Exhibit 10.33

                           FIRST AMENDED AND RESTATED
                         FACULTATIVE MASTER CERTIFICATE

This First Amended and Restated Facultative Master Certificate  (hereinafter the
"Master  Certificate")  is issued by XL  Reinsurance  America  Inc.,  a New York
insurance  corporation  with  administrative  offices in  Stamford,  Connecticut
(hereinafter the "Reinsurer") to XL Capital Assurance Inc., a financial guaranty
insurance  corporation  organized  under  the  laws  of the  State  of New  York
(hereinafter the "Company").

                                   WITNESSETH:

WHEREAS,  the Company and the  Reinsurer  are  parties to a  Facultative  Master
Certificate  effective  as  of  November  1,  2002  (hereinafter  the  "Original
Agreement");

WHERAS,  the Company and the Reinsurer  desire to amend and restate the Original
Agreement in the manner and on the terms and conditions set forth herein;

NOW  THEREFORE,  in  consideration  of  the  mutual  covenants  of  this  Master
Certificate, and good and valuable consideration, the receipt and sufficiency of
which are hereby expressly acknowledged, the parties agree as follows:

Certain  capitalized  terms  used  herein  have the  meanings  set  forth in the
DEFINITIONS Article of this Master Certificate.

ARTICLE I
                                BUSINESS COVERED

A.       This Master  Certificate  shall apply to financial  guaranty  insurance
         policies,  as  defined  in  paragraph  B of  this  Article,  which  are
         underwritten by the Company and which the Reinsurer accepts to reinsure
         hereunder in accordance with the provisions of Article II hereof..

B.       Financial  guaranty  insurance   policies   (hereinafter   individually
         referred  to as  the  "Policy"  or  collectively  the  "Policies")  are
         Policies  which,  in  the  reasonable  judgment  of  the  Company,  are
         considered,  at the time such Policies are bound or written,  financial
         guaranty  insurance under Section 6901(a) of the New York Insurance Law
         or any succeeding statutory provision,  in each case as may be amended,
         modified or interpreted  from time to time in any regulation,  bulletin
         or opinion promulgated by the New York Department of Insurance.

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                                   ARTICLE II
                     REINSURANCE SUBMISSIONS AND CERTIFICATE

A.       The Company shall submit any Policy or other  documentation  describing
         the  risk   proposed  for  cession   hereunder  to  the  Reinsurer  for
         acceptance.  Each such submission shall contain such information  about
         the risk  proposed to be  reinsured  as the  Reinsurer  may require and
         shall be submitted to the  Reinsurer  by  electronic  mail or facsimile
         pursuant to instructions provided to the Company by the Reinsurer.  The
         Reinsurer shall promptly  acknowledge  receipt of each proposed cession
         to the Company.  Each proposed cession shall be considered accepted for
         reinsurance  by the Reinsurer  after the close of two (2) Business Days
         from the  receipt  of the  proposed  cession  by the  Reinsurer  unless
         rejected by the Reinsurer prior to the close of business on such second
         Business  Day.  Business  Day shall mean any day other  than  Saturday,
         Sunday or other day on which  commercial  banking  institutions  in New
         York,  New York are  authorized  or obligated by law to be closed.  The
         Reinsurer  shall have the right, in its sole  discretion,  to accept or
         reject any proposed cession presented to the Reinsurer by the Company.

B.       As soon as reasonably  practical following the acceptance of a proposed
         cession for reinsurance  hereunder,  the Company and the Reinsurer will
         execute  a  reinsurance  certificate  (the  "Reinsurance  Certificate")
         setting  forth the specific  terms of the  reinsurance.  Each  executed
         Reinsurance   Certificate   with   respect  to  any  Policy  is  hereby
         incorporated by reference as if fully set forth herein;  PROVIDED that,
         in the event of any conflict or inconsistency between the terms of this
         Master  Certificate and the terms of any Reinsurance  Certificate,  the
         terms of this Master  Certificate  shall  control;  PROVIDED,  FURTHER,
         HOWEVER, that in the event that each of the parties agree in writing in
         any Reinsurance Certificate to specifically amend any provision of this
         Master Certificate with respect to such Reinsurance  Certificate,  then
         in such case the amendatory  language in such  Reinsurance  Certificate
         shall control..

                                  ARTICLE III
                               TERM OF REINSURANCE

The Company will cede, and the Reinsurer will accept, as facultative reinsurance
the Reinsurer's share of the Losses and Loss Adjustment Expenses with respect to
the Policy or Policies indicated in each Reinsurance Certificate executed by the
parties to this Master  Certificate.  Each such  Reinsurance  Certificate  shall
identify the share of such  liabilities  ceded and whether such cession is to be
made on either a quota share or excess of loss basis. The Reinsurer's  liability
shall  commence,  with respect to each such  Policy,  on the  effective  date of
reinsurance  specified  in the related  Reinsurance  Certificate  and  terminate
simultaneously  with the termination of the Company's  obligations arising under
such Policies.

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                                   ARTICLE IV
                          COMMENCEMENT AND TERMINATION

A.       This Master  Certificate  shall become effective at 12:01 a.m. New York
         time, July _____,  2006 and shall remain in full force and effect until
         terminated as provided in this Article.

B.       Either party shall have the right to terminate this Master  Certificate
         at any time by giving no less than sixty (60) days prior written notice
         by certified mail to the other party, stating therein the date on which
         termination shall become effective (the "Termination  Effective Date").
         In  determining  whether the requisite  number of days' notice has been
         given in any case,  the date of  termination  shall be counted  but the
         date of mailing shall not.

C.       In the  event  of the  termination  of  this  Master  Certificate,  the
         Reinsurer shall remain liable for Losses and Loss  Adjustment  Expenses
         relating  thereto  occurring  under or arising  out of all  Reinsurance
         Certificates   relating  to  Policies   written  on  or  prior  to  the
         Termination  Effective Date,  including those written during the period
         between the  transmittal  of a termination  notice and the  Termination
         Effective Date, until all obligations and liabilities  incurred by each
         party hereunder are fully performed and discharged.

D.       In addition, the Company and the Reinsurer may, by mutual agreement and
         the prior approval of the  Superintendent  of Insurance of Insurance of
         New York,  terminate  this Master  Certificate  on a cut-off basis upon
         payment  by the  Reinsurer  of an amount  determined  by a  commutation
         formula  agreed to by the  Company and the  Reinsurer.  In the event of
         termination  pursuant to this Article  IV.D.,  the  Reinsurer  shall be
         released and  discharged of all  liabilities  whatsoever  arising under
         this Master Certificate,  whether such liabilities are known or unknown
         as of said termination date.

E.       Except as  provided  in this  Article,  Section  IV.D.  or the  SPECIAL
         TERMINATION Article, Section XIV.B.(i), in the event of the termination
         of this Master  Certificate  the provisions of this Master  Certificate
         shall  continue to apply to all  Reinsurance  Certificates  relating to
         Policies written on or prior to the Termination Effective Date.

                                   ARTICLE V
                                   TERRITORY

The reinsurance  provided hereunder shall apply to Policies  regardless of where
issued or of the location of the risks covered thereby.

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                                   ARTICLE VI
                                     PREMIUM

A.       As consideration for the reinsurance provided herein, the Company shall
         pay to the Reinsurer the proportion of the Net Written Premium received
         by the Company set forth in each Reinsurance Certificate.  "Net Written
         Premium"  shall  mean  the  gross  premium  (including  any  additional
         premiums  or  return  premiums)  with  respect  to  Policies  Reinsured
         hereunder  less the  amount of any  ceding  commission  allowed  by the
         Reinsurer.

B.       The reinsurance premium payable hereunder shall be accounted for in the
         monthly   Bordereaux  as  set  forth  in  the  ACCOUNTS,   REPORTS  AND
         REMITTANCES Article. If obligations covered by a Policy are refunded in
         advance of maturity and a credit is allowed to the premium  charged for
         insuring the refunding  obligations,  the Reinsurer shall refund to the
         Company its proportionate share of any premium credited to the refunded
         obligations.

                                  ARTICLE VII
                        ACCOUNTS, REPORTS AND REMITTANCES

A.       As  evidence  that a risk is  reinsured  hereunder,  the  Company  will
         furnish to the Reinsurer a copy of the Reinsurance  Certificate,  fully
         executed  by both  parties,  within  thirty  (30)  days  following  the
         Reinsurer's acceptance of a risk.

B.       (i)      Within forty-five (45) days following the end of each calendar
                  quarter  in which  there is any  activity,  the  Company  will
                  furnish to the  Reinsurer a  bordereaux  substantially  in the
                  form and containing the  information set forth in Exhibit A to
                  this Master Certificate (the  "Bordereaux"),  as respects each
                  Policy  reinsured  hereunder and bound during such month.  The
                  Bordereaux  shall reflect the Net Written  Premium  payable to
                  the Reinsurer by the Company, the gross premium and any ceding
                  commission  on  gross  premium  as set  forth  in the  PREMIUM
                  Article and the Reinsurance Certificate.

         (ii)     In addition, within forty-five (45) days after the end of each
                  calendar  quarter,  the Company  shall report to the Reinsurer
                  the Reinsurer's share of the following on a cumulative basis:

                  1)       Unearned premium reserve;

                  2)       Outstanding Loss and Loss Adjustment Expense reserve;

                  3)       Incurred Losses;

                  4)       Contingency Reserve;

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                  5)       Loss  and  Loss  Adjustment   Expenses  paid  by  the
                           Company, after deduction for any amounts paid under a
                           Special Account,  as set forth in paragraph F of this
                           Article;

                  6)       A copy of any applicable notices of loss; and

                  7)       The net loss  balance  due either the  Company or the
                           Reinsurer.

C.       The Company will pay the Reinsurer any amount shown due the  Reinsurer,
         and the  Reinsurer  will pay any amount  shown due the  Company,  which
         amount  shall be paid by the  owing  party  within  fifteen  (15)  days
         following the Reinsurer's  receipt of the monthly or quarterly  report.
         All  payments  due  hereunder  shall be  remitted  by wire  transfer in
         immediately  available funds. If a party shall dispute the amount owing
         to the second  party as set forth in any monthly or  quarterly  report,
         the first  party  nevertheless  shall pay any amount in  dispute  (plus
         interest payable at the same rate as the first six-month U.S.  Treasury
         Bill  issued  during that  quarter) to the second  party as provided in
         this paragraph, pending resolution of the dispute.

D.       The parties to this Master Certificate shall, upon request of the other
         party,  provide  the other with their  annual and  quarterly  statutory
         financial statements in the form prescribed by the National Association
         of Insurance Commissioners (NAIC) or any insurance regulatory authority
         having  jurisdiction  over  the  parties,  as soon  as  such  financial
         statements are available.

E.       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 against any balance or balances due to the other party under this
         Master Certificate or any other agreement between the parties,  and the
         party  asserting  the right of offset shall have and may exercise  such
         right  whether the balance or balances 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 this Master
         Certificate or such other agreement or agreements  between the parties;
         provided,  however,  that in the event of insolvency of a party hereto,
         offsets  shall be allowed only in  accordance  with the  provisions  of
         applicable law or regulations.

F.       Notwithstanding  anything  herein to the contrary,  should  payment due
         from the Reinsurer  exceed  $500,000.00,  as respects any one loss, the
         Company may give the Reinsurer  notice of payment made or its intention
         to make  payment on a certain  date.  If the Company has paid the loss,
         the  Reinsurer  will make payment five (5)  Business  Days,  as defined
         below,  days after receipt of the above report.  If the Company intends
         to pay the loss by a  certain  date and has  submitted  a  satisfactory
         proof  of loss or  similar  document,  payment  will  be due  from  the
         Reinsurer  twenty-four  (24)  hours  prior to that date,  provided  the
         Reinsurer  has a period of five (5) Business Days after receipt of said
         notice to dispatch the

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         payment.  Cash loss amounts  specifically  remitted by the Reinsurer as
         set forth  herein  will be credited  to its next  quarterly  or monthly
         account. As used herein, "Business Day" shall mean any day other than a
         Saturday,  Sunday or a day on which banking  institutions in either New
         York or Connecticut  are permitted or obligated by law to be closed for
         regular banking business.

                                  ARTICLE VIII
              LOSS, LOSS ADJUSTMENT EXPENSE, SALVAGE AND RECOVERIES

A.       Settlement  of any Loss made by the Company,  whether under a Policy or
         by way  of  compromise,  shall  be  unconditionally  binding  upon  the
         Reinsurer.   If  such  settlement   involves  the  refinancing  of  the
         obligations  insured under a new Policy (the "Refinanced  Obligations")
         by the issuance of new obligations that are insured by the Company (the
         "Refinancing  Obligations"),  the  Reinsurer  shall  assume  under this
         Master  Certificate  the same  proportionate  share of the  Refinancing
         Obligations  as the Reinsurer  assumed of the  Refinanced  Obligations;
         however,  such Refinancing  Obligations shall not be in amounts greater
         than the amounts  assumed by the  Reinsurer  relating  to the  original
         Policy.  All  salvages and  recoveries  received  subsequent  to a loss
         settlement  shall be applied as if recovered  or received  prior to the
         settlement and all necessary  adjustments  shall be made by the parties
         hereto. The Reinsurer shall benefit  proportionally in all salvages and
         recoveries   and  the  Company  will  credit  the  Reinsurer  with  its
         proportionate  share of any such salvages and  recoveries on account of
         claims and settlements involving the reinsurance hereunder.

B.       In the event that  reinsurance  is provided  hereunder on a quota share
         basis,  the Reinsurer  shall bear its  proportionate  share of all Loss
         Adjustment  Expenses  incurred by the Company in the same proportion to
         the Reinsurer's  participation in Losses  hereunder,  and shall receive
         its  proportionate  share of any  recoveries  of such  Loss  Adjustment
         Expenses.

C.       In the event that  reinsurance  is provided  hereunder  on an excess of
         loss basis,  the Reinsurer  shall be  responsible  for its share of the
         Loss Adjustment Expenses with respect to a Loss recoverable  hereunder.
         Such Loss Adjustment Expense amount shall be apportioned according to a
         fraction,  the numerator of which shall be the amount of Loss reinsured
         under the Reinsurance Certificate and the denominator of which shall be
         the total  amount of Loss  payable by the  Company.  The parties  shall
         receive a share of any  recovery  of such Loss  Adjustment  Expenses in
         accordance with the same fraction.

D.       Notwithstanding  the foregoing,  the Company shall, upon the request of
         the  Reinsurer,  provide  information  relating  to any  Loss  and Loss
         Adjustment  Expense,  in a level of detail and with such  frequency  as
         shall be reasonably  requested by the Reinsurer.  The Reinsurer's share
         of  Losses,  Loss  Adjustment  Expenses  and loss  recoveries  shall be
         reflected in the  quarterly  report in  accordance  with the  ACCOUNTS,
         REPORTS AND REMITTANCES Article.

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E.       The  Reinsurer's   liability  on  policies   accepted  for  reinsurance
         hereunder shall attach simultaneously with that of the Company, and all
         reinsurance  with  respect  to which the  Reinsurer  shall be liable by
         virtue of this Master  Certificate  shall be subject in all respects to
         the same risks, terms, rates, conditions, interpretations,  assessments
         and  waivers,   and  to  the  same   modifications,   alterations   and
         cancellations,  as the respective Policies of the Company to which such
         reinsurance  relates,  the true intent of this Master Certificate being
         that  the  Reinsurer   shall,  in  every  case  to  which  this  Master
         Certificate applies and in the proportion specified herein,  follow the
         fortunes of the  Company,  and the  Reinsurer  shall be bound,  without
         limitation, by all payments and settlements entered into by the Company
         in good faith,  provided such payments and  settlements  are subject to
         the terms and conditions of this Master Certificate.

                                   ARTICLE IX
                                    CURRENCY

A.       All premium and other  payments and all  accounts and reports  provided
         pursuant  to this  Master  Certificate,  any  security  required by the
         STATUTORY FINANCIAL STATEMENT CREDIT Article and any awards pursuant to
         the ARBITRATION  Article or court judgments  arising out of this Master
         Certificate or the Reinsurance  Certificates  shall be in United States
         currency.

B.       Premiums  paid to the  Company  for  Policies  covered  by this  Master
         Certificate  in other than United States  currency shall be paid by the
         Company  to the  Reinsurer  in United  States  dollars  at the rates of
         exchange used by the Company in its own books of account at the time of
         the settlement, including any subsequent adjustment to such account.

C.       The amounts  recoverable by the Company from the Reinsurer for payments
         in other than United  States  currency  shall be converted  into United
         States  dollars  at the same  rates  of  exchange  as were  used by the
         Company  in its own  books of  account  at the time of the  settlement,
         including any subsequent adjustment to such account.

D.       For Policies where (i) the obligation insured thereunder is denominated
         in a foreign  currency,  (ii) the  Reinsurer's  limit of  liability  is
         denominated  in United States  dollars and (iii) the amount  insured is
         such  that  the  Reinsurer's  applicable  limit  of  liability  for the
         cessions is  applicable  using the currency  exchange rate in effect on
         the Policy  effective  date, the Reinsurer's  percentage  participation
         shall be calculated by converting  the  Reinsurer's  limit of liability
         using the  currency  exchange  rate in effect on the  Policy  effective
         date, and the Reinsurer shall be entitled to its proportionate share of
         premiums  and liable  for its  proportionate  share of Policy  payments
         based on such percentage  notwithstanding any subsequent changes in the
         currency  exchange  that  would  result  in the  Reinsurer's  limit  of
         liability  being  exceeded,  the intent being that the Reinsurer  shall
         bear the currency exchange rate risk for its proportionate share in all
         cases.

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                                   ARTICLE X
                                      TAXES

The  Company  will be liable  for  premium  taxes on  premiums  reported  to the
Reinsurer hereunder.

                                   ARTICLE XI
                                ACCESS TO RECORDS

The Company  shall place at the  disposal of the  Reinsurer,  and the  Reinsurer
shall have the right to inspect, through its authorized representatives,  at all
reasonable  times during the term of this Master  Certificate  and thereafter to
the extent  relating  to claims made under  Policies  written on or prior to the
Termination  Effective  Date,  the  books,  records  and  papers of the  Company
pertaining to the reinsurance provided hereunder.

                                  ARTICLE XII
                                   INSOLVENCY

In the event of insolvency and the  appointment of a conservator,  liquidator or
statutory successor of Company, the portion of any risk or obligation assumed by
the  Reinsurer  shall be payable to the  conservator,  liquidator,  or statutory
successor  on the basis of claims  allowed  against  the Company by any court of
competent jurisdiction or by any conservator, liquidator, or statutory successor
of the Company having authority to allow such claims, without diminution because
of that  insolvency,  or  because  the  conservator,  liquidator,  or  statutory
successor has failed to pay all or a portion of any claims.

It is  understood,  however,  that in the event of the insolvency of the Company
the liquidator or receiver or statutory  successor of Company shall give written
notice to Reinsurer of the pendency of a claim against the Company on the Policy
or Policies  reinsured  hereunder  within a reasonable  time after such claim is
filed in the  insolvency  proceeding  and during  the  pendency  of such  claim.
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 which
it may deem  available to the Company or its liquidator or receiver or statutory
successor.  It is further understood that the expense thus incurred by Reinsurer
shall be chargeable,  subject to court approval,  against the Company as part of
the expense of liquidation to the extent of a proportionate share of the benefit
which  may  accrue  to the  Company  as a result of the  defense  undertaken  by
Reinsurer.

                                  ARTICLE XIII
                            AMENDMENTS AND ASSIGNMENT

This Master  Certificate  may be changed,  altered or amended as the parties may
agree, provided such change,  alteration or amendment is evidenced in writing or
by endorsement to this Master Certificate and signed by the parties hereto. Such
writing or endorsement will then constitute a part of this Master Certificate.

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No assignment or change of the Company's interest  hereunder,  whether voluntary
or involuntary and whether by merger or reinsurance or reinsurance of its entire
business with another company or otherwise, shall be binding upon the Reinsurer.

                                  ARTICLE XIV
                               SPECIAL TERMINATION

A.       (i)      The Company  shall have the right,  at its  option,  to effect
                  termination   of  this  Master   Certificate   (the   "Special
                  Termination  Right")  at any  time  effective  as of any  date
                  ("Company  Special  Terminate Date"), by giving 30 days' prior
                  written  notice to the  Reinsurer  by certified  mail,  in the
                  event that:

                  1.       The Reinsurer  fails to maintain the minimum  capital
                           and  surplus  requirements  and  any  other  solvency
                           requirements  as  determined  under  the  laws of the
                           Reinsurer's domicile jurisdiction; or

                  2.       The  Reinsurer  has a rating below A- from Standard &
                           Poor's   Corporation   or  below  Aa3  from   Moody's
                           Investors Service.

         (ii)     In the event that the Company's  right to exercise its Special
                  Termination  Right is triggered  upon the occurrence of any of
                  the foregoing events, in lieu of the Company's  exercising its
                  Special  Termination  Right,  the  Reinsurer  may,  subject to
                  receipt of the  Company's  prior  consent  and  receipt of all
                  required regulatory approvals,  provide a reinsurer acceptable
                  to  the  Company  that   satisfies   each  of  the  applicable
                  requirements  of Section 6906 of New York's  Insurance Law (or
                  any successor  statute  thereto) (an "Assuming  Reinsurer") to
                  novate  all of the  Reinsurer's  liabilities  and  obligations
                  under this Master  Certificate with the same effect as if such
                  Assuming  Reinsurer  had  directly  entered  into this  Master
                  Certificate   in  place  of  the  Reinsurer  (a   "Novation").
                  Notwithstanding anything herein to the contrary, the Reinsurer
                  recognizes  the  Company's  right  to  terminate  this  Master
                  Certificate  pursuant  to the  Special  Termination  Right and
                  agrees and  acknowledges  that any  Novation is subject to the
                  Company's  right to exercise  the Special  Termination  Right,
                  which the Company may exercise at any time  before,  during or
                  after  such a  Novation  is in place and the  Company's  prior
                  written consent to any such Novation.

B.       The  Reinsurer  shall  have  the  right,  at  its  option,   to  effect
         termination of this Master  Certificate at any time effective as of any
         date  ("Reinsurer  Special  Termination  Date") by giving not less than
         thirty (30) days prior written  notice to the Company by certified mail
         upon the occurrence of either one of the following events:

                  1.       A Company Change in Control (as defined below); or

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                  2.       A  downgrade  of  the  Company's  Standard  &  Poor's
                           financial  strength rating below AA or a downgrade of
                           the Company's Moody's financial strength rating below
                           Aa2.

                  For purposes of this Master Certificate,  a "Company Change in
                  Control"  will be deemed  to occur in the  event  that (i) the
                  ownership  in Security  Capital  Assurance  Ltd ("SCA") by the
                  Reinsurer or by the Reinsurer and its affiliates,  falls below
                  thirty-five  percent  (35%) or (ii) SCA's  direct or  indirect
                  ownership  interest  in the issued and  outstanding  shares of
                  voting  securities  of the  Company  falls  below  ninety-five
                  percent (95%).

C.       With  respect  to  any   termination  as  set  forth  in  this  Special
         Termination  provision;  the Company shall have the option, in its sole
         discretion, to reassume the liabilities or to effectuate termination of
         such  liabilities  on a  run-off  basis  with  regard  to the  Policies
         reinsured  hereunder.  In the event the  Company  elects to  effectuate
         termination of the liabilities under the Policies  reinsured  hereunder
         on a run-off  basis,  the Reinsurer  shall remain liable for Losses and
         Loss Adjustment  Expenses  relating thereto  occurring under or arising
         out of all Reinsurance  Certificates relating to Policies written on or
         prior to the Company  Special  Termination  Date or  Reinsurer  Special
         Termination Date, as applicable,  until all obligations and liabilities
         incurred   by  each   party   hereunder   or  under   the   Reinsurance
         Certificate(s)  are fully performed and discharged.  Accounts,  reports
         and  remittances  due under such run-off shall be reported and remitted
         by the  parties  hereto  pursuant  to terms set forth in the  ACCOUNTS,
         REPORTS AND REMITTANCES Article.

                                   ARTICLE XV
                      STATUTORY FINANCIAL STATEMENT CREDIT

A.       The  Reinsurer,  upon the request and at the discretion of the Company,
         shall take all steps  necessary to ensure that the Company obtains full
         financial   statement   credit  in  all  domiciliary   states  for  the
         reinsurance ceded to the Reinsurer hereunder,  including the posting of
         security, if required, as set forth in this Article XV.

B.       As regards  Policies  issued by the Company  coming within the scope of
         this Master  Certificate,  the  Company  agrees that when it shall file
         with the insurance regulatory authority or set up on its books reserves
         for unearned  premium and losses  covered  hereunder  which it shall be
         required by law to set up, it will forward to the Reinsurer a statement
         showing the  proportion  of such  reserves  which is  applicable to the
         Reinsurer.   Notwithstanding   any  other   provision  of  this  Master
         Certificate  or any  Reinsurance  Certificate  to the contrary,  if the
         Reinsurer becomes  unauthorized in any jurisdiction where authorization
         is  required  by  insurance  regulatory  authorities  in order  for the
         Company  to  obtain  credit  on  its  statutory  quarterly  and  annual
         statements filed with such  jurisdiction  for the reinsurance  provided
         pursuant to this Master  Certificate,  the  Reinsurer  hereby

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         agrees to fund such  reserves  in respect of  unearned  premium,  known
         outstanding  losses  that have been  reported  to the  Reinsurer,  Loss
         Adjustment Expenses, and contingency reserves relating thereto,  Losses
         and Loss Adjustment Expenses paid by the Company but not recovered from
         the  Reinsurer,  as  shown in the  statement  prepared  by the  Company
         (hereinafter referred to as "Reinsurer's Obligations") by a reinsurance
         trust in compliance  with New York Insurance  Regulation 114, as it may
         be amended form time to time, funds withheld, cash advances or a Letter
         of Credit in compliance  with New York Insurance  Regulation 133, as it
         may be amended from time to time.  The Reinsurer  shall have the option
         of determining the method of funding  provided it is in compliance with
         the  provisions  of Section 6906 of New York's  Insurance  Law (and any
         successor  statute  thereto) and New York  Insurance  Regulation 20, as
         each may be amended from time to time.

C.       When funding by a Letter of Credit,  the Reinsurer  agrees to apply for
         and secure timely  delivery to the Company of a clean,  irrevocable and
         unconditional  Letter of Credit issued by a bank in compliance with New
         York Insurance  Regulation 133, as it may be amended form time to time,
         in an amount equal to the Reinsurer's proportion of said reserves. Such
         Letter  of  Credit  shall be  issued  for a period of not less than one
         year, and shall be automatically extended for one year from its date of
         expiration or any future expiration date unless thirty (30) days (sixty
         (60) days where required by insurance regulatory  authorities) prior to
         any  expiration  date the  issuing  bank shall  notify  the  Company by
         certified  or  registered  mail that the  issuing  bank  elects  not to
         consider the Letter of Credit extended for any additional period.

D.       The Reinsurer and Company agree that the Letters of Credit  provided by
         the Reinsurer pursuant to the provisions of this Master Certificate may
         be drawn upon at any time,  notwithstanding any other provision of this
         Master Certificate, and be utilized by the Company or any successor, by
         operation of law, of the Company  including,  without  limitation,  any
         liquidator,  rehabilitator,  receiver or conservator of the Company for
         the following  purposes,  unless  otherwise  provided for in a separate
         Trust Agreement:

                  (a)      to   reimburse   the  Company  for  the   Reinsurer's
                           Obligations,  the  payment  of which is due under the
                           terms of this  Master  Certificate  and which has not
                           been otherwise paid;

                  (b)      to make  refund  of any sum which is in excess of the
                           actual  amount   required  to  pay  the   Reinsurer's
                           Obligations under this Master Certificate;

                  (c)      to  fund  an  account   with  the   Company  for  the
                           Reinsurer's  Obligations.  Such cash deposit shall be
                           held in an interest bearing account separate from the
                           Company's other assets,  and interest  thereon not in
                           excess of the prime rate shall  accrue to the benefit
                           of the Reinsurer;

                                       11
<PAGE>

                  (d)      to pay the Reinsurer's share of any other amounts the
                           Company claims are due under this Master Certificate.

         In the event the amount drawn by the Company on any Letter of Credit is
         in excess of the actual amount  required for (a) or (c), or in the case
         of (d),  the actual  amount  determined  to be due,  the Company  shall
         promptly return to the Reinsurer the excess amount so drawn. All of the
         foregoing shall be applied without  diminution because of insolvency on
         the part of the Company or the Reinsurer.

E.       The issuing bank shall have no responsibility  whatsoever in connection
         with  the  propriety  of  withdrawals   made  by  the  Company  or  the
         disposition of funds  withdrawn,  except to ensure that withdrawals are
         made only upon the order of properly authorized  representatives of the
         Company.

F.       At annual intervals no later than fifteen days (15) prior to the end of
         each calendar year, the Company shall prepare a specific statement (the
         "Preliminary  Statement") estimating the Reinsurer's  Obligations,  for
         the purpose of amending the Letter of Credit, in the following manner:

                  (a)      If  the   Preliminary   Statement   shows   that  the
                           Reinsurer's  Obligations  are estimated to exceed the
                           balance of credit as of the year end,  the  Reinsurer
                           shall,  no later  than five (5) days prior to the end
                           of the calendar year,  secure delivery to the Company
                           of an  amendment  to the Letter of Credit  increasing
                           the   amount  of   credit  by  the   amount  of  such
                           difference.

                  (b)      If, however, the Preliminary Statement shows that the
                           Reinsurer's Obligations are estimated to be less than
                           the balance of credit as of the year end, the Company
                           shall,  no later  than five (5) days prior to the end
                           of the calendar  year,  release such excess credit by
                           agreeing  to an  amendment  to the  Letter  of Credit
                           reducing the amount of credit available by the amount
                           of such excess credit.

         Within  five (5) days  following  the  filing of the  Company's  annual
         statement  with respect to each  calendar year in which an amendment to
         the Letter of Credit was  required  in  accordance  with the  foregoing
         clauses (a) and (b),  the Company  shall  prepare a specific  statement
         (the "Final Statement")  setting forth the Reinsurer's  Obligations for
         the purpose of confirming  the amount of the  adjustments  reflected in
         the amendment to the Letter of Credit obtained based on the Preliminary
         Statement.  If any such Final Statement  indicates that the adjustments
         required  in the  foregoing  clauses (a) and (b) were  inaccurate,  the
         Reinsurer  shall  secure a further  amendment  to the  Letter of Credit
         reflecting the adjustments required, in the following manner:

                  (c)      If the Final  Statement  shows  that the  Reinsurer's
                           Obligations  exceeded the balance of credit as of the
                           year end reflected in the Preliminary Statement,  the
                           Reinsurer shall, no later than ten (10)

                                       12
<PAGE>

                           days  following  its receipt of the Final  Statement,
                           secure delivery to the Company of an amendment to the
                           Letter of Credit  increasing  the amount of credit by
                           the amount of such difference.

                  (d)      If,  however,  the  Final  Statement  shows  that the
                           Reinsurer's  Obligations are less than the balance of
                           credit   as  of  the  year  end   reflected   in  the
                           Preliminary  Statement,  the Company shall,  no later
                           than ten (10) days following preparation of the Final
                           Statement,  release such excess credit by agreeing to
                           an  amendment  to the Letter of Credit  reducing  the
                           amount  of  credit  available  by the  amount of such
                           excess credit.

                                  ARTICLE XVI
                           COVENANTS OF THE REINSURER

The Reinsurer hereby covenants that it:

A.       has and shall maintain surplus to policyholders of at least thirty-five
         million dollars (US $35,000,000);

B.       shall  establish and maintain the reserves  required in Section 6903 of
         New York's Insurance Laws or any or any succeeding statutory provision,
         as such may be amended,  modified or  interpreted  from time to time in
         any  regulation,  bulletin  or  opinion  promulgated  by the  New  York
         Department of Insurance,  PROVIDED,  HOWEVER,  that if the  Reinsurance
         Certificate  with respect to any Policy  provides that the  reinsurance
         provided hereunder is not pro rata, the Reinsurer's contribution to the
         Contingency Reserve with respect to such Policy shall be equal to fifty
         percent of the  quarterly  earned  reinsurance  premium with respect to
         such Policy;

C.       shall  comply  with the  provisions  of  Section  6904(c) of New York's
         Insurance Laws (except that the maximum total  exposures  reinsured net
         of retrocessions and collateral shall be one-half of that permitted for
         a New York financial guaranty insurance corporation thereunder);

D.       in the event that the  Reinsurer  is an  affiliate  of the  Company (as
         defined in Section  6901(c) of the New York Insurance  Law),  shall not
         assume a percentage of the  Company's  total  exposures  insured net of
         retrocessions  and  collateral  in excess of its  percentage  of equity
         interest in the Company; and

E.       assumes,  together with all other  reinsurers of the Company subject to
         Section  6906(a)(2)(F)  of New York's  Insurance  Law,  less than fifty
         percent of the total  exposures  insured  net of  collateral  remaining
         after deducting any reinsurance  placed with another financial guaranty
         insurance  corporation or an insurer  writing only  financial  guaranty
         insurance  as is or would be  permitted  by  Article  69 of New  York's
         Insurance Law.

                                       13
<PAGE>

                                  ARTICLE XVII
                                 CONFIDENTIALITY

A.       The Reinsurer agrees to maintain the  confidentiality  of the Policies,
         the  reinsurance  of the Policies and the underlying  transactions  and
         documents (the "Information"), except

         (i)      as   to   affiliates,    directors,   employees,   regulators,
                  independent auditor,  counsel, agents or other advisors of the
                  Reinsurer  to  whom  it is  necessary  or  prudent  to show or
                  discuss the Information for purposes  related to the Reinsurer
                  and/or an  affiliate's  underwriting  analysis or  evaluating,
                  monitoring  or  reporting  the  Reinsurer  or  its  affiliates
                  involvement in the individual  risk presented to the Reinsurer
                  by  the  Company,  each  of  whom  will  be  informed  of  the
                  confidential nature of the Information;

         (ii)     in any statement or testimony  pursuant to a subpoena or order
                  by any court,  government  body,  agency or  authority,  or as
                  otherwise required by law or in connection with litigation;

         (iii)    upon the request or demand of any regulatory authority;

         (iv)     as   to    potential    or   actual    assignees,    insurers,
                  retrocessionaires   and/or  other  transfers  of  an  interest
                  (including  extensions  of credit)  related to the  individual
                  risk presented to the Reinsurer by the Company,  provided that
                  such   entities   are  subject  to   substantially   the  same
                  confidentiality  requirements  with respect to the Information
                  as those applicable to the parties hereto;

         (v)      as to Information that (a) is or becomes  generally  available
                  to the public  other than as a result of a  disclosure  by the
                  Reinsurer  or any of  its  affiliates  or  their  agents;  (b)
                  becomes available to the Reinsurer or any of its affiliates on
                  a  non-confidential   basis  from  a  source  other  than  the
                  Reinsurer or any of its affiliates or one of their agents; (c)
                  was  known  to the  Reinsurer  or any of its  affiliates  on a
                  non-confidential   basis  or  has  been  or  is   subsequently
                  independently  developed  by  the  Reinsurer  or  any  of  its
                  affiliates  prior to its  disclosure  by the Company or one of
                  its agents; or (d) constitutes experience,  content, knowledge
                  or know-how that is susceptible of use without disclosure to a
                  third party of the identity or source of such  information and
                  without  infringement of any copyright,  patent,  trademark or
                  other  proprietary  rights  of  any  kind  whatsoever  of  the
                  Company; or

         (vi)     to a rating agency in connection  with the  Reinsurer's or any
                  of its affiliates' credit rating provided,  however,  that, in
                  the case of (i) above,  such entity is not, or such individual
                  is not  affiliated  with,  a  financial  guaranty  insurer  in
                  competition  with the Company,  and provided  further that, in
                  the case of (ii) above,  the Reinsurer  shall promptly  notify
                  the

                                       14
<PAGE>

                  Company  of such  subpoena  and shall  allow at the  Company's
                  direction and expense the Company to contest such subpoena. If
                  required  by a  participant  in  a  transaction  insured  by a
                  Policy, the Reinsurer shall execute a separate confidentiality
                  agreement requiring the above  confidentiality with respect to
                  such transaction.

B.       With respect to  Information  disclosed by the  Reinsurer or any of its
         affiliates to the Company and/or its affiliates,  the terms, conditions
         and  obligations of this  Agreement  shall apply to the Company and its
         affiliates  as though they were the  Reinsurer and to the Reinsurer and
         its affiliates as though they were the Company, MUTATIS MUTANDIS.

                                 ARTICLE XVIII
                              ERRORS AND OMISSIONS

Any inadvertent delay,  omission or error shall not be held to relieve any party
hereto  from any  liability  that would have  attached  to it under this  Master
Certificate had such delay,  omission or error not been made,  provided that the
liability of the  Reinsurer  under this Master  Certificate  or any  Reinsurance
Certificate  shall in no event  exceed  the  terms,  conditions  and  provisions
specified  therein  nor  extend  to cover  any  risks or  classes  of  insurance
generally or specifically excluded therein.

                                  ARTICLE XIX
                                   ARBITRATION

As a condition precedent to any right of action hereunder,  any and all disputes
relating  to  this  Agreement,  including  its  formation,   interpretation  and
performance,  shall  be  resolved  by a panel  of  three  arbitrators  and  such
arbitration  shall be initiated  at the written  request of either  party.  Each
party shall choose an  arbitrator  and the two so chosen shall choose the third.
If either party fails to appoint an arbitrator  within thirty (30) days of being
requested  to do so by the other  party,  the  requesting  party may choose both
arbitrators  who shall choose the third.  In the event the two  arbitrators  are
unable  to agree  upon the third  arbitrator  within  thirty  (30) days of their
appointment,  each of them shall name five, of whom the other shall decline four
and the decision shall be made by drawing lots. All arbitrators  shall be active
or retired  executive  officers of insurance or reinsurance  companies  normally
transacting  business  in the  United  States of  America,  and shall not have a
personal or financial interest in the parties or the outcome of the arbitration.

The  arbitration  panel  shall  have power to fix all  procedural  rules for the
holding of the arbitration  including  discretionary  power to make orders as to
any matters which it may consider  proper in the  circumstances  of the case and
consistent with this Agreement with regard to pleadings,  discovery,  inspection
of the documents, examination of witnesses, sanctions for failure to comply with
the panel's rulings and any other matter  whatsoever  relating to the conduct of
the arbitration.

                                       15
<PAGE>

The panel shall make its decision  with regard to the custom and practice of the
applicable  insurance  and  reinsurance  business.  The panel is relieved of all
judicial formalities and may abstain from following the strict rules of evidence
and procedure.

Each party shall bear the expenses of the arbitrator it selected and shall share
equally  with  the  other  in the  expenses  of the  third  arbitrator  and  the
arbitration.  The panel  shall  issue  its  decision  as  promptly  as  possible
following  the  completion  of a hearing,  if there is one,  but in no event may
punitive,  exemplary,  multiple or enhanced compensatory damages be awarded. The
majority decision of the arbitrators shall be final and binding upon all parties
to the  proceeding.  Judgment  may be entered upon the award of the panel in any
court having jurisdiction thereof.

The arbitration shall take place in New York, New York unless the panel deems it
in  the  best  interest  of the  arbitration  to  conduct  all  or  part  of the
arbitration at another location.

                                   ARTICLE XX
                          NO THIRD PARTY BENEFICIARIES

Nothing  herein shall in any manner  create any  obligations  or  establish  any
rights  against a party  hereto in favor of any  person  which is not a party to
this Master Certificate, unless otherwise expressly provided herein.

                                  ARTICLE XXI
                      ADDRESSES FOR NOTICES AND REMITTANCES

All reports, payments, remittances,  notices, letters, instructions or any other
communications between the parties to this Master Certificate shall be addressed
as follows:

To the Company:            XL Capital Assurance Inc.
                           1221 Avenue of the Americas
                           New York, New York 10020
                           Fax:  (212) 478-3579
                           Attn: Chief Financial Officer

To the Reinsurer:          XL Reinsurance America Inc.
                           Seaview House
                           70 Seaview Avenue
                           Stamford, CT 06902
                           Fax:  (203) 964-5309
                           Attn: General Counsel

PROVIDED,  HOWEVER,  that in the event a party  notifies  the other  parties  in
writing of a change in address,  all communications shall thereafter be directed
to the address indicated in such notice.

                                       16
<PAGE>

                                  ARTICLE XXII
                                  GOVERNING LAW

A.       This  Master  Certificate  shall be deemed to have been made  under and
         governed by the laws of New York.

                                 ARTICLE XXIII
                                   DEFINITIONS

Unless  otherwise  defined  herein,  the  terms as used  herein  shall  have the
meanings set forth below:

A.       "Assuming  Reinsurer" shall have the same definition as provided in the
         SPECIAL TERMINATION Article.

B.       "Business  Day"  shall  have the same  definition  as  provided  in the
         ACCOUNTS, REPORTS AND REMITTANCES Article.

C.       "Contingency  Reserve"  shall mean the reserve  required  under Section
         6904 of New York's  Insurance  Law to be  maintained  by the Company in
         connection with any Bond reinsured by a reinsurance certificate.

D.       "Incurred Loss" shall mean Losses plus Loss Adjustment Expenses paid by
         the Company, less salvages and recoveries.

E.       "Insured  Bond  Issue"  shall  mean all  bonds,  notes  or  other  such
         instruments  of a single type and source of security  and for which the
         Company or an affiliate has issued or reinsured as a Policy.

F.       "Loss" or  "Losses"  shall  mean the  amount of  liability  paid by the
         Company with respect to an Insured Bond Issue under the written  terms,
         limits and conditions of the applicable Policy and related contract, if
         any.

G.       "Loss Adjustment Expenses" shall mean all expenses which have been paid
         by the Company in the investigation,  adjustment, settlement or defense
         of claims covered under Policies reinsured hereunder, but not including
         office,  administrative  or  overhead  expenses of the Company or of an
         affiliate or salaries and expenses of its officials and employees or an
         affiliate.

H.       "Master  Certificate"  shall mean this Master  Certificate,  as amended
         from time to time in accordance with its terms.

I.       "Net  Written  Premium"  shall have the same  meaning  set forth in the
         PREMIUMS; CEDING COMMISSION Article.

J.       "Policy" shall have the same meaning set forth in the BUSINESS  COVERED
         Article.

                                       17
<PAGE>

K.       "Reinsurance Certificate(s)" shall be in the form of Exhibit B hereto.

L.       "Special  Payment"  shall have the same  definition  as provided in the
         ACCOUNTS, REPORTS AND REMITTANCES Article.


IN WITNESS WHEREOF the parties hereto have caused this Master  Certificate to be
executed in duplicate this day of , 2006.



                                           XL CAPITAL ASSURANCE INC.




                                           By:
                                               ---------------------------------
                                                    Name:
                                                    Title:




                                           XL REINSURANCE AMERICA INC.




                                           By:
                                              ----------------------------------
                                                    Name:
                                                    Title:

                                       18
<PAGE>

         The cession evidenced by this Reinsurance  Certificate shall be subject
to all the terms and conditions  contained in the Facultative Master Certificate
between the  parties,  which the  undersigned  here by  acknowledge  as being an
agreement between and binding upon the undersigned.


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SUBMITTED BY:                               ACCEPTED BY:
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XL CAPITAL ASSURANCE INC.                   XL REINSURANCE AMERICA INC.


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