EXHIBIT 10.8

EXECUTION COPY

EMPLOYMENT AGREEMENT

     AGREEMENT, made and entered into as of this 30th day of October, 2008, by
and between, Syncora Holdings Ltd, a Bermuda corporation (the “Company”), and
Susan Comparato (the “Executive”).

     WHEREAS, prior to August 15, 2008, the Executive was employed by the
Company as General Counsel;

     WHEREAS, effective August 15, 2008, the Executive was also appointed Acting
Chief Executive Officer and President; and

     WHEREAS, the Executive and the Company desire that the Executive continue
to be Acting Chief Executive Officer, President & General Counsel of the Company
on the terms and subject to the conditions set forth herein;

     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
October 30, 2008 (the “Date of the Agreement”) and shall continue through the
close of business on the first 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 first 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 Acting Chief Executive
Officer, President and General Counsel of the Company. In each 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. In

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carrying out her duties and responsibilities, the Executive shall report to the
Board of Directors of the Company. During the term of this Agreement, the
Executive shall devote her full business time to the business and affairs of the
Company and its subsidiaries, and shall use her best efforts, skills and
abilities to promote the interests of the Company and its subsidiaries.

     (b) Performance of Services. The Executive’s services under this Agreement,
which are global in nature, shall be performed in the greater New York City
metropolitan area, as reasonably requested by the Company, 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. To the extent reasonably requested by the
Company, and acceptable to Executive, the Executive shall allocate greater
business time to a location other than her principal business location, if
necessary.

     4.      BASE SALARY.

     The Executive shall be paid a base salary by the Company of not less than
US$450,000.00, payable in accordance with the Company’s regular pay practices
(“Base Salary”). 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, but not decreased, at the discretion of the
Compensation Committee of the Board of Directors of the Company (the
“Compensation Committee”).

     5.      BONUSES.

     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, with an annual
target bonus equal to 100% of the Executive’s Base Salary. The Executive may be
awarded such annual bonuses 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; provided that, at its August 2008 Compensation Committee meeting, the
Compensation Committee approved a guaranteed minimum bonus of $750,000 for 2008
(the “2008 Guaranteed Bonus”). 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; provided that, subject to Section 8 of
this Agreement, the 2008 Guaranteed Bonus shall be paid as follows: the first
installment shall be (and, the Executive acknowledges, was) paid on August 31,
2008; and the second installment shall be paid in 2009 when bonuses are normally
paid by the

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Company but in no event later than March 15, 2009. Except as otherwise provided
in this Section 5 for 2008, nothing shall confer upon the Executive any right to
a minimum annual bonus.

     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, including without limitation any
trust related arrangement, as are in effect from time to time and in which
similarly situated senior executives of the Company are eligible to participate
on the same terms as such other similarly situated senior executives of the
Company.

     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 on the same terms as such other
similarly situated senior executives of the Company.

     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 her, 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 (as in effect at the time of death), 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 Section 5 above, and reimbursement of business expenses
incurred prior to death in accordance with Section 7 above,

(ii) if the date of death occurs after 2008, 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),

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(iii) if the date of death occurs prior to the date the second installment of
the 2008 Guaranteed Bonus is paid, such unpaid installment shall be paid as
provided in Section 5 as if the Executive’s employment had not terminated,

(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 Executive’s death, continued
medical benefit plan coverage (including dental and vision benefits if provided
under the applicable plans) for the Executive’s immediate family members, if
any, under the Company’s medical benefit plans upon substantially the same terms
and conditions (including cost of coverage to the immediate family members) as
is then in existence for other senior executives during the coverage period;
provided, that, if the Executive’s immediate family members 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

(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, including any previously
granted and unpaid LTIP, deferred cash and retention awards.

     (b) Termination due to Disability. In the event (x) the Executive’s
employment hereunder is terminated due to her disability, as determined under
the Company’s long-term disability plan, or (y) the Executive incurs a
separation from service pursuant to Code Section 409A as a result of her
incapacity due to physical or mental illness (in which case she shall be
terminated for disability at the date of the separation from service), the
Executive shall be entitled to the following amounts:

(i) a cash lump sum payment made, within sixty (60) days after the date of
termination in an amount equal to the Base Salary as provided in Section 4,
above, that would have been paid to the Executive had she remained employed
through the end of the sixth month after the month in which the Executive’s
employment terminates due to disability,

(ii) 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 Section 5 above, and reimbursement of business expenses
incurred prior to termination of employment in accordance with Section 7 above,

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(iii) if the date of termination occurs after 2008, within 60 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) if the date of termination occurs prior to the date the second installment
of the 2008 Guaranteed Bonus is paid, such unpaid installment shall be paid as
provided in Section 5 as if the Executive’s employment had not terminated,

(v) 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,

(vi) 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 immediate family members, 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 reemployed with another employer and becomes
eligible to receive medical benefits from such employer, the medical benefits
described herein shall immediately cease, and

(vii) the vested accrued benefits, if any, under the employee benefit pro-grams
of the Company, as provided in Section 6 above, determined in accordance with
the applicable terms and provisions of such programs, including any previously
granted and unpaid LTIP, deferred cash and retention awards.

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

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(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 her 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 hereof; 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 she 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 she reasonably believed her
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’s Board of Directors 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 her 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 reimbursement 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

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that the Executive shall be entitled thereto in the event her employment is
terminated for Cause (as defined in this Agreement or otherwise).

     (d) Termination Without Cause and Termination for Good Reason.

(i) Anything in this Agreement to the contrary notwithstanding, the Executive’s
employment may be terminated by the Company without Cause or by the Executive
for Good Reason 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 or a Termination for Good Reason under this Section 8(d). For the
avoidance of doubt, if a notice of nonrenewal of this Agreement pursuant to
Section 2 is issued by the Company and, within three (3) 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 (x) by the Company
without Cause or (y) by the Executive for Good Reason, the Executive shall be
entitled to:

(A) Base Salary as provided in Section 4, above, at the rate in effect at the
time of her termination of employment without Cause or for Good Reason, through
the date on which such termination occurs, to be paid in accordance with the
Company’s regular payroll practices,

(B) provided the Executive executes on or before the date that is 50 days
following the date of her termination of employment, a general release of
employment liability claims against the Company and its affiliates in
substantially the form of Exhibit B attached hereto, and does not revoke such
release prior to the end of the seven-day statutory revocation period, a cash
lump sum payment made within 60 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),

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(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 Section 5 above and reimbursement of business expenses
incurred prior to termination of employment in accordance with Section 7 above,

(D) if the Executive’s termination occurs prior to the payment date of the
second installment of the 2008 Guaranteed Bonus, such installment shall be paid
as provided in Section 5 as if the Executive’s employment has not terminated,

(E) 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, or rights to any
cash-based long term incentives, determined in accordance with the terms thereof
or the applicable plan,

(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 immediate family members, 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
senior 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) 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 , including any previously
granted and unpaid LTIP, deferred cash and retention awards.

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

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(A) A material diminution in the Executive’s base compensation;

(B) A material adverse change or material adverse reduction in the Executive’s
authority, duties, or responsibilities, including the Executive no longer having
primary responsibility for a material portion of the financial guaranty business
as conducted by the Company and its affiliates;

(C) A material adverse change or a material adverse reduction in the authority,
duties, or responsibilities of the Board of Directors of the Company, including
such a change or reduction with respect to the board of directors of one or more
of the Company’s affiliates which results in such a change or reduction with
respect to the Board of Directors of the Company;

(D) A requirement that the Executive report to (i) an individual or entity other
than directly to the Board of Directors of the Company or (ii) an individual or
entity in addition to directly to the Board of Directors of the Company;

(E) A material diminution in the budget over which the Executive retains
authority;

(F) A material change in the geographic location at which the Executive must
perform the services; or

(G) Any other action or inaction that constitutes a material breach by the
Company of this Agreement.

Notwithstanding any provision in this Agreement to the contrary, the Executive
must give written notice of her intention to terminate her employment for Good
Reason within thirty (30) days after the act or omission which constitutes Good
Reason, and the Company shall have thirty (30) days from such notice to remedy
the condition if such condition is reasonably capable of being remedied. In the
event that the condition constituting Good Reason is so remedied, Good Reason
shall no longer exist with regard to such condition. Any failure to give such
written notice within such period will result in a waiver by the Executive of
her right to terminate for Good Reason as a result of such act or omission. Any
termination for Good Reason hereunder shall occur within 90 days after the Good
Reason event occurs.

In addition, the Executive shall have the right to terminate her employment for
any reason within thirty (30) days following a Change in Control (as defined in
Exhibit A), and such termination shall be deemed to be a termination with Good
Reason, unless the

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Executive is offered a Qualifying Position (as defined below) at least thirty
(30) days prior to the anticipated consummation date of the Change in Control. A
“Qualifying Position” shall mean a position, commencing upon the consummation of
the Change in Control, with the Company, a successor to the Company or an
affiliate of the Company or such a successor (the “Post-Transaction Employer”),
which offer contains the following features:

(A) employment with the Post-Transaction Employer as (i) the senior executive
officer with primary responsibility for a material segment of the financial
guaranty business of the Post-Transaction Employer and its affiliates, or (ii)
General Counsel of the Post-Transaction Employer, or if there is one or more
direct or indirect parent entities of the Post-Transaction Employer, of the
highest such parent;

(B) for the one-year period immediately following the Change in Control, (i)
annual base compensation (base salary plus annual target bonus opportunity,
excluding special bonuses) at a rate which is not less than the Executive’s
annual base compensation rate in effect immediately prior to the Change in
Control, (ii) a geographic location at which the Executive must perform the
services for the Post-Transaction Employer and its affiliates which is not more
than fifty (50) miles from the location at which the Executive performed her
services for the Company and its affiliates immediately prior to the Change in
Control and (iii) a severance benefit entitlement in the same amount and under
the same terms and conditions as in effect hereunder immediately prior to the
Change in Control, except that (with respect to clause (iii)), for purposes of
determining whether a Good Reason event described in clause (A) through (F)
above has occurred, (I) clause (B) of the definition of Good Reason shall be
determined by reference to the position offered pursuant to clause (A) of this
sentence, (II) references to “the Company” shall be deemed to refer to the
Post-Transaction Employer and (III) the other elements of Good Reason shall be
determined by reference to the terms and conditions of the Executive’s
employment on the day following the day on which the consummation of the Change
in Control occurs; and

(C) such other terms and conditions of employment which are not less favorable
to the Executive than the terms and conditions of the employment of other
similarly situated executive officers of the Post-Transaction Employer and its
affiliates.

If the Executive receives but does not accept a Qualifying Position, any
termination of the Executive’s employment (whether by the Company, the
Post-Transaction Employer or by the Executive) within thirty (30) days prior to
the Change in Control or thirty (30)

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days after the Change in Control, shall be deemed to be a voluntary termination
under Section 8(e) hereof.

     (e) Voluntary Termination by the Executive. The Executive may voluntarily
terminate her employment prior to the expiration of the term of this Agreement
upon at least 30 days’ prior written notice to the Company (or, if the Board
deems a longer period necessary to effect an orderly transition, the Board may,
by prompt written notice to the Executive, extend the termination date up to an
additional 60 days), provided such termination shall constitute a voluntary
termination and, except as provided in Section 8(d)(ii), 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
death or disability as described in Section 8(a) or 8(b), above or a termination
by the Executive for Good Reason as described in Section 8(d) above shall not be
deemed a voluntary termination within the meaning of this Section 8(e). For the
avoidance of doubt, a notice of nonrenewal 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).

     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 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)(ii)(B) and (C) hereof were each reduced by up to 20 percent, then the
payments set forth in Section 8(d)(ii)(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

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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)(ii)(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 independent 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 she has
substantial authority not to report any Excise Tax on her Federal income tax
return. Any determination by the Accounting Firm meeting the requirements of
this Section 9(c) shall be 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

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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 she 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.

     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

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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.

     Subject to any earlier time limits set forth in Section 9, all payments and
reimbursements to which the Executive is entitled under this Section 9 shall be
paid to or on behalf of the Executive not later than the end of the taxable year
of the Executive next following the taxable year of the Executive in which the
Executive (or the Company, on the Executive’s behalf) remits the related taxes
(or, in the event of an audit or litigation with respect to such tax liability
under Section 9(d), not later than the end of the taxable year of the Executive
next following the taxable year of the Executive in which there is a final
resolution of such audit or litigation (whether by reason of completion of the
audit, entry of a final and non-appealable judgment, final settlement, or
otherwise)).

     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 her knowledge,
she is not using the confidential or proprietary information of any other person
in violation of any agreement or rights of others known to her. 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 her 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
“know-how”) 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, know-how, 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

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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 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;

(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 financial guaranty business of the Company
as historically conducted by the Company and its affiliates prior to the Date of
the Agreement; and

(iv) 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 assist any person
or group in the acquisition or proposed acquisition of all or any part of the
Company or any of its Affiliates, or any of its or their lines of business or
assets, (including without limitation, all preparatory steps antecedent to an
acquisition or proposed acquisition, such as preparation of valuations,
financial models, management analysis or other evaluative materials).

     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 six-month anniversary of such termination.

     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

16

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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 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 she 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 her 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
her 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 she 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 for so long as the information remains Confidential and
proprietary to the Company and is not readily available to the public and this
Section 12 shall apply in accordance with its terms after employment has
terminated for any reason. The Executive acknowledges and agrees that she 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.

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     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.

     14.      SUBSIDIARY SERVICES AND GUARANTEE.

     (a) Each of Syncora Holdings US Inc and Syncora Guarantee Services
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, her 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 her 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

18

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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, she 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$25,000,000. Such directors’ and officers’ liability insurance
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 her 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 her obligations under Section
11 or 12 in any Federal or state court sitting in the City and State of New York
or, at the Company’s or any Affiliate’s election, in any other jurisdiction in
which Executive maintains her residence or her 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 her obligations under Section 11 or 12 she will forfeit any and all bonus and
rights to any payments to which she 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.

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     (c) 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. Following the final determination of
the dispute in which the Executive has substantially prevailed, the Company
shall reimburse all such reasonable costs within 30 days following written
demand therefor (supported by documentation of such costs) by the Executive, and
the Executive shall make such written demand within 60 days following the final
determination of the dispute; provided, however, that such payment shall be made
no later than on or prior to the end of the calendar year following the calendar
year in which the cost is incurred. Notwithstanding the foregoing, in the event
a final determination of the dispute has not been made by December 1 of the year
following the calendar year in which the cost is incurred, the Company shall,
within 30 days after such December 1, reimburse such reasonable costs (supported
by documentation of such costs) incurred in the prior taxable year; provided,
however, that the Executive shall return such amounts to the Company within ten
(10) business days following the final determination if the Executive did not
substantially prevail in the dispute.

     19.      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 A, any
waiver must be in writing and signed by the Executive and a duly authorized
officer of the Company and the Guarantors, as the case may be.

     20.      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:

Syncora Holdings Ltd.
1221 Avenue of the Americas
New York, New York 10020
Att’n: Secretary of the Company

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If to the Executive:

To the last address delivered to
the Company by the Executive in
the manner set forth herein.

     21.      POST TERMINATION COOPERATION. After the termination of the
Executive’s employment for any reason, the Executive shall cooperate, at the
reasonable request of the Company, (i) in the transition of any matter for which
the Executive had authority or responsibility during the employment period, or
(ii) with respect to any other matter involving the Company or any of its
Affiliates for which the Executive may be of assistance. Any such cooperation
required from the Executive shall take into account any responsibilities to
which the Executive is subject to a subsequent employer or otherwise.

     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 her
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to her 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.

     (a) The intent of the Parties is that payments and benefits under this
Agreement comply with Internal Revenue Code Section 409A and the regulations and
guidance promulgated there under (collectively “Code Section 409A”) and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance

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therewith. If the Executive notifies the Company (with specificity as to the
reason therefor) that the Executive believes that any provision of this
Agreement (or of any award of compensation, including equity compensation or
benefits) would cause the Executive to incur any additional tax or interest
under Code Section 409A and the Company concurs with such belief or the Company
(without any obligation whatsoever to do so) independently makes such
determination, the Company shall, after consulting with the Executive, reform
such provision to attempt to comply with Code Section 409A through good faith
modifications to the minimum extent reasonably appropriate to conform with Code
Section 409A. To the extent that any provision hereof is modified in order to
comply with Code Section 409A, such modification shall be made in good faith and
shall, to the maximum extent reasonably possible, maintain the original intent
and economic benefit/burden to the Executive and the Company of the applicable
provision without violating the provisions of Code Section 409A.

     (b) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits that constitute deferred compensation subject to Section
409A upon or following a termination of employment unless such termination is
also a “separation from service” within the meaning of Code Section 409A and,
for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment” or like terms shall mean “separation
from service.” If the Executive is deemed on the date of termination to be a
“specified employee” within the meaning of that term under Code Section
409A(a)(2)(B), then with regard to any payment that is considered deferred
compensation under Code Section 409A payable on account of a “separation from
service,” such payment or benefit shall be made or provided at the date which is
the earlier of (i) the expiration of the six (6) month period measured from the
date of such “separation from service” of the Executive, and (ii) the date of
the Executive’s death (the “Delay Period”). Upon the expiration of the Delay
Period, all payments and benefits delayed pursuant to this Section 26(b)
(whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to the
Executive in a lump sum with interest at the prime rate as published in The Wall
Street Journal on the first business day of the Delay Period, and any remaining
payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein.

     (c) With regard to any provision herein that provides for reimbursement of
costs and expenses or in-kind benefits, except as permitted by Code Section
409A, (i) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the foregoing
clause (ii) shall not be violated without regard to expenses reimbursed under
any arrangement covered by Code Section 105(b) solely because such expenses are

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subject to a limit related to the period the arrangement is in effect and (iii)
such payments shall be made on or before the last day of the Executive’s taxable
year following the taxable year in which the expense was incurred.

     (d) Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty (30)
days after termination of employment”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.

     (e)(i) The Company shall indemnify the Executive, as provided in this
subsection (e), if the Executive incurs additional tax under Code Section 409A
as a result of a violation of Code Section 409A (each an “Indemnified Code
Section 409A Violation”) that occurs as a result of (1) the Company’s clerical
error (other than an error cause by erroneous information provided to the
Company by the Executive), (2) the Company’s failure to administer this
Agreement or any benefit plan or program in accordance with its written terms
(such written terms, the “Plan Document”), or (3) following December 31, 2008,
the Company’s failure to maintain the Plan Documents in compliance with Code
Section 409A; provided, that the indemnification set forth in clause (3) shall
not be available to the Executive if (x) the Company has made a reasonable, good
faith attempt to maintain the applicable Plan Document in compliance with Code
Section 409A but has failed to do so, or (y) the Company has maintained the
applicable Plan Document in compliance with Code Section 409A but subsequent
issuance by the Internal Revenue Service or the Department of the Treasury of
interpretive authority results in the applicable Plan Document not (or no
longer) complying with Code Section 409A (except that, if the Company is
permitted by such authority or other authority to amend the Plan Document to
bring the Plan Document into compliance with Code Section 409A and fails to do
so, then such indemnification shall be provided).

     (ii) In the event of an Indemnified Code Section 409A Violation, the
Company shall reimburse the Executive for (1) the 20% additional income tax
described in Code Section 409A(a)(1)(B)(i)(II) (to the extent that the Executive
incurs the 20% additional income tax as a result of the Indemnified Code Section
409A Violation), and (2) any interest or penalty that is assessed with respect
to the Executive’s failure to make a timely payment of the 20% additional income
tax described in clause (1), provided that the Executive pays the 20% additional
income tax promptly upon being notified that the tax is due (the amounts
described in clause (1) and clause (2) are referred to collectively as the “Code
Section 409A Tax”). In addition, in the event of an Indemnified Code Section
409A Violation, the Company shall make a payment (the “Code Section 409A
Gross-Up Payment”) to the Executive such that the net amount the Executive
retains, after paying any federal, state, or local income tax or FICA tax on the
Code Section 409A Gross-Up Payment, shall be equal to the Code Section 409A Tax.
The procedures set forth in Section 9(c) and 9(d) with respect to the Gross-Up
Payment shall also apply to

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the payment of the Code Section 409A Tax and the Code Section 409A Gross-Up
Payment (including, without limitation, the Company’s right to contest the Code
Section 409A Tax); provided, that, in addition to such procedures, the Executive
shall reasonably cooperate with measures identified by the Company that are
intended to mitigate the Code Section 409A Tax to the extent that such measures
do not materially reduce or delay the payments and benefits to the Executive
hereunder.

     (f) Any payment made by the Company in respect of any taxes imposed with
regard to the Company’s obligation to provide benefits in lieu of continued
medical plan coverage shall be paid to the Executive, her dependents or the
applicable taxing authority on their behalf, no later than the due date of such
taxes.

     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.

    SYNCORA HOLDINGS LTD   By: /s/ Michael P. Espoisito     Name: Michael P.
Espoisito     Title: Chairman of the Board                 SUSAN COMPARATO   By:
/s/ Susan Comparato                 GUARANTORS:           SYNCORA HOLDINGS US
INC               By: /s/ Edward B. Hubbard     Name: Edward B. Hubbard    
Title:                 SYNCORA GUARANTEE SERVICES     INC.               By: /s/
Edward B. Hubbard     Name: Edward B. Hubbard     Title:

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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

A-1

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election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act);

     (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 or any of its affiliates;

     provided, however, that neither the entry by the Company into the Master
Transaction Agreement, dated July 28, 2008, among the Company and several of its
subsidiaries, XL Capital Ltd and certain of its affiliates and certain financial
institutions (the “Master Transaction Agreement”) nor the consummation of any of
the transactions contemplated by the Master Transaction Agreement, shall
constitute a Change in Control for purposes of this Agreement.

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Exhibit B

FORM OF GENERAL RELEASE AND COVENANT NOT TO SUE

1.     

General Release of Claims. In consideration for the payments and benefits paid
to you under Section 8 of the Agreement, you hereby release and forever
discharge the Company, and any and all of their respective affiliates,
predecessors, successors, assigns, and their respective officers, directors,
administrators and employees (the “Released Parties”) of and from all actions,
claims, liabilities, demands and causes of action, known or unknown, fixed or
contingent, in law or equity, included but not limited to those arising under
the Civil Rights Act of 1964, the Reconstruction Era Civil Rights Act, the Age
Discrimination in Employment Act of 1967 (“ADEA”), the Employee Retirement
Income Security Act of 1974, The Americans with Disabilities Act, The Family and
Medical Leave Act of 1993, The New York State Human Rights Law Section 196 ET
SEQ., the New York City Administrative Code, as amended, and any and all other
federal, state, and local laws, rules and regulations prohibiting, without
limitation, discrimination in employment, tortuous or wrongful discharge, breach
of an express or implied contract, breach of a covenant of good faith and fair
dealing, negligent or intentional infliction of emotional distress, defamation,
misrepresentation or fraud, which you ever had, now have or hereafter can, shall
or may have for, upon or by reason of any matter, cause or thing, up to and
including the day on which you sign this Agreement (the “Claims”); provided,
however, that you are not waiving any right to claim benefits under qualified
employee benefit plans, any right of indemnification, any rights to directors
and officers’ liability insurance or any amounts due to you on termination under
your employment agreement with the Company.

  2.     

Effect of General Release; Limitations on General Release. You understand that
by signing this General Release you are prevented from filing, commencing or
maintaining any action, complaint, or proceeding with regard to any of the
claims released hereby. However, nothing in the General Release of Claims above
precludes you from filing a charge with an administrative agency or from
participating in an agency investigation. You are, however, waiving your right
to recover money in connection with any such charge or investigation. You are
also waiving your right to recover money in connection with a charge filed by
any other individual or by the Equal Employment Opportunity Commission or any
other federal or state agency.

  3.     

Covenant Not to Sue. In addition to waiving and releasing the claims and rights
covered by the General Release of Claims, you promise not to sue the Company or
any other Released Party in any forum for any reason, including but not limited
to claims, laws or theories covered by the General Release of Claims. This
covenant by you not to sue is different from the General Release of Claims,
which will provide the Company a defense in the event you violate the General
Release.

 

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If you violate this Covenant Not to Sue by suing a Released Party, you may be
liable to that party for monetary damages. More specifically, if you sue a
Released Party in violation of this Covenant Not to Sue, you will be required to
either: (1) pay that Released Party’s attorneys’ fees and other costs incurred
as a result of having to defend against your suit; or (2) alternatively, at the
Released Party’s option, return to the Company all of the severance pay provided
to you under Section 8 of the Agreement, except for one-hundred dollars
($100.00). In the event of such violation, the Company will also be excused from
providing you any remaining severance payments under Section 8 of the Agreement.
However, nothing in this Covenant Not to Sue or in any other part of this
Agreement prevents you from challenging the validity of this Agreement under the
ADEA.

  4.     

Knowing and Voluntary Decision to Sign. You further agree that no statements,
representations, promises, threats or suggestions have been made by the Company
or its representatives, officers, or employees to influence you to sign this
General Release except such statements as are expressly set forth herein. You
have signed this General Release upon reaching the considered conclusion that it
is best for you, and of your own free will, relying entirely upon your own
judgment, and the judgment of such lawyers and other personal advisors who you
have chosen to consult. You further acknowledge that you are under no disability
or impairment, which affects your decision to sign this General Release.

  5.     

Time to Consider the Agreement. You have actually read this General Release, and
have had adequate time of at least 21 days to consider its terms and effect, and
to ask any questions that you may have of the legal or other personal advisors
of your own choosing.

  6.     

Subsequent Facts. No fact, evidence, event or transaction currently unknown to
you but which may hereafter become known to you shall affect in any way or
manner the final and unconditional nature of this General Release.

 

  READ, ACCEPTED & AGREED     Susan Comparato     Dated

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