- Statement of Beneficial Ownership (SC 13D)
November 26 2008 - 3:16PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under the
Securities Exchange Act of 1934
SYNCORA
HOLDINGS LTD
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(Name
of Issuer)
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Common Shares, $.01
par value
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(Title
of Class of Securities)
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G8018D107
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(CUSIP
Number)
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Craig
MacIntyre
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with
copies to:
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Conyers
Dill & Pearman
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Joseph
L. Seiler III
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Clarendon
House
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Dewey
& LeBoeuf LLP
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2
Church Street, PO Box HM 666
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1301
Avenue of the Americas
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Hamilton,
HMCX, Bermuda
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New
York, NY 10019
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(Name,
Address and Telephone Number of Person
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Authorized
to Receive Notices and Communications)
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November
19, 2008
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(Date
of Event which Requires Filing of this Statement)
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If the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
£
.
* The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(the “Act”) or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Cusip
No. G8018D107
1
NAME
OF REPORTING PERSON:
Syncora
Private Trust Company Limited, as Trustee
of
the CCRA Purpose Trust
SS
OR IRS IDENTIFICATION NOS. OF ABOVE PERSONS: NA
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2
CHECK
THE APPROPRIATE BOX IF A MEMBER OF GROUP (See Instructions)
(a)
£
(b)
T
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3
SEC
USE ONLY
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4
SOURCE
OF FUNDS: OO
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5
CHECK BOX IF
DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR
2(e)
£
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6
CITIZENSHIP
OR PLACE OF ORGANIZATION: Bermuda
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7
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SOLE VOTING POWER:
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0
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Number
of Shares Beneficially Owned by
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8
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SHARED VOTING
POWER:
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30,
069,049
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(1)
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Each
Trustee
With:
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9
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SOLE DISPOSITIVE
POWER:
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0
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10
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SHARED DISPOSITIVE POWER
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30,
069,049
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(1)
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11
A
GGREGATE AMOUNT BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON:
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(1)
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12
CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDE CERTAIN
SHARES
(See Instructions)
£
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13
PERCENT OF CLASS
REPRESENTED BY AMOUNT IN ROW 9: 46%
(1)
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14
TYPE OF REPORTING PERSON (See
Instructions): OO
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(1) The
filing of this statement on Schedule 13D by Syncora Private Trust Company
Limited, as trustee (the “Trustee”) of the CCRA Purpose Trust (the “Trust”) does
not constitute, and should not be construed as an admission that either the
Trustee or the Trust beneficially owns any securities covered by this Statement
or is required to file this Statement. The Trustee and the Trust
disclaim beneficial ownership of the securities covered by this
Statement.
Item
1.
Security
and Issuer.
The title and
class of equity security to which this statement on Schedule 13D (this
“Statement”) relates is the Common Shares, par value $.01 per share (the “Common
Shares”), of Syncora Holdings Ltd., a holding company organized under the laws
of Bermuda (the “Issuer”). The address of the Issuer’s principal executive
offices is A.S. Cooper Building, 26 Reid Street, 4th Floor, Hamilton, Bermuda HM
11.
Item
2.
Identity
and Background.
Syncora
Private Trust Company Limited (the “Trustee”) is a company organized under the
laws of Bermuda, acting as trustee of the CCRA Purpose Trust (the “Trust”). The
Trustee, under a Declaration of Trust, dated as of November 18, 2008 (the
“Declaration of Trust”), holds Common Shares on behalf of certain parties to the
Master Commutation, Release and Restructuring Agreement, dated as of July 28,
2008 (as amended, the “Settlement Agreement”), by and among the Issuer and
certain of its subsidiaries, XL Capital Ltd and certain of its subsidiaries and
certain counterparties to credit default swap agreements with certain affiliates
of the Issuer (the “Financial Counterparties”). The Settlement Agreement is
described in further detail under Item 4 of this Statement. The Trustee’s
principal business is to act as trustee of the Trust. The address of the Trustee
is Richmond House, 12 Par-la-Ville Road, Hamilton HM 081, Bermuda.
During the
last five years, the Trustee has not (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which the Trustee was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
of such laws.
The three
directors of the Trustee are Charles Collis, Craig MacIntyre and Peter Pearman
(the “Directors”). The business address of each of the Directors is Richmond
House, 12 Par-la-Ville Road, Hamilton HM 081, Bermuda. The Directors are
partners at Conyers Dill and Pearman, a law firm headquartered in Bermuda. The
address of Conyers Dill & Pearman is Clarendon House, 2 Church Street,
Hamilton HM 11, Bermuda. The Directors are citizens of the United
Kingdom.
During the
last five years, none of the Directors has (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
of such laws.
Item
3.
Source
and Amount of Funds or Other Consideration.
On November
19, 2008, the 30,069,049 Common Shares to which this filing relates (the
“Shares”) were delivered to the Trustee, as trustee of the Trust (the
“Delivery”), as contemplated by the Settlement Agreement. The Shares were in the
custody of an escrow agent immediately prior to the Delivery and were previously
owned by XL Insurance (Bermuda) Ltd, a Bermuda insurer and a wholly-owned
indirect subsidiary of XL Capital Ltd, a company organized under the laws of the
Cayman Islands.
Pursuant to
the Settlement Agreement, a number of reinsurance agreements, guarantees and
other arrangements between the parties were terminated, eliminated or commuted
in return for certain payments and transfers by XL Capital Ltd and certain of
its subsidiaries, including the Delivery. The Delivery did not require the
expenditure of any funds by the Trustee to acquire the Common
Shares.
Item
4.
Purpose
of Transaction.
The Delivery
was made pursuant to the Settlement Agreement as part of the consideration for
the termination, commutation or elimination of certain reinsurance agreements,
guarantees and other arrangements between the parties to the Settlement
Agreement. The Trustee holds and manages the Shares
and
manages any dividends and distributions for the benefit of the parties on whose
behalf the Shares are held until the Issuer and certain of its subsidiaries, on
one hand, and the Financial Counterparties representing not less than the
Minimum Consenting CDS Counterparty Restructuring Threshold (as such term is
defined in the Settlement Agreement), on the other hand, enter into that certain
restructuring agreement contemplated by the Settlement Agreement (the
“Counterparties’ Agreement”) or the earlier termination of the Trust as
described below. Upon the effective time of the Counterparties’ Agreement, the
Trustee shall distribute the Common Shares held in the Trust in accordance with
the provisions of that agreement. Furthermore, pursuant to the Declaration of
Trust, if all or any portion of the Common Shares are disposed of prior to such
time as the Counterparties’ Agreement is reached, the proceeds thereof will be
distributed to Syncora Guarantee Inc. (formerly known as XL Capital Assurance
Inc. and a subsidiary of the Issuer, “Syncora Guarantee”), which payment or
distribution shall be treated as “SCA Share Sale Proceeds” for purposes of
Section 6.12 of the Settlement Agreement. If, however, all or any portion of the
Common Shares are disposed of on or after such time that the Counterparties’
Agreement is entered into, the proceeds thereof will be distributed as set forth
in the Counterparties’ Agreement.
In
addition, the Declaration of Trust provides that the Trustee will terminate the
Trust upon the earliest to occur of: (i) November 18, 2013; (ii) the Trustee’s
distribution of all proceeds from the sale or other disposition of all assets
held in the Trust to the relevant parties in accordance with the provisions of
the Declaration of Trust; and (iii) from and after the effective date of the
Counterparties’ Agreement, the date the Trust shall be terminated in accordance
with the terms of the Counterparties’ Agreement.
The
foregoing summaries of certain provisions of the Settlement Agreement and the
Declaration of Trust are not intended to be complete and are qualified in their
entirety by reference to the full text of such documents. The Settlement
Agreement is filed as Exhibit A, B and C hereto and the Declaration of Trust is
filed as Exhibit D hereto, and each is incorporated herein by
reference.
The
Trustee does not have any plans or intentions which relate to or would result in
any of the actions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
Item 5.
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Interest in Securities of the
Issuer.
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(
a)
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As
of November 19, 2008, the Trust held 30,069,049 Common Shares representing
approximately 46% of the outstanding Common Shares. The
Trustee, as trustee of the Trust, and the Directors
may be deemed to
be the indirect beneficial owner of these shares.
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(b)
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The
Trustee, as trustee of the Trust, and the Directors have
shared voting and
dispositive power with respect to the 30,069,049 Common Shares in
accordance with the Shareholder Agreement, dated November 18, 2008 (the
“Shareholder Agreement”). The Shareholder Agreement provides
that the Trustee must vote the Shares at each annual or special meeting of
stockholders of Issuer at which directors are to be elected (i) in favor
of its nominee designated by, or chosen by the Trustee from a list
provided by, Syncora Guarantee
and the
Financial Counterparties and (ii) with respect to each other open board
seat then standing for election that is not required to be filled by the
Trustee (pursuant to the Shareholder Agreement), in favor of an individual
that satisfies certain independence requirements or, in the Trustee’s
discretion, a nominee of the Issuer’s board of directors (the “Issuer
Board”) that satisfies certain independence requirements. The
process by which the Trustee selects its nominee is described in detail in
Item 6 of this Statement.
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(c)
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The
Trustee has not effected any transactions in the Issuer’s Common Shares
during the sixty day period prior to the date hereof.
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(d)
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Not
applicable
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(e)
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Not
applicable.
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Item
6.
Contracts,
Arrangements, Understandings or Relationships with Respect to Securities of the
Issuer.
As a
condition to the Settlement Agreement and in connection with the Delivery, the
Issuer and the Trustee, as trustee of the Trust, entered into the Shareholder
Agreement which sets forth certain rights and obligations of the Trustee. The
rights of the Trustee to elect directors to the Issuer Board are set forth in
Section 2 of the Shareholder Agreement. Specifically, the Shareholder Agreement
provides that at each annual or special meeting of stockholders at which
directors are to be elected, the Trustee will have the right to nominate to the
Issuer Board the number of nominees equal to one nominee less than a majority of
the directors, if the Issuer Board consists of nine or fewer directors, and the
number of nominees equal to two nominees less than a majority of the directors,
if the Issuer Board consists of ten or more directors. The Shareholder Agreement
sets forth the names of the four initial Issuer Board nominees that are to be
appointed by the Trustee immediately following the Delivery to the eleven-person
Issuer Board. The Shareholder Agreement provides that any director nominee of
the Trustee other than the four initial Issuer Board nominees must either be
jointly designated by Syncora Guarantee and the Financial Counterparties (or by
their designees) or, if they cannot agree, selected by the Trustee from a list
prepared jointly by Syncora Guarantee and the Financial Counterparties (or their
designees). The list will contain the names of two proposed individuals, with
one name proposed by each party, but will not contain any information that would
identify the party proposing any particular nominee (i.e., a “blind” process
will be followed). Each of the Trustee’s nominees is required to meet certain
independence and suitability requirements set forth in the Shareholder Agreement
or as otherwise agreed by Syncora Guarantee and the Financial Counterparties (or
their designees), and the Issuer’s Nominating & Governance Committee has the
right to reject any prospective nominee if such committee reasonably determines,
in the good faith discharge of its fiduciary duties, that such prospective
nominee does not meet such requirements. The Shareholder Agreement further
provides that unless otherwise agreed by Syncora Guarantee and the Financial
Counterparties, the Trustee must re-submit the name of each initial Issuer Board
nominee and each other director nominee selected in accordance with the
foregoing procedures to the Issuer’s Nominating & Governance Committee at
the expiration of such person’s then existing term for nomination to the Issuer
Board until such time that such person resigns, is removed or otherwise is not
available to serve on the Issuer Board.
The
Shareholder Agreement provides that the Trustee will vote the Shares for its own
nominees and, with respect to seats that are not required to be filled by its
own nominees, in favor of individuals who are independent of Issuer and its
subsidiaries, each Financial Counterparty and the Trustee or, in the Trustee’s
discretion, are nominees of the Issuer Board (and who are not nominees of the
Trustee) such that a majority of the Issuer Board is at all times independent of
Issuer and its subsidiaries, each Financial Counterparty and the Trustee. In
exercising its discretion, the Trustee must vote the Shares so that a majority
of the Issuer Board is at all times independent of Issuer and its subsidiaries,
each Financial Counterparty and the Trustee.
In addition,
Section 2 of the Shareholder Agreement provides that until the Trustee, as
trustee of the Trust, holds 35% or less of the Issuer’s Common Shares, certain
transactions require the approval of the affirmative vote of at least 66 2/3% of
the Issuer’s Common Shares. These transactions include the acquisition, sale,
lease or transfer of all or substantially all of the assets of Issuer, the
discontinuance or redomestication of Issuer, mergers, amalgamations or the
liquidation, and dissolution or winding-up of Issuer.
Furthermore,
as a condition to the Settlement Agreement, the Issuer and the Trustee, as
trustee of the Trust, have entered into the Registration Rights Agreement, dated
November 18, 2008 (the “Registration Rights Agreement”), that sets forth the
rights of the Trustee with respect to the registration of the Common Shares it
holds. Pursuant to the Registration Rights Agreement, the Issuer has granted
certain demand registration rights, piggyback registration rights and other
incidental registration rights to the Trustee.
The foregoing
summaries of certain provisions of the Shareholder Agreement and the
Registration Rights Agreement are not intended to be complete and are qualified
in their entirety by reference to the full text of such agreements. The
Shareholder Agreement is filed as Exhibit E hereto and the
Registration
Rights
Agreement is filed as Exhibit F hereto, and each is incorporated herein by
reference.
Item
7.
Material
to be Filed as Exhibits.
Exhibit
A
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Master
Commutation, Release and Restructuring Agreement, dated as of July 28,
2008, by and among Syncora Holdings Ltd and certain of its subsidiaries,
XL Capital Ltd and certain of its subsidiaries and the other parties
thereto (incorporated by reference to Exhibit 99.2 to the Current Report
on Form 8-K of Syncora Holdings Ltd, filed on July 30, 2008).
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Exhibit
B
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Amendment
No. 1, dated as of August 1, 2008, to the Master Commutation, Release and
Restructuring Agreement, dated as of July 28, 2008, by and among Syncora
Holdings Ltd and certain of its subsidiaries, XL Capital Ltd and certain
of its subsidiaries and the other parties thereto (incorporated by
reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q of Syncora
Holdings Ltd, filed on August 11, 2008).
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Exhibit
C
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Amendment
No. 2, effective as of October 15, 2008, to the Master Commutation,
Release and Restructuring Agreement, dated as of July 28, 2008, by and
among Syncora Holdings Ltd and certain of its subsidiaries, XL Capital Ltd
and certain of its subsidiaries and the other parties thereto
(incorporated by reference to Exhibit 99.1 to the Current Report on Form
8-K of Syncora Holdings Ltd, filed on November 3, 2008).
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Exhibit
D
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Declaration
of Trust by Syncora Private Trust Company Limited, dated as of November
18, 2008 (incorporated by reference to Exhibit 4.1 to the Current Report
on Form 8-K of Syncora Holdings Ltd, filed on November 21,
2008).
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Exhibit
E
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Shareholder
Agreement, dated November 18, 2008, between Syncora Holdings Ltd and
Syncora Private Trust Company Limited (incorporated by reference to
Exhibit 4.3 to the Current Report on Form 8-K of Syncora Holdings Ltd,
filed on November 21, 2008).
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Exhibit
F
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Registration
Rights Agreement, dated November 18, 2008, between Syncora Holdings Ltd
and Syncora Private Trust Company Limited (incorporated by reference to
Exhibit 4.4 to the Current Report on Form 8-K of Syncora Holdings Ltd,
filed on November 21, 2008).
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SIGNATURES
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
November 26,
2008
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SYNCORA
PRIVATE TRUST COMPANY LIMITED
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By:
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/s/ Craig
MacIntyre
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Name: Craig
MacIntyre
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Title:
Director
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EXHIBIT
INDEX
Exhibit
A
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Master
Commutation, Release and Restructuring Agreement, dated as of July 28,
2008, by and among Syncora Holdings Ltd and certain of its subsidiaries,
XL Capital Ltd and certain of its subsidiaries and the other parties
thereto (incorporated by reference to Exhibit 99.2 to the Current Report
on Form 8-K of Syncora Holdings Ltd, filed on July 30,
2008).
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Exhibit
B
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Amendment
No. 1, dated as of August 1, 2008, to the Master Commutation, Release and
Restructuring Agreement, dated as of July 28, 2008, by and among Syncora
Holdings Ltd and certain of its subsidiaries, XL Capital Ltd and certain
of its subsidiaries and the other parties thereto (incorporated by
reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q of Syncora
Holdings Ltd, filed on August 11, 2008).
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Exhibit
C
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Amendment
No. 2, effective as of October 15, 2008, to the Master Commutation,
Release and Restructuring Agreement, dated as of July 28, 2008, by and
among Syncora Holdings Ltd and certain of its subsidiaries, XL Capital Ltd
and certain of its subsidiaries and the other parties thereto
(incorporated by reference to Exhibit 99.1 to the Current Report on Form
8-K of Syncora Holdings Ltd, filed on November 3,
2008).
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Exhibit
D
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Declaration
of Trust by Syncora Private Trust Company Limited, dated as of November
18, 2008 (incorporated by reference to Exhibit 4.1 to the Current Report
on Form 8-K of Syncora Holdings Ltd, filed on November 21,
2008).
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Exhibit
E
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Shareholder
Agreement, dated November 18, 2008, between Syncora Holdings Ltd and
Syncora Private Trust Company Limited (incorporated by reference to
Exhibit 4.3 to the Current Report on Form 8-K of Syncora Holdings Ltd,
filed on November 21, 2008).
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Exhibit
F
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Registration
Rights Agreement, dated November 18, 2008, between Syncora Holdings Ltd
and Syncora Private Trust Company Limited (incorporated by reference to
Exhibit 4.4 to the Current Report on Form 8-K of Syncora Holdings Ltd,
filed on November 21, 2008).
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