Excess of Loss Reinsurance Agreement


 Exhibit 10.73 
  
 Excess of Loss Reassurance Agreement 
  
 This Reinsurance Agreement (this “Agreement”) dated as of May 14, 2004, between MBIA UK Insurance Limited, a
corporation existing under the laws of England and Wales with registered number 4401.508 (hereinafter referred to as the “Ceding Company”) and MBIA Insurance Corporation, a New York stock insurance company (hereinafter referred to as the
“Reinsurer”). 
  
 WITNESSETH: 
  
 WHEREAS, the Ceding Company will write financial guaranty insurance as
permitted under the laws of the United Kingdom; 
  
 WHEREAS, the
Ceding Company desires to cede and the Reinsurer desires to reinsure the Ceding Company to the extent and on the terms and conditions and subject to the limitations hereinafter set forth; 
  
 WHEREAS, the Ceding Company will cede financial guaranty insurance business to the Reinsures that the Reinsurer is permitted
to insure under Section 6901 of the New York Insurance Law; 
  
 NOW, THEREFORE, in consideration of the mutual covenants and understandings contained herein and upon the terms and conditions set forth below, the parties hereto agree as follows 
  
 Article 1 
  
 Cover: 
  
 1.1. The Reinsurer agrees to reimburse the Ceding Company, on an excess of loss basis for amounts of losses incurred in each
calendar year period this Agreement is in effect for the Net Retained Insurance Liability (as defined below) of the Ceding Company under the Ceding Company’s policies in force at 12:01 a.m., Greenwich Mean Time in the United Kingdom, on May 14,
2004 and under new policies becoming effective at and after said time and date including extra contractual obligations relating thereto (but excluding, however, liability arising from punitive damages assessed as a result of bad faith, fraud or
negligence). 
  
 Article 2 
  
 Covered Business: 
  
 2.1. Covered Business shall mean all of the Ceding Company’s gross
liability on financial guaranty insurance business written by the Ceding Company as defined in Section 6901 of the New York Insurance Law. The Ceding Company’s Net Retained Liability is the remaining portion of the Ceding Company’s gross
liability on each policy reinsured hereunder after deducting all cessions to facultative and/or other reinsurance cessions and/or other third party risk assumptions which inure to the benefit of the Ceding Company. The term “policy” or
“policies” shall mean the Ceding Company’s policies and endorsements providing coverage of financial guaranty exposures. 
  
 Article 3 
  
 Limits of Cover: 
  
 3.1. The Reinsurer shall reimburse the Ceding Company for the amount of the Ceding Company’s losses, including loss adjustment expenses, incurred in
each calendar year which amount is in the aggregate excess of $100,000,000. However, the liability of the Reinsurer shall not exceed, (i) for 2004, at any time of determination, twenty percent (20%) of the Ceding Company’s net retention (as
defined above) with respect to the aggregate insured principal sum outstanding as of such time plus the insured principal sum outstanding under the Ceding Company’s two largest policies outstanding as of such time and (ii) in any subsequent one
calendar year, twenty percent (20%) of the Ceding Company’s net retention (as defined above) with respect to the aggregate insured principal sum outstanding as of 11:59 p.m., Greenwich Mean Time in the United Kingdom, on December 31 of the
prior year plus the insured principal sum outstanding under the Ceding Company’s two largest policies in effect as of 11:59 p.m., Greenwich Wan Time in the United Kingdom, on December 31 of the prior year. 






 Article 4 
  
 Definitions: 
  
 4.1. As used in this Agreement: 
  
 (a) “Ceded Reserves” shall mean, as of any date, the aggregate of the unearned premium reserve and the loss reserve, if any,
required to be carried by the Ceding Company for the liabilities ceded hereunder in accordance with statutory accounting practices, before giving effect to any reserve credit for the cession made hereby. 
  
 (b) “Contingency Reserve” shall mean contingency
reserve as defined in Section 6903 (a) of the New York Insurance Law. 
  
 Article 5 
  
 Period: 
  
 5.1. This Agreement shall be effective as of 12:01 a.m., Greenwich Mean Time
in the United Kingdom, on May 14, 2004 (the “Effective Time”). This Agreement may be terminated by Agreement of either of the parties hereto upon three (3) months prior written notice to the other party specifying the proposed termination
date; provided however, that this Agreement will not terminate earlier than three (3) months after the date of receipt of the termination notice described above by the nonterminating party and provided further that this Agreement will remain in full
force and effect with respect to all policies relating to Covered Business in effect at the date of Termination until the expiration or cancellation of each such policy. 
  
 Article 6 
  
 Premium: 
  
 6.1. There are two premiums payable to the Reinsurer under this Agreement. An annual premium equal to the lesser of 40% of net written premium, or
$2,000,000 shall be paid to the Reinsurer in four equal quarterly installments in arrears, i.e., at April 1, July 1, October 1 and December 31, for each calendar year this Agreement remains in effect. As soon as practicable after each 12 month
period that this Agreement is in effect, the Ceding Company shall furnish to the Reinsurer a statement of the net earned premium income of the Ceding Company for the same period, and an additional, reinsurance premium shall be payable at a rate of 1
% of net earned premium income. There shall be no annual minimum premium for this Agreement. 
  
 6.2. Within 20 days following the end of each quarter, the Ceding Company will render or cause to be rendered a net account to the Reinsurer for the quarter showing the Ceding Company’s interest in the following:

  
 (a) net written premium accounted for during
the calendar quarter (being the gross written premium less cancellations). 
  
 (b) any loss or loss expense paid during the calendar quarter on losses occurring during the term of this Agreement. 
  
 (c) subrogations, salvage or other recoveries made during the calendar quarter on losses occurring during the term of the Agreement.

  
 6.3. Within 15 days after receipt of the account, the
Reinsurer shall send confirmation of the account or relevant objections to the Ceding Company. 
  
 6.4. Within 30 days following the end of each calendar quarter, the Ceding Company shall furnish a report as to Ceded Reserves, together with any other information which the Reinsurer may require for its accounting
records and which may be reasonably available to the Ceding Company. 






 6.5. Within 45 days following the end of each calendar year, the Ceding Company shall furnish to the
Reinsurer for the calendar year a summary account split up per underwriting year together with any other information which the Reinsurer may require for its accounting records and which may be reasonably available to the Ceding Company. 

 
 6.6.A contingent commission shall be payable to the Ceding Company in
respect of this Agreement. The contingent commission shall be equal to 34% of the difference between net premium earned and incurred losses for each calendar year under this Agreement. 
  
 6.7. All settlements of account under this Agreement between the Ceding Company and the Reinsurer shall be made in cash or
its equivalent in U.S. dollars computed at exchange rates in effect at the end of the accounting period, or if for a loss payable by the Reinsurer pursuant to section 9.3 of this Agreement, the exchange rate in effect at the date of the notice shall
apply. 
  
 Article 7 
  
 Security: 
  
 7.1. When a governing body of any jurisdiction in which the Ceding Company legally operates or to which it submits requires
as a condition to credit for the reinsurance provided by this Agreement that the Reinsurer delivers securities legally pledged for the benefit of the Ceding Company or deposit funds legally pledged for the benefit of the Ceding Company, the
Reinsures shall deliver such securities or deposit such funds in the form and amount necessary to permit the Ceding Company to avoid on any statutory financial statement filed by the Ceding Company the penalty to surplus which would result from the
loss of credit for the reinsurance. 
  
 7.2. Notwithstanding any
other provisions of this Agreement, it is agreed that any securities pledged to the Ceding Company pursuant to section 7.1 of this Article 7 shall be securities which are of a type and quality acceptable to the governing body of any jurisdiction in
which the Ceding Company operates which has required the pledge of securities in Section 7.1 and be drawn upon and utilized by the Ceding Company or its successors in interest only for one or more of the following purposes: 
  
 (a) to reimburse the Ceding Company for losses and loss
expenses paid by the Ceding Company under this Agreement; 
  
 (b) to fund an account with the Ceding Company in an amount at least equal to the deduction allowed for the reinsurance provided by this Agreement, from the Ceding Company’s liabilities for policies ceded under
this Agreement, such amount to include, if applicable, but not be limited to, amounts for Contingency Reserves, loss reserves for paid, reported and incurred but not reported (“IBNR”) losses, loss expense reserves and unearned premium
reserves; or 
  
 (c) to pay any other amounts the
Ceding Company claims are due under this Agreement or under applicable law. 
  
 All of the foregoing should be applied without diminution because of insolvency on the part of the Ceding Company or Reinsurer. 
  

7.3. If the Reinsurer elects to provide a Letter of Credit under section 7.1 of this Article, the Reinsurer shall cause the Letter of Credit to be
issued, in place and effective no later than the “as of date” of the first quarterly filing prepared by the Ceding Company for the appropriate regulatory authority after the effective date of this Agreement. 
  
 Article 8 
  
 Service of Covered Business: 
  
 8.1. The Ceding Company shall service the Covered Business with respect to
collection and payment of premium, notice, service of process and investigation, settlement, defense and payment of claims on all Covered Business. 






 Article 9 
 Claims and Loss Adjustment Expense and Salvage: 
  
 9.1. The Ceding Company agrees that it will investigate, settle or defend all claims arising under policies with respect to which reinsurance is afforded
by this Agreement. 
  
 9.2, The Ceding Company shall be the sole
judge of what shall constitute a loss covered under the Ceding Company’s policies, of the Ceding Company’s liability thereunder, and of the amount or amounts which it shall be proper for Ceding Company to pay thereunder. The Reinsurer
shall be bound by the judgment of the Ceding Company as to the liability and obligation of the Ceding Company under its policies. 
  
 9.3. Any loss chargeable to the Reinsurer under this Agreement shall be paid promptly by the Reinsurer to the Ceding Company within one hour of receiving
written or telephonic notice of any claim (any telephonic notice to be subsequently confirmed in writing), and the Reinsurer shall pay the Reinsures share of all losses and loss expense excluding unallocated loss expense in the amount set forth in
such notice, with any dispute with respect to the amount due being resolved after the making by the Reinsurer of such payment. 
  
 9.4. The term “loss” shall mean the losses incurred by the Ceding Company after making deductions for all other reinsurances or insurances
inuring to the benefit of the Ceding Company under this Agreement, but only to the extent that such reinsurances or insurances are collectible as determined by the Ceding Company, and all salvages and all recoveries, and shall include all loss
adjustment expenses incurred by the Ceding Company in the settlement or defense of claims (other than the office expenses of the Company and the salaries and expenses of its employees). 
  
 Article 10 
  
 Access- to Records: 
  
 10.1. The Reinsurer shall, at all reasonable times during the term of this Agreement and thereafter, have the right to inspect the books, records and
documents of the Ceding, Company with respect to the Covered Business. 
  
 Article II 
  
 Reserves: 
  
 11.1- The Reinsurer agrees to maintain proper unearned premium, loss and
loss expense reserves upon the liabilities ceded hereunder in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of New York 
  
 Article 12 
  
 Follow the Fortunes: 
  
 12.1. This Agreement shall be construed as an honorable undertaking between the parties hereto and shall not be defeated by technical legal construction,
it being the intention of this Agreement that the fortunes of the Reinsurer shall follow the fortunes of the Ceding Company. Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any
third parties or any persons not parties to this Agreement. 






 Article 13 
  
 Errors and Omissions: 
  
 13.1. Any inadvertent error, omission or delay in correction with this Agreement shall not affect the liability which otherwise would have attached to
either party, provided such error, omission or delay is rectified as soon as possible after discovery. 
  
 Article 14 
  
 Offset: 
  
 14.1. Each party hereto shall
have, and may exercise at any time and from time to time, the right to offset any balance or balances, whether on account of premiums or on account of losses or otherwise, due from such party to the other party hereto under this Agreement, and may
offset the same against any balance or balances due or to become due to the former from the latter under the same. The party asserting the right of offset shall have and may exercise such right whether the balance or balances due or to become due to
such party from the other are on account of premiums or on account of losses or otherwise and regardless of the capacity in which each party acted under the agreement or, if more than one, the different agreements involved. In the event of the
insolvency of a party hereto, offsets shall be allowed only in accordance with the provisions of Section 7427 of the New York Insurance Law. 
  
 Article 15 
  
 Insolvency: 
  
 15.1. In the event of the insolvency of the Ceding Company or its successor in interest, this reinsurance shall be payable directly to the Ceding Company,
or directly to its liquidator, receiver, conservator or statutory successor, on the basis of the liability of the Ceding Company without diminution because of the insolvency of the Ceding Company or because the liquidator, receiver, conservator or
statutory successor of the Ceding Company 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 Ceding Company shall give written notice to the Reinsurer of
the pendency of the claim against the Ceding Company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or
liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer 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 Ceding Company or its liquidator, receiver, conservator or statutory successor. The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the court, against the Ceding Company 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 Ceding Company solely as a result of the defense undertaken by the Reinsurer. 
  
 15.2. The Reinsurance shall be payable by the Reinsurer to the Ceding Company
or to its liquidator, receiver, conservator or statutory successor, except (a) where the policy specifically provided another payee of such reinsurance in the event of the insolvency of the Ceding Company and (b) where the Reinsurer with the consent
of the direct insured or insureds has assumed such policy obligations of the Ceding Company as direct obligations of the Reinsurer to the payees under such policies and in substitution for the obligations of the Ceding Company to such payees.

  
 Article 16 
  
 Arbitration: 
  
 16.1. As a condition precedent to any right of action hereunder, any dispute arising out of or related to this Agreement
shall be submitted to the decision of a board of arbitration composed of two arbitrators and an umpire, meeting in Armonk, New York, unless otherwise agreed. 






 16.2. The members of the board of arbitration shall be active or retired disinterested officials of
insurance or reinsurance companies. Each party shall appoint its arbitrator, and the two arbitrators shall choose an umpire before instituting the hearing. If the respondent fails to appoint its arbitrator within four weeks after being requested to
do so by the claimant, the latter shall also appoint the second arbitrator. If the two arbitrators fail to agree upon the appointment of an umpire within four weeks after their nominations, the umpire shall be selected by the regional director of
the American Arbitration Association in New York, New York, or the regional director’s delegate. 
  
 16.3. The claimant shall submit its initial brief within 20 days from appointment of the umpire. The respondent shall submit its brief within 20 days
after receipt of the claimant’s brief and the claimant shall submit a reply brief within 10 days after receipt of the respondent’s brief. The board shall make its decision with regard to the custom and usage of the insurance and
reinsurance business. The board shall issue its decision in writing based upon a hearing in which evidence may be introduced without following strict rules of evidence but in which cross-examination and rebuttal shall be allowed. The board shall
make its decision within 60 days following the termination of the hearings unless the parties consent to an extension. The majority decisions of the board shall be final and binding upon all parties to the proceeding. Judgment may be entered upon
the award of the board in any court having jurisdiction thereof. 
  
 16.4. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the expense of the umpire. The remaining costs of the arbitration proceedings shall be allocated by the board. Unless
prohibited by applicable law, an arbitral award hereunder and any judgment thereon shall bear interest from the date the arbitral award was rendered at the rate equal from time to time to the rate publicly announced by Citibank, NA., as its base
rate plus 2%. 
  
 16.5. The parties consent to the jurisdiction of
the Supreme Court of the State of New York, County of New York, and of the United States District Court for the Southern District of New York, for all purposes in connection with such arbitration, including without limitation any application to
compel arbitration or to confirm an arbitration award. The parties consent that any process or notice of motion or other application to either of said courts, and any paper in connection with arbitration, may be served by certified mail, return
receipt requested, ordinary post or by personal service or in such other manner as may be permissible under the rules of the applicable court or panel provided a reasonable time for appearances is allowed. Service upon the Ceding Company shall be
directed to it, in care of its Chief Executive Officer. Service upon the Reinsurer shall be directed to the Reinsurer in care off its President. 
  
 Article 17 
  
 Miscellaneous: 
  
 17.1. This Agreement shall be governed by the laws of England. 
  
 17.2. The parties hereto agree to execute and deliver such further instruments and do such further acts as may be necessary and proper to carry out the
purposes of this Agreement. 
  
 17.3. If any provision of this
Agreement or the applicability thereto to any person or circumstance is held invalid, the remainder of this Agreement, including the remainder of the section in which such provision appears, or the applicability of such provision to those persons or
circumstances, shall not be affected thereby. 
  
 17.4. This
Agreement contains the entire understanding of the parties with respect to the subject matter hereto. There are no restrictions, promises, warranties, covenants or undertakings with respect to such subject matter, other than those expressly set
forth herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. This Agreement is binding on and shall inure to the benefit of the parties hereto, their successors and assigns;
provided, however, that neither party may voluntarily assign this Agreement without (i) the prior written consent of the other and (ii) without obtaining confirmation from any rating agency that assigns a rating to the Ceding Company at the time of
any proposed assignment (at the moment Standard & Pools Corporation, Moody’s Investors Service Inc. and Fitch) that such assignment will not result in a downgrade of the ratings assigned by such rating agency to the Ceding Company as in
effect immediately prior to such assignment. 







			
	MBIA U.K. INSURANCE LIMITED
		
	By:	 	 /s/ Phil Sullivan


	 	 	Director
	
	MBIA INSURANCE CORPORATION
		
	By:	 	 /s/ Ram D. Wertheim


	 	 	Managing Director