Exhibit 10.6

EMPLOYMENT AGREEMENT

          AGREEMENT, made and entered into as of January 1, 2008, by and
between, Security Capital Assurance Ltd, a Bermuda corporation (the “Company”),
and Claude L. LeBlanc (the“Executive”).

          WHEREAS, the Executive has been employed by Security Capital Assurance
Ltd as its Executive Vice President, Corporate Development & Strategy;

          NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Company, and
the Executive (the“Parties”) agree as follows:

          1.      EMPLOYMENT.

          The Company hereby employs the Executive, and the Executive hereby
accepts employment with the Company, for the term of this Agreement as set forth
in Section 2, below, in the position and with duties and responsibilities set
forth in Section 3, below, and upon such other terms and conditions as are
hereinafter stated.

          2.      TERM OF EMPLOYMENT.

          The stated term of employment under this Agreement shall commence on
the above stated date (the “Date of the Agreement”) and shall continue through
the close of business on the eighteen-month anniversary of the Date of the
Agreement, subject to earlier termination as provided in Section 8, below, and
extension as provided in the next succeeding sentence. On the eighteen-month
anniversary of the Date of the Agreement and on each anniversary thereafter, the
stated term of employment shall be automatically extended for an additional one
year unless the Company gives notice in writing to the Executive or the
Executive gives notice in writing to the Company at least three months prior to
such anniversary that the term is not to be so extended.

          3.      POSITIONS, DUTIES AND RESPONSIBILITIES.

          (a)    General. The Executive shall be employed as Executive Vice
President, Corporate Development & Strategy of the Company. In such position,
the Executive shall have the duties, responsibilities and authority normally
associated with the office, position and titles of such an officer of a
financial guaranty company, or holding company, whose shares are publicly traded
in the United States. The duties and responsibilities of this position shall
include, without limitation, (i) working with senior management to develop the
Company’s corporate strategy, (ii) overseeing all corporate development
activities, (iii) overseeing capital management and pricing model development,
(iv) managing rating agency relations, (v) assuming such other responsibilities
as provided by the CEO in his discretion and (vi) serving as a member of the
Executive Committee. During the term of this Agreement, the Executive shall
devote his full business time to the business and affairs of the Company and its
subsidiaries, and shall use his best efforts, skills and abilities to promote
the interests of the Company and its subsidiaries; provided, however, the
Executive may serve on up to two boards of directors of other entities, so

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long as such service does not interfere with the Executive’s performance of his
duties hereunder or result in any conflict of interest with the Company.

          (b)    Performance of Services. The Executive’s services under this
Agreement, which are global in nature, shall be performed in Bermuda, however,
Executive may be reasonably requested by the Company to perform services
elsewhere in accordance with the guidelines established by the Company from time
to time for the location of the performance of services on behalf of the Company
and its subsidiaries. The Executive acknowledges that the Company may require
the Executive to travel to the extent such travel is reasonably necessary to
perform the services hereunder and that such travel may be extensive, but in no
event will such travel result in Executive spending more than 150 days in any
calendar year in the United States. Subject to the foregoing, to the extent
reasonably requested by the Company, the Executive shall allocate greater
business time to a location other than his principal business location, if
necessary.

          (c)     To the extent that Executive’s service with the Company or any
of its Affiliates triggers an obligation to pay federal, state or local tax in
the United States at any time, and only for tax years from and after January 1,
2006, the Company shall indemnify and hold Executive harmless from any such
obligations on the amounts he received from the Company or any of its Affiliates
with respect to his employment, that is subject to federal, state or local tax,
including any interest and penalties thereon, any reasonable costs incurred by
Executive in connection therewith (including, without limitation, reasonable
costs of preparing and filing tax returns, reasonable costs of any audit or
other proceeding, and reasonable costs of enforcing his rights hereunder), and a
gross up for any tax required to be paid with respect to any indemnity payment
hereunder. Notwithstanding anything herein to the contrary, this provision shall
survive the termination of Executive’s employment. At the Company’s discretion,
any payment under this Section 3(c) shall be paid either (i) at the time the
Company or one of its Affiliates is required to withhold federal, state or local
tax in the United States with respect to Executive, with respect to the amount
required to be so withheld, or (ii) at least two (2) business days before an
amount is paid or required to be paid by Executive to a taxing authority in the
United States, with respect to any other amount; provided that the Company shall
notify Executive of the manner in which it elects to make such payment at least
ten (10) business days prior to the date such payment is required to be made.

          4.      BASE SALARY.

          The Executive shall be paid a Base Salary by the Company of US$300,000
for calendar year 2008, payable in accordance with the Company’s regular pay
practices. Such Base Salary shall be subject to annual review in accordance with
the Company’s practices for executives as in effect from time to time and may be
increased at the discretion of the Compensation Committee of the Board of
Directors of the Company (the “Compensation Committee”).

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          5.      BONUSES.

          (a)     In addition to the Base Salary provided for in Section 4,
above, the Executive shall be eligible for an annual cash bonus under the
Company’s Annual Incentive Compensation Plan as in effect from time to time. The
Executive’s annual cash bonus for calendar year 2007 shall be a minimum of
US$700,000, payable in 2008. The Executive’s target bonus for calendar year 2008
shall be equal to 150% of the Executive’s Base Salary. Any annual bonus shall be
paid in cash in a lump sum no later than March 15 following the year for which
the annual bonus is paid, unless deferred at the Executive’s option in
accordance with the provisions of any applicable deferred compensation plan of
the Company or it subsidiaries in effect from time to time and in compliance
with Section 409A of the Code. Nothing in this Section 5 shall confer upon the
Executive any right to a minimum annual bonus except for the 2007 performance
bonus identified above. Executive also shall be eligible to participate in the
Company’s long term incentive award plan commencing with the year 2007 in
accordance with the terms of that plan. Executive’s long term incentive award
shall be targeted at 150% of Executive’s total cash compensation (base plus
bonus). The Executive may be awarded such annual bonuses and long-term incentive
awards thereunder as may be approved by the Compensation Committee based on
corporate, individual and business unit performance measures, as appropriate,
established or approved from time to time, by the Compensation Committee.

          (b)     Further, Executive shall be awarded a one-time only initial
grant of 100,000 options to vest ratably over three years, vesting to occur at
the rate of 33.33% each year on the anniversary of the grant date which shall be
no later than December 20, 2007. In addition, Executive shall be awarded a
one-time only initial grant of 50,000 restricted stock shares to vest ratably
over four years, vesting to occur at the rate of 25% each year on the
anniversary of the grant date which shall be no later than February 29, 2008.

          6.      EMPLOYEE BENEFIT PROGRAMS.

          During the term of the Executive’s employment under this Agreement,
the Executive shall be entitled to participate in all employee retirement,
pension, welfare and benefit programs of the Company as are in effect from time
to time and in which similarly situated senior executives of the Company are
eligible to participate.

          7.      BUSINESS EXPENSE REIMBURSEMENT AND FRINGE BENEFITS.

          During the term of the Executive’s employment under this Agreement,
the Executive shall be entitled to participate in the Company’s travel and
entertainment expense reimbursement programs and its executive fringe benefit
plans and arrangements, all in accordance with the terms and conditions of such
programs, plans and arrangements as in effect from time to time as applied to
the Company’s similarly situated executives.

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          8.      TERMINATION OF EMPLOYMENT.

          (a)    Termination due to Death. In the event the Executive dies
during the term of employment hereunder, the Executive’s spouse, if the spouse
survives the Executive, (or, if the Executive’s spouse does not survive him, the
estate or other legal representative of the Executive) shall be entitled to
receive the Base Salary as provided in Section 4, above, at the rate in effect
at the time of Executive’s death, to be paid in accordance with the Company’s
regular payroll practices, through the end of the sixth month after the month in
which the Executive dies. In addition to the above, the estate or other legal
representative of the Executive shall be entitled to:

>           (i)       any annual bonus awarded in accordance with the Company’s
> bonus program but not yet paid under Section 5, above, to be paid at the time
> such bonus would otherwise be due under the applicable program, and
> reimbursement of business expenses incurred prior to death in accordance with
> Section 7(a) above,
> 
>           (ii)      within 45 days after the date of death, a pro rata bonus
> for the year of death in an amount determined by the Compensation Committee,
> but in no event less than a pro rata portion of the Executive’s average annual
> bonus for the immediately preceding three years (or the period of the
> Executive’s employment with the Company, if less),
> 
>           (iii)     the rights under any options to purchase equity securities
> of the Company or other rights with respect to equity securities of the
> Company, including any restricted stock or other securities, held by the
> Executive determined in accordance with the terms thereof,
> 
>           (iv)     for a period of six months following the Executive’s death,
> continued medical benefit plan coverage (including dental and vision benefits
> if provided under the applicable plans) for the Executive’s dependents, if
> any, under the Company’s medical benefit plans upon substantially the same
> terms and conditions (including cost of coverage to the dependents) as is then
> in existence for other executives during the coverage period; provided, that,
> if the Executive’s dependents cannot continue to participate in the Company
> plans providing such benefits, the Company shall otherwise provide such
> benefits on substantially the same after-tax basis as if continued
> participation had been permitted, and
> 
>           (v)      the vested accrued benefits, if any, under the employee
> benefit programs of the Company, as provided in Section 6, above, determined
> in accordance with the applicable terms and provisions of such programs.

          (b)     Termination due to Disability. In the event the Executive’s
employment hereunder is terminated due to his disability, as determined under
the Company’s long-term disability plan, the Executive shall be entitled to:

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>           (i)       the Base Salary as provided in Section 4, above, through
> the end of the sixth month after the month in which the Executive’s employment
> terminates due to disability, to be paid in accordance with the Company’s
> regular payroll practices,
> 
>           (ii)      any annual bonus awarded in accordance with the Company’s
> bonus program but not yet paid under Section 5, to be paid at the time such
> bonus would otherwise be due under the applicable program, and reimbursement
> of business expenses incurred prior to termination of employment in accordance
> with Section 7(a) above,
> 
>           (iii)     within 45 days after the date of termination, a pro rata
> bonus for the year of termination in an amount determined by the Compensation
> Committee, but in no event less than a pro rata portion of the Executive’s
> average annual bonus for the immediately preceding three years (or the period
> of the Executive’s employment with the Company, if less),
> 
>           (iv)     the rights under any options to purchase equity securities
> of the Company or other rights with respect to equity securities of the
> Company, including any restricted stock or other securities, held by the
> Executive, determined in accordance with the terms thereof,
> 
>           (v)      for a period of six months following the termination of the
> Executive’s employment, continued medical benefit plan coverage (including
> dental and vision benefits if provided under the applicable plans) for the
> Executive (and the Executive’s dependents, if any) under the Company’s medical
> benefit plans upon substantially the same terms and conditions (including cost
> of coverage to the Executive) as is then in existence for other executives
> during the coverage period; provided, that, if the Executive cannot continue
> to participate in the Company plans providing such benefits, the Company shall
> otherwise provide such benefits on substantially the same after-tax basis as
> if continued participation had been permitted; provided further, however,
> that, in the event the Executive becomes re-employed with another employer and
> becomes eligible to receive medical benefits from such employer, the medical
> benefits described herein shall immediately cease, and
> 
>                (vi)     the vested accrued benefits, if any, under the
> employee benefit programs of the Company, as provided in Section 6 above,
> determined in accordance with the applicable terms and provisions of such
> programs.

          (c)       TERMINATION FOR CAUSE.

>           (i)      The employment of the Executive under this Agreement may be
> terminated by the Company for Cause, such termination to be effective upon the

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> Company giving the Executive written notice of termination in accordance with
> the provisions of this Agreement. For this purpose, “Cause” shall mean:

(A)     

conviction of the Executive of a felony involving moral turpitude, dishonesty or
laws to which the Company or its Affiliates are subject in connection with the
conduct of its or their business;

  (B)     

the Executive, in carrying out his duties for the Company under this Agreement,
has been guilty of (1) willful misconduct or (2) substantial and continual
refusal by the Executive to perform the duties assigned to the Executive
pursuant to the terms; provided, however, that any act or failure to act by the
Executive shall not constitute Cause for purposes of this Section 8(c)(i)(B) if
such act or failure to act was committed, or omitted, by the Executive in good
faith and in a manner he reasonably believed to be in the overall best interests
of the Company, as the case may be. The determination of whether the Executive
acted in good faith and that he reasonably believed his action to be in the
Company’s overall best interest, as the case may be, will be in the reasonable
and good faith judgment of the Compensation Committee and/or the Audit
Committee; or

  (C)     

the Executive’s continued willful refusal to obey any lawful policy or
requirement duly adopted by the Company Board and the continuance of such
refusal after receipt of written notice.

>           (ii)    In the event of a termination for Cause under Section
> 8(c)(i), above, the Executive shall be entitled only to:

(A)     

Base Salary as provided in Section 4, above, at the rate in effect at the time
of his termination of employment for Cause, through the date on which
termination for Cause occurs, to be paid in accordance with the Company’s
regular payroll practices,

  (B)     

the rights under any options to purchase equity securities of the Company or
other rights with respect to equity securities of the Company, including any
restricted stock or other securities, held by the Executive, determined in
accordance with the terms thereof, and

  (C)     

the vested accrued benefits, if any, under employee benefit programs of the
Company, as provided in Section 6, above, and re-imbursement of properly
incurred unreimbursed business expenses under the business expense reimbursement
program as described in Section 7, above, determined in accordance with the
applicable terms and provisions of such employee benefit and expense
reimbursement programs; provided that the Executive shall not be entitled to any
such benefits unless the terms and provisions of such programs expressly state
that the Executive shall be en-

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titled thereto in the event his employment is terminated for Cause (as defined
in this Agreement or otherwise).

          (d)     TERMINATION WITHOUT CAUSE.

>           (i)     Anything in this Agreement to the contrary notwithstanding,
> the Executive’s employment may be terminated by the Company without Cause as
> provided in this Section 8(d). A termination due to death or disability, as
> described in Section 8(a) or (b), above, or a termination for Cause, as
> described in Section 8(c), above, shall not be deemed a termination without
> Cause under this Section 8(d). For the avoidance of doubt, if a notice of
> non-renewal of this Agreement pursuant to Section 2 is issued by the Company
> and, within six (6) months thereafter, a written notice is issued (x) by the
> Company to the Executive of its intention to terminate the employment
> relationship with Executive at the end of the Term or (y) by the Executive to
> the Company of Executive’s intention to terminate the employment relationship
> with the Company at the end of the Term, the termination of the Executive’s
> employment at the end of the Term shall be considered a termination by the
> Company without Cause hereunder.
> 
>           (ii)     In the event the Executive’s employment is terminated by
> the Company without Cause (x) prior to a Change in Control (other than as
> provided in the last paragraph of Section 8(d)(iii), in which case the
> provisions of Section 8(d)(iii) shall apply in lieu of this Section 8(d)(ii))
> or (y) following the Post-Change Period (as hereinafter defined), the
> Executive shall be entitled to:

(A)     

Base Salary as provided in Section 4, above, at the rate in effect at the time
of his termination of employment without Cause, through the date on which
termination without Cause occurs, to be paid in accordance with the Company’s
regular payroll practices,

  (B)     

provided the Executive executes and does not revoke a reasonable general release
of employment liability claims against the Company and its affiliates in form
and substance satisfactory to the Company, a cash lump sum payment made within
30 days after termination of employment equal to (x) two times the Executive’s
annual Base Salary, at the annual rate in effect in accordance with Section 4,
above, immediately prior to such termination and (y) one times the higher of the
targeted annual bonus for the year of such termination, if any, or the average
of the Executive’s annual bonus payable by the Company or its subsidiaries for
the three years immediately preceding the year of termination (or such shorter
period during which the Executive has been employed by any of such entities),

  (C)     

any annual bonus awarded in accordance with the Company’s bonus program but not
yet paid under Section 5, above, to be paid at the time such bonus would
otherwise be due under the applicable program, and reim-

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bursement of business expenses incurred prior to termination of employment in
accordance with Section 7(a) above,

  (D)     

the rights under any options to purchase equity securities of the Company or
other rights with respect to equity securities of the Company, including any
restricted stock or other securities, held by the Executive, determined in
accordance with the terms thereof,

  (E)     

for a period of twenty-four months following the termination of the Executive’s
employment, continued medical benefit plan coverage (including dental and vision
benefits if provided under the applicable plans) for the Executive (and the
Executive’s dependents, if any) under the Company’s medical benefit plans upon
substantially the same terms and conditions (including cost of coverage to the
Executive) as is then in existence for other executives during the coverage
period; provided, that, if the Executive cannot continue to participate in the
Company plans providing such benefits, the Company shall otherwise provide such
benefits on substantially the same after-tax basis as if continued participation
had been permitted; provided, however, that, in the event the Executive becomes
reemployed with another employer and becomes eligible to receive medical
benefits from such employer, the medical benefits described herein shall
immediately cease, and

  (F)     

the vested accrued benefits, if any, under the employee benefit programs of the
Company, as provided in Section 6 above, determined in accordance with the
applicable terms and provisions of such programs.

>           (iii)   In the event the Executive’s employment is terminated by (x)
> the Company without Cause within the twenty-four month period following a
> Change in Control (as defined in Exhibit A hereto) (the “Post-Change Period”)
> or (y) the Executive terminates his employment for “Good Reason” (as defined
> in Exhibit B hereto) during the Post-Change Period, the Executive shall be
> entitled to the following, paid in the case of amounts set forth in (A), (B),
> (C) and (D) below within 30 days after termination of employment:

(A)     

Base Salary as provided in Section 4, above, at the rate in effect at the time
of his termination of employment, through the date on which termination occurs,

  (B)     

a cash lump sum payment equal to two times the Executive’s annual Base Salary,
at the rate in effect in accordance with Section 4, above, or immediately prior
to such termination or Change in Control, whichever is greater,

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(C)     

a cash lump sum payment equal to two times the higher of (i) the average annual
bonus awarded to the Executive by the Company or its subsidiaries in the three
years prior to the year in which the Change in Control occurs (or shorter period
during which the Executive had been employed by any of such entities) or (ii)
the Executive’s target annual bonus for the year of termination,

  (D)     

an amount equal to (i) the higher of (x) the bonus actually awarded to the
Executive by the Company for the year immediately preceding the year in which
the Change in Control occurs or (y) the targeted amount of bonus that would have
been awarded to the Executive in respect of the year in which the termination of
employment occurs, multiplied by (ii) a fraction, the numerator of which is the
number of months or fraction thereof in which the Executive was employed by the
Company in the year of termination of employment, and the denominator of which
is 12,

  (E)     

options to purchase equity securities of the Company or other rights with
respect to equity securities of the Company held by the Executive shall
immediately vest in full and shall continue to be exercisable for three years
from the date of termination of employment, notwithstanding the Executive’s
termination of employment, or the original full term of the option or other
right, if shorter,

  (F)     

for a period of twenty-four months following the termination of the Executive’s
employment, continued medical benefit plan coverage (including dental and vision
benefits if provided under the applicable plans) for the Executive (and the
Executive’s dependents, if any) under the Company’s medical benefit plans upon
substantially the same terms and conditions (including cost of coverage to the
Executive) as is then in existence for other executives during the coverage
period; provided, that, if the Executive cannot continue to participate in the
Company plans providing such benefits, the Company shall otherwise provide such
benefits on substantially the same after-tax basis as if continued participation
had been permitted; provided, however, that, in the event the Executive becomes
reemployed with another employer and becomes eligible to receive medical
benefits from such employer, the medical benefits described herein shall
immediately cease, and

  (G)     

full and immediate vesting under the Company’s retirement plans as of the date
of termination, to the extent permitted by applicable law; provided, however,
that if such full and immediate vesting cannot be provided under a retirement
plan under applicable law, then economically equivalent benefits shall be
provided through arrangements outside the applicable retirement plan.

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          Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled to the benefits described in (A)-(G) above, if the
Executive’s employment with the Company is terminated by the Company (other than
for Cause) within one year prior to the date on which a Change in Control
occurs, and it is reasonably demonstrated that such termination (i) was at the
request of a third party who has taken steps reasonably calculated or intended
to effect the Change in Control or (ii) otherwise arose in connection with or
anticipation of the Change in Control; provided, however, that in such event,
amounts will be payable hereunder only following the Change in Control (and
within 10 days thereafter).

>           (iv)       If, in situations where Section 8(d)(iii) does not apply,
> at any time during the term of the Executive’s employment hereunder, duties
> are assigned to the Executive that are materially inconsistent with his
> position, or the Company does not cure any other material breach by it of any
> provision of Sections 3 through 7, 14, 17 and 19 of this Agreement within 30
> calendar days following written notice of same by the Executive (which written
> notice must be given within 30 calendar days after such breach), the Executive
> shall have the right to terminate his employment within 30 calendar days of
> the Company’s failure to rescind such assignment in accordance with the
> proviso below or of such failure to cure a breach, as the case may be, and
> such termination shall be deemed a termination by the Company without Cause
> under Section 8(d)(ii), above, provided, in the case of assignment of
> inconsistent duties, the Executive shall have given the Company written notice
> of his decision within 30 calendar days of such assignment and shall not,
> within 30 calendar days thereafter, have had the assignment of inconsistent
> duties rescinded.

          (e)      VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may
voluntarily terminate his employment prior to the expiration of the term of this
Agreement upon at least three months’ prior written notice to the Company,
provided such termination shall constitute a voluntary termination and, except
as provided in Section 8(d)(iii) or Section 8(d)(iv), above, in such event the
Executive shall be limited to the same rights and benefits as applicable to a
termination by the Company for Cause as provided in Section 8(c), above. A
voluntary termination in accordance with this Section 8(e) shall not be deemed a
breach of this Agreement. A termination of the Executive’s employment due to
disability or death as described in Section 8(b) or 8(a), above, a termination
by the Executive which the Executive is entitled to treat as a termination by
the Company pursuant to Section 8(d), above, or a termination by the Executive
under Section 8(d)(iv), above, shall not be deemed a voluntary termination
within the meaning of this Section 8(e). For the avoidance of doubt, a notice of
non-renewal of the Agreement pursuant to Section 2 above issued by the Executive
shall not be considered a voluntary termination within the meaning of this
Section 8(e).

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          9.      EXCISE TAX PAYMENTS.

          (a)      Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that (i) any payment or distribution made,
or benefit provided (including, without limitation, the acceleration of any
payment, distribution or benefit or accelerated vesting or exercisability of any
award) by the Company to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any additional payments required
under this Section 9) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the United States Internal Revenue Code of 1986, as amended
(the “Code”) (or any successor provision or similar excise tax), or any interest
or penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), (ii) the aggregate amount of the
Executive’s Parachute Payments (as defined in Section 280G(b)(2)(A) of the Code)
is less than 3.25 times the Executive’s Base Amount (as defined in Section
280G(b)(3)(A) of the Code), and (iii) no such Payment would be subject to the
Excise Tax if the payments set forth in Section 8(d)(iii)(B) and (C) hereof were
each reduced by up to 20 percent, then the payments set forth in Section
8(d)(iii)(B) and (C) will each be reduced to the smallest extent possible (and
in no event by more than 20 percent in the aggregate) such that no Payment is
subject to the Excise Tax.

          (b)      Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that (i) the aggregate amount of the
Executive’s Parachute Payments equals or exceeds 3.25 times the Executive’s Base
Amount, (ii) the aggregate amount of the Executive’s Parachute Payments is less
than 3.25 times the Base Amount but one or more Payments would be subject to the
Excise Tax even if the payments set forth in Section 8(d)(iii)(B) and (C) hereof
were each reduced by 20 percent, or (iii) notwithstanding a reduction in
payments pursuant to Section 9(a) above, an Excise Tax is payable by the
Executive on one or more Payments, then, in any such case, Payments shall not be
reduced and the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all
taxes (including any income or Excise Tax) imposed upon the Gross-Up Payment and
any interest or penalties imposed with respect to such taxes, the Executive
retains from the Gross-Up Payment an amount equal to the Excise Tax imposed upon
the Payments.

          (c)      Subject to the provisions of Section 9(d), all determinations
required to be made under this Section 9, including determination of whether a
Gross-Up Payment is required and of the amount of any such Gross-Up Payment,
shall be made by a nationally recognized public accounting firm selected by the
Company (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the date of termination of the Executive’s employment, if applicable, or such
earlier time as is reasonably requested. The initial Gross-Up Payment, if any,
as determined pursuant to this Section 9(c), shall be paid to the Executive
within five business days of the receipt of the Accounting Firm’s determination.
If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written opinion that he has
substantial authority not to report any Excise Tax on his Federal income tax
return. Any determination by the Accounting Firm meeting the requirements of
this Section 9(c) shall be

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binding upon the Company and the Executive, subject only to payments pursuant to
the following sentence based on a determination that additional Gross-Up
Payments should have been made, consistent with the calculations required to be
made hereunder (the amount of such additional payments are referred to herein as
the “Gross-Up Underpayment”). In the event that the Company exhausts its
remedies pursuant to Section 9(d) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Gross-Up Underpayment that has occurred and any such Gross-Up
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive. The fees and disbursements of the Accounting Firm shall be paid by
the Company.

          (d)       The Executive shall notify the Company in writing of any
claim by the United States Internal Revenue Service that, if successful, would
require the payment by the Executive of any Excise Tax and, therefore, the
payment by the Company of a Gross-Up Payment. Such notification shall be given
as soon as practicable but not later than 30 business days after the Executive
receives written notice of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires, in good faith, to contest such claim
(which notice shall set forth the bases for such contest) and that it will bear
the costs and provide the indemnification as required by this sentence, the
Executive shall, in good faith:

>           (i)       give the Company any information reasonably requested by
> the Company relating to such claim,
> 
>           (ii)      take such action in connection with contesting such claim
> as the Company shall, in good faith, reasonably request in writing from time
> to time, including, without limitation, accepting legal representation with
> respect to such claim by an attorney selected by the Company and reasonably
> acceptable to the Executive,
> 
>           (iii)     cooperate with the Company in good faith in order
> effectively to contest such claim, and
> 
>           (iv)     permit the Company to participate, in good faith, in any
> proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis to the Executive, for any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as a result of such
representation and payment of all costs and expenses.

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          Without limitation on the foregoing provisions of this Section 9(d),
the Company shall, exercising good faith, control all proceedings taken in
connection with such contest and, at its sole option (but in good faith), may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option (but in good faith), either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis to the Executive, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to the
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority. If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(d), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of Section 9(d)) promptly pay to the Company, as
the case may be, the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(d), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then any obligation of the Executive to
repay such advance shall be forgiven and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.

          Notwithstanding any provision herein to the contrary, the Executive’s
failure to strictly comply with the notice provisions set forth in this Section
9, so long as such failure does not prevent the Company from contesting an
excise tax claim, shall not adversely affect the Executive’s rights under this
Section 9.

          10.      NO MITIGATION; NO OFFSET.

          In the event of any termination of employment under Section 8, above,
the Executive shall be under no obligation to mitigate damages or seek other
employment, and, except as expressly set forth herein, there shall be no offset
against amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain.

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          11.      NONCOMPETITION AND NONSOLICITATION.

          The Executive represents and warrants that, to the best of his
knowledge, he is not using the confidential or proprietary information of any
other person in violation of any agreement or rights of others known to him. The
Executive agrees that the products of the Company and its Affiliates shall
constitute the exclusive property of the Company and its Affiliates.

          For the avoidance of doubt, all trademarks, policy language or forms,
products or services (including products and services under development), trade
names, trade secrets, service marks, designs, computer programs and software,
utility models, copyrights, know-how and confidential information, applications
for registration of any of the foregoing and the right to apply for them in any
part of the world (whether any of the foregoing shall be registered or
unregistered) created or discovered or participated in by the Executive during
the course of his employment (whether or not pursuant to the terms of this
Agreement) or under the instructions of the Company or its Affiliates are and
shall be the absolute property of the Company and its Affiliates, as
appropriate. Without limiting the foregoing, the Executive hereby assigns to the
Company any and all of the Executive’s right, title and interest, if any,
pertaining to the financial products insurance and reinsurance (including,
without limitation, finite insurance and reinsurance), risk assumption, risk
management, brokerage, financial and other products or services developed or
improved upon by the Executive (including, without limitation, any related
“knowhow”) while employed by the Company or its Affiliates, including any
patent, trademark, trade name, copyright, ownership or other right that may
pertain thereto.

          Since Executive has obtained and is likely to obtain in the course of
Executive’s employment with the Company and its Affiliates knowledge of trade
names, trade secrets, knowhow, products and services (including products and
services under development), techniques, methods, lists, computer programs and
software and other confidential information relating to the Company and its
Affiliates, and their employees, clients, business or business opportunities,
Executive hereby undertakes that:

          (i)       Executive will not (either alone or jointly with or on
behalf of others and whether directly or indirectly) encourage, entice, solicit
or endeavor to encourage, entice or solicit away from employment with the
Company or its Affiliates, or hire or cause to be hired, any officer or employee
of the Company or its Affiliates (or any individual who was within the prior
twelve months an officer or employee of the Company or its Affiliates), or
encourage, entice, solicit or endeavor to encourage, entice or solicit any
individual to violate the terms of any employment agreement or arrangement
between such individual and the Company or any of its Affiliates;

          (ii)      Executive will not (either alone or jointly with or on
behalf of others and whether directly or indirectly) interfere with or disrupt
or seek to interfere with or disrupt (A) the relationships between the Company
and its Affiliates, on the one hand, and any customer or client of the Company
and its Affiliates, on the other hand, (including any reinsured party) who
during the period of twenty-four

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months immediately preceding such termination shall have been such a customer or
client, or (B) the supply to the Company and its Affiliates of any services by
any supplier or agent or broker who during the period of twenty-four months
immediately preceding such termination shall have supplied services to any such
person, nor will Executive interfere or seek to interfere with the terms on
which such supply or agency or brokering services during such period as
aforesaid have been made or provided; and

          (iii)      Executive will not (either alone or jointly with or on
behalf of others and whether directly or indirectly) whether as an employee,
consultant, partner, principal, agent, distributor, representative or
stockholder (except solely as a less than one percent stockholder of a publicly
traded company), engage in any activities in Bermuda, the United Kingdom or the
United States if such activities are competitive with the businesses that (i)
are then being conducted by the Company or its Affiliates and (ii) during the
period of the Executive’s employment were either being conducted by the Company
or its Affiliates or actively being developed by the Company or its Affiliates.

          The provisions of the immediately preceding sentence shall continue as
long as the Executive is employed by the Company or its Affiliates and such
provisions shall continue in effect after such employment is terminated for any
reason under Section 8 until the first anniversary of such termination, provided
that if such employment is terminated by the Company under Section 8(d)(iii) or
by the Executive under Section 8(d)(iii), the provisions of clauses (ii) and
(iii) shall automatically terminate upon such termination of employment, unless
the Company elects, in writing, upon such termination to continue the provisions
of clauses (ii) and (iii) in effect through the six-month anniversary of such
termination of employment, in which case the Company shall be obligated to pay
the Executive, in addition to any of the Executive’s rights under Section
8(d)(iii), a lump sum payment equal to the sum of (x) six months of his Base
Salary and (y) one half of the Executive’s average annual bonus payable by the
Company or its subsidiaries for the three years (or shorter period of employment
by any of such entities) immediately preceding the year of termination, and such
lump sum payment shall be made within 30 days following termination of
employment.

          For purposes of this Agreement, an “Affiliate” of the Company means
any person, directly or indirectly, through one or more intermediaries,
controlled by the Company, and such term shall specifically include, without
limitation, the Company’s majority-owned subsidiaries.

          The limitations on the Executive set forth in this Section shall also
apply to any agent or other representative acting on behalf of Executive.

          While the restrictions aforesaid are stated to be reasonable in all
the circumstances it is also recognized that restrictions of the nature in
question may fail for reasons unforeseen and accordingly it is hereby declared
and agreed that if any of such restrictions or the geographic or other scope
thereof shall be adjudged to be void as going beyond what is reasonable in the
circumstances for the protection of the interests of the Company and its
Affiliates but would be

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valid if part of the wording thereof were deleted and/or the periods (if any)
thereof reduced and/or geographic or other area dealt with thereby reduced in
scope then said restrictions shall apply with such modifications as may be
necessary to make them valid and effective.

          Nothing contained in this Section 11 shall limit in any manner any
additional obligations to which Executive may be bound pursuant to any other
agreement or any applicable law, rule or regulation and Section 11 shall apply,
subject to its terms, after employment has terminated for any reason.

          12.      CONFIDENTIAL INFORMATION.

          The Executive covenants that he shall not, without the prior written
consent of the Company, use for the Executive’s own benefit or the benefit of
any other person or entity other than the Company and its Affiliates or disclose
to any person, other than an employee of the Company or other person to whom
disclosure is necessary to the performance by the Executive of his duties in the
employ of the Company, any confidential, proprietary, secret, or privileged
information about the Company or its Affiliates or their business or operations,
including, but not limited to, information concerning trade secrets, know-how,
software, data processing systems, policy language and forms, inventions,
designs, processes, formulae, notations, improvements, financial information,
business plans, prospects, referral sources, lists of suppliers and customers,
legal advice and other information with respect to the affairs, business,
clients, customers, agents or other business relationships of the Company or its
Affiliates. Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret, confidential proprietary or privileged information or data
relating to the Company or any of its Affiliates or predecessor companies, and
their respective businesses, which shall have been obtained by Executive during
his employment, unless and until such information has become known to the public
generally (other than as a result of unauthorized disclosure by the Executive)
or unless he is required to disclose such information by a court or by a
governmental body with apparent authority to require such disclosure. The
foregoing covenant by the Executive shall be without limitation as to time and
geographic application and this Section 12 shall apply in accordance with its
terms after employment has terminated for any reason. The Executive acknowledges
and agrees that he shall have no authority to waive any attorney-client or other
privilege without the express prior written consent of the Compensation
Committee as evidenced by the signature of the Company’s General Counsel.

          13.      WITHHOLDING.

          Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Executive shall be
subject to withholding of such amounts relating to taxes as the Company may
reasonably determine should be withheld pursuant to any applicable law or
regulation. In lieu of withholding such amounts, in whole or in part, the
Company may, in its sole discretion, accept other provision for payment of taxes
as required by law, provided it is satisfied that all requirements of law
affecting its responsibilities to withhold such taxes have been satisfied.

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          14.      SUBSIDIARY SERVICES AND GUARANTEE.

          (a) Each of Security Capital Assurance Ltd, XL Financial Assurance Ltd
and SCA Holdings US Inc. (together, the “Guarantors”) hereby agrees to be
jointly and severally liable, together with the Company, for the performance of
all obligations and duties, and the payment of all amounts, due to the Executive
under this Agreement.

          (b) All of the terms and provisions of this Agreement relating to the
Executive’s employment by the Company shall likewise apply mutatis mutandis to
the Executive’s employment by any of its subsidiaries, it being understood that
if the Executive’s employment with the Company is terminated, his employment
with its subsidiaries shall also be terminated and the Executive shall be
required to resign immediately from all directorships and other positions held
by the Executive in the Company and its subsidiaries or in any other entities in
respect of which the Executive was acting as a representative or designee of the
Company or its subsidiaries in connection with his employment.

          15.      ENTIRE AGREEMENT.

          This Agreement, together with the Exhibits, contains the entire
agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Company and the Executive
with respect thereto.

          16.      ASSIGNABILITY; BINDING NATURE.

          This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs and assigns. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
by the Executive other than his right to compensation and benefits hereunder,
which may be transferred by will or operation of law subject to the limitations
of this Agreement. No rights or obligations of the Company under this Agreement
may be assigned or transferred by the Company except that such rights or
obligations may be assigned or transferred pursuant to a merger or consolidation
or amalgamation or scheme of arrangement in which the Company is not the
continuing entity, or the sale or liquidation of all or substantially all of the
assets of the Company, provided that the assignee or transferee is the successor
to all or substantially all of the assets of the Company and such assignee or
transferee assumes by operation of law or in writing duly executed by the
assignee or transferee all of the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law.

          17.      INDEMNIFICATION.

          The Executive shall be provided indemnification by the Company to the
maximum extent permitted by applicable law and its charter documents. In
addition, he shall be covered by a directors’ and officers’ liability policy
with coverage for all directors and officers of the Company in an amount equal
to at least US$30,000,000. Such directors’ and officers’ liability in-

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surance shall be maintained in effect for a period of six years following
termination of the Executive’s employment.

          18.      SETTLEMENT OF DISPUTES.

          (a)      Any dispute between the Parties arising from or relating to
the terms of this Agreement or the Executive’s employment with the Company or
its Affiliates shall, except as provided in Section 18(b) or Section 18(c), be
resolved by binding arbitration held in New York City in accordance with the
rules of the American Arbitration Association.

          (b)      Executive acknowledges that the Company and its Affiliates
will suffer irreparable injury, not readily susceptible of valuation in monetary
damages, if Executive breaches his obligations under Section 11 or 12.
Accordingly, Executive agrees that the Company and its Affiliates will be
entitled, in addition to any other available remedies, to obtain injunctive
relief against any breach or prospective breach by Executive of his obligations
under Section 11 or 12 in any Federal or state court sitting in the City and
State of New York or court sitting in Bermuda or the United Kingdom, or, at the
Company’s or any Affiliate’s election, in any other jurisdiction in which
Executive maintains his residence or his principal place of business. Executive
hereby submits to the non-exclusive jurisdiction of all those courts for the
purposes of any actions or proceedings instituted by the Company or its
Affiliates to obtain such injunctive relief, and Executive agrees that process
in any or all of those actions or proceedings may be served by registered mail
or delivery, addressed to the last address of Executive known to the Company or
its Affiliates, or in any other manner authorized by law. Executive further
agrees that, in addition to any other remedies available to the Company or its
Affiliates by operation of law or otherwise, because of any breach by Executive
of his obligations under Section 11 or 12 he will forfeit any and all bonus and
rights to any payments to which he might otherwise then be entitled by virtue
hereof and such payments may be suspended so long as any good faith dispute with
respect thereto is continuing; provided, however, that payments, benefits and
other rights and privileges of the Executive under this Agreement following
termination of the Executive’s employment during a Post Change Period shall not
be forfeited, suspended, offset, diminished or otherwise altered in any way on
account of any breach or prospective breach of Section 11, Section 12 or any
other provision of this Agreement alleged by the Company.

          (c)      Notwithstanding any other provision of this Agreement, the
Executive may elect to resolve any dispute involving a breach or alleged breach
of this Agreement following termination of the Executive’s employment during a
Post-Change Period in any Federal or State court sitting in the City and State
of New York or court sitting in Bermuda or the United Kingdom. The Company
hereby submits to the non-exclusive jurisdiction of all those courts for the
purposes of any such actions or proceedings instituted by the Executive, and the
Company agrees that process in any or all of such actions or proceedings may be
served by registered mail or delivery, addressed to the Company as set forth in
Section 22, or in any other manner authorized by law. The Company shall pay all
costs associated with any court proceeding under this Section 18(c) without
regard to the outcome of such proceeding, including all legal fees and expenses
of the Executive, who shall be reimbursed for all such costs promptly upon
written demand therefore by the Executive.

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          (d)      Each Party shall bear its own costs incurred in connection
with any proceeding under Sections 18(a) or 18(b) hereof, including all legal
fees and expenses; provided, however, that the Company shall bear all such costs
of the Executive (to the extent such costs are reasonable) if the Executive
substantially prevails in the proceeding. The Executive shall be reimbursed by
the Company for all such reasonable costs promptly upon written demand therefor
by the Executive which is made within a reasonable time following the proceeding
and is supported by documentation of such costs.

          19.      HOUSING BENEFIT.

          The Executive shall be paid a monthly housing allowance by the Company
equal to the amount set forth below. The amount will be paid on a monthly basis
at the time the regular monthly payroll is paid. The monthly payments will be
US$11,000.00 per month. Notwithstanding the foregoing, payment of the housing
allowance set forth herein will cease upon termination of the Executive’s
employment with the Company and its Affiliates, except that payment of the
housing allowance will cease upon the expiration of three (3) months following
termination of the Executive’s employment with the Company and its Affiliates in
the event of the Executive’s termination pursuant to Sections 8(a), (b) and (d)
above (including the Company giving notice of nonrenewal under Section 2 above).
If the Executive’s employment is terminated pursuant to Sections 8(a), (b) or
(d) above (including by the Company giving notice of nonrenewal under Section 2
above), the Executive will receive reimbursement of all reasonable and
documented moving expenses in an amount not to exceed US$50,000.

          20.      AMENDMENT OR WAIVER.

          No provision in this Agreement may be amended unless such amendment is
agreed to in writing, signed by the Executive and by a duly authorized officer
of the Company. No waiver by any Party of any breach by the other Party of any
condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same or any prior or subsequent time. Except as set forth in Exhibit B, any
waiver must be in writing and signed by the Executive or a duly authorized
officer of the Company, as the case may be.

          21.      NOTICES.

          Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or sent by courier, or by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party concerned at the
address indicated below or to such changed address as such Party may
subsequently by similar process give notice of:

> If to the Company:

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> Security Capital Assurance Ltd
> A.S. Cooper Building
> 26 Reid Street
> Hamilton HM11, Bermuda
> 
> Att’n: Executive Vice President and
>            Chief Financial Officer
> 
> If to the Executive:
> 
> To the last address delivered to
> the Company by the Executive in
> the manner set forth herein.

          22.      SEVERABILITY.

          In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

          23.      SURVIVORSHIP.

          The respective rights and obligations of the Parties shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.

          24.      REFERENCE.

          In the event of the Executive’s death or a judicial determination of
his incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his estate or other legal representative.

          25.      GOVERNING LAW.

          This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York without reference to the
principles of conflict of laws.

          26.      SECTION 409A.

          It is intended that this Agreement will comply with Section 409A of
the United States Internal Revenue Code of 1986, as amended (and any regulations
and guidelines issued thereunder) to the extent the Agreement is subject
thereto, and the Agreement shall be interpreted on a basis consistent with such
intent. If an amendment of the Agreement is necessary in order for it to comply
with Section 409A, the parties hereto will negotiate in good faith to amend

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the Agreement in a manner that preserves the original intent of the parties to
the extent reasonably possible.

          27.      HEADINGS.

          The heading of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

          28.      COUNTERPARTS.

          This Agreement may be executed in one or more counterparts.

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          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

SECURITY CAPITAL ASSURANCE LTD                                
                         By: _        /s/ Tom Currie             Claude L.
LeBlanc   By: _        /s/ Claude L. LeBlanc             GUARANTORS:    
SECURITY CAPITAL ASSURANCE LTD     By:        /s/ Tom Currie            XL
FINANCIAL ASSURANCE LTD     By:       /s/ Tom Currie            SCA HOLDINGS US
INC.     By:   /s/ Susan Comparato   

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EXHIBIT A

CHANGE IN CONTROL

          For purposes of this Agreement, “Change in Control” shall mean:

          (i)      the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of 30% or more
of either (1) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that the following acquisitions shall not constitute a Change in
Control: (i) any acquisition by the Company or any of its Subsidiaries; (ii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Subsidiaries; (iii) any acquisition by
any corporation with respect to which, following such acquisition, more than 60%
of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such acquisition in substantially
the same proportions as their ownership, immediately prior to such acquisition,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be (unless a Person’s ownership of the acquiring
corporation results in that Person directly or indirectly owning 30% or more of
the Outstanding Company Common Stock or Outstanding Company Voting Securities);
or (iv) any acquisition by XL Capital Ltd or its wholly-owned subsidiaries
unless, at any time after the Effective Date and prior to such acquisition, XL
Capital Ltd and its subsidiaries own less than 30% of the Outstanding Company
Voting Securities;

          (ii)     during any period of two consecutive years, individuals who,
as of the beginning of such period, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the beginning of
such period whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act);

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          (iii)      consummation of a reorganization, scheme of arrangement,
merger, consolidation or similar transaction (collectively, a “Transaction”), in
each case, with respect to which all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and outstanding Company Voting Securities immediately prior
to such Transaction, do not, following such Transaction, beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Transaction in
substantially the same proportions as their ownership, immediately prior to such
Transaction, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be;

          (iv)      consummation of a sale or other disposition of all or
substantially all of the assets of the Company, other than to a corporation with
respect to which following such sale or other disposition, more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in substantially the same
proportions as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be; or

          (v)       approval by the shareholders of the Company of a complete
liquidation or dissolution (or similar transaction) of the Company.

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EXHIBIT B

GOOD REASON

          For purposes of this Agreement, “Good Reason” shall mean any of the
following, unless done with the prior express written consent of the Executive:

>           (i)     (A)     The assignment to Executive of duties inconsistent
> with Executive’s position (including duties, responsibilities, status, titles
> or offices as set forth in Section 3 hereof); or (B) any elimination,
> diminution or reduction of Executive’s duties or responsibilities except in
> connection with the termination of Executive’s employment for Cause,
> disability or as a result of Executive’s death or by Executive other than for
> Good Reason; and for purposes for this clause (i), the determination of
> whether there has been a reduction of duties or responsibilities or an
> assignment of duties inconsistent with the Executive’s position shall take
> into account the Executive’s duties, responsibilities and position with the
> ultimate parent of the parent/subsidiary group as a whole which includes the
> Company;
> 
>           (ii)     The (A) reduction in Executive’s Base Salary from the level
> in effect immediately prior to the Change in Control, or (B) payment of an
> annual bonus in an amount less than the lesser of (x) the most recent annual
> bonus paid prior to the Change in Control or (y) the greater of (I) the most
> recent target bonus, if any, established prior to the Change in Control or
> (II) the annual average bonus paid for the preceding three complete years
> prior to the Change in Control (or such lesser number of complete years as the
> Executive shall have been employed by the Company);
> 
>           (iii)    The failure by the Company to obtain the specific written
> assumption of this Agreement by any successor or assign of the Company or any
> person acquiring substantially all of the Company’s assets;
> 
>           (iv)    Any breach by the Company of any provision of this Agreement
> or any agreements entered into pursuant thereto that remains uncured for 20
> calendar days following written notice of same by the Executive;
> 
>           (v)     Notwithstanding the provisions of Section 3(b) of this
> Agreement, requiring the Executive to be based at any office or location that
> is greater than 35 miles from the office or location at which the Executive
> was principally located immediately prior to the Change in Control;
> 
>           (vi)    During the Post Change Period, (A) the failure to continue
> in effect any compensation or incentive plan in which Executive participates
> immediately prior to the time of the Change in Control unless an equitable
> arrangement (embodied in an ongoing substitute or alternative plan providing
> Executive with at least the same aggregate economic opportunity on an
> after-tax basis available to the Executive immediately prior to

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> the Change in Control) has been made with respect to such plan in connection
> with the Change in Control, or the failure to continue Executive’s
> participation therein on substantially the same basis both in terms of the
> amount of benefits provided and the level of his participation relative to
> other participants, as existed at the time of the Change in Control; or (B)
> the failure to continue to provide Executive with benefits and coverage at
> least as favorable in the aggregate as those enjoyed by him under the
> Company’s pension, life insurance, medical, health and accident, disability,
> deferred compensation or savings plans in which he was participating at the
> time of the Change in Control; or
> 
>           (vii)    The failure by the Company to pay within 7 calendar days of
> the due date any amounts due under any benefit or compensation plan, including
> any deferred compensation plan.

Notwithstanding any provision in this Agreement to the contrary, the Executive
must give written notice of his intention to terminate his employment for Good
Reason within sixty (60) days after the act or omission which constitutes Good
Reason, and any failure to give such written notice within such period will
result in a waiver by the Executive of his right to terminate for Good Reason as
a result of such act or omission.

-2-

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