Exhibit 10.20

                     THIRD AMENDED AND RESTATED FACULTATIVE
                         QUOTA SHARE REINSURANCE TREATY


         This Third Amended and Restated Facultative Quota Share Reinsurance
Agreement, executed on June 29, 2006 and effective as of July 1, 2006, is
between XL Financial Assurance Ltd., a Bermuda company (herein referred to as
the "Reinsurer"), and XL Capital Assurance Inc., a New York financial guaranty
insurance corporation (herein referred to as the "Ceding Company").

                                   WITNESSETH,

         WHEREAS, the Ceding Company and the Reinsurer are parties to a
Facultative Quota Share Reinsurance Treaty dated as of October 6, 1999 as
amended and restated by an Amended and Restated Facultative Quota Share
Reinsurance Treaty dated as of June 22, 2001 and as further amended and restated
by an Amended and Restated Facultative Quota Share Reinsurance Treaty dated as
of May 1, 2004, as amended (collectively, the "Original Agreement");

         WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in the manner, and on the terms and conditions herein provided;

         NOW THEREFORE, in consideration of the mutual covenants of this Third
Amended and Restated Facultative Quota Share Reinsurance Agreement (the
"Facultative Quota Share Reinsurance Agreement"), and good and valuable
consideration, the receipt and adequacy of which are hereby expressly
acknowledged, the parties agree as follows:

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                                    ARTICLE I

            BUSINESS COVERED; REPRESENTATION OF REINSURER; COMMISSION

1.1               The Ceding Company agrees to cede and the Reinsurer agrees to
accept, under the terms of this Facultative Quota Share Reinsurance Agreement,
Policies hereafter issued on behalf of the Ceding Company. Cessions made to the
Reinsurer hereunder shall be effected by way of quota share reinsurance, whereby
the Reinsurer shall accept and reinsure, up to 75% on a quota share basis or
such alternative basis as the parties may mutually agree Liabilities in respect
of each Policy ceded pursuant to the terms of this Facultative Quota Share
Reinsurance Agreement.

1.2               Such cessions shall apply to all Policies of financial
guaranty insurance and surety insurance which have been submitted to Reinsurer
in accordance with the provisions of Article II hereof.

1.3               As a material condition of this Facultative Quota Share
Reinsurance Agreement, the Reinsurer hereby agrees during the duration of this
Facultative Quota Share Reinsurance Agreement to write only Policies of
insurance of the type as would be permitted under Article 69 of the Insurance
Laws of the State of New York.

1.4               The ceding commissions shall be thirty percent (30%) of Gross
Net Premiums Written (or such percentage on an arm's length basis) unless
otherwise specified in the Reinsurance Memorandum (as hereinafter defined).

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1.5               Once during any four year period the Reinsurer sustains
cumulative losses under this Facultative Quota Share Reinsurance Agreement in
excess of $450 million, the Ceding Company agrees that with respect to those
Policies the premium of which is to be paid on an installment basis
("Installment Premium") it will pay the Reinsurer an additional premium with
respect to such ceded Policies of 0.25 times such Installment Premium

1.6               The Ceding Company shall pay to the Reinsurer the Gross Net
Premiums Written after first deducting the ceding commission and U.S. Federal
Excise Tax.

                                   ARTICLE II

                       ACCEPTANCE OF FACULTATIVE CESSIONS

2.1               Within 30 days of the issuance of any Policy, the Ceding
Company shall submit (i) all cessions in respect of such Policy to the Reinsurer
for acceptance hereunder pursuant to a reinsurance memorandum (the "Reinsurance
Memorandum") in substantially the same form of Exhibit A; and (ii) a transaction
information summary in substantially the same form of Exhibit B; annexed to this
Facultative Quota Share Reinsurance Agreement. The Reinsurer may, but shall not
be required to, accept cessions delivered more than 30 days after the issuance
of the related Policy. All such submissions shall contain such information about
the Policy to be reinsured as the Reinsurer may reasonably require.

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2.2               Subject to Section 2.1 hereof, the Reinsurer shall accept any
cession presented by the Ceding Company with an underlying investment grade
rating. The Reinsurer shall acknowledge each cession hereunder by providing the
Ceding Company with a copy of the Reinsurance Memorandum for that particular
risk signed by a duly authorized representative of the Reinsurer. The Reinsurer
shall return the signed Reinsurance Memorandum as soon as practicable.

                  Once the risk has been ceded by the Ceding Company as herein
provided, the Reinsurer shall be bound to provide coverage under this
Facultative Quota Share Reinsurance Agreement in accordance with the terms and
conditions of the underlying Policy, unless the terms and conditions of coverage
with respect to the particular risk relating to such Policy are modified in the
Reinsurance Memorandum pertaining to that risk. The Reinsurer's Liabilities in
respect of each such Policy shall attach as of the effective date of the Policy,
unless the Reinsurance Memorandum provides for a different date. Unless
otherwise provided by the Reinsurance Memorandum, the Reinsurer shall assume the
designated portion or amount of principal or other obligation insured under the
Policy, any interest or premium on such amount assumed and a pro rata share of
Loss Expenses and Loss Adjustment Expenses Paid.

                  The share of the Reinsurer in the interests and liabilities of
the Policies covered by this Facultative Quota Share Reinsurance Agreement shall
be separate and apart

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from the shares of any other reinsurers assuming such risks. The Reinsurer's
obligation pursuant to this Facultative Quota Share Agreement shall be several
and not joint with any such other reinsurer and in no event shall the Reinsurer
participate in the interests and liabilities of such other reinsurers.

2.3               Notwithstanding Sections 2.1 and 2.2 hereof to the contrary,
the Ceding Company and the Reinsurer may agree to substitute mutually acceptable
underwriting criteria and standards for the procedures set forth in Sections 2.1
and 2.2.

                                   ARTICLE III

                                    TERRITORY

                  This Facultative Quota Share Reinsurance Agreement shall apply
to the Policies issued by the Ceding Company covering risks worldwide.

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                                   ARTICLE IV

                                      TERM

4.1               This Facultative Quota Share Reinsurance Agreement shall apply
to any Policy issued by the Ceding Company which is ceded to the Reinsurer
pursuant to the terms of Article II hereof and which becomes effective on or
after the date hereof, subject to termination by mutual consent, or by either
party hereto upon at least sixty (60) days' prior notice, at any time.

4.2               Should one party at any time:

(a)               become insolvent, or

(b)               fail to maintain the minimum capital and surplus requirements
                  as determined under the laws of the Ceding Company's domicile
                  jurisdiction, or

(c)               file a petition in bankruptcy, or

(d)               be the subject of liquidation or rehabilitation proceeding, or

(e)               have a receiver appointed, or

(f)               be acquired or controlled by any other insurance company or
                  organization which is not controlled by XL Capital Ltd,

the other party shall have the right to immediately terminate this Facultative
Quota Share Reinsurance Agreement by giving notice in writing to the first
party.

4.3               In the event of the severance or obstruction of free and
unfettered communication and/or normal commercial and/or financial intercourse
between Bermuda and the United States of America as a result of war, currency
regulations,

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or any circumstances arising out of political, financial or economic emergency,
either party may immediately terminate this Facultative Quota Share Reinsurance
Agreement by giving notice in writing to the other party.


4.4               In the event of the termination of this Facultative Quota
Share Reinsurance Agreement, Reinsurer shall continue to be liable for
Liabilities in respect of Policies in force which have been ceded pursuant to
the terms of Article II hereof and with respect to which notice of occurrence,
claim or circumstances which may give rise to a claim is given by the insured to
the Ceding Company prior to natural expiration or termination date of such
Policies ceded to the Reinsurer under this Facultative Quota Share Reinsurance
Agreement.

                                    ARTICLE V

                               NET RETAINED LINES

5.1               [Reserved]

5.2               The amount of the Reinsurer's liability hereunder in respect
of any Loss shall not be increased by reason of the inability of the Ceding
Company to collect from any other reinsurers, whether specific or general, any
amounts which may have became due from them, whether such inability arises from
the insolvency of such other reinsurers or otherwise.

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5.3               It is understood and agreed that recoveries by the Ceding
Company from other third party reinsurance (except political risk reinsurance
and catastrophe excess reinsurance which shall inure to the benefit of the
Reinsurer) shall be entirely disregarded for all purposes of this Facultative
Quota Share Reinsurance Agreement and shall inure to the sole benefit of the
Ceding Company as expressly set forth in the Reinsurance Memorandum.

                                   ARTICLE VI

                                     REPORTS

6.1               Within thirty (30) days following the end of each month in
which there is any activity in respect of a Policy covered under a Reinsurance
Memorandum, the Ceding Company shall furnish to the Reinsurer monthly accounts
of business ceded showing all Gross Net Premiums Written, ceding commissions,
Losses Paid and Loss Expenses Paid, and salvage and recoveries on losses due to
the Reinsurer. The net balance due shall be payable by the debtor party within
fifteen (15) business days after the report is furnished. If the Reinsurer shall
dispute the amount owing by the debtor party as set forth in the report, the
debtor party nevertheless shall pay the amount in dispute to the creditor party
as provided in this paragraph pending resolution of the dispute as provided in
this Agreement.

6.2               If the Reinsurer is required to post security pursuant to
Article XVIII, the quarterly report shall include the amount of security
required. At the Company's sole option, the Company may provide a written report
of the estimate of the amount of such security

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required, which shall be based upon an estimate of the results of the second and
fourth quarters of each year prior to the due date of the quarterly report for
such quarters. Provided that the Reinsurer receives such estimate report at
least thirty (30) days prior to the end of such quarter, the Reinsurer shall
provide the Ceding Company with the security required by Article XVIII no later
than the last day of such quarter. If the estimate varies materially from the
actual amount of security required as reported in the quarterly report for that
quarter, the Ceding Company and the Reinsurer shall take such steps necessary to
adjust the amount of the security within thirty (30) days of the Reinsurer's
receipt of the report.

                                   ARTICLE VII

                                     OFFSET

                  In the event of insolvency of any party hereto, any offset
permitted under this paragraph will be in accordance with and to the extent
permitted under the provisions of Section 7427 of the New York Insurance Law.
Subject to the foregoing, each party hereto shall have, and may exercise at any
time and from time to time, the right to offset any balances, whether on account
of premiums or on account of losses or otherwise, due from such party to the
other party hereto under this Facultative Quota Share Reinsurance Agreement or
under any other agreement heretofore or hereafter entered into by and between
them, and may offset the same against any balance or balances due or to become
due to the former from the latter under the same or any other agreement between
them; and the party asserting the right of offset shall have and may exercise
such right whether the balance or balances due or to become

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due to such party from the other are on account of premiums or on account of
losses or otherwise and regardless of the capacity, whether as Ceding Company or
as Reinsurer, in which each party acted under the agreement or, if more than
one, the different agreements involved.

                                  ARTICLE VIII

                                   SUBROGATION

8.1               The Ceding Company hereby agrees to enforce such subrogation
rights as it may obtain by virtue of payments made under the Policies, but in
case it shall refuse or neglect to do so, Reinsurer is hereby authorized and
empowered to bring any appropriate action to enforce such rights.

8.2               All subrogation recoveries, other recoveries, salvage or
payments made subsequent to the settlement of Losses hereunder shall be applied
as if made before such settlement and all necessary adjustments to that and
shall be made as soon as practicable.

8.3               Reinsurer shall have the right, before the happening of an
occurrence, to waive its right of subrogation.

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                                   ARTICLE IX

                           LOSSES AND LOSS ADJUSTMENT

9.1               The Ceding Company, in its discretion, shall adjust,
investigate, settle, defend or compromise all claims and losses. All costs and
expenses incurred in connection therewith, excepting overhead expenses of the
Ceding Company, shall be borne by the Ceding Company and the Reinsurer as Loss
Expenses Paid in proportion to their respective Liabilities hereunder and shall
include outside legal, loss accounting, loss auditing, or other services not a
part of the ordinary servicing function provided by the Ceding Company, but
shall not include salaries or expenses of persons employed by the Ceding Company
in an administrative or supervisory capacity, nor for ordinary office expenses
of the Ceding Company. A pro-rata portion of such Loss Expenses Paid shall be
recoverable hereunder in addition to limits.

9.2               The Reinsurer shall have the right, at its own expense and
upon prior written notice to the Ceding Company, to become associated in any
suit or litigation which is the subject of this Facultative Quota Share
Reinsurance Agreement with counsel of their own choice.

9.3               In the event of a Loss payable hereunder exceeding $2,500,000
(on a 100% basis), the appropriate proportion of such Loss shall be paid by the
Reinsurer immediately upon request from the Ceding Company; otherwise Losses
shall be carried to account as provided in Article VI.

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                                    ARTICLE X

                        OVERSIGHTS, ERRORS AND OMISSIONS

                  Inadvertent delays, errors or omissions made in connection
with this Facultative Quota Share Reinsurance Agreement or any transaction
hereunder shall not relieve either party from any liability which would have
attached had such delay, error or omission not occurred, provided always that
such error or omission is rectified as soon as possible after discovery, and
provided that the party making such error or omission or responsible for such
delay shall be responsible for any additional liability which attaches as a
result.

                                   ARTICLE XI

                                      TAXES

11.1              The Ceding Company shall be liable for all taxes on premiums
paid on the Policies except U.S. Federal Excise Tax.

                  For any portion of the Reinsurer's proportionate share of the
premium due to the Reinsurer pursuant to Section 1.6 hereof which is subject to
U.S. Federal Excise Tax, the Ceding Company shall act as the withholding agent
and remit such tax to the United States Internal Revenue Service and withhold,
for U.S. Federal Excise Tax purposes, the applicable U.S. federal excise tax due
with respect to Gross Net Premiums Written paid on policies of insurance and
reinsurance that cover risks wholly or partly paid within the United States.

11.2              The Ceding Company reserves the right to withhold the U.S.
Federal Excise Tax in the future for any subsequent reinsurance transactions
entered into by the Ceding Company with the Reinsurer, to the extent the U.S;
Federal Excise Tax is applicable.

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                                   ARTICLE XII

                               FOLLOW THE FORTUNES

                  The Reinsurer's liability shall attach simultaneously with
that of the Ceding Company, and all reinsurance with respect to which the
Reinsurer shall be liable by virtue of this Facultative Quota Share Reinsurance
Agreement shall be subject in all respects to the same risks, terms, rates,
conditions, interpretations, assessments, waivers, the exact proportion of
premiums paid to the Ceding Company without any deductions for brokerage, and to
the same modifications, alterations and cancellations, as the respective
Policies of the Ceding Company to which such reinsurance relates, the true
intent of this Facultative Quota Share Reinsurance Agreement being that the
Reinsurer shall, in every case to which this Facultative Quota Share Reinsurance
Agreement applies and in the proportion specified herein, follow the fortunes of
the Ceding Company, and the Reinsurer shall be bound, without limitation, by all
payments and settlements entered into by the Ceding Company in good faith.


                                  ARTICLE XIII

                                    CURRENCY

13.1              Where (i) the obligation ceded to the Reinsurer denominated in
a foreign currency and (ii) the amount ceded is such that the Ceding Company's
applicable limit of liability for the cession is based on the currency exchange
rate in effect on the Policy effective date, the Reinsurer's Proportionate Share
of Ceded Par shall

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be calculated by converting the Reinsurer's limit of liability using the
currency exchange rate specified in and in effect on the effective date of the
applicable Reinsurance Memorandum, and the Ceding Company shall be entitled to
its Proportionate Share of premiums and liable for its Proportionate Share of
Losses and Loss Expenses based on such calculation notwithstanding any
subsequent changes in the currency exchange that would result in the Ceding
Company's limit of liability being exceeded, the intent being that the Ceding
Company shall bear the currency exchange rate risk for its proportionate share
in all cases.

13.2              In all cases, the rate of exchange used by the Ceding Company
in connection herewith shall be either (i) the rate published or distributed by
a recognized financial publication or a recognized financial service or (ii) the
rate agreed upon by the Ceding Company and the insured.


                                   ARTICLE XIV

                                   INSPECTION

                  The Reinsurer or its duly accredited representatives shall
have the right to inspect and copy the books and records of the Ceding Company
relative to the Policies being reinsured hereunder at all reasonable times and
shall have reasonable access to personnel of the Ceding Company for the purpose
of obtaining information concerning this Facultative Quota Share Reinsurance
Agreement or the subject matter thereof. At the request of the Reinsurer, Ceding
Company shall use its best efforts to make available such books, records and

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personnel. Any information obtained pursuant to this Article XIV shall be held
in confidence and used only in furtherance of the transactions contemplated
hereby, provided, however, that nothing herein shall be deemed to prohibit
disclosure to any regulatory authority as may be required under applicable law
or regulations.


                                   ARTICLE XV

                                   ARBITRATION

15.1              Any dispute or other matter in question arising between the
parties out of or relating to the interpretation, performance, or breach of this
Facultative Quota Share Reinsurance Agreement, whether such dispute arises
before or after termination of this Facultative Quota Share Reinsurance
Agreement, shall be settled by arbitration under Article 75 of New York Civil
Practice Law and Rules. Arbitration shall be initiated by the delivery of a
written notice of demand for arbitration by one party to the other within a
reasonable time after the dispute has arisen.

15.2              Each party shall appoint an individual as arbitrator, and the
two so appointed shall then appoint a third arbitrator. If either party refuses
or neglects to appoint an arbitrator within sixty days, the other party may
appoint the second arbitrator. If the two arbitrators do not agree on a third
arbitrator within sixty days of their appointment, each of the arbitrators shall
nominate three individuals. Each arbitrator shall then decline two of the
nominations presented by the other arbitrator. The third arbitrator shall then
be chosen from the remaining two nominations by drawing lots. The arbitrators
shall be active or retired officers of insurance or reinsurance

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companies; the arbitrators shall not have personal or financial interest in the
result of the arbitration.

15.3              The arbitration hearings shall be held in New York. Each party
shall submit its case to the arbitrators within a reasonable time after the
selection of the third arbitrator or as may be agreed by the arbitrators. The
arbitrators shall not be obliged to follow judicial formalities or the rules of
evidence except to the extent required by governing law; they shall make their
decisions according to the practice of the reinsurance business. The decision
rendered by a majority of the arbitrators shall be final and binding on both
parties. Such decision shall be a condition precedent to any right of legal
action arising out of the arbitrated dispute which either party may have against
the other. Judgment upon the award rendered may be entered in any court having
jurisdiction thereof.

15.4              Each party shall pay the fee and expenses of its own
arbitrator and one-half of the fee and expenses of the third arbitrator. All
other expenses of the arbitration shall be equally divided between the parties.

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                                   ARTICLE XVI

                                  GOVERNING LAW

                  This Facultative Quota Share Reinsurance Agreement shall be
governed by and construed in accordance with the internal laws of New York,
without giving effect to the principles of conflicts of laws thereof.


                                  ARTICLE XVII

                                    RESERVES

17.1              Reinsurer hereby agrees to establish reserves for the Policies
being reinsured under this Facultative Quota Share Reinsurance Agreement in
accordance with the requirements of Article 69 of the New York Insurance Law.

17.2              Reinsurer hereby further agrees to comply with those
provisions of Article 69 of the New York Insurance Law in order to permit the
Ceding Company to take credit on its statutory financial statements for the
reinsurance being provided by the Reinsurer under this Facultative Quota Share
Reinsurance Agreement under Section 6906(a)(1) of the New York Insurance Law.


                                  ARTICLE XVIII

                  CREDIT FOR REINSURANCE; REINSURANCE SECURITY

18.1              The Reinsurer shall take all steps necessary to comply with
all applicable laws and regulations so as to permit the Ceding Company to obtain
full credit for the reinsurance provided by this Facultative Quota Share
Reinsurance Agreement

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in all applicable jurisdictions, including, without limitation, compliance with
Section 6906 of the New York Insurance Law, to the extent credit is not
otherwise available under applicable law or regulations. It is understood and
agreed that any term or condition required by such law or regulation to be
included in this Facultative Quota Share Reinsurance Agreement for the Ceding
Company to receive financial credit for the reinsurance provided by this
Facultative Quota Share Reinsurance Agreement shall be deemed to be incorporated
in this Facultative Quota Share Reinsurance Agreement by reference.

18.2              Where required by applicable law in order for the Ceding
Company to take financial credit for the reinsurance provided by this
Facultative Quota Share Reinsurance Agreement, the Ceding Company shall be
entitled to withhold from the Reinsurer as security for the payment of the
latter's obligations, an amount herein called the "Deposit". The Deposit shall
equal the Reinsurer's share of Losses and Loss Expenses Paid of the Ceding
Company but not recovered from the Reinsurer and outstanding and incurred but
not reported Loss, Unearned Premium Reserves and contingency reserves.

                  The Deposit shall be adjusted monthly to equal Losses and Loss
Expenses Paid of the Ceding Company but not recovered from the Reinsurer and the
unearned premium, contingency and outstanding and incurred but not reported Loss
reserves, calculated on the basis of the requirements of applicable law,
corresponding to the Reinsurer's proportionate share.

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                  At any time after default or anticipatory default by the
Reinsurer of payments owing to the Ceding Company under this Facultative Quota
Share Reinsurance Agreement, the Ceding Company may appropriate so much of the
Deposit as may be required to eliminate the default. Until the Deposit has been
utilized in such manner, interest thereon shall be credited to the Reinsurer
monthly at the lesser of (a) the prime rate charged by Citibank, N.A. or its
successor (the "Prime Rate") on the applicable date or (b) the same interest
rate payable on the first six-month U.S. Treasury Bill issued during each
quarter.

                  The Ceding Company may at its discretion, instead of taking
any part of the Deposit, require payment of any sum in default, and it shall be
no defense to any such claim that the Ceding Company might have had recourse to
the Deposit.

                  Upon termination of this Facultative Quota Share Reinsurance
Agreement the Deposit shall be adjusted monthly to reflect cessions in force
pursuant to Section 4.4 of this Facultative Quota Share Reinsurance Agreement.

18.3              A Letter of Credit and/or a Trust Account may be substituted
or combined with the Deposit. Should such substitution be made, notwithstanding
any other provisions of this Facultative Quota Share Reinsurance Agreement, the
Letter of Credit and/or Trust Account may be drawn upon by the Ceding Company at
any time to fund the Deposit or for any amounts due from the Reinsurer under
this Facultative Quota Share Reinsurance Agreement to the extent permitted by
applicable law and the following provisions. If so used, the Reinsurer shall
otherwise not be liable for the same amount.

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                  The Ceding Company and the Reinsurer agree that the Deposit,
Letter of Credit and/or Trust Account will be in such form and held in such
manner so as to allow the Ceding Company to take financial credit for the
reinsurance provided by this Facultative Quota Share Reinsurance Agreement, and
also allow, if possible, the Reinsurer to treat the Deposit as an admitted asset
in accordance with applicable law.

18.4              If the Reinsurer elects to substitute a Letter of Credit for
the Deposit, the following provisions shall apply to the Reinsurer:

(1)      The Reinsurer shall provide to the Ceding Company a clean,
         unconditional, irrevocable Letter of Credit with the Ceding Company as
         the beneficiary covering the recoverables that otherwise would be
         covered by the Deposit. The Letter of Credit shall be issued or
         confirmed by a qualified bank (as defined in Section 79.1(e) of the New
         York Insurance Regulations (Regulation 133), and shall be in a form
         that complies with all applicable requirements of regulatory
         authorities having jurisdiction over the Ceding Company. If the issuing
         or confirming bank, if applicable, shall cease to meet such
         requirements during the term of the Letter of Credit, the Reinsurer
         shall replace such Letter of Credit with one complying with the
         provision of this sub-section upon the earlier of the stated
         expiration, next extension or renewal date, or modification or
         amendment of the Letter of Credit. Within thirty (30) days of the
         Reinsurer's receipt of monthly account reports pursuant to Article VI:

         (a) if the Reinsurer's share of the obligations under this Agreement
         shall exceed the then existing balance of the Letter of Credit made
         available, the Reinsurer shall secure delivery to the Ceding Company of
         an amendment to the Letter of Credit

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         increasing the amount of the Letter of Credit available by the amount
         of such difference, or

         (b) if the Reinsurer's share of the obligations under this Agreement
         shall be less than the balance of the Letter of Credit available on the
         accounting date, the Ceding Company shall release such excess credit by
         agreeing to an amendment to the Letter of Credit, reducing the amount
         of the Letter of Credit available by the amount of such excess credit.

(2)      The Reinsurer and the Ceding Company agree that the Letter of Credit
         provided by the Reinsurer pursuant to this Facultative Quota Share
         Reinsurance Agreement may be drawn upon at any time, notwithstanding
         any other provisions in this Facultative Quota Share Reinsurance
         Agreement, and shall be utilized by the Ceding Company or its
         successors in interest only for one or more of the following:

         (a) to reimburse the Ceding Company for the Reinsurer's share of
         premiums returned to the owners of Policies reinsured under this
         Facultative Quota Share Reinsurance Agreement on account of
         cancellations of such Policies;

         (b) to reimburse the Ceding Company for the Reinsurer's share of Losses
         and Loss Expenses Paid of the Ceding Company for the Reinsurer's share
         of Losses and Loss Expenses Paid of the Ceding Company pursuant to the
         provisions of the Policies reinsured by this Facultative Quota Share
         Reinsurance Agreement;

         (c) to fund an account with the Ceding Company in an amount at least
         equal to the deduction, for reinsurance ceded, from the Ceding
         Company's liabilities for Policies ceded under this Facultative Quota
         Share Reinsurance Agreement; such amount

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         shall include, but not be limited to, amounts for policy reserves,
         claims and Losses incurred, unearned premium and contingency reserves;

         (d) where the Ceding Company has received notification of the
         non-renewal of the Letter of Credit, such Letter of Credit has not been
         replaced by the Reinsurer with a new letter of credit complying with
         the requirements of subparagraph (1) of this Section 18.4 and the
         Reinsurer's entire obligations under this Facultative Quota Share
         Reinsurance Agreement remain unliquidated and undischarged ten (10)
         days prior to such Letter of Credit's expiration date, to obtain a cash
         deposit equal to such obligations and deposit such amounts in a
         separate account, in the name of the Ceding Company, in any United
         States bank or trust company, apart from its general assets, in trust
         for such uses and purposes specified in this paragraph of this
         Facultative Quota Share Reinsurance Agreement as may remain executory
         after obtaining the cash deposit and for any period after such
         expiration date; provided, however, that where the amounts held in such
         separate account exceed the actual amount required to fund the
         Reinsurer's entire obligations under this Facultative Quota Share
         Reinsurance Agreement, the Ceding Company shall make payment to the
         Reinsurer of the excess amount; and

         (e) to pay any other amounts the Ceding Company claims are due under
         this Facultative Quota Share Reinsurance Agreement. All of the
         foregoing shall be applicable without diminution because of insolvency
         on the Ceding Company or the Reinsurer.

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(3)      The Ceding Company shall credit to the Reinsurer quarterly interest on
         the Amounts drawn from the Letter of Credit and held pursuant to
         paragraph (2)(c) or (d) of this subsection above at the lesser of the
         Prime Rate or the same interest rate payable on the first six-month
         U.S. Treasury Bill issued during each quarter.

18.5              If the Reinsurer elects to substitute a trust account for the
Deposit, the following provisions shall apply to the Reinsurer:

(1)      The Reinsurer shall enter into a trust agreement and establish a trust
         account (the "Trust Account") for the benefit of the Ceding Company,
         covering the recoverables that otherwise would be covered by the
         Deposit. The trustee of the Trust Account (the "Trustee") and the trust
         agreement shall comply with all applicable requirements of regulatory
         authorities having jurisdiction over the Ceding Company. Within fifteen
         (15) days of the Reinsurer's receipt of the monthly accounts current
         required by Article VI of this Facultative Quota Share Reinsurance
         Agreement or an estimate by the Ceding Company of the premium and loss
         amount due pursuant to Article VI, whichever is received by the
         Reinsurer earlier, the Reinsurer shall adjust the assets held in the
         Trust Account so that the market value of such assets meets or exceeds
         the amounts in such report and provide a certification to the Ceding
         Company of such fact.

(2)      The assets deposited in the trust account shall be valued according to
         their current fair market value, and shall consist only of cash (United
         State legal tender), certificates of deposit issued by a United States
         bank and payable in United States legal tender and investments of the
         types specified in section 1404(a) (1), (2), (3),

                                       23
<PAGE>

         (8) and (10) of the New York Insurance Law, provided that such
         investments are issued by an institution that is not the parent,
         subsidiary or affiliate of either the Reinsurer of the Ceding Company.

(3)      Prior to depositing assets with the Trustee, the Reinsurer shall
         execute assignments, endorsements in blank, or transfer legal title to
         the Trustee of all shares, obligations or any other assets requiring
         assignments, in order that the Ceding Company, or the Trustee upon the
         direction of the Ceding Company, may whenever necessary negotiate any
         such assets without consent or signature from the Reinsurer or any
         other entity.

(4)      All settlements of account between the Ceding Company and the Reinsurer
         shall be made in cash or its equivalent.

(5)      The Reinsurer and the Ceding Company agree that the assets in the trust
         account, established pursuant to this provision of this Facultative
         Quota Share Reinsurance Agreement, may be withdrawn by the Ceding
         Company at any time, notwithstanding any other provisions in this
         Facultative Quota Share Reinsurance Agreement and shall be utilized and
         applied by the Ceding Company or its successor in interest, without
         diminution because of insolvency of the part of the Ceding Company or
         the Reinsurer, only for the following purposes:

         (a) to reimburse the Ceding Company for the Reinsurer's share of
         premiums returned to the owners of Policies reinsured under this
         Facultative Quota Share Reinsurance Agreement on account of
         cancellations of such Policies;

                                       24
<PAGE>

         (b) to reimburse the Ceding Company for the Reinsurer's share of Losses
         and Loss Expenses that are paid by the Ceding Company pursuant to the
         provisions of the Policies reinsured under this Agreement;

         (c) to fund an account with the Ceding Company in amount at least equal
         to the deduction, for reinsurance ceded, from the Ceding Company's
         liabilities for Policies ceded under this Facultative Quota Share
         Reinsurance Agreement; such account shall include, but not be limited
         to, amounts for Policy reserves, claims and Losses incurred, unearned
         premium and contingency reserves; and

         (d) to pay any other amounts the Ceding Company claims are due under
         this Facultative Quota Share Reinsurance Agreement.

(6)      The Reinsurer has the right to seek approval from the Ceding Company to
         withdraw from the aforementioned trust account all or any part of the
         assets contained therein and transfer such assets to the Reinsurer,
         provided that:

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

         (b) after such withdrawal and transfer, the market value of the trust
         account is not less than 102 percent of the required amount. The Ceding
         Company shall be the sole judge as to the application of this
         provision, but shall not unreasonably or arbitrarily withhold its
         approval.

(7)      The Ceding Company shall return any amount withdrawn in excess of the

                                       25
<PAGE>

         actual amounts required for in Sections 18.5(5) (a), (b) and (c), or in
         the case of Section 18.5(5) (d), any amounts that are subsequently
         determined not to be due.

(8)      The Ceding Company shall credit quarterly to the Reinsurer interest on
         the amounts drawn from the Trust Account and held pursuant to Section
         18.5(5) (c) at the lesser of the Prime Rate or the same rate of
         interest payable on the first six-month U. S. Treasury Bill issued
         during each quarter.


                                   ARTICLE XIX

                                   INSOLVENCY

19.1              In the event of the insolvency of the Ceding Company and the
                  appointment of a liquidator, receiver, conservator or
                  statutory successor, this reinsurance shall be payable
                  immediately upon demand, with reasonable provision for
                  verification, on the basis of the liability of the Ceding
                  Company as a result of claims allowed against the Ceding
                  Company by any court of competent jurisdiction or any
                  liquidator, receiver, conservator or statutory successor
                  having authority to allow such claims, without diminution
                  because of such insolvency or because such liquidator,
                  receiver, conservator, or statutory successor has failed to
                  pay all or a portion of any claims.

19.2              Payments by the Reinsurer as above set forth shall be made
directly to the Ceding Company or to its liquidator, receiver, conservator or
statutory successor, except as provided by subsection (a) of section 4118 of the
New York Insurance

                                       26
<PAGE>

Laws or except (a) where this contract specifies another payee in the event of
the insolvency of the Ceding Company, and (b) the Reinsurer with the consent of
the direct insureds have assumed such policy obligations of the Ceding Company
as their direct obligations to the payees under such Policies, in substitution
for the obligations of the Ceding Company to such payees.

19.3              In the event of the insolvency of the Ceding Company, the
liquidator, receiver, conservator or statutory successor of the Ceding Company
shall give written notice to the Reinsurer of the pendency of a claim against
the insolvent Ceding Company on the Policy or Policies reinsured within as
reasonable time after such claim is filed in the insolvency proceeding and
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 which 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 court
approval against the insolvent Ceding Company as part of the expense of
liquidation to the extent of a proportionate share of the benefit which may
accrue to the Ceding Company solely as a result of the defense undertaken by the
Reinsurer.


                                   ARTICLE XX

                                    SURVIVAL

                  The last paragraph of Article IV and Articles VI through XXIV
shall survive the termination of this Facultative Quota Share Reinsurance
Agreement.

                                       27
<PAGE>

                                   ARTICLE XXI

                                     NOTICE

                  All notices (including, without limitation, notices of
cancellation or amendments to Policies), requests, demands, approvals and other
communications under this Facultative Quota Share Reinsurance Agreement shall be
in writing and shall be delivered personally, telegraphed, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid.
Any such notice or other communication shall be deemed given: (a) upon actual
delivery if presented personally or sent by prepaid telegram or telex or by
facsimile transmission and (b) three (3) business days following deposit in the
United States mail, if sent by certified, registered or express mail, postage
prepaid, in each case to the following addresses:

                  If to Ceding Company:

                  XL Capital Assurance Inc.
                  1221 Avenue of the Americas, 31st Floor
                  New York, New York 10020
                  Attn: Corporate Secretary
                  Fax: (212) 478-3579

                  If to Reinsurer:
                  XL Financial Assurance Ltd.
                  XL House
                  One Bermudiana Road
                  Hamilton HM11
                  1.1.   Bermuda

                  Attention:  Surveillance
                  Fax: (441) 296-4351

                                       28
<PAGE>

                                  ARTICLE XXII

                                   DEFINITIONS

(A)      The term "Business" as used in this Facultative Quota Share Reinsurance
         Agreement shall mean the financial guaranty and surety Policies as
         described in Article I.

(B)      The term "Policy" or "Policies" as used in this Facultative Quota Share
         Reinsurance Agreement shall mean with respect to the Ceding Company,
         any and all binders, certificates, policies, contracts of insurance and
         retrocessions (including, without limitation, retrocessions with
         respect to the Ceding Company's reinsurance of risks insured by XL
         Capital Assurance (U.K.) Limited, a subsidiary of the Ceding Company),
         accepted or held covered provisionally or otherwise subject to this
         Facultative Quota Share Reinsurance Agreement.

(C)      The term "Liabilities" as used in this Facultative Quota Share
         Reinsurance Agreement means any and all liabilities and obligations,
         including Losses, assessments and policy dividends, arising out of or
         relating to the Policies, including, without limitation, Liabilities in
         Excess of Policy Limits, net of collateralization required by any
         regulatory authority, and exclusive of investment and acquisition costs
         and underwriting expenses.

(D)      The term "Loss" as used in this Facultative Quota Share Reinsurance
         Agreement shall mean actual Loss sustained by the Ceding Company. Any
         salvages and all other recoveries, except reinsurance recoveries, shall
         be deducted

                                       29
<PAGE>

         from such Loss to arrive at the amount of Liability, if any, attaching
         hereunder.

(E)      The term "Gross Net Premiums Written" as used in this Facultative Quota
         Share Reinsurance Agreement shall mean direct written premiums less any
         premiums paid to third party reinsurers by XLCA and return premiums and
         cancellations.

(F)      The term "Unearned Premium Reserve" as used in this Facultative Quota
         Share Reinsurance Agreement shall mean the premium represented by the
         unexpired portion of the Policy in force as of any specified date.

(G)      The term "Losses Paid" as used in this Facultative Quota Share
         Reinsurance Agreement shall mean losses paid less recoveries for
         salvage and subrogation.

(H)      The term "Loss Expenses Paid" as used in this Facultative Quota Share
         Reinsurance Agreement shall mean all court costs, fees and expenses;
         fees for service of process; fees to attorneys; cost of undercover
         operative and detective services; fees of independent adjusters or
         attorneys for investigation or adjustment of claims beyond initial
         investigation, cost of employing experts for preparation of reports,
         photographs, diagrams, chemical or physical analysis or for advice,
         opinion or testimony concerning claims under investigation or in
         litigation; costs for legal transcripts of testimony taken at

                                       30
<PAGE>

         coroner's inquests, criminal or civil proceedings; costs for copies of
         any public records; costs of depositions and court reported or recorded
         statements; and any other similar fees; cost or expense reasonably
         chargeable to the investigation, negotiation, settlement or defense of
         a claim or loss or to the protection and perfection of the subrogation
         rights of any insured covered by a Policy reinsured hereunder.

(I)      The term "Liability in Excess of Policy Limits" as used in this
         Facultative Quota Share Reinsurance Agreement means liability in excess
         of the limit of the Ceding Company's original Policy, such Loss in
         excess of the limit having been incurred because of, but not limited
         to, failure by the Ceding Company to settle within the Policy limit or
         by reason of alleged or actual negligence or bad faith in rejecting an
         offer of settlement or in the preparation of the defense or in the
         trial of any action against its insured or reinsured of the Ceding
         Company or in the preparation or prosecution of an appeal consequent
         upon such action or failure of the Ceding Company to pay any claim when
         due or improper denial by the Ceding Company of coverage.
         Notwithstanding any application of the foregoing definition herein, in
         no event shall coverage for any Liability in Excess of Policy Limits be
         provided to the extent that such coverage is not permitted under New
         York law pursuant to any provision of this Facultative Quota Share
         Reinsurance Agreement.

                                       31
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Facultative Quota Share Reinsurance Agreement to be signed by their duly
authorized representatives.

Signed in New York, New York
as of this 29th day of June, 2006

                                               XL CAPITAL ASSURANCE INC.
                                                 as Ceding Company

                                               By: /s/ Edward B. Hubbard
                                                  ___________________________
                                                  Name:  Edward B. Hubbard
                                                  Title: President

                                               Witness: /s/ Susan Comparato
                                                       _____________________



And Signed in Hamilton, Bermuda
as of this 29th day of June, 2006


                                               XL FINANCIAL ASSURANCE LTD.
                                                 as Reinsurer

                                               By: /s/ Michael Rego
                                                  ___________________________
                                                  Name:  Michael Rego
                                                  Title: Chief Operating Officer

                                               Witness: [/s/         ]

                                       32
<PAGE>


                                    EXHIBIT A
                             REINSURANCE MEMORANDUM
                                     FOR AN
                             INDIVIDUAL RISK CESSION
                                    UNDER THE
                        FACULTATIVE REINSURANCE AGREEMENT
                                     BETWEEN
                            XL CAPITAL ASSURANCE INC.
                                       AND
                           XL FINANCIAL ASSURANCE LTD


REINSURANCE MEMORANDUM NO.

ISSUER:

ISSUE:

POLICY NUMBER:

EFFECTIVE DATE:

TOTAL PRINCIPAL INSURED BY COMPANY:

TOTAL PRINCIPAL CEDED TO REINSURER:


GROSS PREMIUM:

GROSS FACULTATIVE PREMIUM CEDED:

CEDING COMMISSION:


<PAGE>


The cession evidenced by this Reinsurance Memorandum shall be subject to all the
terms and conditions contained in the Facultative Quota Share Reinsurance
Agreement between the parties, which the undersigned here by acknowledge as
being an agreement between and binding upon the undersigned. By signing this
Reinsurance Memorandum, XL Financial Assurance Ltd expressly acknowledges and
agrees that all conditions to its acceptance of this cession have been met.

SUBMITTED BY:                                        ACCEPTED BY:
XL CAPITAL ASSURANCE INC.                            XL FINANCIAL ASSURANCE LTD

BY:                                                  BY:

NAME:                                                NAME:

TITLE:                                               TITLE:

DATE:                                                DATE:




<PAGE>

                                    EXHIBIT B
                             TRANSACTION INFORMATION
                        ATTACHED TO AND FORMING PART OF A
                             REINSURANCE MEMORANDUM
                                    UNDER THE
                        FACULTATIVE REINSURANCE AGREEMENT
                                     BETWEEN
                            XL CAPITAL ASSURANCE INC.
                                       AND
                           XL FINANCIAL ASSURANCE LTD.


---------------------
POLICY NUMBER:
---------------------------------------------------------------
LEGAL NAME:
---------------------------------------------------------------
TRANCHE NAME:
---------------------------------------------------------------
CREDIT NAME:
---------------------------------------------------------------
CREDIT NUMBER:
---------------------------------------------------------------
TEAM LEADER:
---------------------------------------------------------------

---------------------------------------------------------------
GENERAL INFORMATION
---------------------------------------------------------------
XL RATING TRIGGER (Y/N):
---------------------------------------------------------------
BUSINESS AREA:
---------------------------------------------------------------
BUSINESS TYPE:
---------------------------------------------------------------
XL CATEGORY:
---------------------------------------------------------------
SECTOR CODE:
---------------------------------------------------------------
SECTOR DESCRIPTION:
---------------------------------------------------------------
CUSIP NUMBER:
---------------------------------------------------------------
CONTRACT TYPE:
---------------------------------------------------------------
MARK-TO-MARKET (Y/N):
---------------------------------------------------------------
MARKET (PRIMARY/SECONDARY):
---------------------------------------------------------------
AVERAGE LIFE:
---------------------------------------------------------------
ACTUAL CLOSE DATE:
---------------------------------------------------------------
FIRST CALL DATE:
---------------------------------------------------------------
EXPECTED MATURITY:
---------------------------------------------------------------
LEGAL MATURITY:
---------------------------------------------------------------
STATE:
---------------------------------------------------------------
COUNTRY:
---------------------------------------------------------------
SINGLE RISK CATEGORY:
---------------------------------------------------------------
SELLER/SERVICER:
---------------------------------------------------------------
SELL./SERV. RATING:
---------------------------------------------------------------

---------------------------------------------------------------
XLCA 100% PRICING
---------------------------------------------------------------
PAR AMOUNT:
---------------------------------------------------------------
DEBT SERVICE (P&I):
---------------------------------------------------------------
COUPON RATE:
---------------------------------------------------------------
CURRENCY:
---------------------------------------------------------------
FX RATE:
---------------------------------------------------------------
PREMIUM RATE (BPS):
---------------------------------------------------------------
AGP PREMIUM:
---------------------------------------------------------------
12 MONTH NPE:
---------------------------------------------------------------
EST. CURRENT YEAR NPE:
---------------------------------------------------------------
S&P CAP CHARGE:
---------------------------------------------------------------
CC BASIS AADS OR PAR:
---------------------------------------------------------------
CREDIT GAP:
---------------------------------------------------------------
ROE:
---------------------------------------------------------------

---------------------------------------------------------------
ACCOUNTING INFORMATION
---------------------------------------------------------------
PREMIUM TIMING
(INSTALLMENT/UPFRONT)
---------------------------------------------------------------
DATE OF FIRST PREMIUM TO BE RECEIVED
BY XLCA
---------------------------------------------------------------
PREMIUM PAYMENT DATE (EX. FIRST OF
THE MONTH, 15TH, ETC)
---------------------------------------------------------------
PREMIUM-DAY BASIS (EX. 30/360)
---------------------------------------------------------------

---------------------------------------------------------------
RATING
---------------------------------------------------------------
XL                                                                SHADOW (Y/N)
--------------------------------------------------------------------------------
S&P
--------------------------------------------------------------------------------
MOODY'S
--------------------------------------------------------------------------------
FITCH
--------------------------------------------------------------------------------