Document:

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                                                                     Exhibit 4.2

                           KINGSWAY U.S. FUNDING INC.

                              OFFICERS' CERTIFICATE
                              ---------------------
                 (pursuant to Section 2.01(b) of the Indenture)

     The undersigned, James R. Zuhlke, President, and Brian K. Williamson, Chief
Financial Officer, of Kingsway U.S. Funding Inc. (the "Company"), being duly
authorized officers, by authority duly delegated by the Board of Directors of
the Company, do hereby certify, pursuant to the resolutions of the Board of
Directors of the Company duly adopted by unanimous written consent
dated___________, 2003, and Section 2.01(b) of the Indenture dated as of
____________, 2003, (the "Indenture"), between the Company, Kingsway Financial
Services Inc., as Guarantor, and BNY Midwest Trust Company as Trustee (the
"Trustee"), that with respect to the creation, issuance and sale of up to
$59,279,000 aggregate principal amount of the Company's ____% Junior
Subordinated Debentures (the "Securities"):

1.   (a)  The Securities shall be designated the "____% Junior Subordinated
          Debentures."

     (b)  The Securities shall be limited to $59,279,000 aggregate principal
          amount.

     (c)  The Securities shall bear interest at ___% per annum from _______,
          2003, payable quarterly in arrears on March 31, June 30, September 30
          and December 31 of each year (each an "Interest Payment Date"),
          beginning __________, 2003, except as any such Interest Payment Date
          may be adjusted so as to be payable on a Business Day (as defined in
          the Indenture) to the persons in whose names the Securities are
          registered at the close of business on the fifteenth day of the last
          month of the calendar quarter (whether or not a Business Day), as the
          case may be, next preceding such Interest Payment Date.

     (d)  Unless previously redeemed or repurchased, the Securities will mature
          on ____________, 2033.

     (e)  Pursuant to Section 2.12 of the Indenture, the Company has the right
          to defer the payment of interest on the Securities at any time for a
          period not exceeding 20 consecutive quarterly periods with respect to
          each deferral period. No Extension Period may extend beyond the Stated
          Maturity.

     (f)  Subject to certain exceptions, the Securities will be redeemable, in
          whole or in part, at the option of the Company at any time prior to
          maturity on or after ___________, 2008 at 100% of the principal amount
          redeemed.

     (g)  If a Tax Event or Investment Company Event shall occur and be
          continuing, the Company may, at its option and subject to certain
          exceptions, terminate the Trust and distribute the Securities to the
          holders of the Trust Securities at any time

                                       1

<PAGE>

          within 180 days following the occurrence of such Tax Event or an
          Investment Company Event and, if such Tax Event or Investment Company
          Event continues notwithstanding the taking of such actions, prepay the
          Securities in whole (but not in part) at a redemption price equal to
          100% of the principal amount of such Junior Subordinated Debentures
          plus interest accrued thereon to but excluding the date of payment
          ("the Event Prepayment Price").

     (h)  The Securities will be unsecured obligations of the Company and will
          rank junior and be subordinate in right of payment to all Company
          Senior Debt of the Company and will be effectively subordinated to all
          existing and future liabilities of the Company's subsidiaries, all as
          more fully described in the Indenture.

     (i)  The Securities initially will be represented by one certificate
          registered in the name of BNY Midwest Trust Company, as Property
          Trustee to the Trust. Should the Securities be distributed to holders
          of the Trust Securities, beneficial interests in the Securities will
          be held through The Depository Trust Company ("DTC").

     (j)  If the Securities are issued in certificated form, the Securities
          shall be issued and transferable only in fully-registered certificated
          form without coupons in denominations of $25 and integral multiples
          thereof.

     (k)  Any principal and interest, including Additional Interest, Additional
          Amounts and any Additional Sums, if applicable, will be payable at the
          office of the Paying Agent, BNY Midwest Trust Company, in the City of
          New York. The Securities may be presented for registration of transfer
          or exchange, and notices and demands to or upon the Company in respect
          of the Securities may be made, at the Corporate Trust Office of the
          Trustee.

     (l)  The Company shall reimburse the Trust for any expenses incurred by or
          imposed upon the Trust and other governmental charges imposed thereon;
          and if the Trust is required to pay additional taxes, duties, or other
          governmental charges (including Additional Taxes), the Company will
          pay as additional amounts on the Securities such amounts as shall be
          required so that the Distributions payable by the Trust shall not be
          reduced as a result of such additional taxes, duties and other
          governmental charges, including payment of all Additional Amounts and
          Additional Sums as set forth in the Indenture.

     (m)  The Securities shall have the benefit of the Guarantee of Kingsway
          Financial Services Inc., as set forth in Article XIV of the Indenture.

     (n)  All references in the Indenture and the Securities to the date the
          Securities were originally issued shall refer in the case of the
          Securities to the date hereof.

     (o)  The Securities shall not be subject to any sinking fund.

                                       2

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     (p)  The Securities shall not be defeasible.

     (q)  The Stated Maturity of the Securities shall not be subject to
          extension.

2.   The Securities shall be in the form of the certificate attached hereto as
     Exhibit A, and such form of certificate is hereby approved and provides for
     all of the terms specified in item (1) above.

3.   The certificate representing the Securities shall be executed, by manual or
     facsimile signature, by the President or Chief Financial Officer of the
     Company, in the name of, and for and on behalf of, the Company, in
     substantially the form hereinabove approved with such changes therein or
     additions thereto as may be approved by such officer, such approval to be
     conclusively evidenced by his execution and delivery thereof. The
     certificate shall be attested, by manual or facsimile signature, by the
     Secretary or Assistant Secretary of the Company. The manual or facsimile
     signatures of all such officers shall signify due execution by the Company
     of the certificate representing the Securities notwithstanding that, at the
     time of authentication and delivery thereof by the Trustee, any of such
     persons shall have ceased to be an officer of the Company. The proper
     officers are directed to take and perform all such other actions which, in
     their judgment, are necessary or advisable in connection with the
     foregoing.

4.   The date of issuance and delivery of the Securities shall be ___________,
     2003 or such later date as may be provided for in the Underwriting
     Agreement dated as of __________, 2003, among the Trust, the Company, the
     Guarantor, Kingsway America Inc. and the Underwriters named therein.

5.   Capitalized terms not defined herein shall have the meanings set forth in
     the Indenture.

     IN WITNESS WHEREOF, the undersigned have executed this Certificate this ___
day of _________, 2003.

                                          -------------------------------------
                                          James R. Zuhlke
                                          President and Chief Executive Officer

                                          -------------------------------------
                                          Brian K. Williamson
                                          Chief Financial Officer

                                       3

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                       Exhibit A to Officers' Certificate

                           [Form of Face of Security]

                        __% Junior Subordinated Debenture
                                    Due 2033

                     Guaranteed as to Payment of Principal,
                        Premium, if any, and Interest by
                        Kingsway Financial Services Inc.

                               -------------------

                                                          CUSIP No. 496859 AA 7
No. R -                                                            $___________

          Kingsway U.S. Funding Inc., a corporation duly organized and existing
under the laws of the state of Delaware (hereinafter called the "Company", which
term includes any successor Person under the Indenture dated as of ________,
2003 (herein called the "Indenture"), between the Company, Kingsway Financial
Services Inc., as Guarantor (herein called the "Guarantor") and BNY Midwest
Trust Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture)), for value received, hereby promises to
pay to _____________________, or registered assigns, the principal sum of
$_________ on ______________, 2033, and to pay interest thereon from __________,
2003, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, quarterly in arrears on March 31, June 30,
September 30 and December 31 in each year, commencing __________, 2003, at the
rate of ___% per annum, including any Additional Amounts and any Additional
Sums, if applicable, until the principal hereof is paid or made available for
payment, and at the rate of ___% per annum on any overdue principal and premium
and on any overdue installment of interest, Additional Interest, Additional
Amounts, and Additional Sums, if applicable. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which will be the fifteenth day of
the last month of the calendar quarter (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof will be given to Holders of
Securities of this series not less than 10 calendar days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.

          So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Security, from
time to time, to defer payment of interest on such Security for up to 20
consecutive quarterly interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Periods the

                                       1

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                       Exhibit A to Officers' Certificate

Company shall have the right to make partial payments of interest on any
Interest Payment Date, and at the end of which the Company shall pay all
interest (compounded quarterly) then accrued and unpaid; including Additional
Interest, any Additional Amounts, and any Additional Sums, if applicable;
provided, however, that no Extension Period may extend beyond the Maturity of
this Security. During any such Extension Period, the Company and the Guarantor
will not (a) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (which includes common and preferred stock) or (b) make, or permit
any Subsidiary to make, any payment of principal, interest or premium, if any
(other than payments under the Subordinated Notes), on or repay, repurchase or
redeem any debt security that ranks pari passu with or junior in interest to
this Security, the Guarantee, the Guarantee Agreement or the Subordinated Notes,
as the case may be, or (c) make, or permit any Subsidiary to make, any guarantee
payments with respect to any guarantee of any debt security (other than payments
under the Guarantee or the Guarantee Agreement), if such guarantee ranks pari
passu with or junior in interest to this Security, the Guarantee, the Guarantee
Agreement, or the Subordinated Notes, as the case may be. Notwithstanding the
foregoing, the following shall not be prohibited: (i) repurchases, redemptions
or other acquisitions of shares of capital stock of the Guarantor in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the occurrence of the Event of
Default or selection of an Extension Period by the Company, as applicable,
(ii) any transactions described in (a) or (b) above resulting from any
reclassification of the Guarantor's capital stock, or the exchange or conversion
of any class or series of the Guarantor's capital stock for any other class or
series of the Guarantor's capital stock, or the exchange or conversion of any
class or series of the Guarantor's Indebtedness for any class or series of the
Guarantor's capital stock, (iii) the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
or (iv) any declaration of a dividend in connection with any stockholders'
rights plan, or the issuance of rights, stock or other property under any
stockholders' rights plan, or the redemption or repurchase of rights pursuant
thereto. Prior to the termination of any such Extension Period, but provided
that no Event of Default has occurred and is continuing, the Company may further
extend such Extension Period, provided, however, that such extension does not
cause such Extension Period to exceed 20 consecutive quarterly interest payment
periods or extend beyond the Maturity of this Security. Upon the termination of
any Extension Period and the payment of all accrued and unpaid interest
(compounded quarterly), including Additional Interest, any Additional Amounts,
and any Additional Sums, if applicable, and then due, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period except at the end thereof.
The Company shall give the Holder of this Security and the Trustee notice of its
election to begin any Extension Period at least five Business Days prior to the
Interest Payment Date, or prior to the earlier of (i) the date the Distributions
on the Preferred Securities to which this Security relates would have been
payable except for the election to begin or extend such Extension Period or
(ii) the date the Administrative Trustees of Kingsway Financial Capital Trust I
are required to give notice to any exchange or automated quotation system or to
holders of such Preferred Securities of the record date or the date such
Distributions are payable, but in

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                       Exhibit A to Officers' Certificate

any event not less than five Business Days prior to such record date. There is
no limitation on the number of times the Company may elect to begin an Extension
Period.

          Payment of the principal of (and premium, if any) and any such
interest, including any Additional Interest, any Additional Amounts, and any
Additional Sums, if applicable, on this Security will be made at the office or
agency of the Company maintained for the purpose in New York, NY, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company, payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Security
Register.

          This Security has the benefit of the Guarantee as contained and
described in the Indenture.

          REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE
REVERSE HEREOF. SUCH PROVISIONS WILL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.

          This Security will not be valid or become obligatory for any purpose
until the certificate of authentication herein has been signed manually by the
Trustee under the Indenture referred to on the reverse side hereof.

          IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.

                                              KINGSWAY U.S. FUNDING INC.

                                              By:
                                                 ------------------------------
                                                  Name:
                                                  Title:

Attest:

By:
   -----------------

                          [Form of Reverse of Security]

          This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties, and immunities
thereunder of the Company, the Guarantor, the Trustee, and the Holders of the
Securities of this series and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof limited in aggregate principal amount to
$59,279,000.

                                       3

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                       Exhibit A to Officers' Certificate

          The Securities of this series are subject to redemption at the
election of the Company: (a) in whole or in part, on or after _________, 2008
and up to 90 days prior to _____, 2033 upon not less than 30 calendar days'
notice by mail, (b) in whole but not in part at any time within 180 days
following the occurrence of a Tax Event or an Investment Company Event, or
(c) as otherwise provided in the Indenture.

          In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.

          The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all amounts due and payable with respect to all Company
Senior Debt and all Guarantor Senior Debt as defined in the Indenture, and this
Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on
his, her or its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided, and (c) appoints the
Trustee his, her or its attorney-in-fact for any and all such purposes.

          As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of this series may declare the principal amount of all the Securities
of this series to be due and payable immediately, by a notice in writing to the
Company and the Guarantor (and to the Trustee if given by Holders), provided,
however, that if, upon an Event of Default, the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of this series
fails to declare the principal of all the Securities of this series to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount of the corresponding series of Preferred Securities then
outstanding shall have such right by a notice in writing to the Company, the
Guarantor, the Trustee and the Property Trustee. The Holders of a majority in
aggregate principal amount of the Outstanding Securities of this series may
annul such declaration and waive the default if the default (other than the
non-payment of the principal of, any premium and interest on, and any Additional
Amounts with respect to, these Securities which has become due solely by such
acceleration) has been cured or waived as provided in the Indenture, and a sum
sufficient to pay all overdue interest (including any Additional Interest and
Additional Amounts) and principal due otherwise than by acceleration has been
deposited with the Trustee. Should the Holders of these Securities fail to annul
such declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Preferred Securities shall have such right. Upon any
such declaration such specified amount of principal and the accrued interest
(including any Additional Interest and Additional Amounts) on all the Securities
of this series shall become immediately due and payable, provided that the
payment of principal and interest on such Securities shall remain subordinated
to the extent provided in the Indenture.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company, the

                                       4

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                       Exhibit A to Officers' Certificate

Guarantor and the rights of the Holders of the Securities of this series at any
time by the Company, the Guarantor and the Trustee with the consent of the
Holders of a majority in principal amount of the Securities of this series at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of this
series at the time Outstanding, on behalf of the Holders of all Securities of
this series, to waive compliance by the Company or the Guarantor, as the case
may be, with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Security will be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

          As provided in and subject to the provisions of the Indenture, the
Holder of this Security will not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee indemnity reasonably satisfactory to
it, and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request and shall have failed to institute such
proceeding for 60 calendar days after receipt of such notice, request, and offer
of indemnity, provided that, if upon an Event of Default, the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series fails to declare the principal of all the Securities of this
series to be immediately due and payable, the holders of at least 25% in
aggregate Liquidation Amount of the corresponding series of Preferred Securities
then outstanding shall have such right by a notice in writing to the Company,
the Guarantor and the Trustee. The foregoing will apply to any suit instituted
by the Holder of this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates
expressed herein.

          No reference herein to the Indenture and no provision of this Security
or of the Indenture will alter or impair the obligation of the Company or the
Guarantor, as the case may be, which is absolute and unconditional, to pay the
principal of and any premium and interest (including Additional Interest, any
Additional Amounts, any Gross Up Amounts, and any Additional Sums, if
applicable) on this Security or the Guarantee, as the case may be, at the times,
place, and rate, and in the coin or currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized

                                       5

<PAGE>

                       Exhibit A to Officers' Certificate

denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

          The Securities of this series are issuable only in registered form
without coupons in denominations of $25 and integral multiples thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

          Prior to due presentment of this Security for registration of
transfer, the Company, the Guarantor, the Trustee, and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security shall be
overdue, and neither the Company, the Guarantor, the Trustee, nor any such agent
will be affected by notice to the contrary.

          All terms used in this Security that are defined in the Indenture will
have the respective meanings assigned to them in the Indenture.

          This Security shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to conflicts of laws
principles thereof.

                                    GUARANTEE

          For value received, the undersigned has unconditionally guaranteed, to
the extent set forth in the Indenture and subject to the provisions in the
Indenture, the due and punctual payment by the Company of all Guaranteed
Obligations (as defined in Section 14.01 of the Indenture) with respect to this
Security, whether at maturity, by acceleration, redemption or otherwise, all in
accordance with the terms of the Indenture. The obligations of the undersigned
to the Holders of this Security and to the Trustee pursuant to this Guarantee
and the Indenture are expressly set forth in Article XIV of the Indenture and
reference is hereby made to the Indenture for the precise terms of this
Guarantee. Each Holder of a Security, by accepting the same, agrees to and shall
be bound by such provisions.
                                       6

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                       Exhibit A to Officers' Certificate

     IN WITNESS WHEREOF, the Guarantor has duly executed this Guarantee.

                                           KINGSWAY FINANCIAL SERVICES INC.

                                           By
                                             ---------------------------------
                                               Name:
                                               Title:

                     Trustee's Certificate of Authentication

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

                                             BNY Midwest Trust Company,
                                             as Trustee

Dated:                                       By:
      ------------------                        -------------------------------
                                                  Authorized Signatory

                     [Form of Legend for Global Securities]

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF, AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE
FOR, OR IN LIEU OF, THIS SECURITY WILL BE A GLOBAL SECURITY SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

                                       7<PAGE>

                                                                     Exhibit 4.9

     =====================================================================

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

                       KINGSWAY FINANCIAL CAPITAL TRUST I

                                 by and between

                        KINGSWAY FINANCIAL SERVICES INC.

                                       AND

                            BNY MIDWEST TRUST COMPANY

                          DATED AS OF ___________, 2003

     =====================================================================

<PAGE>

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (this "Preferred Securities Guarantee"), dated as
of __________, 2003, is executed and delivered by Kingsway Financial Services
Inc., a Canadian corporation (the "Guarantor"), and BNY Midwest Trust Company as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
Kingsway Financial Capital Trust I, a Delaware statutory trust (the "Issuer").

                                    RECITALS

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
Declaration"), dated as of __________, 2003, among the trustees of the Issuer
named therein, Kingsway U.S. Funding Inc., a Delaware corporation (the
"Debenture Issuer"), as depositor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof, or will issue hereafter, up to $57,500,000 aggregate
liquidation amount of its [ ]% trust preferred securities (stated liquidation
amount $__ per preferred security) (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Declaration;

     WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof together with the proceeds from the issuance of the Issuer's
Common Securities (as defined herein) will be used to purchase the Debentures
(as defined herein) of the Debenture Issuer, which will be deposited with BNY
Midwest Trust Company, as Property Trustee under the Declaration, as trust
assets;

     WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

SECTION 1.1  Definitions and Interpretation

     In this Preferred Securities Guarantee, unless the context otherwise
requires:

                                        1

<PAGE>

     (a) capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;

     (b) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;

     (c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;

     (d) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified;

     (e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and

     (f) a reference to the singular includes the plural and vice versa.

     "Authorized Officer" of a Person means any Person that is authorized to
bind such Person.

     "Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.

     "Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Guarantee
Trustee is closed for business.

     "Commission" has the meaning provided in Section 2.3.

     "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.

     "Corporate Trust Office" means the office of the Guarantee Trustee at which
the corporate trust business of the Guarantee Trustee shall, at any particular
time, be principally administered, which office at the date of execution of this
Preferred Securities Guarantee is located at 2 N. LaSalle Street, Suite 1020,
Chicago, Illinois 60602, Attention: Corporate Trust Department.

     "Covered Person" means any Holder or beneficial owner of Preferred
Securities.

     "Debentures" means the series of subordinated debt securities of the
Debenture Issuer designated the [ ]% Junior Subordinated Debentures, due 2033
issued pursuant to the Indenture.

     "Debenture Guarantee" means the Guarantee as defined in the Indenture.

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     "Debenture Issuer" has the meaning set forth in the recitals.

     "Declaration Event of Default" means an "Event of Default" as defined in
the Declaration.

     "Distributions" has the meaning provided in the Declaration.

     "Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice.

     "Foreign Taxes" has the meaning provided in Section 5.6.

     "Gross Up Amount" means any additional amount required to be paid to
Holders in respect of Foreign Taxes as described in Section 5.6.

     "Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the
Declaration) that are required to be paid on the Preferred Securities, to the
extent the Issuer has funds on-hand and available in the Payment Account (as
defined in the Declaration) for the payment of such amounts, (ii) the redemption
price of $25 per Preferred Security, plus all accrued and unpaid Distributions
to the date of redemption (the "Redemption Price"), to the extent the Issuer has
funds on-hand and available in the Payment Account for the payment of such
amounts, with respect to any Preferred Securities called for redemption by the
Issuer and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as provided in
the Declaration or the redemption of all of the Preferred Securities upon the
maturity or redemption of all of the Debentures as provided in the Declaration)
the lesser of (a) the aggregate of the liquidation amount of $25 per Preferred
Security and all accrued and unpaid Distributions on the Preferred Securities to
the date of payment, to the extent the Issuer has funds on-hand and available in
the Payment Account for the payment of such amounts, or (b) the amount of assets
of the Issuer remaining for distribution to Holders in liquidation of the Issuer
(in either case, the "Liquidation Distribution").

     "Guarantee Trustee" means BNY Midwest Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Preferred Securities Guarantee and thereafter means each
such Successor Guarantee Trustee.

     "Guarantor" has the meaning provided in the preamble.

     "Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.

                                        3

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     "Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.

     "Indenture" means the Indenture dated as of _________, 2003, among the
Debenture Issuer, the Guarantor and BNY Midwest Trust Company, as trustee, and
any indenture supplemental thereto pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.

     "Indenture Event of Default" means an "Event of Default" as defined in the
Indenture.

     "Issuer" has the meaning provided in the preamble.

     "Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a
class, holding Preferred Securities representing more than 50% of the aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.

     "OECD Country" has the meaning provided in the Indenture.

     "Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Preferred Securities Guarantee shall include:

     (i) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;

     (ii) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;

     (iii) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

     (iv) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.

     "Payment Account" has the meaning provided in the Declaration.

     "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

     "Preferred Securities" has the meaning provided in the recitals.

                                        4

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     "Preferred Securities Guarantee" has the meaning provided in the preamble.

     "Responsible Officer" means, with respect to the Guarantee Trustee, any
officer of the Guarantee Trustee with direct responsibility for the
administration of this Preferred Securities Guarantee and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.

     "Subordinated Notes" means the subordinated debt securities of Kingsway
America Inc. designated the [__]% Junior Subordinated Notes, due _______, 2033,
issued to the Debenture Issuer.

     "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

     "Taxing Jurisdiction" has the meaning provided in Section 5.6.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.1  Trust Indenture Act; Application

     (a) This Preferred Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Preferred Securities
Guarantee and shall, to the extent applicable, be governed by such provisions;
and

     (b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

SECTION 2.2  Lists of Holders of Securities

     (a) In the event the Guarantee Trustee is not also acting in the capacity
of the Property Trustee, the Guarantor shall, or shall cause the Property
Trustee to, provide the Guarantee Trustee with a list of the names and addresses
of the Holders (the "List of Holders") (i) on a date not later than the record
date for any payment or other distribution to the Holders hereunder or under the
Declaration, and (ii) at such other times as the Guarantee Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any such
request, as of a date no more than 14 days before such List of Holders is given
to the Guarantee Trustee; provided that the Guarantor shall not be obligated to
provide such a List of Holders at any time that such list would not differ from
the last such list provided by the Guarantor to the Guarantee Trustee under this
Section 2.2(a).

     The Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders. Unless supplemented, amended or restated
pursuant to this Section

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<PAGE>

2.2(a), the Guarantee Trustee shall be entitled to rely exclusively on the last
List of Holders provided to it by the Guarantor or any Property Trustee.

     (b) The Guarantee Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.

SECTION 2.3 Reports by the Guarantee Trustee.

     The Guarantee Trustee will transmit to Holders such reports concerning the
Guarantee Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313 (a) of the Trust Indenture Act, the
Guarantee Trustee shall, within sixty days after each [ ] following the date of
this Preferred Securities Guarantee deliver to Holders a brief report, dated as
of such [ ], which complies with the provisions of such Section 313 (a).

     A copy of each such report will, at the time of such transmission to
Holders, be filed by the Guarantee Trustee with each stock exchange upon which
any Preferred Securities are listed, with the Securities and Exchange Commission
(the "Commission"), and with the Guarantor. The Guarantor will promptly notify
the Guarantee Trustee when any Preferred Securities are listed on any stock
exchange or of any delisting thereof.

SECTION 2.4 Periodic Reports by the Guarantor.

     The Guarantor shall provide to the Guarantee Trustee, the Commission and
the Holders such information, documents, and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents, or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, will
be filed with the Guarantee Trustee within 15 calendar days after the same is so
required to be filed with the Commission.

     Delivery of such reports, information and documents to the Guarantee
Trustee is for informational purposes only and the Guarantee Trustee's receipt
of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Guarantor's compliance with any of its covenants hereunder (as to which the
Guarantee Trustee is entitled to conclusively rely exclusively on Officers'
Certificates).

SECTION 2.5 Evidence of Compliance with Conditions Precedent.

     The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.

SECTION 2.6 Events of Default; Waiver.

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<PAGE>

     The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

SECTION 2.7 Event of Default; Notice.

     (a) The Guarantee Trustee shall, within 60 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such Events of Default have been cured or waived
before the giving of such notice; provided, that, the Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.

     (b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default (other than defaults in scheduled payments of principal and
interest) unless the Guarantee Trustee shall have received written notice, or of
which a Responsible Officer of the Guarantee Trustee charged with the
administration of this Preferred Securities Guarantee shall have obtained actual
knowledge.

SECTION 2.8 Conflicting Interests.

     The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

SECTION 3.1 Powers and Duties of the Guarantee Trustee.

     (a) This Preferred Securities Guarantee shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer its right, title and interest in this Preferred Securities Guarantee to
any Person except a Holder exercising his or her rights pursuant to Section
5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest in
any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.

     (b) If an Event of Default actually known to a Responsible Officer of the
Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall
enforce this Preferred Securities Guarantee for the benefit of the Holders of
the Preferred Securities.

                                        7

<PAGE>

     (c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants shall be read into this
Preferred Securities Guarantee against the Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the Guarantee Trustee,
the Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Preferred Securities Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.

     (d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Guarantee Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:

          (i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:

     (A) the duties and obligations of the Guarantee Trustee shall be determined
solely by the express provisions of this Preferred Securities Guarantee, and the
Guarantee Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Guarantee Trustee; and

     (B) in the absence of bad faith on the part of the Guarantee Trustee, the
Guarantee Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and substantially conforming to the
requirements of this Preferred Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are specifically required
to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they substantially conform
to the requirements of this Preferred Securities Guarantee;

          (ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;

          (iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Preferred Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or exercising
any trust or power conferred upon the Guarantee Trustee under this Preferred
Securities Guarantee; and

          (iv) no provision of this Preferred Securities Guarantee shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the

                                        8

<PAGE>

Guarantee Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of
this Preferred Securities Guarantee or indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not reasonably assured to
it.

SECTION 3.2  Certain Rights of Guarantee Trustee.

     (a) Subject to the provisions of Section 3.1:

          (i) The Guarantee Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting upon, any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties.

          (ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an Officers'
Certificate.

          (iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor.

          (iv) The Guarantee Trustee shall have no duty to see to any recording,
filing or registration of any instrument (or any rerecording, refiling or
re-registration thereof).

          (v) The Guarantee Trustee may consult with competent counsel of its
selection, and the written advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees.

     The Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Preferred Securities Guarantee from any
court of competent jurisdiction.

          (vi) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Preferred Securities Guarantee
at the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Preferred Securities Guarantee.

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          (vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.

          (viii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.

          (ix) Any action taken by the Guarantee Trustee or its agents hereunder
shall bind the Holders of the Preferred Securities, and the signature of the
Guarantee Trustee or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its compliance with any of
the terms and provisions of this Preferred Securities Guarantee, both of which
shall be conclusively evidenced by the Guarantee Trustee's or its agent's taking
such action.

          (x) Whenever in the administration of this Preferred Securities
Guarantee the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request instructions from the Holders
of a Majority in liquidation amount of the Preferred Securities, (ii) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.

     (b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.

     The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Guarantee Trustee does not
assume any responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

SECTION 4.1  Guarantee Trustee; Eligibility.

     (a) There shall at all times be a Guarantee Trustee which shall:

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          (i) not be an Affiliate of the Guarantor; and

          (ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Commission to
act as an institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or examining
authority referred to above, then, for the purposes of this Section 4.1(a)(ii),
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.

     (b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).

     (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustees.

     (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.

     (b) The Guarantee Trustee shall not be removed in accordance with Section
4.2(a) until a Successor Guarantee Trustee has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.

     (c) The Guarantee Trustee appointed to office shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee, whereupon the resigning Guarantee Trustee shall be
released and discharged of the trusts and other duties imposed on such trustee
in connection herewith.

     (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of resignation or removal, the Guarantee Trustee
resigning or being removed may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.

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     (e) No Guarantee Trustee shall be liable for the acts or omissions to act
of any Successor Guarantee Trustee.

     (f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Guarantee Trustee all amounts accrued and owing to such
Guarantee Trustee to the date of such termination, removal or resignation.

                                    ARTICLE V

                                    GUARANTEE

SECTION 5.1  Guarantee.

     The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer pursuant to the Declaration), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied, at the Guarantor's option, by: (i) direct payment of an amount equal
to the amount of funds on-hand and available in the Payment Account at such
time, it being understood that, upon payment of such amount by the Guarantor,
such amount shall be deducted from the amount of any funds on-hand and available
in the Payment Account for the purpose of calculating any future Guarantee
Payments; or (ii) causing, through the Debenture Issuer, the Issuer to pay such
amount to the Holders.

SECTION 5.2 Waiver of Notice and Demand.

     The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 5.3  Obligations Not Affected.

     The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

     (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

     (b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or

                                       12

<PAGE>

other sum payable that results from the extension of any interest payment period
on the Debentures as permitted by the Indenture);

     (c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

     (e) any invalidity of, or defect or deficiency in, the Preferred
Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or (g) to the extent permitted by law, any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.

SECTION 5.4 Rights of Holders.

     (a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of this
Preferred Securities Guarantee or exercising any trust or power conferred upon
the Guarantee Trustee under this Preferred Securities Guarantee.

     (b) If the Guarantee Trustee fails to enforce its rights under this
Preferred Securities Guarantee, any Holder may directly institute a legal
proceeding against the Guarantor to enforce the Guarantee Trustee's rights under
this Preferred Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person or
entity.

     (c) A Holder may also directly institute a legal proceeding against the
Guarantor to enforce such Holder's right to receive payment under this Preferred
Securities Guarantee without first (i) directing the Guarantee Trustee to
enforce the terms of this Preferred Securities Guarantee or (ii) instituting a
legal proceeding directly against the Issuer or any other Person or entity.

SECTION 5.5 Guarantee of Payment.

     This Preferred Securities Guarantee creates a guarantee of payment and not
of collection (i.e., a Covered Person may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Preferred Securities
Guarantee without first instituting a legal proceeding against any other person
or entity). This Preferred Securities Guarantee will not be discharged

                                       13

<PAGE>

except by payment of the Guarantee Payments in full to the extent not previously
paid or upon Distribution to the Holders of the corresponding series of
Debentures as provided in the Declaration.

SECTION 5.6 Gross Up.

     All payments paid directly by the Guarantor under this Preferred Securities
Guarantee shall be made by the Guarantor without withholding or deduction at
source for, or on account of, any present or future taxes, fees, duties,
assessments or governmental charges of whatever nature imposed or levied by or
on behalf of Canada or such other country under the laws of which a successor to
the Guarantor is organized (such as Bermuda, Barbados, the Cayman Islands or any
OECD Country, such country of organization or Canada, as the case may be, being
herein referred to as the "Taxing Jurisdiction"), or any province, territory,
political subdivision or taxing authority thereof or therein (collectively, such
taxes, fees, duties, assessments or governmental charges are herein referred to
as "Foreign Taxes"), unless such Foreign Taxes are required to be withheld or
deducted by (i) the laws (or any regulations or ruling promulgated thereunder)
of the Taxing Jurisdiction or any province, territory, political subdivision or
taxing authority thereof or therein or (ii) an official position regarding the
application, administration, interpretation or enforcement of any such laws,
regulations or rulings (including, without limitation, a holding by a court of
competent jurisdiction or by a taxing authority in the Taxing Jurisdiction or
any province, territory or political subdivision thereof). If a withholding or
deduction for Foreign Taxes is required, the Guarantor shall, subject to certain
limitations and exceptions set forth below, pay to the Holders such Gross Up
Amount as may be necessary so that every net payment paid directly by the
Guarantor under this Preferred Securities Guarantee to such Holder, after such
withholding or deduction, shall not be less than the amount provided for in this
Preferred Securities Guarantee to be then due and payable if such Foreign Taxes
had not been withheld or deducted; provided, however, that the Guarantor shall
not be required to make payment of such Gross Up Amount for or on account of:

          (a) any Foreign Taxes which would not have been imposed but for the
fact that a Covered Person with respect to such Preferred Securities was a
resident, domiciliary or national of, or engaged in business or maintained a
permanent establishment or was physically present in, the Taxing Jurisdiction or
any province, territory or political subdivision thereof or otherwise had some
connection therewith other than by reason of the mere ownership of, or receipt
of payment under, such Preferred Security;

          (b) any estate, inheritance, gift, sale, transfer, personal property
or similar tax, assessment or other governmental charge;

          (c) any Foreign Taxes that are imposed or withheld by reason of the
failure by a Covered Person with respect to such Preferred Securities to comply
with any reasonable and timely request by the Guarantor addressed to the Holder
within 60 days of such request (A) to provide information concerning the
nationality, residence or identity of the Covered Person or (B) to make any
declaration or other similar claim or satisfy any information, certification,
identification, documentation or other reporting requirement, which, in the case
of (A) or (B), is required or imposed by statute, treaty, regulation or
administrative practice of the Taxing

                                       14

<PAGE>

Jurisdiction or any province, territory or political subdivision thereof as a
precondition to exemption from all or part of such Foreign Taxes; or

          (d) any combination of items (1), (2) and (3); nor shall Gross Up
Amount be paid with respect to any payment paid directly by the Guarantor under
this Preferred Securities Guarantee to any Holder who is, for income tax
purposes of the Taxing Jurisdiction, a fiduciary or partnership or other than
the sole beneficial owner of such Preferred Security to the extent such payment
would be required by the laws of the Taxing Jurisdiction (or any province,
territory or political subdivision or relevant taxing authority thereof or
therein) to be included in the income for tax purposes of a beneficiary or
settlor with respect to such fiduciary, or a partner of such partnership, or a
beneficial owner who would not have been entitled to such Gross Up Amount had it
been the Holder.

SECTION 5.7 Subrogation.

     The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.

SECTION 5.8 Independent Obligations.

     The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1 Limitation of Transactions.

     So long as any Preferred Securities remain outstanding, if there shall have
occurred and be continuing any event that would constitute an Event of Default,
an Indenture Event of Default, or Declaration Event of Default or if an Extended
Interest Payment Period (as defined in the Indenture) has been declared and is
in effect, then the Guarantor will not (a) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock (which includes common and preferred
stock), or (b) make, or permit any subsidiary to make, any payment of principal,
interest or premium, if any (other than payments under the Subordinated Notes or
the Debentures), on, or repay, repurchase or redeem, any debt security that
ranks pari passu with or junior to the Debentures, the Debenture

                                       15

<PAGE>

Guarantee or the Subordinated Notes, as the case may be, or (c) make, or permit
any subsidiary to make, any guarantee payments with respect to any guarantee of
any debt security (other than payments under the Preferred Securities Guarantee
or the Debenture Guarantee), if such guarantee ranks pari passu with or junior
to the Debentures or the Debenture Guarantee, as the case may be.
Notwithstanding the foregoing, the following shall not be prohibited: (i)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Guarantor (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the occurrence of the Event of Default, Indenture Event of Default,
Declaration Event of Default or selection of an Extension Period by the
Debenture Issuer, as applicable, (ii) any transactions described in (a) or (b)
above resulting from any reclassification of the Guarantor's capital stock, or
the exchange or conversion of any class or series of the Guarantor's capital
stock for any other class or series of the Guarantor's capital stock, or the
exchange or conversion of any class or series of the Guarantor's Indebtedness
(as defined in the Indenture) for any class or series of the Guarantor's capital
stock, (iii) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, or (iv) any declaration of a
dividend in connection with any stockholders' rights plan, or the issuance of
rights, stock or other property under any stockholders' rights plan, or the
redemption or repurchase of rights pursuant thereto.

SECTION 6.2  Ranking.

     This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all Guarantor Senior Debt (as defined in the Indenture), to the extent and in
the same manner as the Debenture Guarantee is subordinate and junior in right of
payment to all Guarantor Senior Debt as provided in Article XV of the Indenture,
(ii) pari passu with (A) the most senior preferred or preference stock now or
hereafter issued by the Guarantor, (B) any guarantee now or hereafter entered
into by the Guarantor in respect of any preferred or preference stock or
preferred trust security of any Affiliate of the Guarantor and (C) those debt
securities previously issued and from time to time issued and outstanding as
described in clause (1) of the proviso to the definition of Guarantor Senior
Debt set forth in the Indenture, and (iii) senior to the Guarantor's common
stock.

                                   ARTICLE VII

                                   TERMINATION

SECTION 7.1  Termination.

     This Preferred Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Preferred Securities, (ii) the distribution of
the Debentures to the Holders of all of the Preferred Securities or (iii) full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case

                                       16

<PAGE>

may be, if at any time any Holder must restore payment of any sums paid under
the Preferred Securities or under this Preferred Securities Guarantee.

                                  ARTICLE VIII

                                 INDEMNIFICATION

SECTION 8.1  Exculpation.

     (a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Preferred Securities Guarantee or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.

     (b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.

SECTION 8.2  Indemnification.

     (a) To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Preferred Securities Guarantee,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by reason of
such Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.

     (b) To the fullest extent permitted by applicable law, reasonable expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).

                                       17

<PAGE>

     (c) The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.

                                   ARTICLE IX

                            COMPENSATION AND EXPENSES

     The Guarantor agrees to pay to the Guarantee Trustee compensation for its
services as shall be mutually agreed upon by the Guarantor and the Guarantee
Trustee. The Guarantor shall reimburse the Guarantee Trustee upon request for
all reasonable out-of-pocket expenses incurred by it, including the reasonable
compensation and expenses of the Guarantee Trustee's agents and counsel, except
any expense as may be attributable to the negligence or willful misconduct of
the Guarantee Trustee.

                                    ARTICLE X

                                  MISCELLANEOUS

SECTION 10.1 Successors and Assigns.

     All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.

SECTION 10.2  Amendments.

     Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may be amended only with the prior approval
of the Holders of not less than a majority in aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 13.2 of the Declaration with respect to meetings of
Holders apply to the giving of such approval. This Preferred Securities
Guarantee may not be amended, and no amendment hereof that affects the Guarantee
Trustee's rights, duties or immunities hereunder or otherwise shall be
effective, unless such amendment is executed by the Guarantee Trustee (which
shall have no obligation to execute any such amendment, but may do so in its
sole discretion). In executing any such amendment, the Guarantee Trustee will be
entitled to receive, and (subject to Section 3.1) will be fully protected in
relying upon, an Officers' Certificate and an opinion of legal counsel stating
that the execution of such amendment is authorized or permitted by this
Preferred Securities Guarantee.

SECTION 10.3  Notices.

         All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:

                                       18

<PAGE>

     (a) If given to the Guarantee Trustee, at the Guarantee Trustee's mailing
address set forth below (or such other address as the Guarantee Trustee may give
notice of to the Holders): 2 N. LaSalle Street, Suite 1020, Chicago, Illinois
60602, Attention: Corporate Trust Department.

     (b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the
Holders): 5310 Explorer Drive, Mississauga, Ontario L4W 5H8, Attention: Chief
Executive Officer, with a copy to the attention of the Chief Financial Officer
at such address.

     (c) If given to any Holder, at the address set forth on the books and
records of the Issuer.

     All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

SECTION 10.4  Benefit.

     This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.

SECTION 10.5 Governing Law.

     THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 10.6 Submission to Jurisdiction.

     The Guarantor agrees that any judicial proceedings instituted in relation
to any matter arising under this Preferred Securities Guarantee may be brought
in any United States Federal or New York State court sitting in the Borough of
Manhattan, the City of New York, New York to the extent that such court has
subject matter jurisdiction over the controversy, and, by execution and delivery
of this Preferred Securities Guarantee, the Guarantor hereby irrevocably
accepts, generally and unconditionally, the jurisdiction of the aforesaid
courts, acknowledges their competence and irrevocably agrees to be bound by any
judgment rendered in such proceeding. The Guarantor also irrevocably and
unconditionally waives for the benefit of the Guarantee Trustee and the Holders
any immunity from jurisdiction and any immunity from legal process (whether
through service or notice, attachment prior to judgment, attachment in the aid
of execution, execution or otherwise) in respect of this Preferred Securities
Guarantee. The Guarantor hereby irrevocably designates and appoints for the
benefit of the Guarantee Trustee and the Holders for the term of this Preferred
Securities Guarantee Kingsway America Inc., 1515 Woodfield Road, Suite 820,
Schaumburg, Illinois 60173, Attention: James R. Zuhlke, as its agent to receive
on its behalf service of all process (with a copy of all such service of process
to be delivered to Lord, Bissell & Brook, 115 S. LaSalle St., Chicago, Illinois
60603, Attention: Janet O. Love) brought against it with respect to any such
proceeding in any such court in the

                                       19

<PAGE>

City of New York, such service being hereby acknowledged by the Guarantor to be
effective and binding service on it in every respect whether or not the
Guarantor shall then be doing or shall have at any time done business in New
York. Such appointment shall be irrevocable so long as any of the Preferred
Securities or the obligations of the Guarantor hereunder remain outstanding, or
until the appointment of a successor by the Guarantor and such successor's
acceptance of such appointment. Upon such acceptance, the Guarantor shall notify
the Guarantee Trustee of the name and address of such successor. The Guarantor
further agrees for the benefit of the Guarantee Trustee and the Holders to take
any and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of said Kingsway America Inc. in full force and effect so long as
any of the Preferred Securities or the obligations of the Guarantor hereunder
shall be outstanding. The Guarantee Trustee shall not be obligated and shall
have no responsibility with respect to the failure by the Guarantor to take any
such action. Nothing herein shall affect the right to serve process in any other
manner permitted by any law or limit the right of the Guarantee Trustee or any
Holder to institute proceedings against the Guarantor in the courts of any other
jurisdiction or jurisdictions.

     THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                               KINGSWAY FINANCIAL SERVICES INC.
                                               as Guarantor

                                               By:
                                                  ------------------------------
                                               Name:
                                               Title:

                                               By:
                                                  ------------------------------
                                               Name:
                                               Title:

                                               BNY MIDWEST TRUST COMPANY,
                                               as Guarantee Trustee

                                               By:
                                                  ------------------------------
                                               Name:
                                               Title:

                                       20

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