EXHIBIT 10.01

Ambac Financial Group, Inc.

One State Street Plaza

New York, NY 10004
212.208.3443 Fax: 212.208.3131
gbienstock@ambac.com

Gregg L. Bienstock. Esq. Senior Vice President,

Chief Administrative Officer and Employment Counsel

		September 18, 2008 Revised as of: September 22, 2008
		Mr. John W. Uhlein, III 416 West Road
		New Canaan, CT 06840
		Dear John:
		This agreement (the “Agreement”) sets forth our agreement concerning the terms and conditions of the resignation of your employment from Ambac Financial Group, Inc. (“Ambac”).
	1.	Effective Date of Resignation
		Your last day of employment with Ambac (the “Resignation Date”) will be February 1, 2009.
	2.	Employment Period & Payments
		(a)	During the period from the date of this Agreement (“Agreement Date” or “Date of Agreement”) through the Resignation Date (the “Employment Period”), you will continue to report to Ambac’s CEO. You will not be required to report to the office or perform your full-time duties but will be required to provide transition and consulting services to and on behalf of Ambac as requested by the CEO or his designee.
		(b)	During the Employment Period, you will continue to receive your regular salary at the rate in effect as of the Date of Agreement. Such salary will be paid to you in accordance with Ambac’s normal payroll practices and procedures.
		(c)	Subject to Section 4, you will be awarded a bonus of $750,000 for the 2008 performance year (the “2008 Bonus”), to be paid

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		(d)	Subject to Section 4, you will be paid severance in the amount of $350,000 in consideration of your signing this Agreement. The fee will be paid within ten business days of the date you execute this Agreement and Waiver and General Release Agreement annexed hereto as Exhibit A.
	3.	Outplacement and Legal Expenses
		Ambac will pay up to a total of $25,000 for (i) legal expenses in reviewing this document and (ii) outplacement services to be provided to you until the date on which you secure new employment. You must engage such outplacement services by March 15, 2009 otherwise you forfeit the right to the payment arrangement set forth in the preceding sentence. The selection of the service provider, dates and scope of services will be as you elect, All invoices for legal fees and/or outplacement must be made out to Ambac Financial Group, Inc., Attention: Gregg Bienstock. All such invoices must note services for John Uhlein.
	4.	Release Obligation
		Ambac’s obligations under this Agreement, including its obligation to provide you with the payments set forth in paragraphs 2 and 3, are contingent on the execution, delivery and non-revocation of this Agreement and the Waiver and General Release Agreement in the form set forth as Exhibit A hereto and, in addition, the execution, delivery and non-revocation, on the Resignation Date, of the Waiver and General Release Agreement in the form set forth as Exhibit A hereto in respect of the period from the date you initially sign the Waiver and General release Agreement through the Resignation Date. In the event the agreement described in the preceding sentence is not executed and delivered, or revoked, (a) any Option and/or RSU Award that has vested from the date hereof through the Resignation Date will be forfeited and (b) you will be required to reimburse Ambac the entire amount of the payments set forth in paragraphs 2 and 3 within ten business days of the revocation date.
	5.	Accrued Obligations
		On the Resignation Date, Ambac will pay you any unused, fully accrued vacation as of the Resignation Date. In addition, Ambac will pay you for any unreimbursed business expenses incurred by you for the period through the Resignation Date, provided, that all of your reimbursable business expenses are submitted in accordance with Ambac’s business expense reimbursement policy. Such reimbursement(s), if any, shall be paid in accordance with Ambac’s normal practices and procedures.

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	6.	Welfare Benefits
		(a)	Through January 31, 2010, you will continue be eligible to participate in all medical, dental and prescription drug programs available to Ambac’s full-time employees in accordance with the terms of such programs. You will be required to make premium contributions as applicable to all full-time employees with like coverage. If you obtain alternative coverage, you are required to advise Ambac and terminate the Ambac coverage.
		(b)	On and after February 1, 2010, you will be entitled to receive continuation coverage under Section 4980B(f) of the Internal Revenue Code of 1986, as amended (relating to “COBRA” coverage),
	7.	Retirement Benefits
		Through the Resignation Date, company-match and profit-sharing contributions will be credited on your behalf to the Ambac Savings Incentive Plan in accordance with the terms and conditions of such plan.
	8.	Other Benefits
		Ambac will pay you all vested amounts, if any, due but not previously paid to you, pursuant to the terms of any welfare, deferred compensation or other benefit plan as of the Resignation Date, or which by their terms extend to or beyond the Resignation Date. Notwithstanding the foregoing, any amount due under the Non-Qualified Savings Incentive Plan will be paid to you no sooner than six months and one day from the Resignation Date.
	9.	Stock Options and Restricted Stock Units
		As of the date of this Agreement, 16,050 of the Ambac stock options that have been granted to you by the Compensation Committee of Ambac Financial Group, Inc.’s Board of Directors are vested. As of the Resignation Date, an additional 21,334 Ambac stock options that have been granted to you by the Compensation Committee of Ambac Financial Group, Inc.’s Board of Directors will be vested. You will have one year from the Resignation Date to exercise the vested stock options. The terms of the 1997 Equity Plan as Amended and the General Terms and Conditions of the respective stock option grants shall govern. Any vested options not exercised within the time frame set forth above will be forfeited. All unvested long-term compensation is forfeited.

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		Restricted stock units that are vested as of the Resignation Date will be settled within ten business days of the Resignation Date. The terms of the 1997 Equity Plan as Amended and the General Terms and Conditions of the respective restricted stock unit grants shall govern. All unvested long-term and deferred compensation is forfeited as is any other unvested restricted stock unit.
	10.	Return of Property
		Any Ambac property currently in your possession and any property made available to you in connection with your employment relationship with Ambac must be returned to Ambac on or prior to the Resignation Date.
	11.	Confidentiality
		In consideration for the payments described above, you agree to the following:
		(a)	Ambac (for purposes of this Section 11, Ambac refers to Ambac and all of its affiliates) is engaged in a highly competitive business and that, in connection with your employment, you have access to information relating to Ambac’s business that provides Ambac with a competitive advantage, that is not generally known by persons not employed by Ambac, and that could not easily be determined or learned by someone outside Ambac (collectively, “Confidential Information”). Subject to the foregoing, such Confidential Information may include, but is not limited to, the characteristics and preferences of Ambac’s customers (as defined below) and accounts, matters relating to information, pricing, fee and commission structures, trading policies and procedures, trade secrets, records, files, memoranda, documents, reports, and other written, printed or recorded materials and data, regardless of data storage method (collectively “Documents”) received, created, or used by you during the course of your employment and other methods of doing business, whether or not marketed as confidential or secret. As used herein, “Customer” shall include all clients and actively pursued prospective clients of Ambac.
		(b)	You agree that before and after the Resignation Date, you shall not, directly or indirectly, use or disclose such Confidential Information, except as may be necessary in the good faith performance of your duties to Ambac. You acknowledge that all Confidential Information will remain the sole property of Ambac and all such Confidential Information, other than intellectual knowledge, will be returned by you to Ambac within five business days of the Resignation Date. The terms and conditions of this Section 11 (a) and (b) are in addition to and do not supersede or replace the terms and obligations of Ambac’s Code of Business Conduct.

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	(c)	You further agree that from the Agreement Date through the one year anniversary of the Resignation Date, you will not for any reason, unless Ambac consents in writing, solicit the business of or encourage or assist any other party in competition with Ambac to solicit any such Customer or account of Ambac in connection with any business activities of Ambac as of the Resignation Date.
		If you breach the terms of this Section 11(c), you forfeit your right to future payments provided for herein from the date of such breach and, to the extent any payments have been made, you agree to return all payments made pursuant to this Resignation Agreement including, but not limited to, the gross payments provided for in paragraphs 2 and 3. The return of the aforementioned payments must be made within ten business days of the breach of this Section 11(c).
	(d)	In view of the nature of Ambac’s business, you also acknowledge that the restrictions contained in this Section 11 are fair, reasonable and necessary to protect the legitimate business interests of Ambac and that Ambac will suffer irreparable harm in the event of any actual or intended violation by you of this paragraph. You, therefore, agree that, in the event of any actual or intended violation by you of Section 11(b) or 11(c), Ambac shall be entitled to a court order requiring you to cease any such violations in addition to and without prejudice to any other rights or remedies which may be available to Ambac through the legal system.
	(e)	You shall not be deemed to be in breach of any covenant set forth in this Resignation Agreement on the basis of any communications you may have with third parties relating to: (i) the fact and circumstances of your employment and resignation by/from Ambac; (ii) your job titles at Ambac; (iii) the dates of your employment by Ambac; (iv) the responsibilities and authorities of your positions at Ambac; (v) the nature and extent of your achievements during employment by Ambac; (vi) the names and positions of individuals with whom you worked during your employment at Ambac; and (vii) the restrictions on your post-resignation date employment activities. You hereby authorize Ambac to provide the information responsive to items (i) through (iv) and (vi) to prospective employers.
	(f)	You shall not be deemed in breach of the confidentiality obligations set forth in this Section 11 if, compelled by legal process or court order, you are to participate in any

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			administrative, judicial or criminal investigation, probe, grand jury proceeding or other demand for testimony, information or documentation.
		(g)	In the event of any breach of this paragraph 11, Ambac shall provide you with written notice (to the address set forth on page one of this Agreement) and you will have ten business days from the date of receipt of said written notice to cure any curable breach. If you fail to cure any such breach or the breach is not curable, Ambac shall be released from any obligation to make any payment to you or on your behalf and provide any benefits under this Agreement. Ambac shall be further entitled to pursue any and all of its remedies under the law arising out of such breach including, but not limited to, recoupment as outlined in Section 1l(c). In any action alleging breach of this Agreement, the prevailing party shall be entitled to recover reasonable costs and/or attorneys’ fees incurred to enforce this Agreement. Upon written request, you will receive Ambac’s determination in writing regarding whether a particular activity or act would be deemed in breach of your obligations and/or covenants under this Resignation Agreement.
	12.	Withholding
		Any payments made or benefits provided to you under this Resignation Agreement will be reduced by any applicable withholding taxes.
	13.	Cooperation
		(a)	You agree to make yourself available to Ambac (for purposes of this Section 12, Ambac refers to Ambac and all of its affiliates), at reasonable times and places, and subject to non-interference with your then employment or business activities, to provide information to Ambac or its representatives in connection with any matters relating to the business or affairs of Ambac, and any pending or future governmental or regulatory investigation, civil or administrative proceeding, litigation, arbitration or other proceeding related to the business of Ambac during your term as an officer of Ambac or your employment with Ambac. Ambac will reimburse you at your then daily rate of base compensation, certified by you in writing, for any lost wages and/or reasonable out-of-pocket expenses incurred in connection with the provision of such cooperation and assistance, provided that Ambac’s prior written approval for such expenses have been obtained. Such expenses will include reasonable attorney fees only in the event representation by Ambac’s counsel is deemed, by Ambac’s counsel, to be a conflict of interest. You agree to reasonable requests by Ambac to travel in performing services pursuant to this Section 13(a).

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		(h)	To the extent you are a named party to any action, suit or proceeding as a result of your having been an officer or employee of Ambac or any of its affiliates, Ambac will indemnify you to the fullest extent permitted (including payment of expenses and fees in advance of final disposition of a proceeding) by the laws of the State of Delaware or by the Certificate of Incorporation and By-Laws of Ambac and you shall be entitled to the protection of any insurance policies Ambac may elect to maintain generally for the benefit of its directors and officers (and to the extent Ambac maintains such an insurance policy or policies, you shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage provided for any officer or director of Ambac), against all costs, charges and expenses whatsoever incurred or sustained by you or your legal representatives at the time such costs, charges and expenses are incurred or sustained, in connection with such actions.
	14.	Entire Agreement
		This Resignation Agreement sets forth the entire agreement and understanding of the parties hereto and supersedes and replaces all prior or contemporaneous agreements or understandings, oral or written, negotiations, or discussions relating to the subject matter of this Resignation Agreement. This Resignation Agreement may be amended only by written document signed by the parties hereto.
	15.	Severability
		In the event that any one or more of the provisions of this Resignation Agreement shall be held invalid, illegal or unenforceable, the validity and enforceability of the remainder of the Resignation Agreement shall not in any way be affected or impaired thereby.
	16.	Governing Law
		This Resignation Agreement will be governed by, and construed in accordance with, the laws of the State of New York.
	17.	Revocation
		(a)	You are required to execute and deliver the Waiver and General Release Agreement in the form set forth as Exhibit A hereto at times heretofore set forth.
		(b)	This Waiver and General Release Agreements may be revoked by you within the 7-day period described therein. In the event of

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	any such revocation by you, all of Ambac’s obligations under this Resignation Agreement will terminate and be of no further force and effect as of the date of such revocation. No such revocation by you will be effective unless it is in writing and signed by you and received by Ambac prior to the expiration of the Revocation Period. The revocation must be mailed or delivered to Gregg L. Bienstock, Esq., Senior Vice President, Ambac Financial Group, Inc., One State Street Plaza, New York, New York 10004.
	* * *
	IN WITNESS WHEREOF, Ambac has executed this Resignation Agreement as of the date first set forth above and you have executed this Resignation Agreement as of the date set forth below (or, if you do not include a date under your signature line, the date set forth shall be the date this Resignation Agreement, signed by you, is received by the Ambac.

AMBAC FINANCIAL GROUP, INC.
By:	/s/ Gregg L. Bienstock
	Gregg L. Bienstock Senior Vice President

ACCEPTED AND AGREED:
By:	/s/ John W. Uhlein, III
	John W. Uhlein, III
Date:	September 23, 2008

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EXHIBIT A
WAIVER AND GENERAL RELEASE AGREEMENT
			This Waiver and General Release Agreement (this “Release”) is entered into as of the date indicated on the signature page of this Release by John W. Uhlein, III (“Executive”). Executive has been employed by Ambac Financial Group, Inc. (the “Company”), and in connection with Executive’s resignation and for the consideration of the payments and benefits set forth in the Agreement between Executive and the Company dated as of September     , 2008 (the “Agreement”), the receipt and adequacy of which are herein acknowledged Executive agrees as follows:
	1.		General Release
			Executive and Executive’s heirs, executors, administrators, trustees, legal representatives and assigns (hereinafter collectively referred to as the “Releasors”) hereby irrevocably and unconditionally release and forever discharge Ambac, and any and all of its parent corporations, shareholders, subsidiaries, divisions, affiliated and related entities, employee benefit and/or pension plans or funds, successors and assigns, and any and all of its or their past, present or future officers, directors, agents, stockholders, fiduciaries, administrators, employees or assigns (whether acting as agents for Ambac or in their individual capacities) (hereinafter collectively referred to as the “Released Parties”), of and from any and from any and all claims, actions, causes of action, rights, judgments, obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, “Claims”), including, without limitation, any Claims under any federal, state, local or foreign law, that the Releasors may have, or in the future may possess, arising out of (i) the Executive’s employment relationship with and service as an employee, officer or director of the Company, and the termination of such relationship or service, and (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided, however, that the Executive does not release, discharge or waive any rights to payments and benefits provided under the Resignation Agreement that are contingent upon the execution, delivery and non-revocation by the Executive of this Release.
	2.		ADEA Release
			The Releasors hereby unconditionally release and forever discharge Ambac, its subsidiaries and affiliates and each of their respective officers, employees, directors, shareholders and agents from any and all Claims that the Releasors may have arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”). By signing this Release, you hereby acknowledge and confirm the following:
		(a)	Executive was advised by Ambac in connection with his resignation to consult with an attorney of his choice prior to signing this Release and to have such attorney explain to you the terms of this Release, including, without limitation, the terms relating to your release of claims arising under ADEA;

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		(b)	Executive was given a period of not fewer than 21 days to consider the terms of this Release and to consult with an attorney of her choosing with respect thereto;
		(c)	Executive is providing the release and discharge set forth in this Section only in exchange for consideration in addition to anything of value to which he is already entitled; and
		(d)	that Executive knowingly and voluntarily accept the terms of this Release.
	3.	No Legal Claim
		(a)	Executive represents and warrants that he will not commence, maintain, prosecute or participate in any action or proceeding of any kind (judicial or administrative) against any of the Released Parties, arising out of any act, omission, transaction or occurrence happening up to and including the Effective Date (as defined below) of this Release, and has not done so as of the Effective Date of this Release.
		(b)	If Executive commences or voluntarily and affirmatively joins any legal action against a Released Party, Executive will promptly indemnify such Released Party for its reasonable costs and attorneys fees incurred in defending such action as well as any monetary judgment obtained by Executive against any Released Party in such action. If Executive is named as a party or included in a class action against any Released Party, Executive agrees to execute a waiver of rights and release of any such claims against Released Party.
	4.	Non-Disparagement
		Executive and Ambac each agree with respect to the other to refrain from making, directly or indirectly, now or at any time in the future, whether in writing, orally or electronically: (i) any defamatory or product disparaging comment concerning the Executive and Ambac or any of its current or former directors, officers, employees or share holders, or (ii) any other comment that could reasonably be expected to be detrimental to the Executive or Ambac’s business or financial prospects or reputation.

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	5.	Continuing Obligations
		This Release shall not supersede any continuing obligations Executive may have under the terms of the Resignation Agreement or any other agreement between Executive and the Company.
	6.	Governing Law
		This Release will be governed by, and construed in accordance with the laws of the State of New York.
	7.	Effective Date
		This Release shall not become effective until the day following the last day of the Revocation Period (as defined below) (the “Effective Date”).
	* * *
	Executive shall have the right to revoke this Release during the seven-day period (the “Revocation Period”) commencing immediately following the date Executive signs and delivers this Release to the Company. The Revocation Period shall expire at 5:00 p.m. New York City Time on the last day of the Revocation Period; provided, however, that if such seventh day is not a business day, the Revocation Period shall extend to 5:00 p.m. New York City Time on the next succeeding business day. In the event Executive revokes this Release, all obligations of the Company under the Resignation Agreement shall terminate and be of no further force and effect as of the date of such revocation. No such revocation by Executive shall be effective unless it is in writing and signed by Executive and received by the Company prior to the expiration of the Revocation Period.

By:	/s/ John W. Uhlein III
	John W. Uhlein, III
Date:	September 23, 2008

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