AMENDMENT NO. 3 TO TAX SHARING AGREEMENT

Exhibit 10.4

AMENDMENT NO. 3 TO TAX SHARING AGREEMENT

This Amendment No. 3 to the Tax Sharing Agreement (“Amendment No. 3”) is executed on June 7, 2010 by and among Ambac Financial Group, Inc. (formerly known as AMBAC Inc.) (“Ambac” or “Parent”) and each of the other corporations that are parties to the Prior Agreement, as defined below (each of such other corporations, individually, a “Subsidiary” and, collectively, the “Subsidiaries”).

WHEREAS, the Subsidiaries include Ambac Assurance Corporation (formerly known as AMBAC Indemnity Corporation) (“AAC”).

WHEREAS, Ambac and the Subsidiaries are parties to a Tax Sharing Agreement as of July 18, 1991, as amended by Amendment No. 1, effective as of October 1, 1997, and as amended by Amendment No. 2, effective November 19, 2009 (as so amended, the “Prior Agreement”) which sets forth a method to allocate and settle among them the consolidated Federal income tax liability of the consolidated return group of which Ambac is the common parent.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Effective Date. This Amendment No. 3 shall have effect for all Taxable Periods, beginning on or after January 1, 2010.

2. Additions to Defined Terms. The following definitions are hereby added to paragraph 2 of the Prior Agreement:

“AAC” shall mean Ambac Assurance Corporation.

“AAC Subgroup” shall mean AAC and its subsidiaries including Everspan.

“AAC Subgroup Loss” shall mean any current loss or net operating loss carryover or carryback, or capital loss carryover or carryback attributable to any Member included in the AAC Subgroup.

“AFGI Subgroup” shall mean the Members of the Group other than the Members of the AAC Subgroup.

“AFGI Subgroup CODI” shall mean any income (including any increase in income resulting from a disallowance of any deduction, loss or credit) recognized by any Member included in the AFGI Subgroup related to the restructuring, modification, cancellation, settlement or any other similar transaction related to any debt, liability or other obligation (i) owed by a Member included in the AFGI Subgroup to a person that is not a member of the AFGI Subgroup and (ii) outstanding, due or otherwise accrued as of March 15, 2010.

“Everspan” shall mean Everspan Financial Guarantee Corp.

“Parent Separate Tax” for a Taxable Period shall mean, with respect to Parent, the Federal income tax liability that Parent would have for such Taxable Period (including interest and penalties related to items attributable to Parent) determined as if Parent had filed its own Federal income tax return for such Taxable Period (or portion thereof) and all prior periods beginning on or after the Effective Time. Such Federal income tax liability for such Taxable Period (or portion thereof) shall be computed by employing the methods and principles of accounting, elections and conventions (the “Methods”) actually used in the determination of the Federal income tax liability of the Group.

3. Changes to Defined Terms. The definition of “Group” in paragraph 2 of the Prior Agreement is hereby amended to read as follows:

“Group” shall mean (i) Parent and (ii) all corporations (whether now existing or hereafter formed or acquired) which are includible in an affiliated group, as defined in Section 1504(a) of the Code, that includes Parent.

4. Provisions Relating to Payments. Paragraph 3 of the Prior Agreement is hereby amended, replaced and restated to add the following paragraph (c):

5. Provisions Relating to Redeterminations of Tax Liabilities. Paragraph 5(a) of the Prior Agreement is hereby amended, replaced and restated in its entirety to read as follows:

2

[Remainder of Page Intentionally Left Blank]

3

IN WITNESS WHEREOF, the parties have caused this Amendment No. 3 to be executed as of the date first above written.