations may be satisfied through the
surrender of shares of Stock which the Participant already owns, or to which
the Participant is otherwise entitled under the Plan; provided, however, that
such shares may be used to satisfy not more than the Company’s minimum

 

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statutory
withholding obligation (based on minimum statutory withholding rates for
Federal and state tax purposes, including payroll taxes, that are applicable to
such supplemental taxable income).

 

6. Transferability.
Except as otherwise provided by the Committee, the Restricted Stock Award may
not be sold, assigned, transferred, pledged or otherwise encumbered during the
Restricted Period.

 

7. Dividends.
The Participant shall not be prevented from receiving dividends and
distributions paid on the Covered Shares of Restricted Stock merely because
those shares are subject to the restrictions imposed by this Agreement and the
Plan; provided, however that no dividends or distributions shall be payable to
or for the benefit of the Participant with respect to record dates for such
dividends or distributions for any Covered Shares occurring on or after the
date, if any, on which the Participant has forfeited those shares.

 

8. Voting.
The Participant shall not be prevented from voting the Restricted Stock Award
merely because those shares are subject to the restrictions imposed by this
Agreement and the Plan; provided, however, that the Participant shall not be
entitled to vote Covered Shares with respect to record dates for any Covered
Shares occurring on or after the date, if any, on which the Participant has
forfeited those shares.

 

9. Registration
of Restricted Stock Award. Each certificate issued in respect of the
Covered Shares awarded under this Agreement shall be registered in the name of
the Participant.

 

10. Cancellation and
Rescission of Restricted Stock Award.

 

(a)           The
Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict
the Restricted Stock Award at any time if the Participant engages in any “Detrimental
Activity.”

 

(b)           At the end
of the Restricted Period with respect to an Installment and prior to the
transfer of the Covered Shares to the Participant, the Participant shall
certify, to the extent required by the Committee, in a manner acceptable to the
Committee, that the Participant is not engaging and has not engaged in any
Detrimental Activity. In the event a Participant has engaged in any Detrimental
Activity prior to, or during the six months after, the vesting of any
Installment of Covered Shares, such vesting may be rescinded by the Committee
within two years thereafter. In the event of any such rescission, the
Participant shall pay to the Company the amount of any gain realized as a
result of the rescinded vesting, in such manner and on such terms and
conditions as may be required by the Company, and the Company shall be entitled
to set-off against the amount of any such gain any amount owed to the
Participant by the Company and/or Subsidiary.

 

11. Heirs and Successors. This Agreement shall be
binding upon, and inure to the benefit of, the Company and its successors and
assigns, and upon any person acquiring, whether by merger, consolidation,
purchase of assets or otherwise, all or substantially all of the Company’s
assets and business. If any benefits deliverable to the Participant under this
Agreement have not been delivered at the time of the Participant’s death, such
benefits shall be delivered to the Designated Beneficiary, in accordance with
the provisions of this Agreement and

 

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the
Plan. The “Designated Beneficiary” shall be the beneficiary or beneficiaries
designated by the Participant in a writing filed with the Committee in such
form and at such time as the Committee shall require. If a deceased Participant
fails to designate a beneficiary, or if the Designated Beneficiary does not
survive the Participant, any rights that would have been exercisable by the
Participant and any benefits distributable to the Participant shall be
distributed to the legal representative of the estate of the Participant. If a
deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant but dies before the complete distribution of benefits
to the Designated Beneficiary under this Agreement, then any benefits distributable
to the Designated Beneficiary shall be distributed to the legal representative
of the estate of the Designated Beneficiary.

 

12. Administration. The authority to manage and
control the operation and administration of this Agreement shall be vested in
the Committee, and the Committee shall have all powers with respect to this
Agreement as it has with respect to the Plan. Any interpretation of this
Agreement by the Committee and any decision made by it with respect to this
Agreement is final and binding on all persons. The Committee shall have the
authority to obtain such information from the Participant (including tax return
information) as it determines may be necessary to confirm that the Participant
is in compliance with the requirements applicable to Detrimental Activity, and
if the Participant fails to provide such information, the Committee may
conclude that the Participant is not in compliance with such requirements.

 

13. Plan Governs. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall be subject to the terms of the
Plan, a copy of which may be obtained by the Participant from the office of the
Secretary of the Company; and this Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to
time pursuant to the Plan.

 

14. Not An Employment Contract. The Restricted Stock
Award will not confer on the Participant any right with respect to continuance
of employment or other service with the Company or any Related Company, nor
will it interfere in any way with any right the Company or any Related Company
would otherwise have to terminate or modify the terms of such Participant’s
employment or other service at any time.

 

15. Notices. Any written notices provided for in this
Agreement or the Plan shall be in writing and shall be deemed sufficiently
given if either hand delivered or if sent by fax or overnight courier, or by
postage paid first class mail. Notices sent by mail shall be deemed received
three business days after mailing but in no event later than the date of actual
receipt. Notices shall be directed, if to the Participant, at the Participant’s
address indicated by the Company’s records, or if to the Company, at the
Company’s principal executive office.

 

16. Fractional Shares. In lieu of issuing a fraction
of a share, resulting from an adjustment of the Restricted Stock Award pursuant
to the Plan or otherwise, the Company will be entitled to pay to the
Participant an amount equal to the fair market value of such fractional share.

 

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17. Amendment. This Agreement may be amended in
accordance with the provisions of the Plan, and may otherwise be amended by
written agreement of the Participant and the Company without the consent of any
other person.

 

18. Definitions. For
purposes of this Agreement, words and phrases shall be defined as follows:

 

(a)           Change
in Control. The term “Change in Control” shall be defined as set forth in
the Plan.

 

(b)           Date of
Termination. A Participant’s “Date of Termination” means, with respect to
an employee, the date on which the Participant’s employment with the Company
and Subsidiaries terminates for any reason, and with respect to a Director, the
date immediately following the last day on which the Participant serves as a
Director; provided that a Date of Termination shall not be deemed to occur by
reason of a Participant’s transfer of employment between the Company and a
Subsidiary or between two Subsidiaries; further provided that a Date of
Termination shall not be deemed to occur by reason of a Participant’s cessation
of service as a Director if immediately following such cessation of service the
Participant becomes or continues to be employed by the Company or a Subsidiary,
nor by reason of a Participant’s termination of employment with the Company or
a Subsidiary if immediately following such termination of employment the Participant
becomes or continues to be a Director; and further provided that a Participant’s
employment shall not be considered terminated while the Participant is on a
leave of absence from the Company or a Subsidiary approved by the Participant’s
employer.

 

(c)           Detrimental
Activity. The term “Detrimental Activity” shall mean (i) the rendering of
services for any organization or engaging directly or indirectly in any
business which is or becomes competitive with the Company or the Subsidiaries
(including, without limitation, AMBAC Financial Group Inc., CIFG Group,
Financial Guaranty Insurance Company, Financial Security Assurance Inc., MBIA,
Inc. and Radian Group Inc.), or which organization or business, or the
rendering of services to such organization or business, is or becomes otherwise
prejudicial to or in conflict with the interests of the Company or the Subsidiaries;
(ii) the disclosure to anyone outside the Company or the Subsidiaries, or the
use in other than the Company’s or the Subsidiaries’ business, without prior
written authorization from the Company or the Subsidiaries, of any confidential
information or material, relating to the business of the Company or the
Subsidiaries, acquired by the Participant either during or after employment
with the Company or the Subsidiaries; (iii) a violation of any rules, policies,
procedures or guidelines of the Company or the Subsidiaries, including but not
limited to the Company’s business conduct guidelines; (iv) any attempt directly
or indirectly to induce any employee of the Company to be employed or perform
services elsewhere or any attempt directly or indirectly to solicit the trade
or business of any current or prospective customer, supplier or partner of the
Company; (v) the Participant being convicted of, or entering a guilty plea with
respect to, a crime, whether or not connected with the Company; or (vi) any
other conduct or act determined to be injurious, detrimental or prejudicial to
any interest of the Company. Notwithstanding the foregoing, activity occurring
after the Date of

 

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Termination
shall constitute Detrimental Activity only if it is described in clause (i)
(relating to competition), (ii) (relating to confidentiality), or (iv)
(relating to solicitation) above.

 

(d)           Director.
The term “Director” means a member of the Board of Directors of Assured
Guaranty Ltd., who may or may not be an employee of the Company or a
Subsidiary.

 

(e)           Disability.
The Participant shall be considered to have a “Disability” during the period in
which the Participant is unable, by reason of a medically determinable physical
or mental impairment, to engage in any substantial gainful activity, which
condition, in the opinion of a physician selected by the Committee, is expected
to have a duration of not less than 120 days.

 

(f)            Retirement. “Retirement” of a Participant shall
mean with respect to an employee of the Company or a Subsidiary, the occurrence
of a Participant’s Date of Termination with the consent of the Participant’s
employer after the Participant has completed five years of service and attained
age 55. For purposes of this definition, years of service shall be determined
in accordance with rules established by the Committee, and shall take into
account service with the Company and its Subsidiaries, as well as service with
ACE Limited and its subsidiaries occurring prior to the initial public offering
of stock of the Company.

 

(g)           Plan
Definitions. Except where the context clearly implies or indicates the
contrary, a word, term, or phrase used in the Plan is similarly used in this
Agreement.

 

IN WITNESS WHEREOF, the Participant has executed the
Agreement, and the Company has caused these presents to be executed in its name
and on its behalf, all as of the Grant Date.

 

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Assured Guaranty Ltd.

 

 

	
  By:

  	
  James Michener

  	
   

  
	
  Its:

  	
  General Counsel

  	
   

  
	
   

  
	
   

  
	
  Participant:

  	
   

  	
   

  
				

 

7Exhibit
10.42

 

INDEMNIFICATION AGREEMENT

 

THIS AGREEMENT
is entered into, effective as of December 21, 2005 by and between Assured
Guaranty Ltd., a Bermuda company (the “Company”), and                      (“Indemnitee”).

 

WHEREAS, it is
essential to the Company to retain and attract as directors and officers the
most capable persons available;

 

WHEREAS,
Indemnitee is a director and/or officer of the Company;

 

WHEREAS, both
the Company and Indemnitee recognize the increased risk of litigation and other
claims currently being asserted against directors and officers of corporations;

 

WHEREAS, the
Bye-Laws of the Company require the Company to indemnify its directors and
officers to the fullest extent permitted by law, and permit the Company to
advance expenses relating to the defense of indemnification matters, and the
Indemnitee has been serving and continues to serve as a director and/or officer
of the Company in part in reliance on the Company’s Bye-Laws;

 

WHEREAS, in
recognition of Indemnitee’s need for (i) substantial protection against
personal liability based on Indemnitee’s reliance on the aforesaid Bye-Laws,
(ii) specific contractual assurance that the protection promised by the
Bye-Laws will be available to Indemnitee (regardless of, among other things,
any amendment to or revocation of the Bye-Laws or any change in the composition
of the Company’s Board of Directors or acquisition transaction relating to the
Company), and (iii) an inducement to provide effective services to the Company
as a director and/or officer, the Company wishes to provide in this Agreement
for the indemnification of and the advancing of expenses to Indemnitee to the
fullest extent (whether partial or complete) permitted under law and as set
forth in this Agreement, and, to provide for the continued coverage of
Indemnitee under the Company’s directors’ and officers’ liability insurance
policies; and

 

WHEREAS, the Board of Directors has determined that contractual
indemnification as set forth herein is reasonable and prudent and promotes the
best interests of the Company and its shareholders;

 

NOW,
THEREFORE, in consideration of the above premises and of Indemnitee continuing
to serve the Company directly or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties agree as follows:

 

1.             Certain
Definitions:

 

(a)           Board:
the Board of Directors of the Company.

 

 

(b)           Affiliate:
any corporation or other person or entity that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, the person specified.

 

(c)           Change
in Control: shall be deemed to have occurred if:

 

(i)            any
“person,” as such term is used in Sections 3(a)(9) and 13(d) of the United
States Securities Exchange Act of 1934, becomes a “beneficial owner,” as such
term is used in Rule 13d-3 promulgated under that act, of 25% or more of the
Voting Stock (as defined below) of the Company;

 

(ii)           the
majority of the Board consists of individuals other than Incumbent Directors,
which term means the members of the Board on the Effective Date; provided that
any person becoming a director subsequent to such date whose election or
nomination for election was supported by three-quarters of the directors who
then comprised the Incumbent Directors shall be considered to be an Incumbent
Director;

 

(iii)          the
Company adopts any plan of liquidation providing for the distribution of all or
substantially all of its assets;

 

(iv)          all or
substantially all of the assets or business of the Company is disposed of
pursuant to a merger, consolidation or other transaction (unless the
shareholders of the Company immediately prior to such merger, consolidation or
other transaction beneficially own, directly or indirectly, in substantially
the same proportion as they owned the Voting Stock of the Company, all of the
Voting Stock or other ownership interests of the entity or entities, if any,
that succeed to the business of the Company); or

 

(v)           the
Company combines with another company and is the surviving corporation but,
immediately after the combination, the shareholders of the Company immediately
prior to the combination hold, directly or indirectly, 50% or less of the
Voting Stock of the combined company (there being excluded from the number of
shares held by such shareholders, but not from the Voting Stock of the combined
company, any shares received by Affiliates (as defined below) of such other
company in exchange for stock of such other company).

 

For the purpose of this definition of “Change in Control,” (I) an
“Affiliate” of a person or other entity shall mean a person or other entity
that directly or indirectly controls, is controlled by, or is under common
control with the person or other entity specified and (II) “Voting Stock” shall
mean capital stock of any class or classes having general voting power under
ordinary circumstances, in the absence of contingencies, to elect the directors
of a corporation.

 

(d)           Expenses:
any expense, liability, or loss, including attorneys’ fees, judgments, fines,
ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any
interest, assessments, or other charges imposed thereon, any federal, state,
local, or foreign taxes imposed as a result of the actual or deemed receipt of
any

 

2

 

payments
under this Agreement, and all other costs and obligations, paid or incurred in
connection with investigating, defending, prosecuting (subject to
Section 2(b)), being a witness in, participating in (including on appeal),
or preparing for any of the foregoing in, any Proceeding relating to any
Indemnifiable Event.

 

(e)           Indemnifiable
Event: any event or occurrence that takes place either prior to or after
the execution of this Agreement, directly or indirectly, related to the fact
that Indemnitee is or was a director or officer of the Company, or while a
director or officer is or was serving at the request of the Company as a
director, officer, employee, trustee, agent, or fiduciary of another foreign or
domestic corporation, partnership, limited liability company, joint venture,
employee benefit plan, trust, or other enterprise, or was a director, officer,
employee, or agent of a foreign or domestic corporation that was a predecessor
corporation of the Company or of another enterprise at the request of such
predecessor corporation, or related to anything done or not done by Indemnitee
in any such capacity, whether or not the basis of the Proceeding is alleged
action in an official capacity as a director, officer, employee, or agent or in
any other capacity while serving as a director, officer, employee, or agent of
the Company, as described above.

 

(f)            Independent
Counsel: the person or body appointed in connection with Section 3.

 

(g)           Proceeding:
any threatened, pending, or completed action, suit, or proceeding or any
alternative dispute resolution mechanism (including an action by or in the
right of the Company), or any inquiry, hearing, or investigation, whether
conducted by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any action, suit, or proceeding,
whether civil, criminal, administrative, investigative, or other.

 

(h)           Reviewing
Party: the person or body appointed in accordance with Section 3.

 

(i)            Voting
Securities: any securities of the Company that vote generally in the
election of directors.

 

2.             Agreement
to Indemnify.

 

(a)           General
Agreement. In the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Proceeding by reason of (or arising in part
out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and
against any and all Expenses to the fullest extent permitted by law, as the
same exists or may hereafter be amended or interpreted (but in the case of any
such amendment or interpretation, only to the extent that such amendment or
interpretation permits the Company to provide broader indemnification rights
than were permitted prior thereto). The parties hereto intend that this
Agreement shall provide for indemnification in excess of that expressly
permitted by statute, including, without limitation, any indemnification
provided by the Company’s Bye-Laws, vote of its shareholders or disinterested
directors, or applicable law; provided

 

3

 

that
this indemnity shall not extend to any matter which may attach to Indemnitee in
respect of any fraud or dishonesty on the part of Indemnitee, as determined by
a final and non-appealable judicial determination.

 

(b)           Initiation
of Proceeding. Notwithstanding anything in this Agreement to the contrary,
Indemnitee shall not be entitled to indemnification pursuant to this Agreement
in connection with any Proceeding initiated by Indemnitee against the Company
or any director or officer of the Company unless (i) the Company has joined in
or the Board has consented to the initiation of such Proceeding; (ii) the
Proceeding is one to enforce indemnification rights under this Agreement; or
(iii) the Proceeding is instituted after a Change in Control (other than a
Change in Control approved by a majority of the directors on the Board who were
directors immediately prior to such Change in Control) and Independent Counsel
has approved its initiation.

 

(c)           Expense
Advances. If so requested by Indemnitee, the Company shall advance (within
ten business days of such request) any and all Expenses to Indemnitee (an
“Expense Advance”); provided that, (i) such an Expense Advance shall be made
only upon delivery to the Company of an undertaking by or on behalf of the
Indemnitee to repay the amount thereof if it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company, and (ii) if and to
the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid. If Indemnitee has commenced or
commences legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, as
provided in Section 4, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding, and Indemnitee shall not be required to reimburse the Company
for any Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or have lapsed). Indemnitee’s obligation to reimburse the Company for Expense
Advances shall be unsecured and no interest shall be charged thereon.

 

(d)           Mandatory
Indemnification. Notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any Proceeding relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.  For purposes of this Agreement and without
limiting the foregoing, if any action, suit or proceeding is disposed of, on
the merits or otherwise (including a disposition without prejudice), without
(i) the disposition being adverse to Indemnitee, (ii) an adjudication that
Indemnitee was liable to the Company, (iii) a plea of guilty or nolo contendere
by Indemnitee or (iv) an adjudication that Indemnitee is not entitled to the indemnification
provided by this Agreement, Indemnitee shall be considered for the purposes
hereof to have been wholly successful with respect thereto.

 

4

 

(e)           Partial
Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of Expenses,
but not, however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

(f)            Prohibited
Indemnification. No indemnification pursuant to this Agreement shall be
paid by the Company:

 

(i)            on
account of any Proceeding in which judgment is rendered against Indemnitee for
an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934, as amended, or similar provisions of any
federal, state, or local laws; or

 

(ii)           if a court
of competent jurisdiction by a final judicial determination, shall determine
that such indemnity is not permitted under applicable law.

 

(g)           Contribution.  In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for herein
is held by a court of competent jurisdiction to be unavailable to Indemnitee in
whole or in part or is insufficient to hold Indemnitee harmless, it is agreed
that, in such event, the Company shall, to the fullest extent permitted by law,
contribute to the payment of Indemnitee’s costs, charges and expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in an amount that is just and equitable in the
circumstances, taking into account, among other things, contributions by other
directors and officers of the Company or others pursuant to indemnification
agreements or otherwise; provided, that, without limiting the generality of the
foregoing, such contribution shall not be required where such holding by the
court is due to any limitation on indemnification set forth in Section 2(f),
6(c) or 13 hereof.

 

3.             Reviewing
Party. Prior to any Change in Control, the Reviewing Party shall be any appropriate
person or body consisting of a member or members of the Board or any other
person or body appointed by the Board who is not a party to the particular
Proceeding with respect to which Indemnitee is seeking indemnification; after a
Change in Control, the Independent Counsel referred to below shall become the
Reviewing Party. With respect to all matters arising after a Change in Control
(other than a Change in Control approved by a majority of the directors on the
Board who were directors immediately prior to such Change in Control)
concerning the rights of Indemnitee to indemnity payments and Expense Advances
under this Agreement or any other agreement or under applicable law or the
Company’s Bye-Laws now or hereafter in effect relating to indemnification for
Indemnifiable Events, the Company shall seek legal advice only from Independent
Counsel selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld), and who has not otherwise performed
services for the Company or the Indemnitee (other than in connection with
indemnification matters) within the last five years. The Independent Counsel
shall not include any person who, under the applicable

 

5

 

standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s rights
under this Agreement. Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
the Indemnitee should be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Counsel and to
indemnify fully such counsel against any and all expenses (including attorneys’
fees), claims, liabilities, loss, and damages arising out of or relating to
this Agreement or the engagement of Independent Counsel pursuant hereto.

 

4.             Indemnification
Process and Appeal.

 

(a)           Indemnification
Payment. Indemnitee shall be entitled to indemnification of Expenses, and
shall receive payment thereof, from the Company in accordance with this
Agreement as soon as practicable after Indemnitee has made written demand on
the Company for indemnification, unless the Reviewing Party has given a written
opinion to the Company that Indemnitee is not entitled to indemnification under
applicable law.

 

(b)           Suit to Enforce Rights; Arbitration. Regardless of any action by the Reviewing
Party, if Indemnitee has not received full indemnification within thirty days
after making a demand in accordance with Section 4(a), Indemnitee shall
have the right to enforce its indemnification rights under this Agreement by
commencing litigation in any court of competent jurisdiction seeking an initial
determination by the court or challenging any determination by the Reviewing
Party or any aspect thereof. 
Alternatively, Indemnitee, at his/her option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. The Company shall
not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.  Any determination by the
Reviewing Party not challenged by Indemnitee shall be binding on the Company
and Indemnitee. The remedy provided for in this Section 4 shall be in
addition to any other remedies available to Indemnitee at law or in equity.

 

(c)           Defense
to Indemnification, Burden of Proof, and Presumptions. It shall be a defense
to any action or arbitration proceeding brought by Indemnitee against the
Company to enforce this Agreement (other than an action brought to enforce a
claim for Expenses incurred in defending a Proceeding in advance of its final
disposition where the required undertaking has been tendered to the Company)
that it is not permissible under applicable law for the Company to indemnify
Indemnitee for the amount claimed. In connection with any such action or
arbitration proceeding or any determination by the Reviewing Party or otherwise
as to whether Indemnitee is entitled to be indemnified hereunder, the burden of
proving such a defense or determination shall be on the Company. Neither the
failure of the Reviewing Party or the Company (including its Board, independent
legal counsel, or its stockholders) to have made a determination prior to the
commencement of such action or arbitration proceeding by Indemnitee that
indemnification of the claimant is proper under the circumstances because
Indemnitee has met the standard of conduct set forth in applicable law, nor an
actual determination by the Reviewing Party or Company (including its Board,
independent legal counsel, or its stockholders) that the Indemnitee had not met
such applicable standard of conduct,

 

6

 

shall
be a defense to the action or create a presumption that the Indemnitee has not
met the applicable standard of conduct. 
For purposes of this Agreement, to the fullest extent permitted by law,
the termination of any claim, action, suit, or proceeding, by judgment, order,
settlement (whether with or without court approval), conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.

 

5.             Indemnification
for Expenses Incurred in Enforcing Rights. The Company shall indemnify
Indemnitee against any and all Expenses that are incurred by Indemnitee in
connection with any action or arbitration proceeding brought by Indemnitee for

 

(a)           indemnification
or advance payment of Expenses by the Company under this Agreement or any other
agreement or under applicable law or the Company’s Bye-Laws now or hereafter in
effect relating to indemnification for Indemnifiable Events, and/or

 

(b)           recovery
under directors’ and officers’ liability insurance policies maintained by the
Company, but only in the event that Indemnitee ultimately is determined to be
entitled to such indemnification or insurance recovery, as the case may be. In
addition, the Company shall, if so requested by Indemnitee, advance the
foregoing Expenses to Indemnitee, subject to and in accordance with
Section 2(c).

 

6.             Notification
and Defense of Proceeding.

 

(a)           Notice.
Promptly after receipt by Indemnitee of notice of the commencement of any
Proceeding, Indemnitee shall, if a claim in respect thereof is to be made
against the Company under this Agreement, notify the Company of the
commencement thereof; but the omission so to notify the Company will not
relieve the Company from any liability that it may have to Indemnitee, except
as provided in Section 6(c).

 

(b)           Defense.
With respect to any Proceeding as to which Indemnitee notifies the Company of
the commencement thereof, the Company will be entitled to participate in the
Proceeding at its own expense and except as otherwise provided below, to the
extent the Company so wishes, it may assume the defense thereof with counsel,
and on terms and conditions, reasonably satisfactory to Indemnitee. After
notice from the Company to Indemnitee of its election to assume the defense of
any Proceeding, the Company shall not be liable to Indemnitee under this Agreement
or otherwise for any Expenses subsequently incurred by Indemnitee in connection
with the defense of such Proceeding other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the right
to employ legal counsel in such Proceeding, but all Expenses related thereto
incurred after notice from the Company of its assumption of the defense shall
be at Indemnitee’s expense unless: (i) the employment of legal counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably
determined that there may be a conflict of interest between Indemnitee and the
Company in the defense of the Proceeding, (iii) after a Change in Control
(other than a Change in

 

7

 

Control
approved by a majority of the directors on the Board who were directors
immediately prior to such Change in Control), the employment of counsel by
Indemnitee has been approved by the Independent Counsel, or (iv) the Company
shall not in fact have employed counsel to assume the defense of such
Proceeding, in each of which cases all Expenses of the Proceeding shall be
borne by the Company. The Company shall not be entitled to assume the defense
of any Proceeding brought by or on behalf of the Company or as to which
Indemnitee shall have made the determination provided for in (ii), (iii) and
(iv) above.

 

(c)           Settlement
of Claims. The Company shall not be liable to indemnify Indemnitee under
this Agreement or otherwise for any amounts paid in settlement of any
Proceeding effected without the Company’s written consent, such consent not to
be unreasonably withheld; provided, however, that if a Change in Control has
occurred (other than a Change in Control approved by a majority of the
directors on the Board who were directors immediately prior to such Change in
Control), the Company shall be liable for indemnification of Indemnitee for
amounts paid in settlement if the Independent Counsel has approved the
settlement. The Company shall not settle any Proceeding in any manner that
would impose any penalty or limitation on Indemnitee without Indemnitee’s
written consent. The Company shall not be liable to indemnify the Indemnitee
under this Agreement with regard to any judicial award if the Company was not
given a reasonable and timely opportunity, at its expense, to participate in
the defense of such action; the Company’s liability hereunder shall not be
excused if participation in the Proceeding by the Company was barred by this
Agreement.

 

7. Establishment of Trust. In the
event of a Change in Control (other than a Change in Control approved by a
majority of the directors on the Board who were directors immediately prior to
such Change in Control) the Company shall, upon written request by Indemnitee,
create a Trust for the benefit of the Indemnitee and from time to time upon
written request of Indemnitee shall fund the Trust in an amount sufficient to
satisfy any and all Expenses reasonably anticipated at the time of each such
request to be incurred in connection with investigating, preparing for,
participating in, and/or defending any Proceeding relating to an Indemnifiable
Event. The amount or amounts to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Independent Counsel.
The terms of the Trust shall provide that (i) the Trust shall not be revoked or
the principal thereof invaded without the written consent of the Indemnitee,
(ii) the Trustee shall advance, within ten business days of a request by the
Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby
agrees to reimburse the Trust under the same circumstances for which the
Indemnitee would be required to reimburse the Company under Section 2(c)
of this Agreement), (iii) the Trust shall continue to be funded by the
Company in accordance with the funding obligation set forth above, (iv) the
Trustee shall promptly pay to the Indemnitee all amounts for which the
Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise, and (v) all unexpended funds in the Trust shall revert to the
Company upon a final determination by the Independent Counsel or a court of
competent jurisdiction, as the case may be, that the Indemnitee has been fully
indemnified under the terms of this Agreement. The Trustee shall be chosen by
the Indemnitee. Nothing in this Section 7 shall relieve the Company of any
of its obligations under this Agreement. All income earned on the assets held
in the Trust shall be reported as income by the Company for federal, state,
local, and foreign tax purposes. The Company shall pay all costs

 

8

 

of establishing and maintaining the Trust and
shall indemnify the Trustee against any and all expenses (including attorneys’
fees), claims, liabilities, loss, and damages arising out of or relating to
this Agreement or the establishment and maintenance of the Trust.

 

8.  Non-Exclusivity. The rights of
Indemnitee hereunder shall be in addition to any other rights Indemnitee may
have under the Company’s Bye-Laws, applicable law, or otherwise; provided,
however, that this Agreement shall supersede any prior indemnification
agreement between the Company and the Indemnitee. To the extent that a change
in applicable law (whether by statute or judicial decision) permits greater
indemnification than would be afforded currently under the Company’s Bye-Laws,
applicable law, or this Agreement, it is the intent of the parties that
Indemnitee enjoy by this Agreement the greater benefits so afforded by such
change.

 

9.  Liability
Insurance.  The Company shall use
reasonable commercial efforts to maintain an insurance policy or policies
providing general liability and directors’ and officers’ liability insurance, which
shall cover Indemnitee, in accordance with its or their terms, to the maximum
extent of the coverage available for any Company director or officer.

 

10.  Continuation
of Contractual Indemnity or Period of Limitations. All agreements and
obligations of the Company contained herein shall continue for so long as
Indemnitee shall be subject to, or involved in, any proceeding for which
indemnification is provided pursuant to this Agreement.  Notwithstanding the foregoing, no legal
action shall be brought and no cause of action shall be asserted by or on
behalf of the Company or any Affiliate of the Company against Indemnitee,
Indemnitee’s spouse, heirs, executors, or personal or legal representatives
after the expiration of two years from the date of accrual of such cause of
action, or such longer period as may be required by Bermuda law under the
circumstances. Any claim or cause of action of the Company or its Affiliate
shall be extinguished and deemed released unless asserted by the timely filing
and notice of a legal action within such period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action, the shorter period shall govern.

 

11.           Amendment
of this Agreement. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be binding
unless in the form of a writing signed by the party against whom enforcement of
the waiver is sought, and no such waiver shall operate as a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver. Except as specifically provided herein, no failure to
exercise or any delay in exercising any right or remedy hereunder shall
constitute a waiver thereof.

 

12.  Subrogation.
In the event of payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such rights.

 

13.  No
Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise received payment (under any
insurance policy, Bye-Laws, or otherwise) of the amounts otherwise
indemnifiable hereunder.

 

9

 

14.  Binding
Effect. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors
(including any direct or indirect successor by purchase, merger, consolidation,
or otherwise to all or substantially all of the business and/or assets of the
Company), assigns, spouses, heirs, and personal and legal representatives. The
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation, or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place. The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity pertaining to an Indemnifiable Event even though he may have ceased to
serve in such capacity at the time of any Proceeding.

 

15.  Severability.
If any provision (or portion thereof) of this Agreement shall be held by a
court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable to the fullest
extent permitted by law.  Furthermore, to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of this Agreement containing any provision
held to be invalid, void, or otherwise unenforceable, which is not itself
invalid, void, or unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, void, or unenforceable.

 

16.  Governing
Law; Submission to Jurisdiction. This Agreement shall be governed by and
construed and enforced in accordance with the laws of New York applicable to
contracts made and to be performed in such State without giving effect to its
principles of conflicts of laws.

 

The Company expressly
accepts and irrevocably submits to the non-exclusive jurisdiction of any United
States Federal or New York State court sitting in the Borough of Manhattan, The
City of New York, New York, over any suit, action, proceeding or arbitration
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.  To the fullest
extent it may effectively do so under applicable law, the Company irrevocably
waives and agrees not to assert, by way of motion, as a defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.

 

The Company
agrees, to the fullest extent that it may effectively do so under applicable
law, that a judgment in any suit, action or proceeding of the nature referred
to in the preceding paragraph brought in any such court shall be conclusive and
binding upon the Company, subject to rights of appeal and may be enforced in
the courts of the United States of America or the State of New York (or any
other court the jurisdiction to which the Company is or may be subject) by a
suit upon such judgment.

 

The Company
irrevocably designates and appoints Assured Guaranty Corp. as its authorized
agent, upon which process may be served in any suit, action or proceeding of
the nature referred to in the second preceding paragraph by mailing a copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to the agent at 1325 Avenue of the

 

10

 

Americas, New York, New
York 10019.  The Company agrees that such
service (i) shall be deemed in every respect effective service of process upon
it in every suit, action or proceeding and (ii) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon and
personal delivery to the Company. 
Notices hereunder shall be conclusively presumed received as evidenced
by a delivery receipt furnished by the United States Postal Service or any
commercial delivery service. Nothing in this Section 16 shall affect the right of the
Indemnitee to serve process in any manner permitted by law, or limit any right
to bring proceedings against the Company in the courts of any jurisdiction or
to enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction.

 

17.  Notices. All notices, demands, and
other communications required or permitted hereunder shall be made in writing
and shall be deemed to have been duly given if delivered by hand, against
receipt, or mailed, postage prepaid, certified or registered mail, return
receipt requested, and addressed to the Company at:

 

Assured Guaranty Ltd.

30 Woodbourne Avenue

Hamilton HM08 Bermuda

Attention:  
General Counsel

 

and to Indemnitee at:

 

Notice of change of address shall be
effective only when given in accordance with this Section. All notices complying with
this Section shall
be deemed to have been received on the date of hand delivery or on the third
business day after mailing.

 

18. 
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

11

 

IN WITNESS
WHEREOF, the parties hereto have duly executed and delivered this Agreement as
of the day specified above.

 

	
   

  	
  ASSURED GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Typed Name:

  

 

12

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