Exhibit 4.3


EXECUTION COPY


SHAREHOLDER AGREEMENT


          THIS
SHAREHOLDER AGREEMENT (this “Agreement”) dated November 18, 2008, is
entered into between Syncora Private Trust Company Limited (the “Trustee”),
a Bermuda company as trustee of the special purpose trust (the “Trust”)
established by the Declaration of Trust defined below and known as The CCRA
Purpose Trust (the “SCA Shareholder Entity”), and Syncora Holdings Ltd
(formerly known as Security Capital Assurance Ltd), a Bermuda exempted company
(“SCA”). 


          WHEREAS,
SCA has entered into the Master Commutation, Release and Restructuring
Agreement dated as of July 28, 2008 (the “Master Restructuring Agreement”)
with Syncora Guarantee Inc. (formerly known as XL Capital Assurance Inc.) (“XLCA”),
Syncora Guarantee Re Ltd (formerly known as XL Financial Assurance Ltd.),
Syncora Guarantee Services Inc. (formerly known as XL Financial Administrative
Services Inc.), Syncora Bermuda Administrative Ltd (formerly known as SCA
Bermuda Administrative Ltd.), Syncora Guarantee (U.K.) Ltd (formerly known as
XL Capital Assurance (U.K.) Limited) and those Portfolio Trusts a party
thereto, XL Capital Ltd., XL Insurance (Bermuda) Ltd. (“XLI”), XL
Reinsurance America Inc., X.L. Global Services Inc., XL Services (Bermuda)
Limited and X.L. America, Inc. and the consenting counterparties party thereto
(the “Consenting Counterparties”); 


          WHEREAS,
in accordance with Section 2.10 of the Master Restructuring Agreement, on
August 5, 2008, the 30,069,049 Common Shares (as hereinafter defined), which
represent approximately 46% of the outstanding Common Shares and all of the
Common Shares beneficially owned by XLI on the Closing Date (as such term is
defined in the Master Restructuring Agreement) (the “SCA Shares”), have
been transferred to HSBC Institutional Trust Services (Bermuda) Limited (the “Escrow
Agent”) to be held by the Escrow Agent until released in accordance with
the terms of the Escrow Agreement dated as of July 30, 2008 (as amended,
modified or supplemented from time to time, the “Escrow Agreement”)
among SCA, XLCA and the Escrow Agent; 


          WHEREAS,
the parties to the Master Restructuring Agreement have agreed that upon the
satisfaction of the SCA Shareholder Entity Formation Conditions (as such term
is defined in the Master Restructuring Agreement), the Escrow Agent will, in
accordance with the terms of the Escrow Agreement, release the SCA Shares and
deliver them to the SCA Shareholder Entity, which shall hold the SCA Shares in
accordance with the terms of that certain Declaration of Trust dated as of the
date hereof (the “Declaration of Trust”) establishing the SCA
Shareholder Entity; and 


          WHEREAS,
the parties to the Master Restructuring Agreement have agreed that in
connection with the receipt of the SCA Shares by the SCA Shareholder Entity,
certain rights afforded to XLI under the Bye-Laws (as hereinafter defined) and
under that certain transition agreement entered into on 






August 4, 2006
between XLI, SCA and the other parties thereto shall be transferred to the SCA
Shareholder Entity. 


          NOW,
THEREFORE, in consideration of the covenants and agreements contained herein,
the parties hereto agree as follows: 


          Section
1. Definitions. 


          (a)
“Act” means the Companies Act 1981 of Bermuda, as amended from time to
time. 


          (b)
“Affiliate” means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person. For purposes of this definition, the term “control” (including its
correlative meanings, the terms “controlling”, “controlled by” and “under
common control with”) shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this Agreement, no Consenting Counterparty shall be
deemed to be an Affiliate of the SCA Shareholder Entity and the SCA Shareholder
Entity shall not be deemed to be an Affiliate of SCA or any of its
Subsidiaries. 


          (c)
“Business Day” means any day excluding Saturday, Sunday and any day on
which banks in New York, New York or Hamilton, Bermuda have the option or are
required by law or other governmental action to close. 


          (d)
“Bye-Laws” means the Amended and Restated Bye-Laws of SCA, as amended
from time to time. 


          (e)
“Common Shares” means the common shares, $0.01 par value per common
share, of SCA, and any share capital into which such common shares shall have
been converted or any share capital resulting from a reclassification of such
common shares. 


          (f)
“Finance and Risk Oversight Committee” means the finance and risk
oversight committee of the SCA Board. 


          (g)
“Independent” means, with respect to any director or nominee for
director, an individual who is both (i) “independent” (as defined in the
corporate governance rules of the listing standards of the New York Stock
Exchange) of (A) SCA and its subsidiaries and (B) each Consenting Counterparty
and the SCA Shareholder Entity, assuming, for purposes of this clause (B), that
such independence standard were applied to, and such individual were a director
of, each such Consenting Counterparty and the SCA Shareholder Entity
(including, for the avoidance of doubt, the Trustee) and (ii) not a director,
officer or employee of the SCA Shareholder Entity (including, for the avoidance
of doubt, the Trustee) or any Consenting Counterparty, or an officer or employee
of SCA or any of its Affiliates. 


2






          (h)
“Material Subsidiary” means at any time, (i) XLCA and (ii) any
subsidiary of SCA which at such time is a “significant subsidiary” as defined
under Regulation S-X of the Securities Exchange Act of 1934, as amended. 


          (i)
“New York Stock Exchange” means the New York Stock Exchange Inc. 


          (j)
“Person” means an individual, corporation, partnership, association,
trust, limited liability company or any other entity or organization, including
a government or political subdivision or an agency, unit or instrumentality
thereof. 


          (k)
“Representatives” means with respect to any Person, such Person’s
Affiliates and its and their respective officers, directors, employees,
accountants, counsel, consultants, advisors, agents and representatives. 


          (l)
“SCA Board” means the board of directors of SCA. 


          (m)
“SCA Board Nominee” means an individual who was nominated for election
by the SCA Board (and who is not an SCA Shareholder Entity Nominee). 


          (n)
“Voting Restriction Termination Event” means the time at which the SCA
Shareholder Entity’s and its Affiliates’ aggregate ownership of the then
outstanding Common Shares is first equal to or less than 35%. 


          Section
2. Corporate Governance. 


          (a)
Voting of SCA Shares. The SCA Shareholder Entity will vote the SCA
Shares at each annual or special meeting of shareholders of SCA at which
directors are to be elected, or execute proxies or written consents, as the
case may be, in favor of (i) each SCA Shareholder Entity Nominee then standing
for election and (ii) with respect to each other open board seat then standing
for election that is not required to be filled by an SCA Shareholder Entity
Nominee pursuant to Section 2(b) below, an individual that is Independent or,
at the SCA Shareholder Entity’s election, an SCA Board Nominee; provided that
in exercising its discretion pursuant to the foregoing clause (ii), the SCA
Shareholder Entity will vote the SCA Shares so that a majority of the SCA Board
is at all times Independent; provided, however, that the SCA Shareholder Entity shall not vote in
favor of any individual who, to the SCA Shareholder Entity’s knowledge (after
reasonable inquiry is made to such individual, and if different from such
individual, the proponent of the proxy solicitation), is either receiving or
entitled to receive, directly or indirectly, any compensation or entitlement to
indemnification, or is named or entitled to be named as a beneficiary under any
D&O insurance policy, for service on the SCA Board, any SCA Board
committees or any SCA subsidiary boards or committees from the Consenting
Counterparties or the SCA Shareholder Entity.  


3






          (b)
SCA Shareholder Entity Nominees. 



	
 

	
 


	
 

	
          (i)
 Until the occurrence of a Voting Restriction Termination Event, the SCA
 Shareholder Entity will have the right to nominate for the SCA Board (i) for
 so long as the SCA Board consists of nine or fewer directors, such number of
 nominees as would equal one nominee less than a majority of the directors and
 (ii) for so long as the SCA Board consists of ten or more directors, such
 number of nominees as would equal two nominees less than a majority of the
 directors (the “SCA Shareholder Entity Nominees”); provided
 that until the occurrence of a Voting Restriction Termination Event, the SCA
 Shareholder Entity shall at all times be entitled to nominate at least one
 nominee to the SCA Board. Such SCA Shareholder Entity Nominees will be
 allocated among the classes of the SCA Board as follows: (i) two to the
 “Class I” directors and (ii) one each to the “Class II” directors and “Class
 III” directors (or as substantially equivalent thereto if for any reason the
 SCA Board consists of more or fewer than nine directors), in each case, as
 such “classes” of directors are described in paragraph (3) of Section 8 of
 the Bye-Laws. For the avoidance of doubt, so long as the SCA Board consists
 of eleven directors, the SCA Shareholder Entity will have the right to
 nominate four of the eleven directors. If, for any reason, there is a vacancy
 in the SCA Board, which vacancy is of a director so nominated by the SCA
 Shareholder Entity, SCA shall fill that vacancy as soon as practicable with
 an SCA Shareholder Entity Nominee. Similarly, if there is a vacancy created
 by an increase in the number of directors, then such vacancy shall be filled
 in a manner consistent with the SCA Shareholder Entity’s rights set forth in
 this Section 2(b)(i). Moreover, if the size of the SCA Board is at any time
 reduced, the SCA Shareholder Entity shall direct such number of SCA
 Shareholder Entity Nominees, if any, in excess of those to which the SCA
 Shareholder Entity is entitled based on the reduced size of the SCA Board to
 resign from the SCA Board and any directorships they hold with subsidiaries
 of SCA. All SCA Shareholder Entity Nominees shall agree for the benefit of
 SCA to abide by such direction. All SCA Shareholder Entity Nominees shall be
 Independent. 


	
 

	
 


	
 

	
          (ii)
 The initial persons who shall serve as SCA Shareholder Entity Nominees (each
 such person, an “Initial SCA Shareholder Entity Nominee”) until their
 successors are elected and qualified or until their earlier death,
 resignation or removal from office, and their respective classes on the SCA
 Board, shall be as follows: 








	
 

	
 

	
 


	
Name

	
 

	
Class


	


	


	



	
Duncan P.
 Hennes

	
 

	
Class I


	
 

	
 

	
 


	
Edward Muhl

	
 

	
Class I


	
 

	
 

	
 


	
Robert J.
 White

	
 

	
Class II


	
 

	
 

	
 


	
Thomas S.
 Norsworthy

	
 

	
Class III





4






	
 

	
 


	
 

	
SCA shall
 take all action necessary to cause the Initial SCA Shareholder Entity
 Nominees to be appointed to the SCA Board immediately after the Effective
 Date (as defined below); provided that prior to the Effective Date,
 each SCA Shareholder Entity Nominee who agrees to comply with the
 confidentiality provisions of SCA’s Corporate Governance Guidelines as in
 effect on the date hereof shall have “observer status” on the SCA Board and
 on the board of directors of XLCA. Unless otherwise agreed by SCA and the
 Consenting Counterparties Enforcer (as such term is defined in the
 Declaration of Trust), the SCA Shareholder Entity shall at the expiration of
 such Initial SCA Shareholder Entity Nominee’s then existing term submit such
 person’s name to SCA’s Nominating & Governance Committee in accordance
 with Section 2(b)(vii) and, unless such person is objected to by such
 committee in accordance with such section, nominate such person as an SCA
 Shareholder Entity Nominee until such time that such person resigns, is
 removed in accordance with SCA’s Bye-Laws or otherwise is not available to
 serve on the SCA Board. If, at any time, the SCA Shareholder Entity shall
 have the right pursuant to Section 2(b)(i) to fill a vacancy on the SCA Board
 that cannot be filled by an Initial SCA Shareholder Entity Nominee, whether
 as a result of an Initial SCA Shareholder Entity Nominee’s death, resignation
 or removal from office, an increase in the number of directors on the SCA
 Board, the agreement by SCA and the Consenting Counterparties Enforcer (as
 such term is defined in the Declaration of Trust) not to re-nominate an
 Initial SCA Shareholder Entity Nominee or otherwise, the person to fill such
 vacancy shall be selected in accordance with Section 1.2.3 of Schedule B of
 the Declaration of Trust. Following the selection of a person other than an
 Initial SCA Shareholder Entity Nominee in accordance with paragraph A or B of
 Schedule E of the Declaration of Trust, the provisions of the second
 preceding sentence shall apply to any re-nomination of such person to the
 same extent as though such person were an Initial SCA Shareholder Entity
 Nominee. 


	
 

	
 


	
 

	
          (iii)
 SCA shall include the SCA Shareholder Entity Nominees in each slate of
 directors proposed, recommended or nominated for election by SCA or the SCA
 Board, and will use the same efforts to cause the election of such nominees
 as it uses for the SCA Board Nominees in connection with that election (it
 being understood that for so long as the SCA Board shall remain classified
 under the Act, this Section 2(b)(iii) shall apply to only the SCA Shareholder
 Entity Nominees assigned to the appropriate “class” then up for election). 


	
 

	
 


	
 

	
          (iv)
 SCA agrees that each SCA Shareholder Entity Nominee shall be entitled to
 receive compensation and indemnification from SCA and its subsidiaries, and
 to be covered by D&O insurance policies of SCA 





5






	
 

	
 


	
 

	
and its
 subsidiaries, on the same terms as the SCA Board Nominees who are
 Independent. The SCA Shareholder Entity agrees that no SCA Shareholder Entity
 Nominee shall receive, directly or indirectly, any compensation or
 entitlement to indemnification, or be named as a beneficiary under any
 D&O insurance policy, for service on the SCA Board, any SCA Board
 committees or any SCA subsidiary boards or committees from the Consenting
 Counterparties or the SCA Shareholder Entity. 


	
 

	
 


	
 

	
          (v)
 Notwithstanding any provision of SCA’s Corporate Governance Guidelines and
 any confidentiality undertaking by the SCA Shareholder Entity or any SCA
 Shareholder Entity Nominee to the contrary, the parties to this Agreement
 acknowledge and agree that, from and after the Effective Date, each SCA
 Shareholder Entity Nominee (i) is hereby authorized to disclose information
 to the SCA Shareholder Entity and its Representatives, (ii) is under no
 obligation to communicate any information received from the SCA Shareholder
 Entity or any of its Representatives to the SCA Chairman or any other Person
 and (iii) is authorized to initiate communications, directly or indirectly,
 with the SCA Shareholder Entity and its Representatives without any
 requirement to first pre-clear such communications with the SCA Chairman or
 any other Person, in each case, to the extent such SCA Shareholder Entity
 Nominee determines in good faith that the taking or the failure to take any
 such actions will not be inconsistent with his or her fiduciary duties to SCA
 under applicable law. For the avoidance of doubt, the provisions of the
 immediately preceding sentence shall not apply to disclosures to or
 communications with the Consenting Counterparties or their Representatives.
 SCA shall, effective as of the Effective Date, amend SCA’s Corporate
 Governance Guidelines to extent necessary so that SCA’s Corporate Governance
 Guidelines do not contain any provisions inconsistent with this Section
 2(b)(v). 


	
 

	
 


	
 

	
          (vi)
 Until the occurrence of a Voting Restriction Termination Event, the SCA
 Shareholder Entity will not knowingly take any action to form or join a
 “group” within the meaning of Section 13(d)(3) of the Exchange Act with any
 other Person, including without limitation any of the Consenting
 Counterparties, for the purpose of seeking to elect more than the number of
 SCA Shareholder Entity Nominees to which it is then entitled under Section
 2(b)(i); provided that, subject to Section 2(a), the foregoing shall
 in no way prohibit the SCA Shareholder Entity from voting any securities of
 SCA in its discretion (including in connection with any election contest) or
 otherwise independently exercising its rights as a shareholder of SCA; provided,
 further, that for the avoidance of doubt, the execution and delivery
 of this Agreement and the Declaration of Trust shall not be deemed to be in
 violation of this Section 2(b)(vi). 





6






	
 

	
 

	
 


	
 

	
          (vii)
 Prior to any individual becoming an SCA Shareholder Entity Nominee or, in the
 case of any individual then serving as an SCA Shareholder Entity Nominee,
 continuing to serve as an SCA Shareholder Entity Nominee following the
 expiration of his or her then existing term, the SCA Shareholder Entity shall
 submit the name of such individual, together with the information and
 documentation referred to in paragraphs (2) and (5) of clause (B) of Schedule
 E of the Declaration of Trust, to SCA’s Nominating & Governance Committee
 for consideration and approval pursuant to this Section 2(b)(vii). During the
 10-Business Day period following such submission, SCA’s Nominating &
 Corporate Governance Committee shall be afforded the opportunity to conduct a
 reasonable inquiry relating to such individual. Unless SCA’s Nominating &
 Governance Committee reasonably determines, in the good faith discharge of
 its fiduciary duties, within such 10-Business-Day period that such
 individual: 


	
 

	
 

	
 


	
 

	
 

	
          (A)
 does not meet the requirement set forth in the last sentence of Section
 2(b)(i), 


	
 

	
 

	
 


	
 

	
 

	
          (B)
 would be a party to or benefit from any arrangement that would violate the
 last sentence of Section 2(b)(iv); or 


	
 

	
 

	
 


	
 

	
 

	
          (C)
 does not meet the suitability criteria of the SCA Board, which criteria shall
 be consistently applied to individuals presented as SCA Shareholder Entity
 Nominees to the same extent as those presented as Independent SCA Board
 Nominees, 


	
 

	
 

	
 


	
 

	
such
 individual shall become an SCA Shareholder Entity Nominee or shall continue
 to be an SCA Shareholder Entity Nominee, as the case may be, in accordance
 with the terms of this Agreement. 


	
 

	
 

	
 


	
 

	
          (viii)
 To the extent that any SCA Shareholder Entity Nominee is to be selected in
 accordance with Schedule E of the Declaration of Trust, SCA shall, and shall
 cause XLCA or any other Person appointed as the “XLCA Enforcer” in accordance
 with the Declaration of Trust to, take all action reasonably necessary in
 cooperation with the SCA Shareholder Entity and the Consenting Counterparties
 Enforcer (as such term is defined in the Declaration of Trust) or its
 designee to complete the selection of such SCA Shareholder Entity Nominee in
 accordance with Schedule E of the Declaration of Trust (including, to the
 extent necessary, the review by SCA’s Nominating & Governance Committee
 of the individuals presented to such committee in accordance with Section
 2(b)(vii)) as promptly as reasonably practicable. 





7






	
 

	
 


	
          (c)      Committees;
 Subsidiary Boards. 


	
 

	
 


	
 

	
          (i)
 Until the occurrence of the Voting Restriction Termination Event, (i) the SCA
 Shareholder Entity will have the right to designate one member of the SCA
 Compensation Committee and (ii) the Compensation Committee of the SCA Board
 shall consist of at least five members which number of members shall not be
 changed without the SCA Shareholder Entity’s prior consent (subject to any
 restrictions imposed by applicable law, rule or regulation). 


	
 

	
 


	
 

	
          (ii)
 Until the occurrence of the Voting Restriction Termination Event, (i) SCA
 will maintain a Finance and Risk Oversight Committee whose charter shall be
 substantially in its current form (with such changes thereto as may be agreed
 by a majority of the members of the Finance and Risk Oversight Committee and
 the SCA Board), (ii) the Finance and Risk Oversight Committee shall consist
 of five members which number of members shall not be changed without the SCA
 Shareholder Entity’s prior consent, and (iii) two of the members of such
 Committee shall be SCA Shareholder Entity Nominees. 


	
 

	
 


	
 

	
          (iii)
 Other than the Audit Committee, a Compensation Committee, a Nominating &
 Governance Committee and a Finance and Risk Oversight Committee, SCA shall
 establish no committees of the SCA Board without the prior written consent of
 at least a majority of the SCA Shareholder Entity Nominees then in office
 (which shall not unreasonably be withheld). 


	
 

	
 


	
 

	
          (iv)
 Subject to applicable law (including the Act) and New York Stock Exchange
 regulations, until the occurrence of the Voting Restriction Termination Event
 and upon the request of the SCA Shareholder Entity, SCA and the SCA Board
 shall take all actions necessary so that the composition of the board of
 directors, general partner, managing member (or controlling committee
 thereof) or any other board or committee serving a similar function with
 respect to each of SCA’s Material Subsidiaries (each a “Subsidiary Board”)
 shall be proportionate to the composition requirements of the SCA Board such
 that the SCA Shareholder Entity shall have the same proportional
 representation (rounded to the nearest whole number of directors, but in no
 event less than one) on each such Subsidiary Board and committee thereof as
 it has on the SCA Board. 


	
 

	
 


	
 

	
          (v)
 In each case where the SCA Shareholder Entity has the right to designate one
 or more members to any committee of the SCA Board, any Subsidiary Board or
 any committee thereof in accordance with this Section 2(c), the SCA Board
 shall select the SCA Shareholder Entity Nominee or SCA Shareholder Entity
 Nominees, as the case may be, to serve on such Subsidiary Board or committee
 in the same manner as Independent SCA Board Nominees are selected to serve on
 such Subsidiary Board or committee. 





8






	
 

	
 


	
          (d)
 Notice of SCA Board Meetings. In addition to any other notice required
 by the Act or the Bye-Laws, SCA shall give each SCA Shareholder Entity
 Nominee the same notice and information provided to any other member of the
 SCA Board with respect to each meeting of the SCA Board or any committee
 thereof (even if such SCA Shareholder Entity Nominee is not a member of such
 committee), at the same time such notice is first made available to any such
 other member of the SCA Board; provided that if such notice and
 information is given by means other than email, SCA shall, simultaneously
 with the giving of such notice and information by such other means, deliver
 such notice and information to each SCA Shareholder Entity Nominee by email
 to the email address of such SCA Shareholder Entity Nominee provided to SCA. 


	
 

	
 


	
          (e)
 Approval of Certain Matters. In addition to any other actions or
 approvals required under the Act or the Bye-Laws, each of SCA and the
 Shareholder Entity Nominee agree that until the occurrence of the Voting
 Restriction Termination Event, (i) the acquisition, sale, lease or transfer
 of all or substantially all of the assets of SCA, (ii) the discontinuance or
 redomestication of SCA out of Bermuda to another jurisdiction, (iii) mergers
 or amalgamations and (iv) the liquidation, dissolution or winding-up of SCA
 shall, in each case, require, as a condition to consummation thereof, the
 approval by the affirmative vote of at least sixty-six and two-thirds percent
 (66 2/3%) of the votes cast in accordance with the provisions of the
 Bye-Laws; provided that this Section 2(e) shall not apply to the
 approval of any of the Transactions (as such term is defined in the Master
 Restructuring Agreement). 


	
 

	
 


	
          Section
 3. Certain Additional Agreements. 


	
 

	
 


	
          (a)
 No Voting Reduction of SCA Shares. SCA hereby acknowledges and agrees
 that for purposes of Section 44 of the Bye-Laws: (x) clause (ii) of paragraph
 (1) of Section 44 of the Bye-Laws applies to the transfer of the SCA Shares
 by XLI to the SCA Shareholder Entity and, in accordance with such clause, no
 reduction in votes contemplated by Section 44 of the Bye-Laws shall occur
 with respect to the SCA Shares or any other Common Shares acquired by the SCA
 Shareholder Entity (or any Affiliate thereof) for so long as the SCA
 Shareholder Entity (or any Affiliate thereof) continues to hold such shares;
 (y) the Master Restructuring Agreement shall be deemed to constitute for all
 purposes of Section 44 of the Bye-Laws the notice required to be delivered by
 XLI to the SCA Board pursuant clause (ii) of paragraph (1) of Section 44 of
 the Bye-Laws in connection with the transfer of the SCA Shares and no other
 condition as to the applicability of such clause is required to be satisfied;
 and (z) the SCA Shareholder Entity (and its Affiliates) are entitled to the
 full benefit of clause (ii) of paragraph (1) of Section 44 of the Bye-Laws
 (including as to the applicability of such benefit to Section 45 of the
 Bye-Laws). 


	
 

	
 


	
          (b)
 Applicability of Paragraph (2) of Bye-Law 44. The SCA Shareholder
 Entity agrees that paragraph (2) of Section 44 of the Bye-Laws shall 





9






apply to the
SCA Shareholder Entity on a mutatis mutandis
basis as though the SCA Shareholder Entity were the “XL Group” for purposes of
such paragraph. 


          (c)
Information Rights. Until the occurrence of the Voting Restriction
Termination Event, SCA shall furnish or make available to the SCA Shareholder
Entity, promptly after such information becomes available to SCA: 


	
 

	
 


	
 

	
          (i)
 such annual budget, business plans and financial forecasts as are customarily
 provided to the SCA Board; 


	
 

	
 


	
 

	
          (ii)
 following the end of each fiscal quarter and fiscal year of SCA, such
 consolidated financial statements and operations reports of SCA (including
 audit reports with respect to fiscal years) as are customarily provided to
 the SCA Board; and 


	
 

	
 


	
 

	
          (iii)
 all information that is provided to members of the Finance and Risk Oversight
 Committee in their capacity as such. 





          (d)
Access. Until the occurrence of the Voting Restriction Termination
Event, SCA will, and will cause its subsidiaries, officers, directors and
employees to, afford that SCA Shareholder Entity and its Representatives the
opportunity to discuss SCA’s and its subsidiaries’ affairs, finances and
accounts with SCA’s and its subsidiaries’ officers from time to time as the SCA
Shareholder Entity may reasonably request, in each event only to the extent
necessary or reasonably appropriate to accomplish the reasonable purpose of the
proposed inspection. 


          (e)
Confidentiality.  


	
 

	
 


	
 

	
          (i)
 The SCA Shareholder Entity shall not, and shall direct each of its
 Representatives not to, disclose any information of a known confidential
 nature received from SCA or any of its subsidiaries in connection with the
 SCA Shareholder Entity’s investment in SCA (“Confidential Information”),
 except as provided in this Section 3(e). The SCA Shareholder Entity may
 disclose Confidential Information to its Representatives so long as such
 Representatives are informed by the SCA Shareholder Entity of the confidential
 nature of such information and provided that in any event the SCA Shareholder
 Entity will be responsible for any breach of this Section 3(e) by its
 Representatives. In addition, the SCA Shareholder Entity agrees that prior to
 the provision of any Confidential Information to any of its Representatives
 who are not (x) employees of the SCA Shareholder Entity or any of its
 affiliates or (y) SCA Shareholder Entity Nominees, the SCA Shareholder Entity
 shall cause such Representative to execute and deliver an acknowledgment in
 substantially the form attached hereto as Exhibit A that such Representative
 shall comply with the provisions of this Section 3(e). For the avoidance of
 doubt, the SCA Shareholder Entity shall not disclose any Confidential
 Information to the Consenting Counterparties or any of their 





10






	
 

	
 


	
 

	
respective
 Representatives; provided that a Person that serves as an accountant,
 counsel, consultant, advisor, agent and/or other representative to both a
 Consenting Counterparty and the SCA Shareholder Entity shall not be deemed to
 be a Representative of such Consenting Counterparty if (A) such Person is not
 acting as a Representative of such Consenting Counterparty in connection with
 the transactions contemplated by the Master Restructuring Agreement and (B)
 internal information barriers customary for the applicable industry are
 established as may be reasonably necessary to prevent the unauthorized
 disclosure of Confidential Information between such Person and any Person
 serving as a Representative to such Consenting Counterparty with respect to
 the transactions contemplated by the Master Restructuring Agreement. 


	
 

	
 


	
 

	
          (ii)
 “Confidential Information” shall not include information (a) that is or
 becomes generally known on a non-confidential basis from a source other than
 the SCA Shareholder Entity or its Representatives, (b) that has become
 available to the SCA Shareholder Entity on a non-confidential basis from a
 source that is not, to the SCA Shareholder Entity’s knowledge, under an obligation
 of confidentiality or (c) that has been developed by or on behalf of the SCA
 Shareholder Entity or any of its Representatives independently of any
 disclosure from SCA or its subsidiaries. 


	
 

	
 


	
 

	
          (iii)
 If the SCA Shareholder Entity or any of its Representatives is legally
 requested or required under an order or subpoena issued by a court,
 administrative agency or arbitration panel, or to comply with regulatory or
 ratings agency requests or requirements (through oral examination,
 interrogatories, requests for information or documents, civil investigation
 demand or other legal, administrative or arbitration processes) to disclose
 any Confidential Information, such Person being so requested or required to
 disclose such Confidential Information shall use reasonable efforts to give
 SCA prompt written notice of the request, requirement, subpoena or order to
 permit (to the extent reasonable) SCA (if it so elects and at its expense) to
 seek an appropriate protective order preventing or limiting disclosure or
 waive compliance with the provisions of this Section 3(e). If, in the absence
 of such protective order or waiver, the SCA Shareholder Entity or any of its
 Representatives is compelled to disclose Confidential Information, such
 Person may disclose such Confidential Information without liability
 hereunder. Notwithstanding any other provision of this Agreement, the SCA
 Shareholder Entity may, if it deems necessary or advisable, provide
 Confidential Information to any regulatory body; provided that the SCA
 Shareholder Entity shall promptly after such Confidential Information is
 provided to such regulatory body deliver to SCA written notice thereof
 (together with a copy of any written submission made to such regulatory
 body). 





11






	
 

	
 


	
 

	
          (iv)
 The SCA Shareholder Entity agrees that money damages would not be a
 sufficient remedy for any breach of this Section 3(e) and that, in addition
 to all other remedies, SCA shall be entitled to specific performance and
 injunctive or other equitable relief as a remedy for any such breach. 


	
 

	
 


	
 

	
          (v)
 The SCA Shareholder Entity acknowledges that any information provided to the
 SCA Shareholder Entity or any of its Representatives by SCA pursuant to
 Section 3(c) or Section 3(d) may constitute material non-public information
 and that its possession of such information may subject the SCA Shareholder
 Entity to the restrictions imposed by federal and state securities laws on
 Persons in possession of material non-public information. 


	
 

	
 


	
 

	
(f) Constituent
 Documents. 


	
 

	
 


	
 

	
          (i)
 SCA shall take or cause to be taken all lawful action necessary or
 appropriate to ensure that none of SCA’s Memorandum of Association, Bye-Laws,
 Corporate Governance Guidelines or any other similar documents of SCA and any
 of the corresponding constituent documents of SCA’s subsidiaries contain any
 provisions inconsistent with this Agreement or which would in any way nullify
 or impair the terms of this Agreement or the rights of the SCA Shareholder
 Entity hereunder. 


	
 

	
 


	
 

	
          (ii)
 Until the occurrence of the Voting Restriction Termination Event, SCA shall
 not, without the prior written consent of the SCA Shareholder Entity, amend,
 alter or repeal its Memorandum of Association, Bye-Laws, Corporate Governance
 Guidelines and any other similar document of SCA in any manner adverse to the
 SCA Shareholder Entity. 


	
 

	
 


	
 

	
Section
 4. Miscellaneous. 


	
 

	
 


	
          (a)
 Interpretation. In this Agreement, the SCA Shareholder Entity shall be
 deemed to be the Trust or the Trustee acting in its capacity as such trustee,
 in each case as the context may require to be most protective of the
 interests of SCA. 


	
 

	
 


	
          (b)
 Termination. This Agreement (except for the provisions of Sections
 3(a) and 3(e)) shall terminate upon the occurrence of the Voting Restriction
 Termination Event at which time the SCA Shareholder Entity shall cause the
 SCA Shareholder Entity Nominees to resign from the SCA Board and all
 directorships they hold in subsidiaries of SCA. 


	
 

	
 


	
          (c)
 Amendment and Waiver. This Agreement may not be amended except by an
 instrument in writing signed on behalf of each of SCA and the SCA Shareholder
 Entity; provided that SCA and the Consenting Counterparties Enforcer
 (as such term is defined in the Declaration of Trust) may, without the 





12






consent of the
SCA Shareholder Entity, agree in writing to requirements that a particular
individual must satisfy to serve as an SCA Shareholder Entity Nominee that are
different from or in addition to those set forth herein (it being understood
that each of SCA and the Consenting Counterparties Enforcer may decline to so
agree with the other for any or no reason). Any party hereto may waive any
right of such party hereunder by an instrument in writing signed by such party
and delivered to the other party. The failure of any party to enforce any of
the provisions of this Agreement shall in no way be construed as a waiver of
such provisions and shall not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its
terms. 


          (d)
Severability. If any provision of this Agreement shall be declared by
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement shall not be affected and shall remain in
full force and effect. 


          (e)
Entire Agreement. This Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
to the subject matter hereof in any way. 


          (f)
Successors and Assigns. Neither this Agreement nor any right or
obligation hereunder is assignable in whole or in part by any party without the
prior written consent of the other party hereto; provided, that the SCA
Shareholder Entity may assign any or all its rights under this Agreement to one
or more of its Affiliates; provided, further, that no such assignment shall
relieve the SCA Shareholder Entity of any of its obligations hereunder and all
Common Shares held by any subsidiary or Affiliate of the SCA Shareholder Entity
shall be deemed to be held by the SCA Shareholder Entity for all purposes under
this Agreement.  


          (g)
Counterparts; Execution by Facsimile Signature. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument. This Agreement may be
executed by facsimile signature(s). 


          (h)
Public Announcement. No party to this Agreement shall make, or cause to
be made, any press release or public announcement or otherwise communicate with
any news media in respect of this Agreement or the transactions contemplated
hereby without the prior consent of the other party and the parties shall
cooperate as to the timing of any such press release or public announcement; provided,
however, that this provision does not apply to any disclosures required
by law. 


          (i)
Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given (i) upon personal delivery to the 


13






party to be
notified, (ii) when sent by confirmed facsimile if sent during normal business
hours of the recipient, if not, then on the next Business Day or (iii) one
Business Day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the addresses set forth below or such other
address or facsimile number as a party may from time to time specify by notice
to the other parties hereto: 


	
 

	
 

	
 


	
 

	
If to SCA:


	
 

	
 

	
 


	
 

	
 

	
Syncora
 Holdings Ltd


	
 

	
 

	
A.S. Cooper
 Building


	
 

	
 

	
26 Reid
 Street, 4th Floor


	
 

	
 

	
Hamilton HM
 11


	
 

	
 

	
Bermuda


	
 

	
 

	
Attention:
 General Counsel


	
 

	
 

	
Fax: (441)
 296-4351


	
 

	
 

	
 


	
 

	
with a copy
 (which shall not constitute notice) to:


	
 

	
 

	
 


	
 

	
 

	
Weil,
 Gotshal & Manges LLP,


	
 

	
 

	
767 Fifth
 Avenue


	
 

	
 

	
New York,
 New York 10153


	
 

	
 

	
Attention:
 Gary Holtzer


	
 

	
 

	
Fax:
 (212) 310-8007


	
 

	
 

	
 


	
 

	
If to the
 SCA Shareholder Entity:


	
 

	
 

	
 


	
 

	
 

	
Syncora
 Private Trust Company Ltd


	
 

	
 

	
Richmond
 House


	
 

	
 

	
12 Par La
 Ville Road


	
 

	
 

	
Hamilton, HM
 081, Bermuda


	
 

	
 

	
Attention:
 Craig MacIntyre, Director


	
 

	
 

	
Facsimile
 No.: (441) 298-7849


	
 

	
 

	
 


	
 

	
with a copy
 (which shall not constitute notice) to:


	
 

	
 

	
 


	
 

	
 

	
Dewey &
 LeBoeuf LLP


	
 

	
 

	
1301 Avenue
 of the Americas


	
 

	
 

	
New York, NY
 10019-6092


	
 

	
 

	
Attention:
 Joseph L. Seiler III


	
 

	
 

	
Fax: (212)
 259-6333


	
 

	
 

	
 


	
 

	
 

	
and





14






	
 

	
 

	
 


	
 

	
 

	
Conyers Dill
 & Pearman


	
 

	
 

	
Clarendon
 House


	
 

	
 

	
2 Church
 Street


	
 

	
 

	
PO Box HM
 666


	
 

	
 

	
Hamilton HM
 CX


	
 

	
 

	
Bermuda


	
 

	
 

	
Attention:
 Charles Collis


	
 

	
 

	
Fax: (441)
 292-4720








	
 

	
 


	
 

	
(j) Governing
 Law; Consent to Jurisdiction. 


	
 

	
 


	
 

	
          (i)
 This Agreement shall be governed in all respects by the laws of the State of
 New York, without regard to its conflicts of laws principles. 


	
 

	
 


	
 

	
          (ii)
 Each of the parties hereto agrees that any suit, action or proceeding seeking
 to enforce any provision of, or based on any matter arising out of or in connection
 with, this Agreement or the transactions contemplated hereby shall be brought
 in the courts of Bermuda, and each of the parties hereby consents to the
 exclusive jurisdiction of such courts (and of the appropriate appellate
 courts therefrom) in any such suit, action or proceeding and irrevocably
 waives, to the fullest extent permitted by law, any objection which it may
 now or hereafter have to the laying of the venue of any such suit, action or
 proceeding in any such court or that any such suit, action or proceeding
 which is brought in any such court has been brought in an inconvenient forum.
 Process in any such suit, action or proceeding may be served on any party
 anywhere in the world, whether within or without the jurisdiction of any such
 court. Without limiting the foregoing, each party agrees that service of
 process on such party as provided in Section 4(i) shall be deemed effective
 service of process on such party. 


	
 

	
 


	
 

	
          (iii)
 Each of the parties hereto hereby irrevocably and unconditionally waives
 trial by jury in any legal Action or proceeding in relation to this Agreement
 and for any counterclaim therein. 





          (k)
Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.



          (l)
No Third Party Beneficiaries. This Agreement is solely for the benefit
of the parties hereto and shall not be deemed to confer upon third parties
(including shareholders or members of any party hereto) any remedy, claim,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement; provided, however, that the
Consenting Counterparties Enforcer (as such term is defined in the Declaration
of Trust) shall be a third party beneficiary under this Agreement entitled to
enforce, on its own, with the same rights to enforcement as if it were party
hereto, any breach by SCA under Sections 2(b), 2(c) and 2(e) and the proviso in
Section 4(o) (it being understood, for the avoidance of doubt, that the
Consenting Counterparties 


15






Enforcer shall
not have any rights as a third party beneficiary hereunder to enforce the
provisions of this Agreement against the SCA Shareholder Entity in connection
with any breach, or alleged breach, by the SCA Shareholder Entity under this
Agreement). 


          (m)
Specific Performance. Each party hereto acknowledges that the remedies
at law of the other parties for a breach or threatened breach of this Agreement
would be inadequate and, in recognition of this fact, any party to this
Agreement, without posting any bond, and in addition to all other remedies that
may be available, shall be entitled to obtain equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy that may then be available. 


          (n)
Effectiveness. Notwithstanding anything herein to the contrary, the
provisions of this Agreement (other than the proviso in Section 2(b)(ii)) shall
not become effective until the date the SCA Shares are released from escrow and
delivered to the SCA Shareholder Entity in accordance with the terms of the
Escrow Agreement (such date, the “Effective Date”). 


          (o)
Limitation of Liability. Notwithstanding anything else herein contained,
the Trustee has entered this Agreement solely in its capacity as trustee of the
Trust and the benefits of this Agreement are held by the Trustee subject to the
provisions of the Trust. Notwithstanding any other provision of this Agreement,
any and all liabilities of the Trustee created by this Agreement shall, save in
the case of the fraud or dishonesty of the Trustee when the limitation set
forth in this Section 4(o) shall not apply, be limited to the extent such liability
can be met from and out of the property from time to time subject to the trusts
of the Trust and, no obligation of the Trustee under this Agreement or that
otherwise may arise in connection with the matters contained in this Agreement
is binding upon, nor in respect thereof shall any resort or recourse be had,
judgment issued, or execution or other process levied against, any other
property of the Trustee held in its personal capacity; provided, however,
that SCA shall not, and shall cause its Affiliates not to, take any action to
satisfy any such liability from and out of the property from time to time
subject to the trusts of the Trust without the prior written consent of the
Consenting Counterparties Enforcer (as such term is defined in the Declaration
of Trust). Notwithstanding the foregoing, this Section 4(o) shall not operate
to limit the rights of SCA to seek non-monetary equitable remedies (including
specific performance or injunctive relief). 


[signature page follows]


16







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


	
 

	
 

	
 


	
 

	
SYNCORA
 HOLDINGS LTD


	
 

	
(formerly
 known as, SECURITY CAPITAL


	
 

	
ASSURANCE
 LTD)


	
 

	
 


	
 

	
By:

	
/s/ Susan Comparato


	
 

	
 

	



	
 

	
 

	
Name: Susan Comparato


	
 

	
 

	
Title: Acting CEO & President and General Counsel














	
 
	
 
	
 

	
 
	
 
	
SYNCORA
 PRIVATE TRUST COMPANY LIMITED 

	
 
	
 
	
 

	
 
	
By:
	
/s/ Charles Collis

	
 
	
 
	


	
 
	
 
	
Name: Charles Collis

	
 
	
 
	
Title: Director

	
 
	
 
	
 

	 	 	 
	
 
	
By:
	
/s/ Craig MacIntyre

	
 
	
 
	


	
 
	
 
	
Name: Craig MacIntyre

	
 
	
 
	
Title:   Director

	
 
	
 
	

  

	
 
	
 
	
 

	
 
	
 
	












EXHIBIT A


	
 

	
 


	
 

	
______________ ___, ____ 





Syncora Holdings Ltd

A.S. Cooper Building

26 Reid Street, 4th Floor

Hamilton HM 11

Bermuda

Attention: General Counsel 


	
 

	
 

	
 


	
 

	
Re: Confidentiality Agreement





Ladies and Gentlemen: 


          Reference
is made to the Shareholder Agreement dated as of November 18, 2008 (the “Shareholder Agreement”) between Syncora
Private Trust Company Limited, a Bermuda company as trustee of the special
purpose trust established by the Declaration of Trust defined below and known
as The CCRA Purpose Trust and Syncora Holdings Ltd (formerly known as Security
Capital Assurance Ltd), a Bermuda exempted company. The undersigned hereby
agrees to be bound by and comply with the terms of Section 3(e) the Shareholder
Agreement to the fullest extent as if the references to the “SCA Shareholder
Entity” therein were deemed to instead apply to the undersigned. The letter is
for the benefit of Syncora Holdings Ltd and shall be governed by the laws of the
State of New York. 


	
 
	
 
	
 

	
 
	
[For entities:] 

	 	 
	
 
	
Very truly yours, 

	
 
	
 

	
 
	
[NAME OF ENTITY] 

	
 
	
 

	
 
	
By: 
	
 

	
 
	
 
	


	
 
	
 
	
Name: 

	
 
	
 
	
Title:

	
 
	
 

	
 
	
[For individuals:]
 

	
 
	
 

	
 
	
Very truly yours, 

	
 
	
 

	
 
	


	
 
	
Name: