AMENDED AND RESTATED EMPLOYMENT AGREEMENT

      (d) “ Change in Control ” means: (i) the acquisition by any person, entity or “group” (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended), other than by The PMI Group, Inc., of fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of Holding or the Company; (ii) the merger, amalgamation, reorganization, or consolidation of, or share exchange involving Holding or the Company, as a result of which the shareholders of Holding or the Company immediately before such transaction do not, immediately thereafter, own, directly or indirectly, more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the merged or consolidated company; (iii) a sale of all or substantially all of Holding’s or the Company’s assets; and (iv) approval by Holding or the Company of the liquidation or dissolution of Holding or the Company, other than a liquidation of the Company into Holding.

      (e) “ Code ” means the Internal Revenue Code of 1986, as amended.

      (f)   “ Common Shares ” means the common shares, par value $1.00 per share, of RAM Holdings II Ltd.

      (g) “ Cost of Living Allowance ” means the amount paid to the Executive under Section 7(e).

      (h) “ Disability ” means the Executive’s inability to substantially fulfill the positions, duties, responsibilities and obligations set forth in this Agreement because of physical, mental or emotional incapacity that entitles the Executive to long-term disability benefits under the Company’s disability plan or policy.

      (i) “ Effective Date ” means January 16, 2006 or, if later, the date on which the Executive obtains an appropriate, valid work permit from the applicable Bermuda governmental authorities.

      (j) “ Good Reason ” means a termination of the Executive’s employment by the Executive for one or more of the following reasons: (i) a reduction in the Executive’s Base Salary, Cost of Living Allowance or the target bonus opportunity described in Section 5, (ii) Holding’s or the Company’s removal of the Executive from her position as General Counsel of Holding and/or the Company, (iii) a material breach of this Agreement by Holding or the Company, (iv) a material diminution in the Executive’s duties or the assignment to the Executive of duties that are not materially consistent with those customarily assigned to the General Counsel of a company of the size and nature of Holding or the Company or which do, or would be reasonably expected to, materially impair her ability to function as the General Counsel of Holding and/or the Company, (v) a relocation of the corporate headquarters away from Bermuda, (vi) the refusal of a purchaser of all or substantially all of the assets of Holding or the Company to continue the Executive’s employment with substantially the same position, title and responsibilities and at least the same compensation as described herein, or (vii) the Executive’s inability to maintain a valid work permit from the applicable Bermuda governmental authorities after the Executive has used her best efforts to maintain such permit. Notwithstanding the foregoing, a termination shall not be treated as a termination for Good Reason (i) if the Executive shall have consented in writing to the occurrence of the event giving rise to the claim of termination for Good Reason, or (ii) unless the Executive shall have delivered a written notice to the Holdings Board within ninety (90) days of her having actual knowledge of the occurrence of one or more of such events stating that she intends to terminate her employment for Good Reason and specifying the factual basis for such termination, and such event, if capable of being cured,

shall not have been cured by Holding or the Company within thirty (30) days of the receipt of such notice.

      (k) “ Holding Board ” means the Board of Directors of Holding.

      (l)   “ Party ” or “ Parties ” means Holding, the Company and/or the Executive.

      (m) “ Person ” means any individual, corporation, partnership, limited liability company, joint venture, trust, estate, board, committee, agency, body, employee benefit plan or other person or entity.

      (n) “ Proceeding ” means any threatened or actual action, suit or proceeding, whether civil, criminal, administrative, investigative, appellate or other.

      (o) “ Restriction Period ” means the Term of Employment plus, if applicable, any further period during which the Executive is being paid Base Salary by the Company following termination under Section 9(d).

      (p) “ Standard Benefit ” means any amounts earned, accrued or owing to the Executive but not yet paid, and receipt of other benefits, if any, in accordance with applicable plans and programs of Holding, the Company or a Subsidiary, provided , however , that in no event shall the Standard Benefit be deemed to include any bonus payments.

      (q) “ Share Option Plan ” means the RAM Reinsurance Company Ltd. Stock Option Plan for Management Employees as Amended and Restated Effective August 10, 2005, as may be amended from time to time, or any successor plan, including but not limited to the RAM Holdings Ltd. 2006 Equity Plan.

      (r) “ Subsidiary ” means, with respect to Holding, any corporation, partnership, limited liability company or other entity of which (a) if a corporation, fifty percent (50%) or more of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors thereof is at the time owned or controlled, directly or indirectly, by Holding, or one or more of the other Subsidiaries of Holding, or a combination thereof, or (b) if a partnership, limited liability company or other entity, fifty percent (50%) or more of the partnership, membership or other similar equity ownership interest thereof is at the time owned or controlled, directly or indirectly, by Holding, or one or more of the other Subsidiaries of Holding, or a combination thereof. For purposes hereof, Holding and their Subsidiaries will be deemed to have fifty percent (50%) or more ownership interest in a partnership, limited liability company or business entity if Holding and/or a Subsidiary is/are allocated fifty percent (50%) or more of partnership, limited liability company or other entity gains or losses or control(s) the general partner, managing member or similar managing body of such partnership, limited liability company or other entity.

      (s) “ Term of Employment ” means the period specified in Section 2.

2.   Term of Employment .

      (a) Holding and the Company agree to employ the Executive under this Agreement, and the Executive accepts such employment, for a period commencing on the Effective Date and ending on the third anniversary thereof, or such later date as provided in Section 2(b). Notwithstanding the foregoing, the Term of Employment shall be earlier terminated upon the

termination of the Executive’s employment, but only in strict accordance with the provisions of Section 9.

      (b) The Term of Employment shall be extended automatically for one additional year beginning on the last day before the third anniversary of the Effective Date (the “ Extension Date ”) unless and until, not later than six (6) months prior to the Extension Date, either Holding or the Company, on the one hand, or the Executive, on the other hand, gives written notice to the other Party that the Term of Employment shall not be so extended. A termination of the Executive’s employment that results from the expiration of the Term of Employment shall not be treated as a termination of employment for any purposes under this Agreement except as specifically noted herein.

      3.     Positions; Duties; Responsibilities; and Place of Employment .

      (a) During the Term of Employment, the Executive shall be employed as General Counsel of Holding and the Company and shall be employed in such other position or positions with Holding and the Company as the Holding Board shall from time to time specify. The Executive, in carrying out her executive duties under this Agreement, shall report to the President and Chief Executive Officer of Holding and the Company. While employed by Holding and the Company hereunder, the Executive shall perform her duties at the Company’s offices in Bermuda; provided , however , that the Executive shall be required to travel as reasonably necessary in carrying out her duties and obligations hereunder. The Executive is required to work the hours and days necessary to fulfill her executive duties under this Agreement.

      (b) Notwithstanding anything herein to the contrary, nothing shall preclude the Executive from (i) serving on the boards of directors of a reasonable number of other corporations, subject to prior approval by the Holding Board (which shall not be unreasonably withheld), or the boards of a reasonable number of trade associations and/or charitable organizations, (ii) engaging in charitable activities and community affairs, including political activities, and (iii) managing her personal investments and affairs, provided that such activities do not materially interfere with the proper performance of her duties and responsibilities as the General Counsel or violate Section 13 of this Agreement.

7.       Other Benefits .

      (a) Employee Benefits . During the Term of Employment, the Executive shall be eligible to participate in all employee benefit plans, programs and arrangements made available generally to Holding’s and the Company’s executives in accordance with the terms and subject to the conditions of such plans, programs and arrangements, including, without limitation, share option, profit-sharing, savings (qualified and non-qualified) and other defined contribution retirement plans or programs, medical, dental, hospitalization, vision, short-term and long-term disability and life insurance plans or programs, accidental death and dismemberment protection, travel accident insurance and any other employee welfare benefit plans or programs that may, from time to time, be sponsored by Holding, the Company or by a Subsidiary for the benefit of the Holding’s or the Company’s employees, including any plans or programs that supplement the above-listed types of plans or programs, whether funded or unfunded; provided , however , that nothing in this Agreement shall be construed to require Holding, the Company or a Subsidiary to establish or maintain any such plans, programs or arrangements, or to prevent Holding, the Company or a Subsidiary from terminating any such plan, program or arrangement in accordance with its terms, except as required by Bermuda law.

      (b) Perquisites . During the Term of Employment, the Executive shall participate in all fringe benefits and perquisites available to executives of Holding and the Company at levels and on terms and conditions that are commensurate with her position and responsibilities at Holding and the Company. The Executive shall also receive such additional fringe benefits and perquisites as Holding and the Company may, in their discretion, from time to time elect to provide.

      (c) Vacation, Holidays, and Leave . During the Term of Employment, the Executive shall be entitled to vacation, holidays, and leave in accordance with the reasonable practices of Holding and the Company and as required by Bermuda law.

      (d) Annual Travel . Each year during the Term of Employment, the Executive, her spouse and any dependent children, as applicable, shall each be provided one round-trip ticket between Bermuda and the east coast of the U.S., such tickets to be paid for by the Company and used by the Executive, her spouse and dependent children.

      (e) Cost of Living Allowance . During the Term of Employment, the Company shall pay the Executive a monthly cost of living allowance of $10,000.

      (f) Tax Treatment . In the event that, during the Term of Employment, there is an amendment to the Code governing the taxation of income earned by, and/or cost of living/housing allowances paid to, a United States citizen resident in Bermuda that results in both the inclusion in the Executive’s income subject to U.S. taxation of amounts paid by the Company and not previously subject to such taxation and a decrease in the combined net after-tax Base Salary and Cost of Living Allowance of the Executive, the Company shall increase the amount payable hereunder to the Executive as Base Salary and/or Cost of Living Allowance, as applicable, by an amount such that, with such increase, the combined net after-tax Base Salary and Cost of Living Allowance payable hereunder equals the Executive’s combined net after-tax Base Salary and Cost of Living Allowance payable hereunder immediately prior to the effective date of any such amendment to the Code.

8.     Reimbursement of Business and Other Expenses .

      (a) The Executive is authorized to incur reasonable expenses in carrying out her duties and responsibilities under this Agreement and the Company shall promptly reimburse the Executive for all such expenses, subject to documentation in accordance with reasonable policies of Holding and the Company.

      (b) Upon presentation of appropriate vouchers or other expense statements, during the Term of Employment, the Company shall pay for personal tax advice and/or tax return preparation for the Executive (up to a maximu